Tag: HR

I’ve been out of day-to-day HR for four years. It was one of the best decisions that was ever made for me. That’s not just because it set me on my current career path (whatever that may be), but it opened up a space for someone who liked doing HR.

I’ve obviously stayed close to the space in that time. This week though, I got a little closer than comfort to the function. HR software provider Silkroad invited me (and, for full disclosure, paid my way there) to their users conference in Florida.

Those who know me know I don’t go to most conferences for pure education. Usually it was either my conference (so I was working), I was speaking, or I was covering the conference as a journalist (so I was focused on reporting what I saw).

That wasn’t the case here. This time, I was at the conference like an attendee for the most part. Outside of a lunch with Silkroad executives, I was focused on experiencing the conference like a normal HR person would. So I listened to the keynote speaker on the first day (Dan Pink) and there were some parts where I saw some uncomfortable laughs from my pseudo-colleagues:

• When he suggested that performance reviews were simply CYA’s
• That to get the most out of white-collar, knowledge workers, you had to start first by paying them fairly and well

I won’t play armchair psychologist but I’ll tell you what I heard from attendees:

“I love the ideas, Dan. We’ve tried to convince our executive team for years on this. It is hopeless. We’ll drive engagement the best we can within our constraints.”

The theme transpired in other areas of the conference too. New social tools within Silkroad’s product are great but scary, as these HR pros imagine the worse case scenarios. They imagine how they sell this to an executive team that is probably thinking the same as they are.

And that’s fair. I’ve seen what a little bit of openness and social in an inappropriate and immature workplace looks like.

I’ll tell you what I saw: I saw a product that got out of its own way, allowed HR pros to do their job better, and to push employers toward a more progressive and engaged workforce. What I saw were HR pros driven by compliance, efficiency, old-school executive thinking, and squeezing value out of the product without making things uncomfortable at their job.

Let me be clear: I don’t think this is a problem with Silkroad, or with their HR customers. I’m sure the same story gets played out at other user conferences, regional SHRM meetings, and happy hour get togethers among HR pros.

When you follow the bleeding edge of HR like I do, you might assume that everyone is going the way of progressive HR. I love that part of HR. It keeps me fired up and it is something everyone can aspire to.

In that same vein though, we should also acknowledge the uncomfortable reality of HR as it largely exists today. Should we be happy with it? Should we think that’s all we can accomplish? No. The answer is clearly no. But let’s acknowledge that we need tools that not only help HR pros move forward but also tools that help them deal effectively with the present.

“Our goal is to reduce turnover by 25%.”

No it isn’t. I hope not, at least.

Having reduced turnover as a goal leads to all kinds of strange, short-term thinking that lead to deranged organizations. A counter-offer when your 325th best salesperson decides to take another job? Lengthening the corrective action review process? Pushing beyond the budget on labor costs because your team is too expensive? Ploys and programs designed to cater to middle and low performers who may be a flight risk? Yep, yep, yep and yep.

You may even have an executive who is looking at some dashboard in a system and she is instructing you that you have to get control of turnover. She may want to build some goals around reducing that number. Nod your head and then walk out of her office and ignore that.

Reducing turnover may be an okay outcome but it is never a goal. And even if it is an outcome, it is a lousy, broad measuring stick. 2% turnover sounds great until you realize that your organization is bleeding only high performers and high potentials.

So can we agree that reducing turnover is a stupid measuring stick and that it shouldn’t be used as a goal or outcome?

Maybe? I’ll take it. If you are using it for an outcome, make sure what you’re measuring is meaningful.

If someone in your organization is complaining about high turnover and reducing it isn’t a goal or outcome, what’s the proper response? The proper response is finding out what the real issue actually is:

1. Our labor costs are too high. How are we investing labor dollars? Why can’t we do a better job of doing that?
2. Our recruiters are spending too much time on replacements. Is there a resource allocation issue or are we short on recruiters?
3. We’re losing people after 6/12/18 mos. What are we doing in our hiring process that sucks so bad?
4. A top performer left. Yeah, his boss was an asshole. Maybe we should get rid of him?
5. Our culture needs to be changed. Guess what? Culture change will cause massive turnover too.
6. We aren’t performing well as a company. And you found a metric that may or may not have to do with that? Really?
7. The company isn’t well managed. Trying to blame general management issues on turnover is like blaming In-N-Out for your gut.

Turnover is a symptom like body aches. Body aches can be really bad when you’re sick because it can indicate the flu but body aches can be fine if you’re getting back in shape. Should you keep track of turnover? Sure, and if you can, get as granular as you can (who is leaving and why?). Does reducing turnover take precedent over increasing profit, value, and company performance or reducing costs, administrative burden and culture issues? No, never. And don’t forget that.

