Solving The Value Equation

1 in 6 American Workers Underemployed

The unemployment rate, which includes people working part-time jobs even though they'd rather be working full time, has risen to  16.4%. That means that 1 out of every 6 workers are either out-of-work or working part time jobs even though they want to work full time.

Involuntary Part-Time Employment Chart:

Underemployment by State for June 2009 Chart:

Quotes for those let go:

Getting fired is nature's way of telling you that you had the wrong job in the first place. – Hal Lancaster, in The Wall Street Journal

Never continue in a job you don't enjoy. If you're happy in what you're doing, you'll like yourself, you'll have inner peace. And if you have that, along with physical health, you will have had more success than you could possibly have imagined. – Johnny Carson

 

I didn't see it then, but it turned out that getting fired from Apple was the best thing that could have ever happened to me. The heaviness of being successful was replaced by the lightness of being a beginner again, less sure about everything. It freed me to enter one of the most creative periods of my life. –Steve Jobs, (1955- ) Co-Founder, Chairman, and CEO of Apple Inc. (fired in 1986; re-hired in 1996), and former CEO of Pixar.

A Player Hiring Metrics Based on the Interview-to-Hire Ratio

How many qualified interviews does it take to hire an ‘A’ player?

Before we discuss the interview-to-hire ratio for top performers please factor in the following two points on why hiring A Players is paramount to any organization’s success today:

#1: It is harder (paradoxically) to hire in the downturn.  (In a downturn, the amount of resumes from C-Players massively increases while the amount of resumes from A-Players remains the same.)

#2: With a 25% success rate for hiring (that’s a 75% failure rate!), 40 people have to be hired and 30 fired to end up with 10 high performers. With 90% hiring success, only 11 people must be hired and 1 fired to get 10 high performers. (source: TopGrading).

Using a common interview-to-hire ratio (which all staffing companies track) of 4:1 and assuming that only 10% of the workforce qualifies as A Players it takes 40 QUALIFIED interviews to hire one A Player. 

Overview: Interview to Hire Ratio for A Players	Normal Hiring Metrics	A Player Hiring Metrics
Resumes	36	360
Candidates	12	120
Interviews	4	40
Hires	1	1
% of the market	90%	10%

 

The question that then arises is, what is the best way to accurately select an "A" player from the finalists?

Numerous ERE authors have detailed how only interviewing very rarely gets the job done (failure of not using assessments) , however the best interviewing and hiring practice that I know of (and the one most Private Equity and Venture Capitals use) is Hiring Best Practices from TopGrading.   

Technorati Tags: interview to hire ratio,a players,recruiting,workforce planning,hiring best practices,private equity

Hiring ‘A’ Players: Take Action Now to Upgrade Your Team

In your town right at this exact moment in time, a comment is being made by a business owner saying: “We are not hiring right now.”   

My reply, “But you should be because ‘A’ Players are readily available.” 

The actions and messages companies send their employees in this economy of uncertainty, restructurings, pay freezes and salary reductions dictates how top performers in your organization perceive your company. 

It may be true that employees cannot easily change jobs today in this economic environment, but how your workforce is treated means whether they are fully engaged (engaged employees are on average 25% more productive according to numerous research studies) or whether your employees will jump ship at the first opportunity 6 or 9 months down the road. 

Now is THE opportune time to hire ‘A’ players.   Many firms are distressed and have not done any of the following to retain their top performers:

• Adequately communicated with employees;
• Implemented motivation, employee engagement, and retention programs;
• Changed rewards and incentives to reflect this new economy.

The economy of 2009 and 2010 will be led by the organizations that innovate, adapt to a “Perform” economy, and embrace change.  A Players are needed. 

The following is a brief description of the ‘A Player’ concept according to Brad Smart, author of TopGrading: 

The cornerstone of Brad Smart's TopGrading recruiting and evaluation system is ranking candidates and employees through letter grades. "A" and "B" players are assets; "C" players will kill off your company. "A Players” are the top 10% of talent available in the marketplace. Defining an "A" player sounds simple, but it is not. The person's skills, motivations, and personality traits  will vary depending on the job description. (Your "C" player in one job could be your "A" player in another.) While all must have rock-solid integrity and a sterling job-performance track record, not all will have to be team leaders or long-term visionaries, though that surely helps. They all must be quick studies.

Technorati Tags: A player,a players,recruiting,workforce planning,hiring,retention,perform economy,topgrading

Small Business Signs of the Apocalypse (or at least foreshadowing the future inability to receive credit lending)

While small businesses provide about half of all private-sector jobs according to the SBA, they generate approximately 3/4th of all net new jobs every year over the past decade. These two news major news stories don’t bode well for small business owners looking for credit anytime soon:

1. CIT, the lending group that has made over 950,000 loans to small businesses – the largest in the US by the way, has been denied help (Lending giant CIT on brink after bailout talks fail)
2. Small Business Groups Blast Job-Killing Tax Hike

And in Mark Cuban’s latest blog post he makes a great point, “If(Cash In < Cash Out)= You are (now) a Consultant.”

