According to Deloitte, more than 80% of learning is informal in nature, yet many companies are still unsure how to harness this critical mass of activities to improve performance, minimize risk and deliver organizational value.

Consider this: if you have a toddler, that child can probably pick up your phone, unlock it and open their favorite app. But it’s likely that you haven’t formally created content or delivered a course to the child on how to accomplish this task. It is one of the many learned behaviors that are picked up informally. While simplistic, this example highlights the fact that not much has changed about how people learn new concepts. The difference is that we now have technologies in place to help track, curate and analyze the impact of those learning activities.

Value and Risk: It’s All About Perspective

Discussions around informal learning typically branch off in a few directions. The conversation either turns to the incredible risk associated with “handing over the keys” to the employees to curate and manage their own content or focuses on the supposed anarchy that will reign if learning resources aren’t governed by a single, cohesive L&D team. But there’s another story–one that tempers some of the fear by pointing out the value and opportunities presented by adopting a more informal approach to learning.

Click here to continue reading and to register if you’d like to catch the webinar!

What does engagement mean to you and your company?

That’s a question I’m trying to answer with a new research study. I’m partnering with my friend Jason Lauritsen to examine the ins and outs of engagement in a very hands-on manner. Instead of just looking at the theory, we’re digging into the specific practices that YOU think drive the highest engagement in your workplace.

The survey takes about 10 minutes to complete, and I’ll be randomly selecting two participants to receive Amazon Gift cards from the people who take the survey through this URL in the next 72 hours. You must enter your email address at the end of the survey in order to be eligible to win. Ready, set, go!

Click here to begin the survey.

In case you’re curious, yes, I’ll be writing on these results in the coming weeks to help you understand how and why they matter. I’m also presenting at a few conferences in the next few months and will be weaving the results into those events as well. Your responses do matter!

Employee referrals are not a new topic in the HR and recruiting space. But the truth is that many companies phone it in when it comes to referrals, often leaving them with lackluster results. It takes a little time, effort, and intention to get a referral program into good shape, and the benefits are far-reaching.

Hiring A Players with Referrals

Data from one study shows that referrals are the best source for finding quality hires. Another expert says that referrals should be one of the top metrics that talent acquisition leaders focus on. And our own data at Lighthouse Research says that more than 80% of companies believe that referrals are important for measuring sourcing performance. Yet more than four out of ten employers are measuring nothing or only anecdotal information when it comes to referrals as a source of hire.

Referrals as a Talent Channel

You don’t create a great place to work. You defend it. -CEO of a firm with multiple “Best Places to Work” credits

Let’s face it. Many employees have not had the opportunity to work at a company with a great culture. But when they find one they inevitably become protective of the culture. This is a great tool for ensuring a strong referral program without having to constantly weed out poor performers and poor fits. It’s been said that A players hire A players, but B players hire C players, and companies of all sizes, industries, and geographies are trying to find those critical A players to remain competitive.

The right referral program needs to not only prioritize referrals as a source of hire, but it also needs strong technological underpinnings to help manage the volume and variety of referrals. Systems like MintMesh and others provide that functionality and help companies to get a grasp on what is typically operated as a “shoot from the hip” type of program. From an analytics perspective, being able to track quality of hire, time to fill, and other metrics and tie them back to the referral source is an incredibly valuable practice. Gathering the right data to support your referral practices is going to generate higher quality hires, ensuring those A players end up at your organization, not at the competition.

Using Referrals to Improve Diversity

Diversity has become an HR buzzword, thrown around in meetings and leveraged for positive PR, but what does diversity really mean?

Legally, diversity refers to the age, socioeconomic background, gender, race and ethnicity differences in your workforce. However, the concept of a diverse workforce encompasses more than that, capturing more nuanced elements such as religious and political views, social status, personality, communication styles, and cultural values.

Diversity sourcing, by extension, is a dedicated effort to attract, engage, and hire a diverse slate of candidates. An interesting twist on the diversity sourcing discussion is in referral practices. Anecdotally, it’s often believed that referral hiring will diminish diversity, encouraging people to refer their friends and colleagues that are just like them. In reality, diversity sourcing can be vastly improved with solid, intentional referral practices.

