How to Move HR from Operational Fluff to Strategic Partner
Authored by Ben Peterson
Here’s a truth we often seem to forget: people create value, not companies. People are the ones who have the capacity to be great and do great things, and these actions drive businesses forward. People are a company’s biggest asset, and therefore, the department that’s focused on people — HR — is also an invaluable component of the business.
HR done right is crucial to the success of any company. That’s why the department whose job it is to maximize human potential needs to be involved in business strategy and directly contribute to the goals of the overall business — not just fulfill transactional functions like payroll and benefits.
HR isn’t strategic, and it’s hurting your company
However, HR is not a strategic partner in most companies today. We’re experiencing a value perception crisis in which HR’s true potential is not perceived. Edward Lawler argued that in 2015, HR wasn’t involved in business strategy anymore now than it was 10 years ago. He wrote in a piece on Forbes, “HR spends less than 15 percent of its time as a strategic business partner.” When HR is involved, he says, organizations not only function better but can more easily implement strategic changes.
By not perceiving or leveraging HR as a strategic partner, businesses are losing money. The high-dollar cost in HR failure includes detrimental issues like high employee turnover, low employee engagement, decreases in sales and more. On the flipside, financially stronger organizations are strategic about their people and execute this strategy through the HR department to create attractive company cultures that lead to high productivity, profitability, and retention.
Where we can improve
We have a void to fill in the perception of HR, and we need to fill it fast. Gartner presented research calling out two large market opportunities within the HR space: first, strategic HR skills transformation and second, HCM technology to support HR strategy. Currently, many organizations are keeping their HR departments buried with menial operational tasks like company policy and compliance and recruiting via listing, interviewing and posting — many of which can be automated using HR software, as Gartner points out, to help free HR for strategic action.
It’s understandable that when a company is just starting, HR will be performing a lot of transactional work to set the foundation. But rather than waiting until they’re fully matured to think about making HR strategic, companies should feel more urgency to create higher business value through HR as soon as possible. Let’s move the curve from operational to strategic faster; your money and efficiency depend on it!
Getting to the top of the pyramid
Think of HR’s role as a pyramid. Basic operations like payroll form the base; general operations like reporting, talent acquisition, and compliance tracking are the second tier; and strategic operations like culture, engagement, employment brand, operational efficiency, internal influence and learning and development are the top tier. Most HR departments are still stuck at the base, while a few are working on building the second level. Fewer still make it to the top, where HR fulfills its true strategic potential. What they need is a way to boost themselves up from that broad, transactional first level into a more strategic role — a force multiplier. HR technology is the solution, not only for rising above the transactional level but for elevating mid-level practice to the top of the pyramid with metrics, reporting and added bandwidth. Technology can satisfy the operational and administrative demands as well as aid the strategic side of HR. That’s a win-win.
HR professionals want to be strategic partners, and they want to add high, strategic value, faster. By investing in technologies that help them get there, the HR department and the C-suite can gain mutual trust and collaborate to meet critical business goals. When it comes down to it, the business has to support the profession that supports its greatest asset: people.read more
Authored by By Michael Schneider
What comes to mind after reading these words? “Honest,” “Awesome,” Smart,” and “Punchy”… Was it HR? Probably not. These words aren’t typically synonymous with HR and recruiters (until recently). Whether it’s in corporate America or an agency setting, HR/recruiter stigmas aren’t great: cost centers, the principles office, and necessary evils are just a few that I’ve heard.
As a former third-party recruiter and an HR specialist, I can understand where these negative perspectives come from. That’s why I appreciate the premise of Top Recruiter. Finally, HR/recruiters have a global stage that’s showcasing the positive business impacts of talent acquisition.
For those who haven’t had a chance to check it out, Top Recruiter is a global movement of CEO’s who are re-engineering the business side of talent. The brand is driven by a groundbreaking docu-series broadcasted across channels like YouTube and Facebook.
At the helm is executive producer and talent acquisition advocate, Chris LaVoie. His goal, along with his cast of CEO’s, talent leaders, investors, and strategists, is to challenge contestants (HR/recruiter entrepreneurs) to get out of their bubbles, band together and reinvent an industry. The question driving all of the hype is “How would you re-engineer the business side of talent?”
