The community has always been a part of the creation and development of any business. We consider the community based on our potential target market, access to raw materials and suppliers, and the costs of operations. Sometimes, but rarely, we also consider the local talent pool and skills availability.
But the community is more intertwined with the business than we recognize. That is, each stakeholder is connected to the community in a larger way. For example, when we utilize local resources and suppliers, our business expansion or contraction is now directly impacting job creation and reduction for those businesses to meet our demand. Additionally, we impact the employee's partners/family when we create compensation policies, work schedules, and working climate. Compensation policies also impact the employee's disposable income and how much they will spend in their local community.
This level of intertwinement sometimes makes business leaders uncomfortable. We justify that we don't need to consider this breadth of the community because businesses are required only to provide profits to their shareholders. However, the community is a major stakeholder and are even usually shareholders themselves. For example, employees (insiders) in the U.S. can be up to 20% of shareholders, directly impacting their family, and the disposable income available in the local economy.
Too often when companies choose to enter or leave a market, we only look at the P&L statements. We think this factory is no longer viable because there are better tax incentives in another state or country. We don't consider the broader implications of what it means to leave that community. We see examples of this in towns where one business is the main employer.
For example, let's take Newton, Iowa as an example. A local member of the community, Frederick Louis Maytag founded the Maytag Corporation in 1893 and by 1925 it was primarily a washing machine company. Maytag was one of the very few companies during the 1930's Great Depression to be growing and making a profit. And Newton, Iowa's population grew by 74% because of it. Despite being profitable, Maytag decided they wanted to cut employee's wages by 10%. Reasonably, the workers went on strike. Even though this company was founded with a local leader, the company decided this strike was unacceptable and martial law was declared with tanks and machine guns being brought in against the workers. The workers were forced to go back to work with a 10% pay cut. Then, in 2001 the company decided it was cheaper to move the facility to Mexico and severed ties completely from the city by 2007. This resulted in 1,800 people losing their jobs, or 12% of the community. The city of Newton was forced to incentivize new companies to come to their town and diversify their economy to ensure mass relocation or poverty spikes didn't occur.
The impact of these types of choices has a detrimental effect, not just to the community, but to all stakeholders at large. Consider the spouses who may need to adjust their work. Or the suppliers who then also have to relocate. But even consider the negative publicity's impact of how shareholders will feel about these decisions. Sure, a few will be excited that their dividends will go up, but many will feel sour from the disloyalty and heartlessness. Divestiture of company's based on moral reasoning has long been a trend and shareholders are requiring more and more disclosure.
Small businesses typically understand this dynamic as they are members of the community themselves and see how they a cog in the larger wheel. However, as larger and larger corporations take over, the distance between CEO and the local community increases and the inevitable lack of empathy surrounding that community takes hold.
Company's need to be more mindful if they choose to enter a community, especially if they will be a majority employer. If it no longer makes sense for a company to operate within a community, adequate notice and planning should be required to allow for the community to adjust. Very rarely are you going to see your good news story in the headlines, but layoffs and divesting will be. Therefore, during these times, it's important to make decisions with respect, dignity, and while considering the larger implications. Overall, there is a larger obligation to that community not just morally, but potentially financially.
As we try to navigate this new normal and will likely have an ebb and flow of easing and imposing stay-at-home restrictions, we need to start thinking about a better way of working.
Before lockdowns, some organizations allowed for flexible work arrangements or accommodated certain individuals to work remotely. However, these programs can sometimes have unintended consequences. For example, those who take leave or work from home have been shown to have slower wage growth and earn fewer promotions because they are seen as less motivated or dedicated.
As we are seeing now, individuals can be just as, if not more, productive at home by working hours that work for them.
So how can we utilize our new insights about working from home and redesign the way we do work. Two examples of how some companies have done this already include redesigning work through a person-centred approach or a results-centred approach.
The People-Centered Approach
(also known as the Predictability, Teaming, & Open Communication approach)
In this approach, you, as a manager or as a department, state that you have a collective goal of ensuring every team member's personal interests and needs are met. That is, ensuring both professional and personal goals are met for each team member.
