S.E.T.H. says “show me the money” (or does he?)

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In this series of posts (SETH), I’m outlining the forces that we need to consider in the future of work.  This post is about the economic forces, but not from an economist, just so we’re clear!  The fact that I’m writing about economics in a public forum is making me nervous.  If any economists read this, I’d really love some input…. So far, we’ve looked at the social component of the future of work.

Some of the economic trends or indicators that I think will shape the future of work are:

Globalization/Localization – some feel the globalization of work will continue and others see a counter-trend to localization.   It’s possible that both will happen and have different effects.

BRIC economy (or the global nature of our economy at the least) – this is a force when it comes to automation and redistribution of work – Dan Pink talked about this in A Whole New Mind.  Accountants and lawyers, architects and other professionals, look out, your job is moving to India/Malaysia/China – where it’ll be done cheaper and faster.  Remember economics 100, supply + demand.  This is it. 

Many of us saw Jeff Rubin at the last BC HRMA conference talk about peak-oil and the subsequent ripples – less shipping of goods, onshoring, localized manufacturing, etc.  This might mean the manufacturing jobs that Canada lost may come back, but we’ve lost the “white collar” work to technological automation.  But, will they be the same manufacturing jobs or not? 

Economic cycles – Recessions and depressions happen every 10 years or so.  Don’t pretend that this one was so different.  More protracted than expected, but it shouldn’t shock us.  The subsequent labour cycles of hiring and layoffs are also predictable.  We’ve seen many people in the contingent workforce, self-employment and micro-work increasing, although seems to be more reported in the US.  Canada has been less impacted but when it comes to the future of work, a more flexible workforce could sustain economic shrinkage.

It is also important to consider specific industries.  Some will face stiff competition, others will experience slow and steady growth.  However, the future of work might also see organizations following talent; perhaps this will mean a different type of offshoring.

The point is, HR folks need to be considering the economic climate as it relates to work.   It’s not just about knowing the unemployment rate for your area but considering the global shifts and trends that may or may not impact your industry/organization.  Outlook 2020 produced some very interesting perspectives, including this economic synthesis

Any economists out there willing to add their voices here?  Am I barking up the wrong tree or simply barking mad?  HR folks – how have you used economic trends?

Holly MacDonald is an independent consultant with well over 15 years of experience in the learning & development field.  Holly is a bit of a techno-geek and can often be found playing online.  When she steps away from her computer, she spends time outside: hiking, kayaking, gardening and of course walking the dog.  She lives on Saltspring Island and is a leader in the live/work revolution.


Employment is a master-servant relationship

I am self-employed.  My boss is really easy to work with and yet I have no work-life balance.  It’s all in the same bucket.  But, I like it that way.  No messy vacation requests.  No performance reviews.  No income security.  No banked overtime or nine day fortnight applications.  Not everyone would love it.  But, what if you worked in an environment where things were really flexible?

ROWE (Results Only Work Environment) is becoming a new buzzword in the world of work.  At the heart of it is a focus on performance rather than presence.  A cynic would say to allow the employer to take advantage of the employee and work them like dogs.  Hmm, seems to me when I talk to my “indentured” friends, this may already be happening (emails at all hours, vacations which are interrupted, etc).  A glass half-full type of person would say that it is because the employer trusts the employee to get their job done and treats them like a grown-up.

I think that we need to consider how to move the employment relationship from the master-servant realm to one that is more suited to the 21st century.  Heck, I’d even be ok with shifting to the 20th century!  Trends tell us, we’ll have fewer bodies to fill roles, continued demand for work-life balance (whatever that is), shifting economy (commoditized jobs moving to India/China), etc., etc.  But, we don’t seem to be doing anything about it.

HR has their head in the sand.  We let the lawyers dictate what we should and shouldn’t do.  The risk is managing us, not the other way around.  If we are going to help our organizations compete, we need to remove our heads from the sand and come up with some new alternatives.  Otherwise, we’ll all be fighting for the same shrinking talent pool and losing talented employees to the highest bidder, and continuing to pay escalating costs to manage the employment relationship.  Maybe ROWE isn’t it, but not everyone wants to work full-time.  Or be a servant.