Some important topics that have already been discussed on Top Recruiter are:
Turning a cost center into a profit center
Unlike profit-driving functions such as sales, HR is often viewed as a drain on the bottom line. However, if you look close enough, there are ample opportunities to increase efficiencies, streamline processes, and generate revenue.
Attracting, hiring, and retaining the “right” employees could be worth millions alone. For example, a Fortune article revealed that Google’s top technologists (vs. the average) are 300 times more productive. With the average Google employee generating over $1 million in revenue per year, recruiting an all-star has the potential of adding $300 million in revenue each year.
Also, there are cost savings opportunities when it comes to decreasing employee turnover, increasing engagement, and reducing recruiting spend by building strong talent pipelines.
Improving the candidate experience
Candidate experience is a hot topic in talent acquisition. In a few words, it refers to a prospective candidate’s opinion of your recruiting, interviewing, hiring, and onboarding process.
If negative, a poor candidate experience can adversely impact your organization’s employer brand. Possible side-effects of a poor employment brand are longer time-to-fill ratios, decreased employee morale, and overpaying for talent. On the flip side, per NextWave, a startup that specializes in employer branding, a strong brand can lead to a 50 percent decrease in cost/hire and a 28 percent increase in employee retention.
Being a strategic business partner
Organizations are coming to grips with an important truth that was elegantly said by Simon Sinek, “100 percent of customers are people. 100 percent of clients are people. 100 percent of employees are people. If you don’t understand people, you don’t understand business.”
Companies now have roles called HR business partners where the incumbent is responsible for aligning business objectives with human capital. They serve as an internal consultant to management on people-related issues and act as an employee advocate.
The times when HR and recruiters were seen as necessary evils and policy pushers is over.
The docu-series, Top Recruiter, is empowering HR professionals and recruiters to think differently. To change they way we approach our work and start focusing on savvy business strategies to drive bottom-line results.read more
Authored by By Peter Economy
Take your business from good to great by applying the habits of today’s most successful leaders.
In business today, change can be rapid and unexpected. A great company one day can be not-so-great the next. Your best people may come and go, and your business strategy may need to change radically overnight to keep pace with ever-shifting markets. Challenges like these can make leading a successful business difficult, but the most successful leaders have figured out how to build companies that can thrive in even the most difficult circumstances.
Extraordinarily successful leaders get the most out of their people by helping them become highly motivated, engaged in their jobs, and happy. Adopt these five habits of extraordinarily successful leaders and watch your company’s performance quickly surge.
1. Set the bar high
The best way to encourage your people to consistently give their very best on the job is to set the bar high and then challenge them to meet or exceed your expectations. Delegate some of your most vexing problems to your employees. Set realistic goals for them, treat each employee as a valuable member of your team, and give them the autonomy to make decisions and do their work as they see fit, so long as they meet their performance standards and your expectations.
2. Build a productive work culture
A workplace that is industrious, trusting, open and fun will be the most productive and successful, even during turbulent times. Be open to new ideas and suggestions that come from your employees, and show them that their voices are being heard and their efforts appreciated.
3. Be visible and honest, and keep promises
Make the time to manage by walking around. Be visible to your employees. Find the pulse of your organization by observing your employees at work and asking them for their views on how they think things are going at their level, management’s level, and throughout the organization. Be frank and honest with them, and never make a promise you can’t keep. Listen to their concerns and regularly schedule meetings to strategize and problem-solve with your employees.
4. Make your team a part of the plan
While it’s the job of a leader to set the course for the organization, your employees’ knowledge and skill are critical for your success. Direct your employees toward your goals, but be as transparent with your people as you can be. Involve them in developing company plans and goals, and then show them what their role is in achieving them. When your employees understand the overall plan, they will view themselves as an important piece of the puzzle and may better understand your plans for the organization.
5. Celebrate your team’s successes
Take some time each week to celebrate your team’s successes and to thank your people for their continued efforts. A sincere thank you for a job well done can be a powerful motivator. Thank your employees personally and promptly when you find them doing something right by writing a quick email or text message, or by dropping by their office to tell them in person.read more
Emotional intelligence is not just your ability to be aware of your own emotions. It also relates to how effective you are at controlling and expressing emotion to others on the job. It involves being able to understand how other people at work feel so you can use that insight to interact with them more effectively.