When you’re a hammer, every problem looks like a nail. To that degree, I think people in human resources think about business problems as human problems. We take the mantra of people as our greatest asset and turn it on its side to diagnose problems.

• Are we hiring the wrong people? We need to train managers again!
• Problems with the quality of your product? Put in better supervision and training!
• Bidding out projects isn’t going as well? Time to talk to Jim and Jane again about doing a better job!

I won’t belabor the point because I think this way too. The tools at your disposal in HR are often the most human oriented. Talking through problems and figuring out the way individuals and teams can solve issues is as important of a skill in the HR wheelhouse as any other.

Many of our problems are human problems, too. We have the wrong people in the wrong place doing the wrong job. And there are indirect causes of action that impact the way people work: compensation, culture, power, and structure. All of that can be easily understood within the context of people being the key to our success and failure.

Not all of our problems are human problems though.

• Hiring the wrong people happens because the right tools are never put in place, no matter the training.
• Product suffers because the process to monitor quality is ineffective (or overbearing enough to create inefficiencies that need to be bypassed at critical moments).
• Poor bidding success can be because the company is in a weak position financially or lack the internal resources to compete in the market.

In these situations, there is a prevalent attitude to take care of the human issues as best as possible first. Make sure managers are trained as well as possible (even if the tools are inadequate), employees have clear direction (in spite of poor performance) and squeeze the prune for more juice (when your internal resources and finances are tightening up).

That plays right into HR’s sphere. “We’ll get the most out of these employees, even if everything around them is inefficient, poorly thought out or unable to function,” they say.

The message that sends to your employees? Getting the maximum output from them (blood, sweat, tears and all) is more important than getting maximum output across all of the organization’s critical processes. You know what? That’s a pretty messed up message.

This is a leadership area for HR: yes, we can fix the people problems but we also need to fix the process, finances, and tools that prevent work from getting done to its greatest value.

Do you have a nearly limitless budget for hiring employees? Can you go to every length to get every single candidate? Do you regularly raid other companies and take their best employees and pay top dollar?

Because this post isn’t for you.

In fact, the whole point of my war for talent post was that nobody has the resources to recruit the way recruiters often advocate. Unless you have that unlimited budget for hires, you aren’t going to hire all A players (if you can even identify them to begin with). A players play for A player money. Unless you are willing to pay A player money on every (and I mean every) hire, you aren’t getting all A players and you aren’t going to war and we can drop the cheesy fighting metaphors.

So if you can’t pay everyone anything they want to get the absolute best every time, let’s take a look at another way. It’s called the Moneyball approach and if you haven’t read Michael Lewis’ book Moneyball or watched the movie, I’ll briefly explain the premise. Under the guidance of General Manager Billy Beane, the Oakland Athletics baseball club has overachieved in comparison to their player payroll. The New York Yankees and other high spending teams spend multiples over what the A’s typically spend and either get marginally better results (on a much more expensive payroll) or sometimes even do worse.

How does he do it? Well, that’s playing Moneyball. Essentially, it is a buy low/sell high scheme of getting the most wins per dollar spent. Using some advanced stats and valuing players that bring in stats that his system values, he drafts and selects players that may be undervalued by other franchises but work well according to his system. If they end up very successful, he has a cheap contract or rookie scale to work on for awhile and then they end up losing them to a team that is willing to pay to the moon for them. Then the process starts all over again.

It is a great lesson in dealing with constraints, talent evaluation, figuring out what really matters and knowing when to let go. Recruiters and HR folks are gung ho about the concept, too.

Fast-forward a few years and everyone knows about Moneyball. Guys who pay a lot of money to players pay attention to this stuff. It would be tough to find anyone doing player evaluation or looking at stats the same way they did even 10 years ago.

And look at that: the A’s are still at a disadvantage. They were second-to-last in payroll by a few thousand dollars in 2012 yet they made the playoffs. That’s with everyone knowing and understanding Moneyball, too. So how did they do it?

They knew when to select A, B and C players. Like most companies, they weren’t in a position to get all A players. If you take a closer look at their payroll from 2012, you’ll notice that their median salary per player was lower than everyone else. Half of their players were making less than $500,000 a year. They were still getting their Moneyball players at even a lower cost. That meant more room on the upper half to do some strategic spending on some mid-tier hitting and pitching that wouldn’t be as risky as a pure Moneyball approach.

So beyond just making good talent evaluations, you also have to know when you really need someone with those higher level skills that you will be paying more for out of the gate, when you can pass on that for lower-level talent and the confidence to stand up to hiring managers and executives to make the case for this approach.

I’m excited more companies are getting into Moneyball-type talent approaches and looking at data in new and interesting ways. Know that there will come a time when Moneyball by itself won’t get the job done when all of your competitors figure it out as well.