Beyond the headlines - HR & executive realities in practice today

Brian Sommer Profile picture for user brianssommer April 15, 2022 Audio mode
Summary:
The Great Resignation may be a result, not the cause, of employment woes in effect today. It’s time to parse the reality of what’s going on in business and add a dose of realism. It’s also time to see what HR & top executives should really be doing at this time.

closed

In January, The Kiplinger Letter (January 2022) stated:

Here’s what won’t get back to normal, economically speaking, in 2022: The labor market. It’ll stay extremely tight, making it hard for employers that are desperate to hire. There are only 65 unemployed workers for every 100 jobs employers are trying to fill.  The shortage of workers will ease, but slowly, and only partially. Older workers are likely to keep retiring in droves. And many younger people appear to have changed priorities, from careers to staying home with kids, for instance.

You can find lots of handwringing articles about the Great Resignation. People are leaving employers in large numbers with a full 1/3rd of the U.S. workforce expected to change employers in 2022 alone. Employees want raises to cover the rising inflation rate and if these don’t occur, they’ll leave their employer. Employers are not doing a great job of attracting talent either. But, in between the eye-catching headlines, there are powerful nuances as to what is happening and these should be the focus of business leaders.

Job-changing is not a one-dimensional issue

I took some time to speak to an active corporate accountant jobseeker that is looking for a better employer, a better work life balance and more. Specifically, this person wants:

  • To work remotely as much as possible.
  • A better boss – the current one believes that all accounting staff should put their personal lives on hold to deal with daily, unplanned ‘fire drills’ no matter what the consequences might be for the staff (e.g., inability to find child care at the last second).
  • A better career path
  • A salary increase to cover inflation and current performance
  • Etc.

This jobseeker is finding some interesting things out, though. Let’s start with remote work. In a review I did of job postings on a major job board, I noticed that very few corporate accounting positions offered remote work as an option. Just the opposite was the case. This is interesting as we know the pandemic triggered a lot of remote work, and, financial accounting people did, in fact, process invoices, close the books, etc. during the pandemic. So, why are firms requiring people to be in the office? From what this jobseeker tells me, it’s simply due to the mindset of the Controller or CFO who wants their ‘team’ in the office 5-6 days/week.

My conclusion: Executives didn’t really learn from the pandemic. Instead of looking at work today with an open mind, they’re quickly reverting to old methods and practices. The cost of this management nostalgia will likely be disappointing recruiting efforts for replacement talent.

What a Smart Executive would learn: The number of applicants for the few remote corporate accounting positions I saw on one job board was in the hundreds within a day or so of posting. In contrast, the number of applicants for in-office positions was in the single digits for the same time period.

TIME magazine had this sobering comment that tracked with my observations:

CareerBuilder has discovered that employers who offer a remote or hybrid work option received seven times the number of responses from applicants than those that don’t. And those employers that simply spell out compensation information upfront receive 10 times the number of responses versus those who don’t.

People like and want to work remotely. This is what people want. So, a smart executive would need to ask themselves: If I don’t permit remote work, am I willing to accept lots of open job requisitions, sub-par applicants, few/no applicants, and, greater turnover? A smart executive would make remote work an option and not an issue. The best executives would realize this issue isn’t about them and their interest in seeing people in the office, but, it’s about attracting and retaining the best and brightest people for their firm/employer. Recruiting without thinking about retention is a game-ender.

TIME also interviewed an enlightened CEO who stated:

Instead, she says, from the moment she hires someone she starts thinking about what she must do to retain them. “I now have to think about what I can do that is uniquely special to help this person grow.”

HR needs to realize that their firm has lots of bad/poorly-trained managers

I’ve spent my entire career planning and executing projects. I take time at the beginning of an initiative to see the big picture goals/objectives, understand the economics, assess the team/skills and, of course, plan the work. It drives me nuts to run into people in positions of responsibility who cannot plan or foresee issues. They haphazardly move from one ‘emergency’ to another and leave a trail of frustrated employees, customers, etc. in their wake. These individuals never received training in managing change, projects and people, or, they chose to forget this training. Either way, they are a morale killing, flight-triggering disaster to a firm’s productivity, culture and bottom line.