The importance of emotional intelligence
Both managers and staff-level employees can benefit from improving their level of EI to lead project teams, influence people and gain more responsibility. When people have high emotional intelligence, they make better leaders as well as better team members.
While EI can be helpful in any type of job or industry, it is particularly valuable for administrative professionals. The admin job involves personal interactions with a wide variety of personalities and workstyles, both internally and externally. Administrative managers need to not only work on their own EI but also help enhance emotional intelligence for their staff and consider it when evaluating job candidates.
How to build emotional intelligence
Here are five strategies that a manager or employee can use to help elevate their EI at work:
1. Boost your self-awareness
Do you know how you typically react to the stress of a pending deadline? When frustrated by a fellow employee who isn’t listening to your ideas, Don’t simply assume that you know how you come across to other people. Make an effort to objectively gauge your reactions and ask trusted colleagues for their candid take on your behavior. As a manager, it’s especially important to be aware of how your level of emotion, management style and behaviors affect your team to avoid being perceived as a bad boss.
2. Think before reacting
Emotional out bursts can cause your credibility with colleagues to plummet. If you’re leading an initiative or a team, consider the bigger picture before having a visible emotional reaction to something that upsets you in the workplace. If you walk away from the situation for a few minutes, it can give you a chance to regain composure.
3. Impact a sense of motivation
When you’re leading others, remember that they depend on you for inspiration. Take steps to enhance your mood before starting work, whether by exercising, talking to upbeat coworkers or other forms of self-care. Help keep the people you lead motivated by working with their strengths and providing them with the resources they need.
4. Listen more
Emotionally intelligent professionals know it’s important to empathize with the feelings and viewpoints of others in the workplace. Yet you can’t understand someone else’s wants and needs without really listening to that person. To lead with higher EI in the workplace, be a better listener. Avoid interrupting and tune in to what someone is saying before you speak.
5. Improve your social skills
Active listening is just one part of having a strong set of interpersonal skills to help you lead with greater EI. You can also work on improving your communication skill level by managing difficult conversations, resolving conflicts proactively and maintaining a friendly demeanor when interacting with other people on your team.
Authored by Deanna Arteaga
By now, hiring managers at even the most traditional accounting firms know that if they hope to find the perfect candidate, they need to look for more than solid technical skills and a pedigreed education. They need to find a recruit who possesses exceptional soft skills as well.
But if you’re truly hoping to hire a candidate who will move your firm forward – someone who fits your culture, grows your business, and is primed to take on future leadership roles – there is one soft skill in particular that you need to move to the top of your must-have list: emotional intelligence (EI).
According to OfficeTeam, a division of staffing firm Robert Half, a growing number of companies are factoring EI into their hiring decisions, and they’re doing it for the very same reason they focus on developing EI in their current workers.
Employees with a high emotional quotient (EQ) can more efficiently deal with workplace changes, challenging situations, and difficult colleagues – and they make great leaders, said Brandi Britton, district president of OfficeTeam.
“Considering emotional intelligence in the recruitment process will pay off in the long run for accounting firms,” Britton said. “Someone’s emotional intelligence ties into their fit with the corporate culture, which is of utmost significance, and EI is also essential when considering future leadership roles.”
So essential that a recent survey from OfficeTeam found that nearly all human resources (HR) managers (95 percent) and workers (99 percent) said it’s important for employees to have a high EQ. Forty-three percent of HR managers identified increased motivation and morale as the greatest benefit of having emotionally intelligent staff, but three in 10 HR managers believe most employers put too little emphasis on EI during the hiring process.
In its research guide, Emotional Intelligence at Work: What It Is and Why You Should Care, OfficeTeam suggests hiring managers at all professional firms should make “EI a consideration when evaluating job candidates.”
“We believe if you want to find the best fit for your firm, it is advisable to ask behavioral interview questions to gauge how someone manages situations, and ask references how well an applicant handles criticism, resolves conflicts, listens to others, and motivates team members,” Britton said.
Many accounting professionals may question, however, whether hiring for EQ is a luxury firms can afford. Given today’s talent shortage, they may be thinking: Can we really afford to judge, and potentially turn away, otherwise talented candidates based on their EQ alone?