Holly MacDonald is an independent consultant with well over 15 years of experience in the learning & development field.  Holly is a bit of a techno-geek and can often be found playing online.  When she steps away from her computer, she spends time outside: hiking, kayaking, gardening and of course walking the dog.  She lives on Saltspring Island and is a leader in the live/work revolution.

When cash is king and people are not.

Why do we treat money like gold and people like scrap metal?

During the recession, it was all about cost cutting and people were the first ones on the chopping block, whether it was a cut to their hours, pay, training or entire jobs.  Unfortunately, CFOs forgot that living breathing people are required for an organization to make money.  Money in itself does nothing.  Even when it’s sitting in a bank, a person is needed to make a decision where the money will sit to get the best return, otherwise it will just lose value over time.

Of course, leaders had to make tough decisions to manage their organizations through the recession in order to come out alive.  However, many of the cost cutting decisions were short-sighted and now that fact is becoming clear.  In this new story, CFOs say the biggest lessons they learned about the recession is to pay more attention to morale:  http://rhmr.mediaroom.com/morale.

According to the Conference Board, employee engagement has taken a dive over the last year.  It wasn’t hard for employees to become disengaged when they were asked to do much more for less.  You know what that means… I’m no fortune-teller but I see the future and it includes huge turnover.  Consider the HR function as part of this group.  This poll originally published in this article is showing signs that your own HR department is not immune to some staffing changes in the near future.  Up to 1/3 of HR folks are considering leaving their organization in the next year.

View the HR Turnover Poll!

With good reason, CFOs were focussed on getting through the recession by managing the bottom line.  However, they cut in the wrong places and without considering the impact of their decisions on their people.

Sure, lots of people were just happy to have a job during the recession regardless of the pay cut and longer hours.  But where was the longer term thinking?  Pretty much everyone knew that the economy would eventually bounce back and there would be some job growth.  Knowing that that magical moment would arrive some day, did they really expect people to be loyal and continue working with them when things got better?

People make rational decisions (for the most part!) and will take advantage of opportunities thrown their way, like a better job offer with a different organization.  Ultimately, that means it’s going to cost the organization in turnover and potentially its competitive edge.  Alternatively, if you’ve laid off your staff in this recession you’re going to have recruitment issues because you’ve sent the message that you’re unstable.

This video is for the bean counters.  Sure, errors of judgement were made but they ‘fessed up, discussed what they learned and what they could do better next time.  What did HR learn from this last recession?

Helen Luketic is the manager of HR metrics & research at BC Human Resources Management Association. Besides editing this blog, researching, and running the HR Metrics Service, she’s recently bought a new set of golf clubs at Costco that she’s been eyeing for months.

The best business school (and cheap, too!)

I heart Dragons’ Den, the best “reality” show around.  It features 5 highly successful entrepreneurs (the “Dragons”) who have experience building companies, have money to burn, and are looking for the next great idea to invest their venture capital.  Entrepreneurs pitch their idea, state the value of the company and make an offer to the Dragons.  The Dragons decide whether or not they love the idea so much that they invest in the company with their own funds.  In the U.S., Dragons’ Den is essentially Shark Tank (but is, alas, a more superior version). 

Looking for money for your latest HR venture? Brush up on the basics of the perfect pitch.

This show is so great, it should be mandated viewing for all HR professionals.  If you’re looking to brush up on your business know-how, then tune in.  Here is a recap of what I’ve learned so far in my free business school: 

To sell an idea, tell a compelling story.  There are no PowerPoint presentations here!  It’s a bedtime story for adults, talking about the inspired way you came up with the idea and describing your vision.  The story seems to get the Dragons more excited than the actual product. 

Show decision-makers the money.  The Dragons react positively when shown sales figures, profit margins, revenue, projections or target market size.  They’re not looking for a novel or again, a PowerPoint presentation.  They are most excited when these numbers are concisely presented to them on a 3 x 5 recipe card.  After the deal is sealed with a handshake, the Dragons have their staff look at the detailed fine print. 