Each team member states what their needs and goals are for the week and the team re-works the work schedule and priorities to ensure both personal and professional goals are met. This process adds time, especially in the beginning. It will usually add about 30 minutes to weekly team meetings and it will take a few months for people to build psychological safety and trust to be transparent in what their needs are. The leader setting the example will go a long way in this approach.
The people-centred approach helps enhance communication, build team cohesion, and helps achieve team goals. Teams create innovative ways of not only completing work but prioritizing work by eliminating unnecessary processes or initiatives. This approach had been found to make teams 2x more efficient, 1.5x more effective, and increase client value by 15%.
For individuals, twice as many people will feel more comfortable taking time off for work, satisfaction with work-life balance increases by 24%, and intent to stay increases by 29%.
The Results-Centered Approach
(also known as the Results-Only Work Environment)
In this approach, as a manager or as a department, state that you have a goal of 'gettin' 'er done'. That is, people should be free to do what they want, whenever they want, as long as the work gets done. The purpose of this approach is to allow people to be more focused, productive, and efficient based on their own style.
Weekly team meetings will be required in the beginning to help bring transparency and clarity to the process. Employees will discuss how they would change their work practices if they could choose their hours/location/etc. This allows the team to have a better understanding of who is available when.
Employees are then empowered to experiment with their own productivity. After two months, the manager should do a check-in and discuss what changes are needed, share success stories and problem-solve any barriers. Additionally, it takes a bit of sophistication on the manager's part to understand what is a fair workload and what will achieve the strategy rather than 'fill the days'. Parameters also need to be set up about what constitutes good work. For example, it's not just that the task was done, but the task was done after consultation and collaboration with stakeholders.
The results-centred approach has been found to reduce turnover to 6% compared to 11%, increase schedule control and decreased work-family conflict, increased sleep, energy and self-reported health and exercise, reduce smoking and drinking and increased family meals.
As you can see, both of these approaches are not HR-led, but leader-led. However, which you choose depends on your company values and strategy (e.g., respect & caring vs. excellence and results). People-centred is more about a philosophy shift about the nature of work and creating team cohesion, collaboration, and team 'wins'. Versus, a results-centred approach is more individualistic and about business strategy achievement. Regardless, they are still both business strategies for goal achievement, rather than work-life balance initiatives.
Both require a significant amount of energy, especially in the early stages, but the benefits outweigh the costs. Regardless of which you may choose, here are some tips to help you ensure a successful implementation:
Most companies and managers believe that they are able to interview people for jobs effectively based on their own experience and intuition (1). Specifically, they prepare for conducting interviews by reviewing resumes and then tailoring questions based on the individual, essentially 'free wheeling". This is referred to as an unstructured interview.
I, as well as the vast majority of the research, argue that a structured (or planned) interview is your best bet for hiring a candidate. A structured interview is one that is planned through standardized questions, trained interviewers, a controlled length of time, and specific response evaluations. That is, every candidate gets asked the same questions and are evaluated on the same rating scale. An unstructured interview, on the other hand, is generally a more 'off the cuff' approach where interviewers ask tailored questions to the individual to understand their specific experiences and to get a 'sense' or 'vibe' of the person (1).
Research shows that people perceive the unstructured interview as the most effective way to understand a candidate, when, in fact, it is the least (as compared to planned interviews, cognitive tests, and personality tests; 2; 3). Planned interviews are twice as likely to predict outcomes such as how well candidates do in training orientation, how successful they are on the job, and how long they stay with the organization (4; 5)
So let's go through the potential arguments against planned interviews and my rebuttal...
Argument 1: In a small company/team, we need to get to know people and ensure that they will get along with the group.
Rebuttal: Sure, by taking an unstructured approach, you are unintentionally (or intentionally) examining how much the candidate is like you (6). However, this reduces the diversity of who you are hiring, not just in terms of gender and ethnicity, but also in thoughts and experiences.
Additionally, you are likely only measuring how charismatic a person is (7; 8), not how well they work within a group. Generally, those with good physical appearance (facial attractiveness, attire, weight) and non-verbal cues (eye contact, smiling) is what you are hiring (7; 8). And, no surprises here, these attributes don't show to predict job performance (9).
People shouldn't be 'fitting' in with your team, they should be 'fitting' into your strategy. That is, candidates should provide a complementary skillset to help you achieve your strategy. Diverse thoughts and styles will likely get you to your strategy better than hiring a 'mini-me' which can open yourself up to biases such as groupthink.
When hiring for really small teams, perhaps no one person will have all the skills necessary to help, so some will argue ‘fit’ is more important. But in these situations you aren’t hiring a technical expert, but a generalist or 'chameleon'. That is, you are hiring for different skills such as agility, problem-solving skills, proactivity, etc. which can all be assessed with planned questions. This is to say, you can still hire for collaboration or influencing skills (rather than the intuitive sense of fit), but what you choose to assess needs to align with the strategy and/or values of the company.
A word of caution: as you increase diversity decision-making will take longer and conflict will increase, however it also bring about more innovation and better financial results, so it's worth it (10).
Argument 2: A planned interview seems impersonal and candidates hate them.
To help ensure a good candidate experience, leave time for candidates to ask their own questions. Additionally, they will see the experience as even more fair if they have advanced knowledge of what the questions will be, even if just a few hours before.
Argument 3: Well I can 'read between the lines' the things that a planned interview will miss.
Rebuttal: When you are hiring, you may think that a planned interview doesn't address the uniqueness of the person's background or the role. Therefore, you may think that because you are adapting to the individual or the situation you will be able to detect patterns and links that a planned interview never could (14).
However it's important to remember, with a planned interview, each candidate is still being evaluated as an individual. From a question like "tell me about a time you received a complaint from a customer", they can respond in a way that is unique to their experiences and their own learnings. The only difference is with a planned interview you have (a) decided that customer service is important ahead of time and (b) you want to see how all candidates respond to the same question and (c) you can evaluate their responses across one another. A trained interviewer can also begin to pick up on subtle patterns. For example, are they self aware? Do they see the errors they make and learn how to overcome them the next time? Do they use the same approach or style each time?
Argument 4: But I've hired good people in the past without a planned interview.
Rebuttal: Have you? Do you have data that supports that? Check your attribution bias. That is, do you think your good hires are a result of your skills? And what about bad hires? Was that not your fault because they must have lied in the interview or become unmotivated once hired? You are more likely to attribute any success to yourself and the failures to others (15).
Attribution bias is compounded by other biases and memory issues. For example, research found that hiring managers only remembered half of the answers to interview questions (16). Additionally, hiring managers' perceptions are heavily skewed by negative information (17). Research shows that hiring managers adding their intuition or instinct along with a planned interview actually REDUCED the predictability success (18) showing how negatively impactful human error really is.
If you are feeling uneasy at this point, it's okay. Research has found that it's not just hiring managers that aren't effectively choosing the right people - similar results have been found with clinicians, social workers, parole boards, judges, auditors, admission committees, marketers, and business planners (19; 20; 21; 22). We are all subject to human error and biases.
Argument 5 - We don't have the time or money to make a planned interview
Rebuttal: Planned interviews create an approximate savings of $40,000 annually per manager role (23). Creating a planned interview will cost a fraction of that. Planning an interview will only add a few extra weeks to the process, but once the interview is created it won't add any time for future candidates who are being evaluated on the same competencies.
Furthermore, replacing an employee costs approximately 1/3 of their salary (24). In Canada, that's, on average, $18,000 (25). This cost is because it take at least a month to fill the job, it costs money and time to train new hires, plus the productivity lag to get them up to speed. Having a good planned interview will reduce the cost by approximately half based on the value gained from its ability to predict job performance and tenure (4; 26).
So what is the solution?
Well, if it hasn't been obvious already, create a planned interview. Here are the basic steps to do so (27):
I was already planning to write an article about the contingent workforce a few months ago, but now in the midst of the COVID-19 pandemic, it seems even more important to discuss. Before the pandemic, contingent, contract, and part-time workers already made up a third of the North American workforce (Forbes, 2015). This number has only increased through recent layoffs and remote working.
There are lots of advantages to having a contingent workforce. It helps companies leverage highly skilled technical experts for short projects rather than hire them internally at a high base salary. This can sometimes help increase the speed of which things get done. Contingent workers also help challenge the organization's way of thinking and assumptions made about the best ways of working. All of which, help reduce costs for the organization.
A great example of how a well functioning contingent workforce works is seeing how films are made here in Vancouver. There is no single studio, but leaders (producers) come in and hire the best available people (gaffers, actors, sound crews), shared services (caterers, drivers), and resources (external power, trailers, buildings). The efficiency of how these crews assemble, work, and dissemble is awe-inspiring, especially given that they are working towards a creative output.
So thinking about this changing workforce, how do we adapt our people and culture strategies and policies to accommodate it? We now have to differentiate who is responsible for people or subsets of people - is it HR? Business Leaders? Procurement?
A handy reference table was created by RBL & Agile Talent Collaborative to consider whom to hire for what:
That is, if information needs to stay internal and/or if something is required on an ongoing basis, hire internal people. However, if you need the best or need something for just a short period of time, use a contingent worker. This will help you balance costs and ensure innovative growth.
However, with an increased mix of internal and contingent workers. Issues are bound to arise. To help smooth some of these processes consider the following:
The workforce is only becoming more and more fluid, therefore, it is important for you and your organization to be ready on how to handle the flux.
While some employers believe stress to be a “necessary evil” to remain productive and profitable in today’s global economy, research indicates otherwise (1). In the United States, 26-40% of employees report being extremely stressed or burned out (1), in the European Union, 28% of employees reported feeling stressed at work, and in Japan, 63% of employees reported serious work anxiety or stress (2).
Ongoing stress can also contribute to longer-term issues and it's even been found that stress could contribute up to 90% of health symptoms and disorders (5). Long-term stress can manifest as psychological disorders (e.g., depression, anxiety, post-traumatic stress disorder), emotional disturbances (e.g., dissatisfaction, fatigue, tension), maladaptive behaviours (e.g., aggression, substance abuse, accidents, injury, suicide), physical illnesses (e.g., cardiovascular disease; cancer; ulcers, decreased immune system, neuroendocrine disorders, autonomous nervous systems, blood pressure, blood lipids, uric acid), and cognitive impairments (e.g., sleep disorders; 1; 2; 4; 6; 9; 10; 11).
It's time to re-think overworking yourself or your employees to get greater productivity and realize that in the long-run it will lead to lower productivity as well as many other consequences including hurting profitability. Now it's time to re-focus on engagement, motivation, and purpose.
When we talk about Corporate Social Responsibility (CSR), we think of corporate sustainability, responsible business practices, environmentalism, and/or community engagement. We discuss annual reports in terms of triple bottom lines of economic, social, and environmental prosperity. However, when we discuss the social piece, we primarily talk in terms of the communities we operate in rather than the employees under our corporate umbrella.
If you are only reading this because CSR initiatives are mandated by your government or your shareholders or you need to build a business case for your executives, researchers have found that there is a stronger impact on organizational commitment by targeting internal people rather than external (1). However, be weary, the minute employees think you are undertaking CSR initiatives to increase your reputation you will be faced with lower worker effort and less consumer interest than if you had done nothing at all (2).
We need to ensure employees are part of our sustainability efforts. We discuss employee engagement and mental health as a way to increase productivity or to reduce costs, but not as a way to ensure people aren't leaving work worse than they arrived. If we are going to continue using the (awful) term Human Resources, then we need to ensure those resources are sustainable just like we would with any other resources.
That is, people need to leave work at the end of the day the same, if not better, than they arrived. This shouldn't be hard. In theory, work should be a place of challenge, achievement, and comradery. However, we see high levels of stress, turnover, absenteeism, low productivity, and so on and so forth.
How do you know where your company stands?
There are two approaches to creating a sustainable employee strategy. You can either just make sure people leave as they come in (baseline). Or you can make work a place where people leave better and thrive (next level). Some questions to ask yourself...
When advocating for better performance management we ask managers to be a "coach" to their employees, borrowing the term from sports. However, it seems that the sports analogy stops there. For example:
Effective coaching can positively change attitudes, knowledge, behaviours, and performance. Organizations that had highly effective coaching were more likely to have:
Gallup outlined the essentials of coaching as: frequent, focused, and future-focused. That is, coaching should be continuous, have a specific purpose, and should be positive and constructive.
Sports provide us with other potential lessons we, in business, need to learn from:
So if we truly want our managers to be like sports coaches, what do we need to do?
Employees are so vital to our bottom line. Increased efforts and efficiencies can help increase profit by reducing expenses. This got me thinking, if employees impact our profit so much, why don't we put similar efforts into employees as we do when we chase revenues? In other words, why don't we chase employees the same way we chase customers?
One way we can change our mindset is by using metrics from customer service--particularly, Net Promoter Scores. Instead of taking an overall average of percentage of customers that like your company, Net Promoter Scores subtract any detractors from your promoters.
Seeing a 34%, I would want to delve into these results. Let's continue down the customer service path and examine what this score means in comparison to 'market segments'. For example, what happens if we find males are the 4 engaged and women are the 2 disengaged? Or perhaps baby boomers are engaged but the 2 millennials are disengaged? In the traditional approach, we may have not even intervened. Now we have a completely different intervention around diversity & inclusion or discrimination.
Before you jump into converting your engagement calculations over, test this out with some of your people leader's engagement scores. Does it give you any surprises? Or does it tell you the story you already knew but didn't have evidence for? Use this to build your business case.
Next, determine how you may action this change? And how many resources do you have to do it? If we are still considering employees like customers, how big is your 'internal engagement team' compared to your sales team? Effective implementation will involve a large team and/or user-friendly software for administration and analytics. Additionally, either your people leaders or Human Resources Business Partners need to have the skills and knowledge to be able to access, analyze, and take action based on these results. How mature is your organization to do this?
Additional Lessons from Customer Service
In addition to an engagement NPS, there are other potential metrics from customer service that may be important to consider using. For example, we set sales targets, but are you setting engagement targets for your people leaders? What other other metrics we could use? How about:
What other metrics can you think of?
Let's start off and imagine you are a chemist and you study hydrogen. You conduct experiments on hydrogen and make conclusions about what you observed when you added or changed things while testing hydrogen. You publish this information in science journals such as Nature or Science. Now everyone in the world can make the same assumptions about hydrogen.
Now imagine in the same scenario that when you study hydrogen from different suppliers, each supplier provides you with slightly different measurements of hydrogen. Hmm, I suppose you could work with that, you can control from some differences or tell people which supplier you used in your experiments so they can use your findings if it's the same supplier or type of hydrogen they are using.
Now let's take this one step further...not only is the hydrogen different from the different suppliers, but each time you examine the same hydrogen sample it gives you different results. What the heck is going on? How do you make sweeping generalizations to other samples of hydrogen? How can we even progress our knowledge in this field? How can we make the non-scientific community comfortable with our findings?
What I am trying to demonstrate is what psychology and other social sciences are faced with. Think of the hydrogen as 'people'. Now, think of the suppliers as different countries, genders, organizations, whatever. We think we get a handle of information and then the rug gets pulled from under us because we find some other variable or attribute changes how "people" are country-to-country, or from male-to-female, etc.
Unlike the chemist who can take the sample of hydrogen and make generalizations to hydrogen everywhere, social scientists can't necessarily do that. Therefore, social scientists use statistics to take a sub-sample of the population and try and generalize it to the whole. That is, we try to ensure we include people from as wide of variety of life that we can, within reason.