Britton acknowledged that hiring for EQ takes additional effort and a shift in perspective at first, but it is a small initial investment that promises a big long-term return. Initially, she said, hires with high EQ are more able to adapt to a firm’s culture, which means firms avoid the costly and time-consuming mistake of making a bad hire.
They are also better communicators, which means they will build stronger client relationships throughout their careers, and once they enter the leadership pipeline, they are also likely more capable of securing new business for the firm.
Technical abilities may be easier to assess and train, but soft skills are more difficult to develop, so “don’t overlook soft skills in the interview process,” she cautioned.
Strategies to Gauge Emotional Intelligence
Once a firm has committed to considering EQ as part of its hiring process, there are specific strategies hiring managers can use to gauge candidates’ EI.
First, Britton said, it’s important to understand the basic concept of EI, which, according to OfficeTeam’s research guide, is defined as “a person’s capacity to be aware of, control, and effectively express emotions.” Perhaps more importantly, EI “involves understanding how others feel and using that knowledge to manage how you interact with them.”
EI pioneer Daniel Goleman, PhD, co-director of the Consortium for Research on Emotional Intelligence in Organizations, identifies the five key components of EI in the workplace as:
- Social skills
According to OfficeTeam, many of the specific EQ indicators – EQ “tells,” if you will – that hiring managers can look for in a simple interview or resume will present themselves in the language a candidate uses to describe his or her goals and accomplishments.
Some specific clues to look for in a resume: Are there indicators the candidate was self-motivated enough to take outside developmental courses? Are there examples of how he or she overcame objections? Does the candidate use phrases that highlight his or her communication, collaboration, and problem-solving skills?
During the personal interview, there are specific questions hiring managers can ask themselves, as well as questions designed to assess the applicants’ EI. According to the research guide, some examples of questions HR managers should ask themselves while listening to an applicant may include:
- If an applicant talks about a failure, does the comment suggest an awareness of some personal responsibility for the episode, or does he or she simply blame others?
- When it comes to handling criticism, is the person able to acknowledge any shortcomings and keep things in perspective rather than becoming defensive and making excuses?
- What about teamwork? Can candidates describe how they have confronted simmering issues and helped to solve them with a team, or are the answers slanted more individually? Similarly, do they credit team members for successes?
- Do candidates seem genuinely interested in the job and the people they’ll be working with? Or do you sense indifference?
“If any of the answers tend toward the latter in these questions, it may be an indicator [the candidate has] a low emotional quotient,” according to the research guide.
Questions hiring managers should ask the applicant may include:
- If you’ve previously reported to multiple supervisors at the same time, how did you get to know each person’s preferences and juggle conflicting priorities?
- Tell me about a workplace conflict you were involved in, either with your peers or someone else in the company. How did you manage that conflict, and were you able to resolve it?
- If business priorities change, describe how you would help your team understand and carry out the shifted goals.
When considering final-round candidates, references can also be an incredibly valuable tool for hiring managers trying to gauge candidates’ EI “in action,” as it were. Questions for references can be very similar to the types of questions asked in the interview, just revised to glean an outsider’s perspective.
For example, the research guide suggests that hiring managers ask references to comment on how the candidate handles conflict and criticism, listens to others, and motivates other team members.
If firm leaders find this EQ learning curve too steep, and if they are still leery of revamping their calcified hiring and interviewing strategies, Britton suggested that there is one additional argument hiring managers can use to make the case for EQ hiring: Employees with high EI can help ease the tensions and transitions surrounding changing demographics at today’s accounting firms.
Nearly every accounting firm today is a generational mosh pit of retiring baby boomers, an influx of millennials, and ambitious Gen Xers elbowing for management positions – all with differing expectations of work and vastly different communication styles.
Team members with high EQ, whatever generation they belong to, are the best at managing change, negotiating these differing work styles, and developing solutions to help team members adapt to new processes, so they are best for the health of the firm in these changing times, Britton said.
