Social Technology is Not the Enemy of HR

Here’s the understatement of the year…we live in a digital world. This digital world connects everyone who wishes to participate. And if you’re not participating, then you’re not contributing to the progression of society.

For quite sometime, I’ve bashed my own industry for not participating. HR has been a late adopter of innovative technologies that build learning communities and create valuable connections. But it seems the tide is turning, and finally, HR is starting to build a digital prowess beyond pure compliance and benefits applications. Now, it seems, HR is finally starting to see the value of these online learning communities and integrated employee life-cycle solutions.While I commend our industry for its recent progress, we’re still so 2006. Check out this article.

For HR, the digital awareness and knowledge gap still exists and it’s significant. It seems the big digital dilemma now is in employee value vs. productivity loss brought about by social technologies. Social technologies scare HR. Why? Because since the beginning, HR operates under control and comply policy and HR loses control in these social environments. So Facebook, Twitter and other social technologies get turned off for concerned, conservative, traditional companies.

But through these social technologies HR has a tremendous opportunity to become more valuable than your PR department, your marketing team, and even your sales team by making a fundamental shift from control and comply to connect and engage. This shift will elevate HR’s impact by making it more relevant to the bottom line than ever before. Let me explain.

Today, everyone is the media. Every one of your employees has a voice, and that single voice can be carbon copied around the world within seconds – your PR department wishes it had such power. You can choose to use this to your advantage or to your detriment.

Your sales team can work relentlessly to build customer relationships. Your marketing team can spend lots of money building your brand. Your PR team can work tirelessly trying to protect your reputation. And all of their efforts can be destroyed overnight by one disgruntled employee who will share her experience with the world whether you control social technologies or not. HR’s focus should not be on trying to limit the voice of your employees (impossible), but rather, to create engaged employees who love their organization and share it with the world. Social technologies allow engaged employees to carry the company banner to everyone they are connected to.

Your employees are the one’s building brand loyalty with consumers today. Advocate groups aren’t limited to consumers anymore. Now advocate groups include producers (employees) and consumers conversing together in real time. In these social communities of producers and consumers, authentic conversations happen, feedback is quickly shared, and so are solutions. Customer service reaches an all-time high because consumers have a direct line of communication with the producers. When the direct line exists, trust exists and a competitive advantage of speed can be captured because the producer-consumer conversation is happening dynamically. Consumer-producer connections create better companies, better products.

It’s time for our industry to embrace today’s open and collaborative global business environment by enabling engaged producers to participate with consumers through social technologies. Below are a few points to consider.

1. Value: Engage your employees – connect with each employee as an individual by understanding their strengths, their dreams and their unique value.
2. Fit: Connect your employees to your mission – align the dreams and unique skills and experiences of each employee with your mission.
3. Benefit: Build a community of consumer-producer advocates – open social technology tools for engaged employees to build trust with your customers.

Onward!

Tags: community, connecting, consumers, facebook, HR, human, innovation, resources, social, stakeholders, twitter

What is Wrong with Retention Rate?

In my previous entry (Is HR Using the Wrong Numbers?), I challenged the HR industry to rethink the numbers it uses to show its value to the board room. Over the course of the last several months I, along with members of my company, have become convinced that HR is using the wrong measures to evaluate its success within companies. This is why, when the going gets tough, HR budgets get slashed.

Now before I go any further, let me attest to the following: I solemnly swear that I am a devoted member of the HR industry. I promise that, while I think that HR is a bit…misguided today, I truly believe that it can provide significant value to companies across the land.

With that out of the way, I will now draw my bead on the first sacred cow. For the weak at heart, let me warn you that what follows will be seen as heresy in the HR industry.

“Retention Rate” is a red herring.

I will pause and allow those who have fainted to wake up…

For far too long, HR has shouted at the top of its lungs that turnover costs money in terms of replacement recruiting and training costs. Members of HR (including me) have used this measure as an argument for increasing our training budgets.

After spending significant time researching and thinking about retention, I no longer believe a low retention rate necessarily correlates to organizational success. More importantly, I am convinced that executive level management doesn’t care a bit about retention. Executive level management is concerned about this: profit and bottom line results.

Below are three reasons why I no longer believe retention rate is a serious argument for HR budget increases or a serious defense against HR cuts:

1. Executives are not in favor of completely reducing turnover. In fact, some turnover is good in that it injects new ideas and energy into the organization. If you post turnover as a key metric and say that success means lowering turnover, then you are saying that zero turnover is good. I just don’t think executive-level management will agree.
2. Some people are not good (or are not willing to be good) at their jobs no matter how much training you throw at them. The cost of retaining them far outweighs the costs associated with their replacement. Retention rate hardly ever distinguishes between top talent that you want to keep and that talent that you don’t want to keep.
3. (Note: this is the big one) The remedies for resolving turnover (i.e. training, development, team-building activities, etc) are disconnected from bottom line results (i.e. profit, sales growth, market share, etc). This means that, for stockholders and executives, turnover is irrelevant. In other words:

On the other hand:

So here is where I wind up. At the end of the day, turnover can matter but it doesn’t matter when it includes everyone and is disconnected from the bottom line. For turnover to be a key indicator that matters in budget arguments it must:

1. Be directly correlated with operational metrics. That means hard core numbers that the operations divisions are accountable to. In other words, operations defines the operational metrics, not HR.
2. The remedies (training, development, etc) that are meant to address turnover must be clearly shown to reduce turnover among top performers. Not everyone, just top performers.

In the next post, I will take on “completion rate”.

Tags: development, HR, hr value proposition, retention, retention rate, team building, Training, turnover, value proposition

Is HR Using the Wrong Numbers?

HR has a problem. When the economy goes south, certain HR activities and budgets are generally the first on the chopping block. Training and development, for instance, are considered luxury items in today’s struggling economy. Yes, they are seen as providing benefit to the company, but they are not seen as required.

Cashiers scanning product is required. Trucks moving merchandise is required. Accountants counting is required. Training cashiers, truck drivers, and accountants? Beyond complying with law, it is not seen as required.

And yet, for years company after company has conceded that training and leadership development does have a positive impact. How many companies, for instance, claim that there number one resource is people. Unfortunately when the people in charge of people development (HR) come to the board room, the door is firmly closed.

Are executives within these companies being disingenuous? Are they simply choosing between the lesser of two evils? Whose fault is this?

Today, I began reading an article on effective onboarding strategies. As any good research paper should do, the authors of the paper initially defined the performance criteria (i.e. metrics) that they chose to distinguish best-in-class onboarding from the rest. I have to tell you that I was immediately struck (and not in a good way) by the metrics that they chose. Here they are:

1. Retention rate of new-hires
2. Completion rate for onboarding tasks/activities
3. Time-to-productivity (as in, time it takes to get through the onboarding process)

In my opinion, these metrics are just plain wrong and the HR industries insistence on keeping them (and measures like them) near and dear is why HR is seen as a luxury item and not a necessary value-add to the organization.

In other words, we in HR, are to blame for our predicament.

The reason why I say that is that none of these numbers have anything to do with what matters most to those who control the purse strings – bottom line results. The only way that HR will be viewed as a necessity is if they start using numbers, accepted by executive-level management, that show the impact of HR activities on the organization’s profit, growth and value.

If you believe that retention rate, onboarding completion rate and onboard completion time is connected to bottom line results, stay tuned. Over the course of the next few blogs, I will address each measure individually and attempt to show to you that they are not the right numbers for HR.

Tags: capital, HR, hr value proposition, human, onboarding, payout, resources, scorecard, turnover