HR Scorecard Template

Today’s HR executive is being challenged to do more as a strategic partner. One of your best tools is the HR Scorecard. It can take many formats including graphs, tables, Powerpoints, timelines, etc. Let’s discuss how to measure what matters and what to do with the data and information obtained.

  1. Measure what matters. For example, if an objective is to reduce the cost of hire, why is that important? Do you intend to do a lot of hiring in the next 12 months? If not, why bother measuring the data? Strategic HR executives always ask how the data they are analyzing ties to the vision, mission, values, goals, and strategic objectives for the company and their department.
  2. Rank it against other objectives. Is perfecting your cost of hire as important as retaining your existing employees? For example, if you intend to hire 50 employees and reduce the cost per hire by $1,000 each, that’s a savings of $50,000. However, if you lose two well-trained employees, the replacement costs would easily dwarf the cost of savings per hire. Therefore, we want to prioritize our objectives so we work in our highest and best use. That’s optimization of HR as a resource.

Read the rest of this extensive report… full PDF here.

A Workplace Disability Accommodation Tool Kit from JAN

Managing disability accommodations can be a real challenge for both employer and employee. Of course, we want to do it gracefully, comply with the law and make sure the result is a productive employee.

My friends at the Job Accommodation Network have released an awesome Workplace Disability Accommodation Toolkit which includes:

  • Sample accommodation procedures
  • Training presentations
  • Role-play videos
  • Examples of policies and forms from leading U.S. businesses
  • Best practices for creating an inclusive workplace
  • Checklists to track the accommodation process

The Toolkit provides guidance for the different areas of the employment process and a resource for recruiters, hiring managers, supervisors, human resource professionals, accommodation consultants and allies of employees with disabilities.

Here’s an example of a resource page.

You can access the Workplace Accommodation Tool Kit https://AskJAN.org/toolkit

Why Every HR Problem Becomes a Sales Problem

Here’s a reality: half of your competitors hire better than the other half. Some are in the bottom 10%, and then there are those great companies in the top 10%. You can imagine how this variance impacts your bottom line, whether you have 5 or 5000 employees.

The same could be said for your retention practices. What if you had half the turnover of your closest competitor?

I speak with a lot of business owners. I do my best to help them understand there is a great opportunity in Great HR practices. I also let them know somebody must pay for poor HR practices and eventually that somebody is the sales team (which may be you).

There’s a lot of variance in the cost of that turnover depending on whether they were poor performers or great performers, took people with them, filed unemployment or work comp claims, etc.  To get a true sense of this exposure, I encourage you to fill in your “replacement” costs:

  1. The time and money it takes to find a replacement. Sourcing, interviewing, referral fees, etc. If you are a small shop and doing the hiring yourself that cost adds up quickly (What’s a few hours of your time worth?) __________________
  2. Time and cost of background checks and pre-hire fit for duty exams. (You do both…right?) Typically $75- $100 per new hire, if you do it right. ______________
  3. Short -term replacements costs such as paying for overtime, hiring a temporary employee or best of all, doing the job yourself. _______________________
  4. The cost of customer dissatisfaction (they lost a contact they liked and trust, or you lost the customer because of that employee they never want to see again) and loss of “brand value.” (What’s the “lifetime” value of a customer? What’s the value of your brand?) _________________________
  5. Training, onboarding, new hire paperwork, payroll, benefits, handbook, etc. _________________________
  6. A poor player affects team productivity. (How many people do they typically work with on a team?) ________________________
  7. Poor employees generate safety and work comp costs. (The most dangerous employee is a new employee. ) ____________________________
  8. It affects unemployment payments __________________
  9. It affects overall morale, reducing engagement and “discretionary” effort. (What % of total payroll costs is affected? If it causes even a 5% dent that’s a huge number. ) ____________________________
  10. It drives you crazy and that is… priceless!

Let’s say the turnover cost is conservatively $5,000 per rank and file worker. The ratio jumps dramatically higher with office personnel.  It is an expense that comes right out of ownership’s pocket. There’s no insurance for it, or any way to amortize the cost. Let’s say you lost three rank and file employees at $15/hr. and an office worker at $30/hr. That will cost you at least $75,000. To put that $75,000 back into ownership’s pocket, you must now produce a certain level of replacement revenue. Sometimes people are quick to think that’s an ROI figure, meaning if the company has a 10% ROI then it will cost $750,000 in revenue to place the $75,000 back into the pockets (bottom line).

Not so fast.

After speaking at two CPA conferences, I learned this was not the case. Because there are many fixed overheads involved, the replacement figure is closer to a 4:1 to 6:1 ratio. Meaning you must bring in top-line revenue of anywhere from $300,000 to $450,000 to put the $75,000 back into your pocket! And…that’s just so you can break-even!

Now that’s a much bigger problem!

It gets owners attention when they connect the dots and realize their personnel practices are not just creating cost problems but revenue problems too. That revenue can be broken down into the number of sales, customers, marketing efforts, engagements and other activities required to generate it. For example, if you’re earning $2,000-$4000 on each new contract sold you must sell at least 75-150 contracts to break even on losing those employees. What will you have to drive those additional sales?