“Navigating interactions with different age groups is a challenge in all workplaces, including those in the accounting space. While demographics can affect certain parties’ motivations, goals, and approaches, making assumptions or stereotyping isn’t the way to go,” she added. “When employees have strong emotional intelligence, they take the time to carefully listen to and understand each other before drawing conclusions. Barriers are broken and the group’s overall ability to collaborate improves.”read more
Authored by NeighthanWhite
What is emotional intelligence? Emotional intelligence is how a person uses their emotions in order to identify, understand, and manage emotional situations in a positive manner in order to communicate successfully and relate to others.
Not long ago businesses hired based on the answers in an interview as to where the candidate went to school, what skills the candidate had and if they were going to stay with a company for more than a couple years. Due to the fact that more and more students tend to cheat or even trick plagiarism tools in their thesis, the real “skills” of an employee can be overestimated. Now interviewing candidates has changed and it isn’t always the smartest or the most skilled candidate that gets the job; today it tends to be the one with the best emotional intelligence.
What gives someone a high emotional intelligence?
Someone who is aware of their own emotions and those around them, who can interact with others so that it brings others to them, and can understand the emotional signals of others so that they can commune successfully in order to form solid connections; has a high emotional intelligence.
The good thing is that like stress management, emotional awareness can be learned which can raise your emotional intelligence.
Emotional intelligence and business
When it comes to business emotional intelligence is a great guide in making hires. The boss or manager who is doing the hiring needs to have a high emotional intelligence in order to hire people. They need to look for; people who cannot only do the job because of skills and education but those who have a high emotional intelligence as well. This results in a more productive workforce.
When it comes to interviewing applicants the interviewer needs to ask certain questions and gauge the applicants’ answer and attitude; basically look at their emotional intelligence to see if they are going to be a good fit in workplace and position they are being hired for.
So what types of questions might an interviewer ask to gauge emotional intelligence? There are 4 basic types of question to ask when gauging emotional intelligence.
- Self-awareness – In order to gauge this you as the interviewer will need to ask the applicant questions such as; what are your weaknesses? Here you are looking for responses that show they understand their genuine weaknesses and not just “I’m not good at math” or “I’m too organized”. You are looking for something that says they understand their genuine weakness; an answer like “For one I am too organized it may actually border on obsessive compulsive”.
- Self-regulation –During the interview you should be able to gauge a person’s self-regulation by what they have to say about previous jobs, bosses, and co-workers. One question that can be asked is “why did you leave your last job?” and depending on their reply you can gauge their self-regulation. If they say my boss was an idiot and my coworkers were morons you should think twice before hiring this person. On the other hand, if they answer with it wasn’t a good fit for me or the business and I felt I could do a better job in a different area or department then you can see that they have some self-regulation.
- Motivation – You want employees who are self-motivated, this will free up the time of supervisors and bosses to concentrate on other areas that need to be taken care of instead of just managing workers. A question that may reveal how self-motivated the applicant is would be; what are looking for in the company if you are hired or where do you see yourself in 5 years? If you were to manage to get your work done early what would you do with your time? Answers such as I am looking to work for a company where I can advance, in 5 years I see myself having advanced to the next level or even 2 levels above the current position I am interviewing for, if I had my work finished early I would ask co-workers if I could be of assistance to them first and if not then I would make sure the area is clean and after that I would find the boss and ask what else needs to be done for this project.
- Empathy –this can be tough to ferret out in a first meeting but if you watch for the signals such as do they look you in the eyes during communication, do they smile, and do they ask questions about you? Questions you could ask to gauge their empathy level are; what would you do if a customer was yelling at a co-worker or how would you handle a customer who needs special assistance?
- People skills –these can be hard to determine during an interview but if you pay attention to social signals of the applicant such as do they look you in the eyes during communication, do they stand up when you do, or do they smile and what their body language is saying you should be able to gauge the skills they have socially when building relationships or communicating with others. You will at least get a general idea of how they interact with others.
Emotional intelligence and school
College can be a tough place, a heavy academic load, a job to help pay for books and tuition, as well as time to study can place a huge amount of stress on a student. How they handle that stress and perform is a great indicator of their emotional intelligence.
College is also a place where you can build your emotional intelligence and learn how to deal with situations and people. Let’s look at a couple of examples of how this can help build your emotional intelligence.
