As HR is increasing its presence as a strategic part of the business, key performance indicators, or KPIs, are becoming a key part of the language for discussing how it is actually performing. Recruiting, in some ways, is actually easier to measure because it is very similar to sales: you either have results or you don’t. Today I want to talk about first year retention, a measure that I believe is going to continue to grow as a recruiting metric, even though many companies wouldn’t consider it even remotely linked to recruiting as of today.

recruiting kpiWhen I realized the link from retention to recruiting

Several years ago I ran into the wall. Figuratively, that is. I was spending about 50% of my time processing termination paperwork and 49% processing new hires. The other 1% was spent wondering just how we were going to sustain this churn. We were turning over about 50% of employees in positions that made up 90% of our workforce. In a company with more than 600 employees, you start to get the picture for just how bad things were. Like I said, my entire job was dedicated to moving the people into and out of the organization.

So I decided to try something. I gathered information. I pulled five years of archived files and noted termination reasons along with tenure and manager information. I looked into our Stone Age HRIS and pulled the same items for more recent terms. Once I had amassed the data, I started analyzing. I quickly identified a few key trends and highlighted them in the report I developed.

A few days later I presented my findings to the VP of HR, demonstrating through the data that approximately half of those terms not only happened within the first year, but within the first 90 days on the job. We were spending hours recruiting, training (each employee received over a dozen hours of training before starting work), and coaching these people, only to have all of that effort wasted. The data showed that if an employee made it past the 90-day mark, they were significantly likely to stay for a year or longer.

This is when I realized that recruiting has a very strong link to retention, especially first year retention.

[Check out: What it’s like to be a recruiter]

First year retention, examined

When we think about retaining employees, a more senior staff member might come to mind. We automatically assume that if someone took the job just a few weeks ago that they are going to be excited and engaged for months to come (hint: the honeymoon period). Well, that depends on several things, including the recruiting process. Here are the ways the two are linked:

  • Realistic job preview-during the recruiting process, an accurate picture of the job must be depicted at every stage (job ad, phone screen, interview, etc.) If not, the candidate might get a more rosy picture of the position than is actually accurate, which leads to frustrations on day one. People are quick to skim over areas that might be bothersome for them in the leap to a new company–it’s critical to show the good, the bad, AND the ugly to provide a full understanding of the job and what it entails.
  • Manager engagement in the hiring process-having managers who not only join in the selection process, but actually lead it, is key. Managers who develop questions to probe candidate abilities and fit ultimately pick better people than those who use a stock list of “what is your greatest strength” type questions.
  • Team engagement in the hiring process-a great way to help people feel like they have friends on day one? Let their team interview them. When I have done this I request that they ask some technical questions, but that they also focus heavily on fit: does the candidate gel with the existing workers? Are they similar in terms of values and passion? How have they felt about coworkers in the past? If a person feels like they have friends at work, they’re more engaged and less likely to bolt a few weeks later.

[Check out: How one of the best managers I’ve ever seen engages new hires from day one]

The future of recruiting metrics

In the past and still today, recruiting has been focused on some very surface level items: mainly time to fill and quality of hire. If we’re solely looking at those numbers, I could have phenomenal time to fill and quality numbers, only to have them dropping out of the workforce a few weeks or months later. Using a metric like first year retention as a recruiting metric provides a more well-rounded picture of just how well it is actually being performed. And it also brings a long-term, holistic view to recruiting.

What recruiting KPI’s does your company use? Are they working? What do you think of first year retention as a metric?

Last week I wrote a post about innovation and employee engagement over at the Brandon Hall Group blog. The basic idea is that listening to, and implementing, employee ideas is a great way to get them engaged within the business.

In the post I talked about a recent Indiegogo campaign I contributed to. I’m really excited about the campaign, so I wanted to share more details here.

I have three kids. One is still in a car carrier, but the other two are in booster seats. Those boosters are massive, and they are tough to get in and out of the car. Then I heard about this new thing called a mifold.

mifold graphic

This is pretty amazing for a variety of reasons:

  • it’s small enough to fit in a backpack, yet safe enough to protect my kids
  • it doesn’t try to seat a child like an adult (pushing up); instead, it pulls the lap belt down to their level.
  • if my older kids are still in boosters when my youngest is ready for one, all three will fit
  • we hate planning for booster seats on travel–we either have to fly with seats or pay to rent them when we arrive

Innovation happens at the point of need

What this most reminds me of is just how innovation happens. It’s typically not when people are sitting in a room and trying to “brainstorm” ideas. It comes when someone has a frustration that isn’t being met by the current system. The times I was able to truly push something innovative through the pipeline were when they affected several people, caused stress or other problems, and had a solution that wasn’t one of the “normal” ways of resolving problems.

