Why CEOs are turning to HR to Lead the Organization Through

Why CEOs are turning to HR to Lead the Organization Through

Today’s Top 5

ThreatsJack Smalley, SPHRExpress Employment Professionals

[email protected]

June 24, 2014

Old Economy Stable– Large company kept competitors at

bay

New Economy is Competition– Ability to anticipate, respond and

adapt to threats– Eliminate bureaucratic structures– Prepare for organizational change in a

minute’s notice– Or become EXTINCT!– Old business model vs. progressive

business model

Why the Best CEOs are Turning to HR to Lead the Organization Through Today's Top 5 Threats

The #1 Movie of 1967Live in a Different World

– 75% of U.S. lives online - autos/farmers

– From industrial revolution to data knowledge revolution

– From social media to twitter to selfies

– Tom Friedman-”The New Average”

There is a big shift to a Digital Economy


“The topple rate” at which companies lose their leadership positions has more

than doubled.

From: “The BIG eats the Small”To: “The Fast Eats the Slow”


Getting suppliers to move fast

Source: Jason Jennings and Laurence Haughton, “It’s Not the Big that Eats the Small … It’s the Fast that Eats the Slow”

SustainingSpeed

FastThinking

FastDecision-

Making

Fast toMarket

Letting the best idea win

Forecasting & road mapping

Establishing guiding principles

Constantly reassessing

Owning competitive advantage

Institutionalizing innovation

Financial flexibility

Adaptability

Business process management system

Engine of Innovation

Microsoft executives were asked how they would break down the

$450 billion market capitalization value of

their company.

“The stuff in people’s heads.”


Threat 1:

Inability to Innovate

• If you do not have the best talent, you will not survive today.

• HR must lead the organization to attract and retain the best talent.


Where’s your weakest link?

80%

of surveyed respondents who are currently employed

“would consider leaving their current job if presented with other opportunities.”

40% will succeed


Cyber ProwlersNot only is your competition

watching your corporate actions on social networks,

they are stalking your talent.


Cyber ProwlersOf the 2,600 North American hiring managers surveyed, 45% use social-networking sites to research job candidates . Not a war for people/war for talent 12/10 more quit vs. “rif’d”


Beware of Hiring in Haste

31%

only of average firms feel they selected their best pick.

Look before you leap.

46% of resumes are falsified

• Halo Effect• One candidate – multiple

resumes• Was it a great hire or a

polished applicant? • To easy to focus on wrong

thing• Arrow vs. Indian

Don’t be distracted by the school colors. Schools attended are not a guarantee. “It’s not the degree, it’s what you can do with it”-T. Friedman


Threat 2:Losing Your Competitive Advantage

HR must lead to increase employee engagement.


Do you have an army of sleepwalkers?

The Opposite of Employee Engagement

Employees who don’t leave – the under-performing and disengaged

The “quit-and- stay” phenomenonThere are 9-to-5er’s who show up to work everyday but who have “checked out” mentally.


$300 billionEmployee disengagement costs businesses in lost productivity every year.

Are your profits melting away, employee after employee?

Over 13 million employees & over 32,000 business units surveyed show of employees in most companies are not engaged in their work.

Customer retention vs. employee retention

67%


Many companies underestimate the importance of their front line.

60% Approximately 50%

of the workforceare non-exempt.

leave before they have been on

Engaged plan to stay for what they GIVE!Disengaged stay for what they GET…

the job for six months. Script the first 90 days.


Threat 3:High Costs of

Reckless Hiring

HR must allow supervisors to participate in the hiring process

then hold them accountable for retention.


• Managers are not experts in hiring

– It is not essential to the job function– Halo vs. Devil effect

• Biggest failure– Lack of preparation– Experience over “fit”

80% of turnover cost is related to bad hiring.


Ask yourself:How much can we afford to lose?Most conservative estimates of turnover show costs anywhere from 50% to 150% times annual salary.

For a professional making $50,000

How many $75,000mistakes can you afford?

Departure Costs• 85% of salary not

uncommon

Hiring Costs• 7-20% of salary

New Hire Training Costs • 13% of salary

New Hire Productivity• 32% base salary


Beware of turnover fever

• It leads to job sniffing• To close the back door

Why am I staying?I’m leaving!

Maybe I should start looking…


Threat 4:Poor Leadership & Communication

HR’s greatest contribution to organizational

success-”Leadership thru Influence”

-Betty Francis, SHRM Board Chair


The organizations that exit the recession early and stronger.

To the employee, the Leader is the company

The messenger is as important as the message. Influence is earned.

Relationships –Trust-Information-Success

Pre-recession ~ Employers not loyal

Post-recession ~ Employees not loyal


What’s on your dashboard?

“I quit!”One in two employees is looking to leave or has checked out on the job.

Worker satisfaction is at its lowest level since the Conference Board began measuring it in 1987.

Only 45% satisfied Two-thirds

of companies are more concerned about retention now than they were before the economic crisis.


Toxic Work EnvironmentJust because you have talent in your field doesn’t mean you’re a great leader.

Do you know what it’s like to work for you?

1.Do you know how to push without being rude or obnoxious?

2.After someone talks to you, do they feel like they have more or less energy?

3.Do employees feel like you have their backs?

Ask yourself these three questions:


Leadership is the #1 reason talent leaves

Managers and Leaders influence each…

32% Need for

advancement

22% Pay and Benefits

20% Lack of job fit

17% Mis-

management


Continuous Learning Is Crucial to Maintaining and Managing Talent

….according to Jim Collins

The mismanagement of human resources is one of the main reasons many “Good” companies never become “Great.”

of organizations surveyed feel

their executives have a gap of leadership level

skills.

50% from the samesurveyed

organizations feel the skills of their current workforce

do not match today’s market challenges.

51%


Remember!

Employees don’t quit companies,

They quit bosses!


Threat 5:Regulatory Nightmares

HR must lead through the regulating minefield

This country has come to feel the same when Congress is in session as when the baby gets hold of a hammer.”

~ Will Rogers


Top Business Risk

The total cost of federal regulations to employers has increased over $1.75 trillion.

Growth of economy is small businesses– Fear of growing


Regulatory NightmaresDocumentGettysburg AddressDeclaration of Independence U.S. Government Regulations on The Sale of Cabbage

H.R. 3962 – The Affordable Healthcare for America Act (AHCAA)

Written by Lawyers

Words286

1,33226,911

363,086

1,990 pages

What’s keeping HR up at night?

Federal, state, and local restrictions

Background checks Hiring, firing,

and employment regulations NLRB’s self-imposed muscle Social media protections Healthcare Reform Legalization and medical use of

marijuana Class Actions


Department of Labor (DOL) 2013

– 25,628 charges– $250M in back wages– 269,000 employees receiving

back wages– 91% class action lawsuits

involve wage/hour claims


Department of Labor (DOL) cont.

– Website instructs on filing claims

– iPhone app tracking hours worked

– Going after misclassified exempts

– Volunteer work– Independent contractors


EEOCDiscrimination and retaliation cases at highest level since Title VII became law in 1965– 93,727 charges– Less employees– Retaliation charges new #1– $372.1M paid by employers– Record number of million dollar

settlements


Light at the End

of the Tunnel?


Why are the Best CEO's turning to HR to solve the Top 5 Threats?


Jack F. Smalley, SPHRDirector, HR Learning and Development

[email protected]

mailto:[email protected]

Why CEOs are turning to HR to Lead the Organization Through

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