- You discover your weaknesses and strengths. Here you could find out that you are not self-motivated which means you need to work on that. You could also find out that you are good at helping people with their problems because you are a great listener.
- You learn how to interact with others in a way that brings them to you. This could be a mediator between your friends or classmates or in being a motivator for a class project.
- You also learn how hurtful gossip and someone talking about you behind your back can be; this is where you have to learn to deal with that. Do you choose to not be a gossiper to directly talk to the person you have an issue with or spread rumors? This is where you can build your empathy for others as well as self-regulation.
- You will also discover if you can manage your time well and if you are able to ask for help when you need it to get work done. An example of this is two days ago you told Sue at work that you would cover for her only to realize that you have an assigned essay due. If you cover for Sue you will not have time to do that essay; what do you do? Cover for her as you said you would and turn the essay in late, cover for her and try to do the essay while you are working; or do you find someone who can help you with that essay?
Building your emotional intelligence during school years and even after can help you get hired at a good paying job or in the industry which you wish to be working in. Always work on emotional intelligence by being more self-aware and honestly understanding your weaknesses and strengths and what you can do to improve your emotional intelligence.
Emotional intelligence has changed the way companies and businesses hire their employees so you need to learn how to strengthen your emotional intelligence.
Someone once told me “it is not the hand you are dealt in life but how you react to that hand that defines your character” I always agreed and still do but I would also say that the hand you’re dealt and how you deal with it defines your emotional intelligence as well.read more
Google Employees Weighed In on What Makes a Highly Effective Manager. Technical Expertise Came in Dead Last
Google was up to the task and found data that will forever change the keys to getting promoted.
Authored by Michael Schneider
Google is widely known as an advocate of data-based decision making. So, it came as no surprise when it looked to its statisticians to help decode the secret formula to effective management.
After gathering and analyzing 10,000 manager observations including performance reviews, surveys, and nominations for top-manager awards and recognition, Google stumbled upon a realization that surprised many–even its former senior vice president of people operations, Laszlo Bock.
In a New York Times article that revealed the findings, Bock acknowledged that the company had historically hired managers or promoted people who exhibited a higher level of technical expertise than others. “It turns out that that’s absolutely the least important thing,” Bock says. “It’s important, but pales in comparison. Much more important is just making that connection and being accessible.”
Bock’s team didn’t stop there. Upon further analysis of the findings, they narrowed in on the “Eight Habits of Highly Effective Google Managers.” Although technical skills made the list, it came in dead last. Here is a complete list via Business Insider (listed in order of importance):
- Be a good coach;
- empower your team and don’t micromanage;
- express interest in employee’s success and well-being;
- be productive and results-oriented;
- be a good communicator and listen to your team;
- help your employees with career development;
- have a clear vision and strategy for the team; and
- have key technical skills, so you can help advise the team.
If those weren’t shocking enough, upon further examination of the most important habits of effective managers, Bock’s group came to the following conclusions.
1. What employees valued most were even-keeled bosses.
We’ve all had bosses lose their cool. Although no one is impervious to the occasional stress overload, the truth is even a single occurrence can add layers of unnecessary anxiety to your employees’ already overloaded mental bandwidth. With the amount of variability and craziness that already comes with work, employees appreciate managers who are patient, poised, and positive. In environments that already lend themselves to stress, bosses who are regularly intense, high-strung, and impatient intensify challenging professions.
2. Manager’s who helped people puzzle through problems were more effective.
The transition to leadership also requires a transformation of thought. Managers have to redirect their focus from the “work” to their staff. Effective managers take care of their people, understanding that their people take care of the work. This is the key to scaling your technical-self as a manager.
Although he’s not typically associated with management best practices, Benjamin Franklin showed mastery with this quote: “Tell me and I forget, teach me and I may remember, involve me and I learn.”
Yes, I know it’s time-consuming. I know you have a million other things on your plate. However, collaborating and supporting your employees in this way pays dividends with each “puzzle” you help them solve. Not only is the work done consistently with your expectations, but your employees observe skills and traits vital to their success. Think of each “puzzle” as an investment in your employee’s future.