Think about your organization as you look at the mifold. How could you bring a solution to a common problem (or multiple problems) today?

Recently someone asked me about allowing employees to volunteer for free instead of being paid. I wanted to answer that more fully here because it might be something you have run into or might be considering in your own business.

For starters, here’s the DOL ruling on that. Let’s break it down and look at two broad categories: for-profit and non-profit organizations.

Employing volunteers at non-profits

The Fair Labor Standards Act (FLSA) defines employment very broadly, i.e., “to suffer or permit to work.” However, the Supreme Court has made it clear that the FLSA was not intended “to stamp all persons as employees who without any express or implied compensation agreement might work for their own advantage on the premises of another.” In administering the FLSA, the Department of Labor follows this judicial guidance in the case of individuals serving as unpaid volunteers in various community services. Individuals who volunteer or donate their services, usually on a part-time basis, for public service, religious or humanitarian objectives, not as employees and without contemplation of pay, are not considered employees of the religious, charitable or similar non-profit organizations that receive their service.

As you might expect, non-profits have some leeway here. I talk again at the end of this article about a specific problem non-profits might run into with employees and volunteering. It’s when we get to the for-profit side of things that it really cracks down on what employers can do.

Can paid employees volunteer for their employer?

Under the FLSA, employees may not volunteer services to for-profit private sector employers. On the other hand, in the vast majority of circumstances, individuals can volunteer services to public sector employers. When Congress amended the FLSA in 1985, it made clear that people are allowed to volunteer their services to public agencies and their community with but one exception – public sector employers may not allow their employees to volunteer, without compensation, additional time to do the same work for which they are employed. There is no prohibition on anyone employed in the private sector from volunteering in any capacity or line of work in the public sector.

Okay, so that helps us understand if employees can volunteer their time.

  • Private/for-profit=no
  • Public/for-profit=yes, as long as the person isn’t an employee doing the same work they normally perform

Even if the employee wants to do it and offers, there is still the chance that the employer would be seen in a negative light. Remember my visit to the OFCCP a few years back? Here’s the highlight of the visit:

Ever heard the phrase “innocent until proven guilty?” Not the way of life with the OFCCP, apparently. During the seminar, the speaker reminded us that having interview notes and other data available could help in the event of an investigation. However, in the next second he casually mentioned, “If you don’t have the data to back up your claims as to why person X was paid differently from person Y and one of them is a minority, we will assume the worst intentions.”

I’ve been around the business world long enough to know that if you’re looking for trouble, you’ll find it. If you assume the worst, you’ll find something to substantiate your claim, no matter how minuscule.

Even if the person is a good employee, there’s no guarantee that will always be the case. DOL audits aren’t started by employees who are happy with their work. They are started by people who are generally unhappy or even those who had a single rough day at work and are looking for a way to fight back. Keep that in mind–it happens to everyone.

Can employees volunteer to work fewer hours?

There is an interesting tangential discussion that I wanted to include here. One of our employees at a previous job was interested in reducing her work schedule to help get through lean times without eating up all of her vacation time. In that instance, exempt employees can voluntarily reduce their work hours, and their pay, without causing issues for the employer.

In that instance, I simply had her draft a short email to her manager and me stating that. The verbiage was something like:

To Whom It May Concern: 

I realize that we are seeing tighter budgets and I would like to voluntarily request a 32 hour (4 days per week) schedule every other week until further notice. I understand that I will not be compensated for the additional 8 hours I take off and that those hours will not be deducted from my leave balance. I also understand that my manager can recall me to full time service at any time without notice. 

Sincerely, 

Jane Doe

Again, if we had simply told the person to stop coming one day every other week, that could have opened up some FLSA issues since technically the person could have said they were an exempt professional ready and willing to work (thus owed their full compensation).

Can volunteers be considered employees?

One final area to cover. Can volunteers be treated like employees? As we have seen, for-profit organizations would do well to stay away from the entire concept of volunteers. For that reason we’ll discuss nonprofits. If given the option, I would try to avoid having volunteers performing any work that other ordinary employees are doing. That helps to keep the “swim lanes” separate and can help to avoid any issues between staff. Imagine doing work for free that the other person next to you is being paid for and you’ll quickly understand that concept.

We used volunteers when I worked at a nonprofit organization and the screening process was handled outside of the normal employment process for the sake of simplicity. We didn’t want to clutter up an already busy hiring process with people who wouldn’t technically be employees.