While virtually all companies say they encourage diversity, and the evidence for diversity as a business performance enhancement is clear, the question remains – how can we source and recruit a diverse workforce? There are three keys to success:

  1. Building a Diversity-Driven Culture-Having the best diversity programs possible won’t matter if your culture doesn’t support it. Diversity begins and ends with your company culture. It should be part of who you are as a company.
  2. Expanding Your Diversity Definition: In a conversation last month with the head of human resources for a U.S.-based construction firm, the leader said that the biggest challenge was filling a key technical role with diverse candidates, because the company had come to see the value in not just diversity of gender or skin color, but in diversity of thought. Candidates that entered the role from diverse backgrounds performed better, connected more thoroughly with their customers and peers, and lasted longer than more traditional candidates.
  3. Employee Referrals: Current employees are living, breathing advertisers for your company. Their testimonies about your organization provide an authentic initiative for potential hires. Missing out on their referrals could be the difference in being a market leader or a laggard. And as mentioned above, this allows your company to target more diverse hires in a way that traditional job postings and advertising just can’t.

Referral Benefits for SMBs

While referrals can help any company, I see the benefits to small and mid-sized businesses as being some of the most valuable.

Referrals are the most powerful tool in recruiting. A provocative statement, sure, but also proven to be true. Recruitment is the lifeline of all organizations and referral programs can deliver top talent to your door at a fraction of the cost of traditional recruiting. According to Dr. John Sullivan, if 50% of your company’s hires aren’t coming from referrals, then you need to get proactive with your referral program.

This is even more true for small and mid-size businesses. With tight recruiting budgets, limited organizational agility, and a need for highly engaged workers from day one, the SMB market can benefit from referrals by reducing costs, lowering time to fill, and ensuring long-term retention and engagement.

Cost

Costs for traditional recruiting sources far exceed those of referrals.Traditional recruiting can cost anywhere from $4,000 to well over $18,000 per hire, but recruiting with a referral program costs closer to $1,000.

Even offering financial incentives to employees for referrals is still a small price to pay for creating an army of talent scouts. Offering a $1000 bonus would still keep the referral hire cost far below that of other methods.

Other cost savings associated with hiring referrals include lower spending on advertising, job boards, and agency fees. Meritage Talent Solutions founder Kara Yarnot found that the typical agency charges a fee of 20 percent of a hire’s first-year salary, equaling $20,000 for a single $100,000 hire. If we’re comparing that to the referral program cost per hire data above, your organization could have hired 20 people for the same cost of one hire through an agency.

Referrals save costs and benefit the bottom line.

Speed

In today’s fast paced workplace, speed is crucial. Referrals can significantly increase hiring speed over traditional recruiting methods. Referrals are the fastest method to hire with an average of 29 days for referrals. Compare that with 39 days for job boards, and 45 days for career sites, on average.

This is due in part to the fact that you have a broader network when you’re prioritizing referrals. Your employees know the company better than anyone and with the rise of social media, employees have networks of contacts at their fingertips ready to tell their peers and friends about openings at your organization.

To get a sense of the size of this potential network, consider this: Pew Research estimates the average person has more than 600 social connections. If your business has just 100 employees, that’s a potential 60,000 people that can learn about your openings with a good referral program.

Not only do referrals start faster–they also onboard faster. A key part of onboarding, beyond understanding the workplace policies and requirements, is assimilating into the social fabric of the organization. By having a social connection already in the firm, the referral can onboard faster. This equates to higher productivity and performance from day one, which is critical for SMBs that don’t have extensive resources to train and develop competencies in new hires.

Referrals are faster to hire, start working quicker and out perform non-referrals.

Retention and Engagement

One third of new hires quit their job after about six months and 32 percent of employers say they expect employees to be job hoppers. This demonstrates the “revolving door” attitude employees have towards companies, but referral programs can increase job loyalty.