When we talked about getting different results each time, this is another 'fun' caveat when studying people. I could give you the same personality test two days apart and I wouldn't get the same answers. I would probably get 95% of the same responses, but would almost never be 100% the same. We then have to create rigorous testing parameters to make sure any test or assessment is valid and reliable. However, with everyone from Facebook to Buzzfeed creating a 'quiz' on "what is your type" we start to blur the lines of who is knowledgeable in creating an assessment.
Therefore, sometimes us social scientists feel we have the odds stacked against us. It doesn't help that other scientists such as physicians and chemists call us "soft". Additionally, once the media gets a hold of our studies, information gets watered down or one one day you hear "this is good for you" then the next "this is bad for you", or "absence makes the heart grow fonder" versus "out of sight, out of mind". Then, you lose trust in us.
I'm writing about this to reassure you and help provide you with tools to how to trust social scientists again. For us social scientists, we are responsible to ensure rigourous testing conditions and informing you on who we studied and what our limitations are. For example, the limitations section may discuss how generalizable our findings are. We talk about whether we only studied university students or only one particular organization and how that may impact the results.
These are vital pieces that can get omitted by media reports. Now the study that should have only been applied to young adults gets applied to everyone and it isn't true.
Not only is the media responsible to find that information, but you are too. Dig deeper before you Retweet or Like that headline. Remember that, contrary to the Westworld 2 season finale, us humans aren't as simple as a book's worth of code. Science needs people to be critical thinkers on both the giving and receiving ends of the information.
How we fail our new hires
We put so much time and resources into hiring employees—sourcing, assessing, interviewing, negotiating—that we are exhausted by the time their start date rolls around. We justify that it's okay and the “sink or swim” is a good initiation – I mean we had to do it ourselves, right?
So how do we get out new hires to thrive? Let's start with Day 1. Even better, let's start with Day -1. Have new hires complete paperwork so that their benefits and payroll will be set up beforehand. Also create an open line of communication so they can ask questions before their start date. Finally, welcome them on behalf of the organization, hiring manager, and/or team.
So then what is lined up on Day 1 for the employee? It should be more than just orientation. How boring is it to sit in front of a screen and click through modules of company propaganda? Why not kick off with an informal coffee/breakfast with the hiring manager to discuss what to expect in the coming months? This is also a great time to provide resources to the employee such as their job description, company information, strategic objectives, industry knowledge, and key points of contact. Perhaps then the employee meets with their buddy. This buddy is a champion of the organization and not only gives a facility and safety tour, but starts providing tips about the unwritten rules. The Talent Team could then meet with the employee to discuss any assessment results they went through in the recruitment phase. Understanding their assessment begins to help them understand their strengths and their possible derailers within the context of the team and organization. Next, the employee goes for an informal lunch with their team, they start placing names to faces, asking and fielding questions. The afternoon could then be filled with module training, paperwork, and reflection time to get them situated, followed by an end-of-day quick check-in with their manager to answer any immediate questions and outline the remainder of the week. How would you feel after that kind of first day?
The purpose of onboarding is about opening dialogue and establishing fit. The employee needs to see how their role contributes to the organization and they also need to see how their own values and style fits within the team and culture. Building this buy-in creates engagement. Understandably engagement cannot be built in a day, a week, or even 100 days. It's an ongoing process and takes at least 6 months, if not a year. However, the results are worth it. With effective onboarding, 69% of employees are staying with the company for at least 3 years. This greatly reduces recruitment costs--money which can now be funneled into new onboarding initiatives, like enhanced technology and training. Good onboarding practices also increase performance outcomes such as goal attainment, customer satisfaction, employee engagement, and revenue. The 'sink or swim' approach is starting to look pretty bad now isn't it? So let's incorporate some best practice into our onboarding (there are even practices that cost little to no money) and let's have our employees and our organizations thrive!