Retained Search and Human Resources Culture Consulting
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Let’s Be Very Clear! Finance controlled HR is not HR using data and analytics?

More blind leadership

Part 5/6

Using a lack of talented applicants as an example:

Finance, CFOs or x-CFO-CEOs have HR look at the problem as the cost of not filling critical positions and the increased never ending training of hires and NEOs.   Finance asks to lower the recruiting and training costs in order to keep the HR department costs aligned with the lower hire rate and “in line” (ROI) with desired projections. They cut HR staff, programs, wages and benefits to align costs and then report there is not enough talent to fill critical positions (a talent gap).

Operations, CEO, CPO or well led HR sees the same problem and asks, why and how is this happening? Through surveys, data and questionnaires they gather and analyze the data to determine the reasons for the observed outcome (i.e. time spent from starting to completing the application, matches to the job applied for, bulk analysis of the number of system-wide occurrences, possibly by position, all applications actions started vs. completed, those screened out by the ATS matching process, etc.).  Educated changes are then made to improve the problem processes and results – receiving more talented applications and hires.  (Usually the answer is: simplifying the process itself, enabling applicants to complete the process quickly and more easily; using accurate but more generalized job descriptions in the ATS matching process; plus, insuring informed and motivated hiring management significantly shortens the hiring process itself.)

Depending on the industry and critical nature of the positions, rewarding applicants for application completion, referral reward programs, sign on bonuses or other incentives might also be implemented.  By increasing the number of matching applications and increasing hires the HR department increases the ROI by decreasing the cost per hire and reducing the ongoing training and NEO costs.  This frees HR budgets for more staff or system changes, not cuts!  For them there is no talent shortage.  They retain their top people and might be overwhelmed with highly skilled and motivated applicants.  These companies also understand the need for greatly increased training, learning and development and team design.

This is covered in greater detail in the 125 pages of Deloitte’s 2016 Global Human Capital Trends.

If a CFO or Finance department head reads the preceding and decides to adopt and implement what is outlined, they might expect the same results.  However, they will miss the all-important key message.  This is an organization-wide and wholly interrelated internal workforce culture challenge.  The candidate application process is just one small part of a much larger issue causing their talent problems.  Although these poorly led organizations say they care about its people and workforce, they actually care most about what the workforce costs and how those costs affect the bottom line…..not really about its people.  “Costs” are their employment policy, emphasizing their blindness to the negative impact their poor cultures have on their organization’s talent problems and performance. Unfortunately, they will never be convinced.

To highlight the finance view of people, ask ANY employee, manager, leader or even the CFO how and what they feel they represent to their organization.  You will never hear, “I am a payroll, insurance and tax liability!”

When HR is used as a finance arm, HR’s traditional role disappears, making it indistinguishable from cost controls.

These HR Departments are then blamed for cutting wages, hours, benefits, rewards and recognition because they are the messenger and support the message. This creates major organizational distrust and employee turnover.  (SHRM has become the text book example of this duality, nationally siding with big business, opposing proposed minimum wage increases, NLRB changes, the Affordable Care Act and not advocating for the workforce’s wellbeing, etc.)  As Guardians of the Workforce Galaxy, traditional HR can’t imagine a finance driven HR.  Unfortunately, finance will never be convinced their policies are the root cause of their talent problems.  Many even want to do away with HR and positive cultures altogether.  For the most part, within these organizations they are succeeding!   (These same issues also exist in poorly led organizations where leadership doesn’t lead, comes from the finance side or simply lets finance lead.)

These financially led HR departments need a new name to differentiate their operational differences from traditional Human Resources like HRR – Human Robot Recruiting, stifling spirit, independence, innovation and adventure; or, EHR – Endless Human Requisitioning, because of the constant turnover and hiring; or, ETR – Effective Talent Repulsion, because of the poor reputations, never ending tightening of budgets, benefits, hours and wages to compensate for lower sales or ROI…..

However, I know by talking to many in these HR roles, their personal HR motivations are to help the organization and workforce by developing great internal communications and trust with employees.  These HR workforce motivations are neither understood nor valued within a financially driven HR framework.  This is because great cultures are not supported within a financially driven and controlled company.   Without top leadership support, these HR efforts are ultimately stifled and negated because the underlying workforce employment policies and programs are Costs not People.  Those working in HR within these organizations will immediately recognize this description and experience.  Most, other than financial leadership, will also recognize this negative workforce experience as well.  Today it is an employment/workforce norm.

Next:  High Performance Cultures and a Great Workplace Are a Choice?  “Choose Wisely!”  Two Examples of Opposite Culture Approaches to the Same Financial Challenge.

John Hagen

With over 30 Years of high-level engagement he leads executive recruitment for Retail (Start-up, Brick and Mortar, e-, Holding, Development, Conglomerate); Human Resources/Culture/Talent/Acquisition; VC / PE & Banking Investment and Development; Warehousing, Shipping/Logistics/Fulfillment/Transportation; Manufacturing (apparel, consumer goods, decor, electronics, high-tech, industrial durable and non-durable0); Real Estate Development Management and Business Services industry segments. He has headed high-level consulting programs to industry and the highly confidential recruitment of hundreds of C-level, divisional, regional leaders supporting the various industries within his corporate and company operations. He has partnered with U.S., Canadian, LATAM, EU and Asian brands in critical external executive search assessments for VP levels executives and above. Confidentiality, honesty, integrity, innovation, humor and a laser like sense of cultural match are the hallmarks of his work.

Posted in Data and Analytics, human resources, retention, talent gap, Uncategorized

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