What other thoughts do you have about employees and volunteering? 

parental leave requirementsMy friend Lance Haun wrote last week about why he thinks we should fight for legislating parental leave in the US. I don’t know that I’ve ironed out my point of view 100%, but I don’t know that I agree with him at this point. Remember, this is a dialogue, not a requirement to conform. :-)

So, as a father to three small children, you might expect me to be for this type of thing. I mean, heck, getting paid to stay home with a baby would be pretty darn awesome. I love my three kids and spending time with them is pure joy.

But here’s the core reason I’m not a raving fan of legislating parental leave:

it’s not the government’s job

Now, if a company out there wants to pay parents, men or women, for leave, then that is an excellent idea. I’m all for it, and I would be happy to work for such an organization. But the truth is that according to census data, approximately half of the workers in the US are working for employers with fewer than 500 employees. I’ve worked in several companies from 10-600 employees (and some larger) in my working life, and I have no earthly idea how those companies would be able to afford paying people for not working. I remember at one employer we had six of our staff members having new babies in a single month!

Family medical leave is one thing–holding your employee’s job while he or she takes time at home for a variety of health and family-related reasons isn’t easy, but it’s doable. But paying them to not work? That’s something else entirely. Several of those companies I worked for were very small or nonprofit organizations, which meant there was little to no wiggle room for things like bonuses or other performance-related measures, much less a coffer set aside to pay people who were expecting children.

But what about Netflix?

The big story last week in this world was about Netflix offering a full year of paid leave for new parents. Having a baby? No worries–take up to 12 months off. People declared the company forward-thinking and were quick to jump on board with the idea.

But this wasn’t forced. It wasn’t legislated. Nobody made them do it.

They chose to.

Why? Probably because it’s a great recruiting tool. It’s also pretty awesome as a retention tool for new parents.I’ve talked before about when our girls were born and my boss didn’t seem especially receptive to me taking ANY time off, even though I only requested a week. 

And you know what? That’s what started the ball rolling for me to leave that company and find an employer who did offer me some flexibility to support my family, whether financially or by being there physically for them. I think more companies will offer slightly-less-boisterous benefits in this area over time, because they’ll see (as they did with medical insurance, workplace flexibility, and a host of other benefit offerings) that it makes them more competitive, makes employees happier, and creates a better working environment. 

Last year I was talking with a company about a new leave program for fathers. The company had been losing male employees in the 20-35 age range at 2-3 times the rate of other employee groups, and they determined that it was the long hours surrounding the birth of a new child that often contributed to the turnover.

So the company began offering 1-3 months of paid leave for new dads and reversed the negative turnover trends within a few short months. That’s an exciting story and one that I expect to hear more often as time goes on.

Facebook got a series of kudos and strange looks when it offered to freeze eggs for young ladies who would rather work than start a family. It’s the same story. The company wanted to offer something different that appeals to a specific audience and makes it more competitive than others in the space. 

The recruiting spin

I’ve recruited for some great (and not so great) companies. The thing that I absolutely loved about one of the good ones was that I could play up some of the benefits we had that no other company offered. Flexibility? We don’t just say it, we live it. Healthcare? We have you covered. Need personal leave? We treat you the same as we treat the CEO–no questions asked. Have an issue? You can get access to anyone, up to the Owner/CEO, in moments.

I’ll say it again: I loved representing the company that offered what others didn’t. And that’s why I think Netflix is doing this. And that’s another (smaller) reason I’m not keen on the government attempting to force employers to provide paid leave for parents. It has to be a choice for the company. Some can afford it and some can’t. Some would be overly burdened, some wouldn’t care. But it’s not a blanket solution, at least not overnight.

Seriously, I’ve been there

When my son was born almost a year ago, my wife had no work benefits to continue her pay. She had some accrued leave and then we used savings to keep her at home until she was ready to go back to work at the end of her leave. And it was fine. I didn’t ask or expect anyone else to foot the bill for her to stay home, because it was our choice in the end. Just as it is her employer’s choice to offer the benefits it does.

This isn’t the same as the Civil Rights Act or the ADA. People don’t choose a specific color, gender, or disability. The discussion here is whether we should pay people who choose to have children, and I’d say it’s up to the company to decide, not the government.

I’d love to hear your thoughts…

 

firing poor performers

Awhile back I received an email from a reader about how to let an employee go who is not performing adequately. It surprised me because I don’t know that I’ve ever actually written on the topic specifically before. I want to talk about some of the dos and don’ts, but first, a story.

The Time Thief

A few years ago a manager called me to see if I could look into an employee’s time card. The employee was consistently putting forty hours of work on his timesheet, but he was arriving late, leaving early, and taking long lunches on a regular basis.