Sadly, when the best and brightest leave for greener pastures, the “can’t plan” people become management. Their lack of critical planning and management skills means there will be lots of unplanned overtime, rework, weekend work, and, of course, frustrated people. And, in today’s business economy, frustrated workers will seek true love elsewhere at a better run firm.

My conclusion: HR has got to look at management (at all levels) to see which executives are running off talent and why. The ‘exit interview’ is too late and rarely all that informative. HR must quiz departees and current employees as to factors like:

  • Are employees able to schedule time off and management will respect that? Are some managers routinely cancelling other peoples’ vacations?
  • Do some departments have exceptionally large amounts of accrued, unspent vacation time?
  • Are employees permitted to develop professionally (e.g., continuing education) and are they succeeding? If not, are last-minute scheduling conflicts a root cause? Is management requiring too much overtime to prevent people from completing their professional development training?

What a Smart Executive would learn: Two critical metrics that HR and top executives should monitor are ‘unplanned hours’ and ‘unplanned overtime’. The first highlights poor planning while the second illuminates staffing issues. Both metrics are early warnings of potential retention issues as employees can’t always adjust their personal lives to accommodate a manager’s bad planning.

There’s one kind of really bad manager/executive out there that is like Chicken Little on a continuous playback loop. The worst of these react to daily emergencies and require people to drop their regular work to assist in one or more pressing ‘fire drills’.  If there’s someone in your firm doing this, train them or fire them! They’re running off your best talent and simultaneously creating an adverse employment brand for the company.

The other item that a Smart Executive would learn is that the bad managers are either incapable of determining the root cause of all of this overtime or that they don’t care to fix the underlying causal factor. These managers should be held accountable for creating and/or not changing the systems, processes, etc. that are triggering all of this unplanned activity and job flight. A manager that won’t make a better work environment is a liability to the firm and should be replaced.

Money/inflation concerns - important but not always the most important

HR Dive recently reported:

Changing jobs during the pandemic paid off for some workers — literally. A Conference Board survey of more than 2,600 US workers found that nearly a third of employees who left their organization during the pandemic now make over 30% more than they did in their previous roles, while 20% received a modest 10% to 20% increase.

Given that current U.S. inflation estimates are running just slightly over 7% annually now, the jobseekers above beat the inflation rate. Kudos to them.  But, why did so many people flee their current employer? Apparently, the HR or leadership groups within the old employers haven’t been reading about the current inflation rate given the pay increases they are offering. Again, HR Drive noted:

Employers generally made clear their intention to raise pay going into 2022, with one mid-2021 Willis Towers Watson survey finding average planned increases of 3% for higher-up positions and 2.8% for production and manual labor employees, with even larger increases for top performers.

It’s simple math: if inflation is running at 7% or better and your firm is only offering a 3% pay increase, then your employees are falling behind. In fact, every time these employees are filling up their gas tank with $4-5/gallon fuel, they’ll be thinking about how little they’re paid in real dollar terms.

My conclusion: Salary increases are often an annual affair and occur in arrears. So, the employee is often behind in their real wages due to the timing delays inherent in this salary administration process. It’s no wonder people are looking for greener pastures as their current employer is not abreast of current events.

People want a fair wage. Sure, they’ll take a bigger one, if offered, but the money should be relevant and equitable. Yet more firms should focus on the totality of the work experience. For example, we know that half or more times that someone quits a job, they are leaving due to the boss/supervisor/leader and not the firm or the pay. It’s time HR got serious about detecting which managers are driving off talent and do something about it. Platitudes about engagement, culture and employee experience are meaningless unless HR is willing to do the hard work and remove the morale-killing, soul-sucking types out of leadership roles.