3. Top-performing managers took an interest in employees’ lives and careers.
Great managers earn respect, engagement, and outstanding effort from their staff. Great mentors and friends gain the trust, loyalty, and appreciation of those they associate with. Now imagine these roles fused together (yep — a Super Boss). Now, I’m not saying you have to be best buddies with your employees. However, managers who truly care about their employees’ success and well-being take an interest in their lives.
Imagine how far someone would go for a Super Boss.
Although promotions usually come as a result of technical mastery, to be effective in your new role as a manager, you’ll have to wear a different hat. Shift your focus to your people, and I promise, you’ll see a significant return.read more
by Eric Garton
Today’s executives spend a lot of time managing the balance sheet, despite the fact that it doesn’t represent their company’s scarcest resource. Financial capital is relatively abundant and cheap. According to Bain’s Macro Trends Group, the global supply of capital stands at nearly 10 times global GDP. As a result of capital superabundance, global quantitative easing and relatively low demand for investments in R&D and capital projects, the after-tax cost of borrowing for many companies is at or near inflation, making the real cost of borrowing close to zero.
In contrast, today’s scarcest resource is your human capital, as measured by the time, talent and energy of your workforce. Time, whether measured by hours in a day or days in a career, is finite. Difference-making talent is also scarce. The average company considers only about 15% of its employees to be difference makers. Finding, developing, and retaining this talent is hard — so much so that the business press refers to a “war” for talent. Energy, too, is difficult to come by. Though intangible, it can be measured by the number of inspired employees in your workforce. Based on our research, inspired employees are three times more productive than dissatisfied employees, but they are rare. For most organizations, only one out of eight employees is inspired.
There you have it. Financial capital is abundant but carefully managed; human capital is scarce but not carefully managed. Why? In part, it’s because we value and reward good management of financial capital. And we measure it. Great CEOs are held in high regard for their clever management and allocation of financial capital. But today’s great CEOs need to be equally great at managing human capital.
How can we manage human capital better?
Measure it. As the adage goes, you can’t manage what you can’t measure. A veritable alphabet soup (ROA, RONA, ROIC, ROCE, IRR, MVA, APV, and the like) exists to measure our financial capital. To measure human capital, you can deploy metrics such as our productive power index, which looks at the cost of organizational drag and the benefits of effective talent and energy management on your overall productive power. You can measure the amount and value of the time that you put into projects or initiatives, and you can measure the return on that time. You can actively measure the amount of difference-making talent that you have in your organization. When Caesars Entertainment, a gaming company, reorganized operations in 2011, the senior team not only developed a database on the performance and the potential of the company’s top 2,000 managers but also analyzed the ability of the top 150 to take on new and different jobs.
Invest human capital just like you invest financial capital. For financial capital, the business world has developed concepts such as the opportunity cost of capital, which is reflected in a company’s weighted average cost of capital. We measure the lifetime value of investments, and we establish hurdle rates before deploying a single dollar of capital. We run Monte Carlo simulations to evaluate various returns under uncertainty. For human capital, we need to start thinking about the opportunity cost of a lost hour. One way to do this is to measure the cost of meetings. My colleagues at Bain discovered that a weekly executive committee meeting at one company consumed 300,000 hours a year in support time from departments across the company. When Woodside, an Australian oil and gas company, took a hard look at meetings, it discovered that they were consuming 25%–50% of staff’s time. A series of pilots reduced meeting time by an average of 14% among the pilot groups — a time savings equal to 7% of those groups’ full-time equivalent capacity. We should think about projects in terms of hours and dollars as well, and before taking on a new meeting or new initiative, including the opportunity cost of time and talent in the hurdle rate.
Monitor it. Teams of financial planning and analysis professionals measure actual and expected results for financial capital. Investment management committees evaluate new investments. Capital expenditure plans are subjected to detailed board reviews. We all must submit capital approval requests to release funds. Similarly, for human capital, we should do periodic reviews of how much controllable organizational drag we have in our organization and what actions we are taking to compress it. Many big data tools, such as Microsoft Workplace Analytics, can provide detailed reviews of how we use time. For talent, we need to know who our difference makers are and whether they are deployed in mission-critical roles and initiatives.