Referral programs are proven to decrease turnover and increase retention. 46% of referral hires are retained after one year as opposed to 33% for non-referrals. With referrals producing 25% more profit than their peers, this is doubly valuable for employers.

As mentioned in a recent blog, great companies are made up of great people, and referrals are the best source for bringing those great people to your front door.

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Sourcing isn’t a new activity in the talent acquisition world. There have always been hard to fill jobs, but we’re seeing more of this kind of issue than ever before. In fact, a recent CareerBuilder study puts the cost of open positions at nearly $800,000 annually, tallying up costs that ultimately hurt business performance. Organizational leaders say these are the top problems caused by jobs they can’t fill:

  • Productivity loss: 45 percent
  • Higher employee turnover: 40 percent
  • Lower morale: 39 percent
  • Lower quality work: 37 percent
  • Inability to grow business: 29 percent
  • Revenue loss: 26 percent

In addition, our Lighthouse Research study of talent acquisition priorities pegs sourcing as a top area that business leaders plan to focus on in the coming year (just 1% behind onboarding, which was the highest priority).

In this episode of We’re Only Human, host Ben Eubanks is joined by the amazing Madeline Laurano, co-founder of Aptitude Research and co-host of Research on the Rocks, another HR Happy Hour network show. She and Ben discuss some of the key aspects of sourcing, such as employment branding, recruitment marketing, and technology’s role in the process. Madeline shares some great insights in this episode, and she stumps me at the end with a question that shouldn’t have been that hard to answer!

In addition, they examine the impact of AI, machines, and algorithms on the sourcing world, breaking down some of the hype and illuminating an amazing competition that pits recruiters against robots to see who is the best at sourcing great candidates. Not to spoil the surprise, but the real story here exemplifies that to get the best results, we need humans and machines working together. Get all this and more in the latest episode of We’re Only Human on the HR Happy Hour podcast network.

*Please note, if you like the show topic and want more in-depth discussion of sourcing and recruiting in a future episode, please feel free to comment below or email me!

Check out our other episodes in the We’re Only Human podcast archive.

global employment lawsDid you know, in some countries it is illegal to email employees after normal work hours? This is just one example of the interesting global employment laws that can catch an unsuspecting employer at an inopportune time. For instance, several years ago I was sending some workers to Saudi Arabia, and we found out at the last minute that we had to abide by the “Saudization” requirement, which forced us to hire local workers to support the contract, even if they were not qualified to do the work on the project. It pays to understand the requirements of the country you are working in.

My company Lighthouse Research has partnered with Papaya Global for our 2017 Global HR Practices study, and we asked companies about their level of risk and confidence in their existing resources. One of the preliminary findings of our study highlighted that 70% of companies are at-risk due to limited understanding of local compliance requirements. Additionally, nearly three-fourths of companies manage the complexities of their global workforce in-house, creating a vulnerability to potential problems if they are unaware of local customs, requirements, and regulations.

Did You Know? Global Employment Law Differences

It has been said that companies based in the United States have it “easy.” In terms of labor laws, there are relatively few that govern how businesses operate. Take the common “employment at will” doctrine for example. In essence, companies can terminate workers at any time and for any reason as long as it’s not explicitly based on a discriminatory reason. In other countries, work contracts, workers’ councils, unique benefits requirements, and strict termination rules that define the employment relationship are common.

  • Other countries however, commonly rely on actual employment contracts to hire workers. Because workers are tied to contracts, terminations often become complicated. For instance, in Dutch employment law, the statutory period of notice for an employee is one calendar month.
  • During one research interview, an international human resource management leader at a German company took some time to explain her challenges with the local workers’ councils. In her story, the company was trying to gather data through an employee survey, but the workers’ council would not allow the HR team to share the information with the consulting partner to analyze and interpret the data, creating a stalemate.
  • Other challenging areas include benefits and leave. For instance, employers must pay Chinese workers 300% of the value of any unused vacation days at the end of the year
  • Brazil requires employers to offer employees thirty calendar days of paid leave after twelve months of service.

