HR Observations January 27, 2023

[Reads: Proximity Bias. The tendency to view those who work close to you as higher performers than their out-of-office colleagues. This comes from an ingrained belief that we are safer with those who are physically part of our group. If you are a manager who wants your employees to return to the office with no objective data to support your view, your bias - not the rational part of your brain - is likely driving your decisions.]

In business, we like to think of ourselves as rational creatures, but this obsession with getting people back into the office is not coming from a place of critical thinking. Study after study shows that people work harder, are more productive, and are more engaged when they have flexibility over where and when they work.

Managers and leaders who want people in the office need to ask themselves why. Some jobs must be done in a certain location or within a physical team, but jobs that were able to be 100% remote over COVID can likely stay mostly remote. Employees keep telling us through studies and surveys that they want work location flexibility some of the time. They are willing to take less pay to work remotely. They are willing to quit if they are being called back into the office. If the data supports the good things about remote work, what's the big deal?

The key to harm-reducing, trauma-informed management is to try to see the lenses and biases through which you see an issue and then try to think of how other folks might see the same things.

What might feel safe for you as a manager, such as having your team sitting in front of you where you feel you have more control, might feel unsafe for an employee juggling family obligations, facing workplace bullying, or struggling with an expensive commute. Once upon a time you might have had the luxury of getting rid of anyone who did not capitulate to your workstyle, but the talent gap is rewriting that script.

If you want the people to come back to the office, you can always make it a great place to be. You can offer flex hours, commuting subsidies, and training around workplace bullying. People will start to come back. 

[Reads: 26% of Fortune 100 companies don't have Human Resources in the C-Suite. (BambooHR/Method Research Study 2023) Does this mean 26% of the Fortune 100 companies don't employ people?]

26% of Fortune 100 companies don't have Human Resources in the C-Suite.

What a lost opportunity.

Data supports that good people practices drive innovation and productivity, which is what build sustainable success.

So why is HR still not in the boardroom in every company?

Why aren't they involved in all board-level decisions?

Why don't they have the same status as finance leaders?

Data shows the power of leveraging people. It's yields a 7% productivity bump, as well as more innovation, a more engaged workforce and less employee churn.

It's time to elevate the HR profession internally.

11%: "The top-line productivity premium when unlocking the growth combination of data, tech and people." 4%: "Top-line productivity premium when unlocking data and tech alone." Accenture, The CHRO as a growth executive, 2023 7%: The productivity premium you forfeit if you don't leverage the talents of your people. Good HR is good business.

Accenture's latest data shows the power of leveraging the talents of your people. When when organizations get data and technology right, they forfeit 7% of the productivity premium - a major driver of growth - if they don't leverage the talents of their people.

The people who look after the people who drive your organization's success need to have an equal seat at the table. If your organization still has HR in an administrative role, they are missing out on key growth opportunities. People drive innovation. People execute strategy. People make the sales. People understand what your customers need because they are people too.

If you are an HR leader who is not being heard, data is your best friend. Make the business case for having a good talent strategy. Let others in leadership know if they are not paying people enough. The talent gap is a major issue facing organizations around the globe reflecting a new social contract between employers and employees: you working harder or switching recruiters is not the solution. Pay transparency, wage gap reduction, harm-reducing talent practices, and more flexible work environments are.

[Salary = Safety]

When you work in HR or management, salaries can start to be seen as a line item in a budget. To the receiver of the salary, it can feel like so much more.

In our society, money can represent safety. It allows us to house ourselves and our loved ones. It pays for healthcare. It fills our fridges with food. It allows us to have a financial cushion in case something unexpected happens. It helps us raise our children. It helps us have meaningful experiences with our friends.

Money also can be associated with power, status, control, and recognition. For employees with a disordered relationship with money, any salary discussions can remind them of old wounds.

To some employees, salary negotiations can feel like safety negotiations. Some employees will find salary discussions feel very unsafe. In some cases, this means that they will not negotiate a fair salary. As an employer, what do you in this situation? Do you offer the salary that the role deserves? Are you transparent in what you pay others in the role? Or do you offer the lower amount and see it as a win.

Knowing that people's money issues run deep, why is the salary and raise negotiation process so stressful? Why is it so secretive?

And why do employees keep being threatened by layoffs? That does not help them bring their most creative and innovative selves to work.

It all comes down to how you view employees. Do you see them as on your team, or are you playing against them?

People are the most important part of your business. If you don't let them know that through your rewards and talent management systems, someone else will.

[89% of CEOs say CHROs should have a key role in driving long-term profitable growth. 29% of CHROs have the profile and conditions to do so. (Accenture, The CHRO as a growth executive, 2023) Elevating HR is an opportunity for organizational growth.]

CEOS are starting to understand the importance of HR as a strategic function. If your HR department is being run as a cost center, engaged in the business of administration and compliance, you are leaving up to 11% of profitability on the table. HR is not a department to keep costs as low as possible and then sweep up the mess: that's what lawyers are for. They are there to provide a window into how people need to be hired, paid, promoted, rewarded and developed to help them do their best work on behalf of the organization.

Nothing happens in business without people. Nothing is created. Nothing is invented. No strategies are executed.

Nothing is purchased.

Unless your long term business plan is replace every person - including your customers - with robotics and AI you need to center people in your business. (Androids may dream of electric sheep, but I don't think they buy them.)

Elevating HR is a key way organizations can become more profitable but it will be a fairly radical change for some companies. Executive compensation plans may need to change. HR may need to move away from being seen as a cost center. The org chart may need to change and promotion paths reconsidered. The CEO may need to support some people first decisions that finance and operations don't like. The time horizons for business success will have to shift from the quarter to the year or even longer because motivating and developing people takes time. The Board may need to be brought up to speed or changed.

The changes are not easy but the data supports that the mindset switch as an organization switches from seeing employees as an expensive inconvenience to the driver of business success, will drive profitability and growth.