Consider the case of one B2B supplier that wanted to figure out what made some salespeople top performers. A statistical analysis of metrics from Workplace Analytics and other factors revealed that top performers and average performers spent their time differently. Some of the differences were obvious: spending an average of four more hours per week than other reps communicating with customers, or being 25% more likely to cross-sell. But some behavior was surprising. For example, top performers were three times more likely to interact with multiple groups inside the company. In other words, they connected with people who could help them with customer issues, such as staff in ﬁnance, legal, pricing, or marketing.
Recognize and reward good management of time, talent, and energy. Historically, successful investment of financial capital can make someone’s career. Variable compensation is often tied to some measure of economic value added. Even though most companies no longer offer lifetime employment, they should still find a way to create a lifetime of assignments for their difference-making talent and work hard every day to re-recruit them by creating a working environment that is inspiring and results oriented. When Reid Hoffman founded LinkedIn, he promised that the company would help advance the careers of talented employees who signed on for two to four years and made an important contribution, either offering them another tour of duty at LinkedIn or supporting their efforts if they moved on. This tour-of-duty approach helped attract and retain entrepreneurial employees.
Leaders should be measured and rewarded on their inspiration quotient. They should also be measured and rewarded for building a talent balance sheet: how many high-potential individuals they have recruited, developed, and retained, and what is the trade balance of talent — that is, the net imports of high-potential talent into their group minus exports. A company’s actual values read Netflix’s famous HR playbook, “are shown by who gets rewarded, promoted, or let go.”
These are only some of the ways that we might begin to bring greater discipline to human capital management. There are likely many more creative solutions out there. Time is finite. Talent is scarce and worth fighting for. Energy can be created and destroyed. The sooner we act on these beliefs, the sooner we will get the return on human capital that we deserve.read more
Introduction to Human Resource Management
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So, you have impressed with your CV and been called to interview. Congratulations!
This next step is often seen the scariest, but you can use your nervous energy to help you perform on the day.
Do your prep
- Prepare answers to common interview questions and expected competency questions. Write them down on separate pieces of paper and pop them in a box or record them and load ‘em into iTunes. Then pick them out and set it to random and practise answering.
- Say it aloud: This is important because you have to get used to hearing yourself express these ideas and answers, otherwise you may surprise yourself or stumble.
- Research background information about the company, the advertised role and your interviewer. You can find most of this online on Google and Linked In. Think of three questions to ask during the interview.
These may seem pretty straightforward but it’s worth thinking about them in advance. Write a list and follow, in case you start getting overwhelmed by the ‘Big Day’.
- Have an early night or a quiet night in, if possible
- Have a travel route and mode of transport planned
- Have an outfit planned
- Have a decent breakfast so you’re energised and not embarrassed by rumbly tummy syndrome
Feel the fear!
The majority of candidates get pretty nervous prior to an interview, there’s a lot riding on it after all. It’s a good thing! It shows that something important is about to happen.
Try and channel nervousness by remembering that your interviewer may be more nervous than you! This is especially true of a panel interview, where inexperienced staff may be pulled in and may be afraid of fluffing their lines or losing face in front of colleagues.
No one will mark you down for being nervous in an interview. It even shows a certain amount of respect. You’re more likely to make a poor impression by appearing complacent or superior.
It’s good to have a couple of techniques to hand if you feel nerves getting in the way of your performance.
In the waiting room, forget about cramming notes about the job description, it’s too late for that and you’ll just stress yourself. Instead, think of a happy memory or someone you love.
The pressure point in the middle of your hand relaxes the mind and eases anxiety, press it gently then release and press more deeply, breathe into your belly and release tension. This technique is subtle enough to use throughout the interview.
If all else fails …breathe. So many of us forget to do this when nerves take over. Breathe out a negative and breathe in a positive.
Focus on body language
Remember, the interview starts the minute you step through the door so be courteous to everyone you meet on the premises. Body language counts more than what you say! So pay attention to the following:
- Smile! This immediately warms the atmosphere and the positive endorphins that smiling releases will calm you too.
- Have eye contact with your interviewer(s). This makes a connection, shows you are confident and engaged with the interviewer and is a crucial part of forming a relationship with them.
- Nod your head from time to time to show your understand or agree with points your interviewer is making.
- Smiling, eye contact and head nodding is the most influential body language, according to research from Goldsmiths University. But don’t slouch and have a firm handshake when the interviewer offers their hand.