It’s clear that without some awareness of the requirements for global employment, companies can often make costly missteps, but there are ways to minimize the risk associated with global employment. Want to learn more? Check out the rest of the blog at Papaya Global to learn how to get educated before it’s too late.

At my last check, the pass rates for the HRCI exams were somewhere around 50%, meaning that half of the people that show up to take the test fail the exam. I’ve been working with people preparing for their PHR and SPHR exams for nearly eight years, and I’ve been giving similar advice to SHRM-CP and SHRM-SCP preppers in the last 12-18 months. For what it’s worth, I have both SPHR and SHRM-SCP credentials. In that time I’ve come to realize that there is one clear reason why people fail the exams, and I’ve seen it proven over and over again. But first, let me use a learning model to help show you where the breakdown is. Below you’ll see Bloom’s Taxonomy, a model that explains the successive levels of learning as someone progresses from “newbie” to expert.

Bloom’s Taxonomy of Knowledge

blooms taxonomy learning

This explains the biggest challenge that most of the test prep tools in the marketplace have (even my friends at HRCP). Most of them are designed to move someone up the scale, but the farthest they get is knowledge or even comprehension. In some cases, that may be enough to help someone complete the PHR exam, because it’s heavily based on recall and summarizing existing information.

However, it’s not going to get someone through the SHRM exams or the SPHR, either. In order to be successful there, learners have to move up the ladder toward synthesis of knowledge. At that level, learners must be able to:

  • infer ideas from information
  • imagine outcomes
  • predict decisions and best practices
  • combine separate ideas to create new strategies

If it seems like a lot, it is. And the truth is, that doesn’t happen by reading a book. Theory is great, and understanding the theory and history behind HR is a good thing. However, decisions at work are not based on just on theory–they require more.

And while people are upset when they don’t pass the exam, often claiming “the questions were nothing like what I studied,” the truth is that is probably a good thing for businesses needing HR support that can think for itself, not just recite study preparation materials. On the other hand, I get it–you want to prepare for the exam and not feel like you’re rolling the dice when you sit down in the testing center. So I’m going to teach you the principle that I’ve used to create the PHR/SPHR audio course, the PHR study course, and the SPHR study course, helping hundreds of testers to prepare for their certification exams over the years.

Getting from Theory to Application

When I taught a live study course a few years back, one of the things that I did every night, without fail, was to mention some recent piece of news or information that tied in with course materials. Studying about ethics? Let’s talk about Enron and its ethical failures. Discussing executive compensation? Let’s look at the new Supreme Court Justice nominee’s beliefs on compensation limits for executive leadership. In each opportunity, I would find relevant information to help take the theories and ideas from the materials and make them real for my students.

This is why I have created tools like the audio course, the prep courses, etc. I want to give practical information and stories so people can “get it,” versus just memorizing more text. I learned this the hard way when I got out into the “real world” of HR from college, and that translates here as well. After four years of studying and learning all of these basic principles, I had to go out into the real world and apply them.

I quickly realized that upon leaving college, I was about 10% prepared for what I needed to be successful. The rest would come from hands-on experience and practice, despite spending money, time, and effort on a degree specialized to human resources.

The lesson for you, if you’re preparing for an exam of any kind, is to look for ways to tie the learning back to your real world experience. Or to current news stories. Or to anything that is practical. You need that mental anchor not only to remember the ideas and concepts, but to understand how they are applied. When people ask me about my study resources, that’s the primary thing I explain as a difference between anything else on the market. Every week I talk about real experiences, real stories, and how to apply the concepts in real life. And my students are more successful than the average test taker, so there’s that.

What are your thoughts? Have you taken an exam and failed–what do you think of this advice? For those of you that have passed, what’s your take?