Promote a greater cause, while making money.  If the idea you’re presenting makes money and promotes a greater good (e.g. environment), the Dragons will definitely be interested.  They want to make money but they are also interested in leaving a legacy. 

Prove that you’ve done your grunt work and that your idea is viable.  Your idea may be brilliant but if you haven’t yet invested any of your own time / money / life to bring that idea to life, no one is interested.  Put it all on the line and prove your idea works before presenting it to anyone else. 

Make a realistic claim on the value of your idea.  One of the biggest mistakes that entrepreneurs make in their presentation to the Dragons is an overvaluation of their company.  You may think $1 million is a realistic valuation but it’s more than likely that the Dragons think your idea is worth a lot less.  When you inflate the value of your idea, company – or even yourself – you lose credibility.  Do the long division and make sure that the cost/benefit analysis is real.
One frequently heard quote on the show:  “Don’t be greedy”. 

Understand the trends.  The population is aging… provide services and products to assist them.  The new generation is entering the workforce… figure out how to tap into their energy and offer work/life balance.  Figure out what people need first and then offer it.  

Understand your audience.  Know who you’re pitching to and whose purse strings you’re after.  Each Dragon has a different background and different spending habits.  Figure out who you want to convince and learn everything about them.  Then, target your presentation to what they care about. 

Now go into the world, HR’ers.  Talk the business talk and go make us proud in 2010.

When “good” ideas backfire

Ever thought of getting the professional opinion of a psychologist for your HR initiatives?  Maybe it’s time we did.  Perhaps then we could better nail down human behavior and predict employee reaction for every management action.

Take for example employee engagement.  You start of measuring engagement for the ultimate purpose of generating more profit (engaged employees > better customer service/product quality/innovation > more revenue > more profit).  Just the simple act of monitoring engagement  can create unintended consequences.  How about the employee that believes that it’s management’s responsibility to make them happy and keep them motivated?  Holy entitlement Batman!  Just try launching engagement surveys and not doing anything with the results – now you’ve got even more disengaged employees.  Then you’ve got the new topic of office gossip – “hey, did you hear about the engagement score for Team X?  Man, are they one unhappy bunch.  They are way underpaid and I hear their manager is a slave driver.”  Even better, dealing with the manager who manages to get an inflated score (via intimidation or mild bribery like a pizza lunch) to ensure they get their performance bonus.    Eek!

The bottom line is, when you start measuring employee engagement you may get some unintended consequences. 

Now let’s move on to the unintended consequences of compensation.  A timely discussion, what with all the kerfuffle around those AIG bonuses.  It’s a big discussion in all media, with all the rage and anger of “how could Americans possibly prop up the insurance giant with taxpayer dollars and then pay these grotesque bonuses”?  An interesting online debate was posted in BusinessWeek discussing the pros and cons of AIG Execs returning their bonuses.

I loved the comment posted by the reader Mark-Anthony who says “Wow, is it just completely impossible for America comprehend unintended consequences?”  In sum, he says you’ve got to give the promised bonus to individuals who meet their targets in order to keep talent and you’ve got to give some reward to the folks sticking it through on sinking ships.  Also, if governments increase taxes to claw back some of those bonuses, you know what will happen?  That’s right – companies will have to boost up that base salary to make up for that dollar loss.

Obama wants to cap executive salary, like they do in Japan.  Let’s consider the potential for unintended consequence there:  Capping CEO Pay – What It Means for All of Us.   Say you’re an exec and you’re putting yourself on the line, from reputation to family life.  Doesn’t greater risk require a greater reward?  Why would anyone put themselves out there without expecting some sort of payback?  And you know what happened in the US when SOX legislation required corporations to start publishing CEO salaries?  Everyone ended up knowing Joe Blow’s salary and wanted to make more than him because they thought they deserved it more than him.  Enter the salary cap and you may start to see all CEOs negotiating for that top range.  HR will have to work even harder to entice top executive talent using other, non-monetary incentives.

There are several more potential unintended consequences.  How about order some lunch in for your team, bring up the topic and hold a debate amongst each other about what other unintended consequences could come up with any of your initiatives.  A good lunch, lots of fun, and a way to engage your brilliant staff.  Are there any potential unintended consequence of doing that?