Luxury Wine Market

The same industry changes happening in the luxury wine market are occurring in other markets;  i.e. only differentiated/niche providers and discounters/low-cost providers are excelling.   (WSJ article: Luxury Wine Market Reels from Downturn)

As any good 2x2 strategy consultant will tell you, profits come from deciding your strategy and then continually out-executing your competition/substitutes. 

Practices for successfully executing in this economy:

1. Change your Distribution: high-end wineries selling more to restaurants, conducting their own wine dinners/events, etc..
   
2. Shift Marketing Tactics: Use tactics that are directly measurable and attributable to sales such as Internet Marketing (i.e. wine makers are using more Google AdWords PPC and  FaceBook or Twitter for promotions and discounts).
   
3. Grow through acquisition.  Acquire either similar minded firms to reduce SG&A, firms with strong niches, or firms with alternative distribution capabilities.

 

Why You Need Strategic Workforce Planning

Whether your organization is hiring this year or not, knowing the current skill and capability gaps of your workforce as well as the market availability of talent (and the cost-to-acquire!) is critical for any executive to make informed management decisions.

When to Utilize Strategic Workforce Planning?
Do any of these scenarios apply to you?

1. Your organization lacks sufficient number of Leaders and/or ‘A’ Players;
2. Even with rising unemployment, or perhaps because of it, it has become even more difficult to find quality talent as job boards are plagued with bottom feeders;
3. Currently in the process of evaluating whether to promote employees, supervisors, or leaders; or
4. Currently evaluating a new product line or business venture.
   

Strategic workforce planning ensures employers have the right people in the right place at the right time and at the right price.

At its core, strategic workforce planning consists of three steps: 

1. Projecting future demand;
2. Assessing your internal supply (breadth and depth of people skills and capabilities), and lastly;
3. Developing your strategy to fill the gaps.

Benefits of Strategic Workforce Planning include:

1. Understand labor/employment and hiring patterns and trends
2. Position your firm to gain a people competitive advantage during a slower economy
3. Assess your people skill and capability deficiency against your financial objectives
4. Forecast hiring dates, costs, and resources
5. Make informed business decisions such as whether it is more cost effective to hire part-time contractors, outsource an activity, or add full-time salaried employees
6. Assess human-capital needs and risks against the opportunity landscape/ROI
7. Hire more than your share of ‘A’ Players
8. Improve career development and “promote-from-within” policies
9. Reduce long-term hiring and retention costs

Want more resources on Strategic Workforce Planning?  Try these thought-leaders:

• Aruspex > Helping Companies Plan and Build Their Best Future Workforce 
• Strategic Workforce Planning Blog
• InfoHRM > Global leader in workforce planning, analytics, and reporting
• Vemo > Strategic Workforce Planning
• Achilles Group > Strategic Workforce Planning for small business
• An Outline of a Strategic Workforce Plan
• TEDS > Talent Management Solution
• Solutions Advisor: Bersin
  

Technorati Tags: strategic workforce planning,workforce best practices,management best practices

 

2009 Small and Medium Best Places to Work Award Winners

Each year, the Great Place to Work^® Institute produces Best Companies to Work for lists in the United States including FORTUNE 100 Best Companies to Work For^® in America.

What Makes a Great Place to Work^®?

At the heart of the institute’s definition of a great place to work is a place where employees "trust the people they work for, have pride in what they do, and enjoy the people they work with." A great workplace is measured by the quality of the three, interconnected relationships that exist within any organization:

1. The relationship between employees and management.
2. The relationship between employees and their jobs/company.
3. The relationship between employees and other employees.

Enhancing the workplace delivers results including:

• Receive more qualified job applications (get more than your fair share of ‘A’ Players).
• Experience a lower level of turnover.
• Experience reductions in health care costs.
• Enjoy higher levels of customer satisfaction and customer loyalty.
• Foster greater innovation, creativity and risk taking.
• Benefit from higher productivity and profitability.

Best Companies Outperform Their Peers

When you invest in your people, you invest in your organization's success. A comprehensive review by the Department of Labor of more than 100 studies that examined the link between progressive people practices and improved bottom line results concluded that:

• There is a positive relationship between training, motivating, and empowering employees and improvements in productivity, employee satisfaction and financial performance.
• When developing and implementing a people strategy with progressive people practices, a combination of practices is more effective than a single practice
• The impact of progressive people practices is greater over the long term (3 plus years), indicating that practices need to be integrated into the work environment to provide benefits

· Fortune "100 Best" versus Stock Market 1998-2008

Any company can be a Great Place to Work^®!  For more information on Best Places to Work checkout:

• 2009 Top 25 Small Business Award Winners
  
• Best Places to Work Articles and Case Studies
  
• Best Small & Medium Companies to Work for in America Nomination and Application Process

Technorati Tags: Human Capital Best Practices,Strategic HR,Effective human resources management,great place to work,award,best place to work,best places to work