One of the conversations I’m having more often is around this concept of the contingent workforce, but in a recent presentation I realized some people weren’t aware of the issues surrounding this group. In essence,this segment of the workforce in the United States is made up of temp workers, contractors, freelancers, part timers, and other non-full time labor. With me so far? Now, let’s look at how big of a deal this is:

“Up to 30% of the Fortune 100 workforce is contingent. That number is expected to increase to 50% by 2020.” Source

When I read that statistic recently in a research paper, the magnitude of this shift is in the makeup of the workforce really hit me. There are three key areas that this trend is impacting businesses: a focus on skills, the gig mentality, and a results-oriented approach. Nontraditional workers are making up an ever-increasing portion of the overall workforce, and for companies that don’t have a clear plan to take advantage of these workers, this can slow down and even hinder their growth.

The Focus on Skills

When companies need payroll support, they seek out companies that know and do payroll on a daily basis. It’s no different when they are looking for nontraditional workers. The organization has a problem, and it needs a solution. In this case that solution happens to come in the form of a person with a specific skill set to get the job done.

Often times, those skills are needed for a temporary basis if they are highly specialized. In this area, staffing and contingent workers can fill the skills gap without a long-term commitment on the part of the employer. According to one PwC study, six in ten CEOs believe that there is a skills shortage. At the same time, that shortage can be mitigated effectively through the use of temporary or contract workers for their specific skill sets.

The Gig Mindset

With the rise of the “Gig Economy,” companies and workers are seeing less of a focus on the traditional employer-employee relationship. The downside of this is that many contingent workers do not receive benefits from the employers, whether financial or personal. This Workforce article highlights one worker who felt scorned by someone she supported, which ultimately impacts her loyalty and commitment over time. Companies need to be sure they treat their contingent workers with the same respect and appreciation they afford their full-time staff.

On the other side of the equation, driven individuals with extensive skill sets can differentiate themselves in the market and command the compensation they deserve. Instead of a single company having a monopoly on a person’s talent, the worker can partner with multiple employers on smaller jobs and tasks. In addition, it allows the person to focus on working in areas of strength, which we know has positive effects on the worker’s ability to reach higher levels of success.

A Results-Oriented Approach

If companies want to attract and retain high quality contingent workers, the focus needs to be more on the results they achieve and less on the process they use. In my mind, this seems to tie together a combination of two strong movements in the world of work that seem to fit here.

  1. Dan Pink’s book, Drive, focuses on how to engage workers through three intrinsic methods: autonomy, mastery, and purpose. These three words have taken on a power all their own as companies try to create compelling work environments that engage employees and allow them to do their best work.
  2. The Results Only Work Environment (ROWE) movement was started at Best Buy’s corporate office years ago as a way to move away from the traditional considerations of how long employees were at the office. Instead, leaders focused on whether employees were producing results. This shift forced managers to examine employee roles, determine what specifically drove performance, and measure those activities effectively.

Management of Contingent Labor

One of the challenges of contingent labor is that it’s made up of people that need to be treated like, well, people. They need to be recognized for their efforts. They need training. Their performance needs to be assessed. The problem, as many HR pros will tell you, is that we don’t always want to be in charge of the contingent workers. Some of the more common reasons:

  • The person isn’t an employee, so procurement needs to handle them.
  • I can’t treat them like an employee or we might run into issues with the IRS or Department of Labor.
  • With a temp hire the advantage is having the agency handle payroll, training, etc. We are offloading those tasks for a reason.

You get the picture. There are laws on the books that don’t provide the flexibility for companies to handle this issue without involving some risk. On the other hand, there has traditionally been a silo mentality breaking out contingent hiring from “regular” hiring practices.

The problem won’t be solved today, and there are enough companies making errors with the current laws that we probably won’t see any changes to the legal side of the issue for some time. But HR can work to take ownership of the process and the contingent workforce while still developing safeguards to keep from running afoul of legal requirements.

In the end, the cause for this issue is partly due to the mindset of the HR population, and it’s partly due to the existing legal framework that governs how we employ our staff.

Take this as a reminder that “the way we’ve always done it” might not be the best way to address issues as you move forward. Reevaluate the assumptions you might have about how work gets done. I’m excited to see how the legal environment changes over time to account for increasing work flexibility and a highly mobilized workforce.

How do you handle your contingent workers? Does your procurement team manage them, or does HR play a role in the process?