I’ll say it again…getting your HR act together is one of the most underutilized opportunities at most companies, and most likely yours. Everything I hear from owners is about getting talent, getting talent, getting talent. Is your HR dept. (even if it’s somebody wearing three hats, like you) helping to attract great employees? Do you have robust referral programs? Is there great onboarding and engagement practices?

In future articles, I’ll drive further into best practices you can consider…but it all starts with knowing the math.

Whether you are an owner reading this, in HR, or simply interested, I will send you an Excel doc where you can help quantify your Turnover Costs and another spreadsheet to help you determine the most cost-effective Retention Programs to use.

Here’s to growing your bottom line!

Don

don@donphin.com

(619) 852-4580

www.donphin.com

www.linkedin.com/in/donphin

66 Powerful Strategies for Great HR

Great HR represents a competitive advantage for your company and career. It affects you whether you are in HR…or not. In the 66 POWERFUL STRATEGIES FOR GREAT HR e-book I discuss the reality that half of all HR managers are more effective than the other half. It’s also a fact the top 10% of HR managers get healthy six figure salaries and a seat at the strategic table.

Would you like me to show you how to break away from the pack and launch into the stratosphere of the top 10%?

Not only am I happy to share this e-book… but for the first 10 people who contact me, I will provide a free one hour coaching session. There is no cost for this and no obligation of any kind. You will love the experience.

I offer this free session because I’m excited about helping HR managers make a difference… and get paid well for it too! I know that if you find value in my help, you may also be interested in one of my programs.

Here’s what you do next. If you want to schedule a coaching session, all you have to do is email me at don@donphin.com and let me know your availability. Once I have your information, I’ll do some research on you and your company and we’ll set up the time for our meeting. I promise to get back to you within 2 business days.

Here’s to your success, Don

The Truth About HR and You

Whether you are in HR …or not…this book can greatly benefit your company. If I was an HR executive I would take it to heart. If I managed an HR executive you will learn how to do that better. I cover both the hard stuff like knowing your numbers and how to communicate them, as well as the soft stuff including the emotional challenges of most HR folks.

As I say in the book, the goal is to be a “Kick Ass” HR Executive. Do that and you will get the rewards and pay you desire.

Click here to get your free copy of the book today (you will get an immediate PDF download.)

Here’ to Kick Ass HR, Don

Ideas that Should be Retired in Human Resources

I love the Freakonomics podcast, especially a recent one on ideas that should be retired in science. http://freakonomics.com/2015/03/05/this-idea-must-die-a-new-freakonomics-radio-podcast/ Of course, this got me thinking about ideas that should be retired in HR. Here’s my shot at it:

1. Data will give us all the answers – In the podcast they discuss the fact that relying solely on data limits our ability to go deeper into relationships and understanding. Of course, data related to hiring or turnover or performance or compliance can be valuable, but it’s simply a starting point. So what if we find that most employees tend to leave our company at 2.8 years of employment. What meaning does that data have? To what extent have we had real conversations with people who have left the company at that time? Bottom line is not to rely solely on data because it seldom has all the answers and can remove us from common sense as well as deeper inquiry.

2. Performance appraisals actually improve performance. Dr. Deming began attacking this idea after World War II. He believed that performance evaluations were more destructive than beneficial of performance. Instead of performance appraisals he instituted kaizen, otherwise known as continuous improvement. He simply asked the question how can we do a better moving forward? What would it take for us to do a perfect job? Instead of performing to a tolerance (i.e. you’ve got to get at least three out of five on your performance evaluation) why don’t we ask how everybody can get fives?

3. HR needs to be strategic and get a seat at the table. I’ve had many conversations about what it means to be “strategic.” The problem is after a 15-year conversation about it, it’s a worn-out metaphor. So what if you don’t get a seat at a table, does that mean you’re somehow less effective? Perhaps you don’t even deserve or want a seat at the table. What’s really most important is whether or not you’re doing the HR job up to your full potential. That’s what really matters. Maybe we should substitute the term the full potential HR executive in place of the strategic HR executive.

What ideas do you think need retirement?

Getting the Blockages Out of the Way of Great HR

For years I have been preaching the opportunity in Great HR. When I do my CEO workshops, I show the financial logic behind the opportunity. I have business owners understand that every HR problem becomes a sales problem. And yet HR still has difficulty getting traction.

In this article, I will talk about where the real opportunity lies… and that is getting the blockages out of the way. I have heard executive after executive tell me how to have a difficulty finding talent, and then I go to their website, and there’s not a word about finding talent. When we talk about performance management many business owners will agree with me that the one to five rating approach doesn’t seem to improve performance and, yet they are unwilling to experiment to find a way that does. So, let’s talk about some blockages and slay those beasts so we can actualize the HR opportunity.

Overwhelm

It seems as if most every executive I speak to is on overwhelm. From the CEO on down. And that includes HR. This overwhelm is a symptom of poor time management. It’s a symptom of not defining and focusing on what is truly important. Here are a few ideas to battle the time/overwhelm obstacle:

  • Stop spending any time doing low-value work. This is true whether you are the CEO or the HR executive. Outsource it, delegate it or eliminate it.
  • Know where your time goes. Peter Drucker advised us in The Effective Executive to track your time and not assume where it goes. I find that once executives do they are amazed by how much of their time is spent on lower value work.
  • Draw a line for total hours worked and don’t work past it. As Parkinson’s Rule states “People get things done in a time allotted for it.” . Give yourself less time to get things done. You’ll work with greater urgency and focus as a result.
  • Stick it on a calendar. You must calendar working on strategic objectives. It is just as important to work on the business, as it is in the business.
  • Understand that overwhelm is neither healthy, productive, nor job security.

Money, money, money

Having spoken to more than 400 CEO groups, I have a good sense of how business owners think about money. Plus, I too ran a business. And the bottom line is this: CEO’s are up for spending money anytime it produces a return on investment. Here’s a link to my HR Cost Calculator. It helps to find the financial opportunity in Great HR. For example, if the company bemoans its ability to find talent and therefore rushes to hire,  how much did the last bad hire cost you? When we act out of desperation instead of out of a process, we produce very expensive variances. These variances are a negative ROI on our activities.

The fight between saving money and making money is very emotional. I encourage HR to connect the dots and help executives understand that all poor HR decisions eventually become a sales problem. That poor hire that might have cost $50,000 out of pocket is the equivalent of at least $250,000 in replacement revenue. I find that when executives connect the dots between costs and their revenue equivalents, they will spend time… and money trying to eliminate that waste.

Top Level Executives Who Could Care Less About HR

Vistage, the CEO organization that I speak for, has some 900 speakers in its system. The vast majority focus on marketing and sales- the number one concern of most CEOs. Every year or two they’ll have a speaker like me to come in and talk about HR practices. If you are at a company where leadership could care less about HR (and there are plenty of those companies out there), then find a company where leadership is open to the GreatHR opportunity….and get that blockage out of the way!

Bad HR

Last, it’s a fact that half of all HR executives are more motivated to make a difference at their companies than the other half. Unmotivated HR is Bad HR and has disastrous impacts on the bottom line. Bad HR focuses on excuses as opposed to execution.

  • Great HR takes the time to understand the company’s strategic initiatives. Bad HR does not.
  • Great HR has a strategic plan. Bad HR does not.
  • Great HR understands the math and data of their operations. Bad HR does not.
  • Great HR coordinates with their fellow executives to understand how they better support their needs. Bad HR does not.
  • Great HR stays on top of their game. They watch webinars, go to workshops and they network with other Great HR executives. Bad HR does not.
  • Bottom-line is Bad HR is disastrous for any organization.

Bad HR is a blockage to the Great HR opportunity. If your HR person doesn’t want to kick ass in HR…find someone who does!

Conclusion

HR continues to get a bad rap, although it professes a desire to be “strategic.” Yes, there are real blockages…and there are also far too many excuses which allow those blockages to hinder doing Great HR.

 

PS if you are in HR and have not watched my video The Truth About HR….and You, now would be a good time to do so!

Building Your Conversational Capacity

I went to an excellent Vistage Chair Group meeting and was treated to the presentation Conversational Capacity by Craig Weber. Craig comes from an organizational design and psychology background and has presented to Vistage groups more than a thousand times. He works with large teams trying to improve their performance under pressure.

Craig asked the question “do really smart people in your company get to use their smarts?” The problem is often they don’t. That reality crystalizes when a group is under pressure.

Craig uses the term “the sweet spot” where one’s position is clearly identified, supported by facts and analysis, and is put to the test by asking for feedback in an open manner. Likewise when considering a divergent idea, seek to understand the basis for their position, facts, and analysis.

Engaging in such a dialogue makes common sense but… emotionally we tend to be driven towards either a “weak” position or a “win” position. Craig suggests that to move from a position of weakness we have to do a better job of identifying our position and providing our supporting facts and analysis. Conversely, if we are win-oriented we can suppress our smart people unless we engage in invitation and inquiry.

Craig brings a unique languaging to the concept of leadership based on his experience. All authors do this, yours truly included. David Bohm, the late quantum physicist, in his treatise On Dialogue said his experience in understanding quantum physics helps him to define dialogue as a safe place for communicating. He said the truth does not emerge from an opinion but only through dialogue. In Good to Great Jim Collins language a similar concept as the humble level 5 leader.

Craig suggests that we keep a “trigger” journal that helps us to gain awareness of when our energy can become too strong.

One thing I love about Vistage meetings is they are built on this belief in Conversational Capacity. We not only get to interact with presenter experts but then have the afternoon devoted to encouraging each other and holding each other accountable…throughout a dialogue.

How can you build the Conversational Capacity at your company?