So I reached out to the company managing the security access point to get the gate logs for this person. Mind you, this is just getting me the time that he swipes into and out of the gate outside the building, not the specific time he’s at his computer and actually productive.

A quick dump into Excel and a few calculations later… My jaw dropped.

The records showed that this person had worked six to six and a half hours per day on average for as far back as the gate checkin log showed (several months). I was dumbfounded that it took this long for the attendance to be discovered by the managers on site. Just in that one spreadsheet alone the employee had been paid for nearly 200 hours of work he never actually performed.

I quickly launched my investigation, talking with his supervisor and our site manager, gathering all of our time data to make sure everything was correct. You see, as a federal contractor, we were billing the government for all of the time the person supposedly worked. If it could have been proven that we were knowingly allowing this sort of behavior to continue, half of the company’s employees could have lost their jobs overnight–not to mention the fines and other penalties levied by the auditors.

So, after a few days to gather everything, I got the employee’s supervisor and the site lead to sit down with me on the phone from six hours away. The employee came in and I told him what I had found and asked if he had any questions. His only response was, “Can I file for unemployment?”

Then the real story began. The employee was quickly approved for their unemployment claim and started receiving checks shortly after being terminated. I spent the next four months fighting that unemployment claim, trying to get the investigator to understand that this wasn’t as simple as poor attendance or a “one strike and you’re out” policy–the employee put the entire company at stake with his behavior.

A final written appeal won the case for the company (felt like a personal victory for me as well) and the employee had to pay all of their unemployment compensation back to the state for lying about their reason for termination. What seemed like a slam dunk investigation and termination finally came to a close and the organization and I could move on to more meaningful activities.

Terminating Unproductive Employees

In some ways, these can be the “easiest” terminations to make. I absolutely hate having to drop employees who are productive, good people. But when someone has had chances, warnings, and other opportunities to make good on their end of the deal and have failed (willingly or not), I have to say that it’s easier to handle the process.

I’ve always thought of it this way: the employee chooses the path–I just help them walk down it. 

The most basic principles that have helped me through all of the terminations I’ve carried out are these: be courteous and respectful. If you have already built trust and rapport with the employee, it will help in this conversation. If not, there might not be much you can do to build it at this point. If you were sitting on the other side of the table, how would you want to be treated? It sounds trite, but it’s indubitably true.

The implication of the original question that got me thinking about this topic was that the person didn’t want to terminate the employee and wanted to give them “just one more chance” after already failing numerous times. This is dangerous and can set up a painful precedent for the organization. It can also damage leader credibility, so it’s important to make the call, take action, and move on.

What advice do you have for terminating employees?

 

Last week I took a vacation with my family to enjoy the lovely beaches of south Alabama. I was able to squeeze in a little reading, and here are the fruits of that labor. Today we have book review on Leadership in the Crucible of Work: Discovering the Interior Life of an Authentic Leader by Sandy Shugart, PhD (Amazon).

leadership crucible work sandy shugartThe book was interesting, and I read it like I mentioned in my previous post on reading for leaders. Here are a few insights from the book:

  • Sometimes followers are as important as the leaders. The author talks about the importance of having a clear, strong leader in musical ensembles–an example I’ve never considered previously. Leaders jumping up to “take the reins” in those situations would hamper performance, not improve it.
  • I think I wrote about this another time, but it bears repeating: leaders should ask themselves “Am I seeking genuine commitment from my associates, or deep down do I only want compliance?” There is a major difference in the two, and it would do us all well to think about the people we lead. How can we best garner commitment from them without forcing them into a mindset where they must comply blindly?
  • Bouncing off the previous comment, if you truly want commitment, are you willing to give it yourself? Like so many things (respect, attention, value) when you want something, you have to offer it to others before it can be returned to you.
  • Do you truly believe in the talent of those you lead? Do you believe they are great at what they do? Because if you spend all of your time thinking, “I could do that job better than them if I had time,” then you’ll never have a great team. And if they truly are not that great, consider replacing them. It’s not worth it to walk around all the time second guessing people.
  • This quote:

The most dangerous thing about communication is the illusion it occurred.

  • A note on the price of experience: “We run to the familiar. This is the price of expertise, the loss of the innocence of a beginner for whom nothing is familiar and so all choices are still possible.
  • And finally, a note on collaboration. We hear the word often and are expected to just “know” what it means. But it doesn’t have the same definition in the mind of each person (hint: for some it looks like an opportunity for micromanagement under the veil of collaborative working). The author’s comment on it made me stop and consider my own method of defining what collaboration looks like: collaboration enlarges leaders and those being led; micromanagement diminishes both.

So, if you’re looking for a book on leadership with some good, thought-provoking takeaways, you might consider checking out Leadership in the Crucible of Work: Discovering the Interior Life of an Authentic Leader by Sandy Shugart, PhD (Amazon link).

debbie mcgee IHRLast year I met a subject matter expert on international HR issues through my local SHRM chapter. A few months later, when I was looking at some HR challenges affecting our expatriate employees, I ran across her again. When I spoke at ALSHRM in May, she was presenting across the hallway on international human resources best practices. In other words, she knows what she’s doing! So I wanted to take a moment to chat with her and learn more about the special niche she fills.

Ben: So, let’s establish your credibility. Tell me about your background. 

Debbie: I have been working with international employee issues for more than two decades. 13 years in international individual taxation and another 12 years in International Human Resources/Global mobility. I have worked as a Senior Manager with Big 4 Accounting Firms, as well as run corporate Global IHR departments for multinational corporations with more than 2,000 expatriates.

In addition, I have managed more than 60 country combinations, including Asia to Europe, Europe to the Americas and  Americas to Asia/Europe. That means travel is a big part of my work: I’ve visited over 30 countries and even lived in Europe for 6 years.

As far as credentials, I am a CPA as well as GPHR, so I think with both sides of my brain and easily switch the conversation from talent development to accounting/taxation for that same talent. My current role is President and CEO of PZI International Consulting, Inc, where I helps clients effectively and legally expand their talent into global marketplaces.

Ben: How did you end up working in an international HR role?  

Debbie: After managing national accounts for the accounting firms and designing programs/policies for their international HR departments, it was a natural progression to move to the corporate side.  I wanted to make a bigger impact with one company and felt by going in and designing the program as a best practice Center of Excellence from the ground up, I could impact not only the corporate culture, but also have an impact on individual employees career as well as quality of life.

My first role as a Global Mobility Manager was with an accounting client.  They wanted to grow the program internally and focus on more than the tax/payroll piece of the IHR program.  I was brought in to design and run that function.

Ben: What was your favorite part of working globally within HR?

Debbie: I like helping people and knowing that I made a difference in someone’s life.  As a CPA, I felt I seldom gave good news to a client, but as a Corporate Head of IHR, I could directly affect an employee’s quality of life while they were working abroad for the company.  Often employees would call me on their last day at the company to thank me for helping them and their families during a difficult situation while they were based abroad for the company.

My main goal was to make the family unit a successful team while they were abroad.  They were the face of the company, whether in the local markets, the local schools or the foreign workplace.  If they were challenged, happy to be there and excited about what they were doing, that would reflect well on the corporation as well.

Ben: What was the most challenging part of international HR work?

Debbie: Human Resources are often a last minute thought for many business units.  They are so entangled in getting the business, closing the sale, that the human capital piece of it is seldom thought through.  I worked diligently at changing the corporate culture around what was required to expand the company into international markets.  I spent a lot of time training the business units, the other functional areas, rather than waiting for them to come to me, I went to them.

I think being proactive and making people aware of why they need to talk with you lets you be an equal stakeholder in the business development, rather than a stumbling block for the business units.

International HR/Global Mobility is still not a well understood area within organizations.  It isn’t until something goes wrong, someone is in jail, someone is turned away at a border, that many companies begin to look at this function and realize the complexity of it and why they need to have people running it that know all the questions to ask and where to find the answers.

Ben: If you could go back and offer some advice to yourself as you were getting started in this type of role, what would you say?

Debbie: No one knows everything.  Being a subject matter expert is a good thing, but you have to understand the business and the business needs.  Otherwise just because you may know the answer, doesn’t mean the business wants to hear it.  Most important part of being a stakeholder in a business is to :: Ask, Listen, Solve.  In that order.  Don’t assume you know the answer before you ask the question.

Ben: Any closing comments, wit or wisdom?

Debbie: Companies should grow their networks, read up on developing trends in the IHR industry. “the authorities haven’t caught us yet” is no way to do business internationally.  Investing in your international HR group is as important as investing in your 401k plan or your product development. Every company today should be looking at how they can expand into international markets, the business is definitely out there.  Expanding into these markets means expanding your human assets into those markets.  Make sure you are as diligent with your human assets as you are with your product assets.

Ben: Thanks for your time, Debbie! This has been incredibly insightful.

—————-

I hope you enjoyed this interview exploring some of the ideas around international HR practices with Debbie McGee. You can find her at her website or on LinkedIn.

What are your thoughts about international HR? Is it harder than domestic HR? How did some of these comments influence your opinion?