HRExaminer v3.31 August 3, 2012
Table of Contents
The New Architecture of Work
The non-administrative parts of HR have their roots in industrial engineering. At one point, HR was focused on the measurement and improvement of the actual mechanics of each job. