HR Observations January 20, 2023

[73% of HR leaders are experiencing burnout caused by recruiting and hiring challenges. (KarmaCheck /Findem: State of Hiring and Recruiting Report 2023)]

Recruiting feels impossible when you are being asked for candidates with impossibly high levels of skills for impossibly low levels of pay.

I remember working as a young executive recruiter when I had zero ability to take on or refuse assignments. Some clients had expectations of perfection while offering 2/3 of the salary needed to get someone that good. It was frustrating for everyone involved.

A key task of HR is to help other leaders in the business rethink hiring budgets. Businesses that need good people to thrive need to be spending most of their money on good people.

One doesn't walk into the dollar store expecting to walk out with a Chanel bag and yet so many organizations expect to build a world class team with a modest budget for salaries, benefits and raises.

One solution to this is to have more representation and opinion weight from HR folks in C-level meetings. When the overall budget is decided, the salary numbers should come from someone who understands the power of compensation, not from someone in accounting.

Burnout is not the indication of a broken system. The system is doing what it was intended to do: extract as much labour as possible to benefit the owners of the resources. But people are simply not putting up with that economic model anymore. HR had a very important strategic task of letting the other leaders know how people are viewing work. When you put yourself in the middle of what candidates are telling you and what management is refusing to hear, burnout is the expected result.

Tell managers that their hiring expectations are not realistic. Share with them that the old way of doing things no longer applies. Show them data such as market intel about salary expectations. Show them the connection between engaged long-term hires and innovation. Show them how building profitability by reducing headcount is a short term and poor decision. Elevate the strategic importance of HR.

[Alice in wonderland looking exhausted. "When bankers at Davos talk about the importance of bringing people back to the office for productivity "coaching."]  

["Quiet quitting is a natural response to feeling your employer or boss has given up on you." Adam Grant, "Quiet Quitting and the Meaning of Work", World Economic Forum, Davos 2023]

It's not a matter of "nobody wants to work." Its a matter of people don't want to overwork for companies that are going to lay them off via email one day.

Quiet quitting has become such an issue that it was on the agenda at the World Economic Forum's annual meeting. Over 50% of the workforce is not engaged in work, according to a Gallup poll. That's not good for productivity and it's even worse for innovation.

So what is the solution? It's certainly not bullying people back into the office, which seemed to be the discussion in another room in Davos. It's reengaging people with work. It's paying them well. It's giving them opportunities to learn and grown and then compensating them for their new skills. It's removing the toxic people and micromanagers from their orbit. It's giving them more control over where and when they work whenever possible.

We are seeing a shift in the workplace climate and people are no longer willing to sacrifice health and happiness to make some billionaire or hedge funder wealthier. They are willing to lend their talents and ideas to organizations that pay them well, recognize their talents, given them training opportunities and create environments that encourage collaboration with other like-minded people. Otherwise, they will be spending their time building their side hustles or applying to the competition while they work for you.

The system is not broken. The system has taught folks that work is transactional in nature and they could be gone at any moment. The smart thing to do for ambitious and hard working people is to look for better opportunities while they put in their time with your organization.

Let's change the system. Let's rewrite the employer/employee contract. Let's make work better for everyone.

[Gen Z is embracing "rage applying" to other companies as a way to increase their pay. While the term may be a TikTok trend, the sentiment behind it is here to stay. The antidote to losing employees this way is salary transparency, regular raises, career path planning, and job security.

Treating people well isn't a trend, it's good business.]

[I have yet to see a merger, acquisition, or change initiative fail due to "numbers issues." People drive business success and business failure. HR needs to be involved in all boardroom-level decisions.]

True story. I once worked on a big acquisition: the largest to be done in Canada at the time. The bankers relied on these massive spreadsheets with projections at every interest level and covenant combination. This deal could not fail on paper. The trouble is, business is not run on paper and the deals team continued to overlook bad management. The patriarch was Logan Roy with a less robust health and the successors made Kendall Roy and his siblings look positively functional.

The company no longer exists even though the numbers looked just dandy because the people thing became a giant mess.

Business is nothing more than people providing products and services that other people need. Number can help measure how things are going after the fact but they never tell the whole story. I say this as someone who has been trained in numbers with an MBA in finance and a CDFA.

The person in charge of your people has insights into your business that the folks who look after the numbers or the sales or the marketing strategy simply don't have. They know where the points of vulnerability are in the business. The trouble is, when they are not listened to, or are asked to take a back seat to other parts of the organization, they stop sharing the warning signs.

Was anyone surprised when this entity that could not fail on paper went bust? Not really. Everyone knew the dysfunction that existed. The issue wasn't that nobody knew. The issue was that the people side of things was not built into the decision making model. The dysfunction wasn't accounted for in RAROC calculations.

If the people side of the business does not have a strong voice in strategic decision making and if the role is not seen as a potential path to CEO and therefore has less respect, businesses will only get part of the story. They will continue to make short sighted decisions like cutting jobs as a first measure or taking strategic leaps without having the bench strength to execute.

People development is good business and HR holds the key.