What a Smart Executive would learn: Smart executives would create a work environment that makes people want to stay with the firm years longer than they otherwise would have. Note, I said ‘work environment’ and did not recommend throwing money at the problem. This means removing toxic forces, designing the work processes to be enjoyable (not tedious), helping mentor key staff, expressing appreciation for great work outcomes, acquiring technologies that enhance a worker’s career and work experience, etc.  Great leaders take the friction out of work. That let’s them focus on even more strategic matters.

Fix the work/employee experience

While this theme is hinted at in the above paragraphs, it’s a real problem beyond just work from home aspirants. Business Insider painted this description of long-haul trucking and why drivers are either moving to smaller/local firms or just buying their own rigs:

But the move to short-haul freight also stems down to drivers wanting to avoid COVID-19 and the intensity of life on the road. To over-the-road drivers, trucking is just as much of a lifestyle as it is a profession: they have to eat at truck stops, sleep in their vehicles, and spend weeks away at a time.

'I have a three-year-old daughter that I've watched grow up over video chat,' Joe Kattermann, a CDL driver trainer at Werner Enterprises, told Insider. 'I spend more time video chatting with my family than I do actually with them.'

Some truckers say that they're treated badly by mega carriers who want to "pay the drivers peanuts" and don't cover the hours they can spend waiting at shippers and receivers. 'You're not a name, you're a number,' Gary Otterson, a 20-year trucking veteran from Alabama, said. 'They want to reduce the driver to an expendable resource.'

My conclusion: Like many of you, I see a number of firms begging for workers. I stopped at two different restaurants in the last two weeks only to find them closed mid-day due to a lack of help. The quick thought is that they must not be paying enough to attract talent, and, that certainly might be a possibility for some firms. But it could also be the work or work experience that is so off-putting to jobseekers. The trucking example above certainly fits that situation.

What a Smart Executive would learn: People are multi-faceted. They want a fair wage, some autonomy, a safe work environment, low-friction, fair bosses, training, a career path, respect, work/life balance and more. If the work/employee experience is deficient on some of these aspects, it will be hard and/or expensive to fill open positions. I know that sounds obvious but it seems like this point has to be made explicit.

Moreover, if the old normal had job retention issues, the new normal will have worse ones.  Fix the employee experience before you start rehiring.

Fix the recruiting process

I checked back with the job seeker at the top of this piece to see how her search was going. Her frustration/anger was palpable. She intimated that:

  • Companies are advertising that a position will be remote work but hiring managers are saying the opposite. As the interviews are happening, companies are backpedaling. They are redefining ‘remote work’ to be something much less. One position was listed as 100% remote but, in the interviews, it became clear that 3-5 days in office would be the norm. The job seeker did not find the comment 'But you can work remotely on the weekends' to be any solace.
  • Recruiters know that remote work opportunities are key to filling open requisitions BUT operational hiring managers are falling back on pre-pandemic work location requirements. This feels like a bait and switch just to get applicants in the pipeline. If the applicant can’t trust this element of the work/job description, why should they trust anything this employer states? Good question!

My take

There’s plenty that requires fixing. For example, HR and top executives should really analyze why they are not winning the latest war for talent. Do they have great insights into the causal factors behind the staff shortfall? I’m not convinced that they do.

Technology will not solve many of the issues mentioned above. So, don’t expect a vendor to offer up a magic cure-all that works. These issues have people, policy, leadership and work environment components. Technology is not a major factor here so get on with the tough work on these other elements.

Quick fixes aren’t likely to solve problems and neither will the wishful thinking of a return to the old normal. That ship has sailed and it’s not coming back.

Current events clearly suggest that while some executives want a return to the old normal, this may be inconsistent with what workers really want. Given this expectations gap, workers are voting with their feet and opting for employers with competitive pay and work environments that mesh with their lives. Nostalgia is not a strategy.

A grey colored placeholder image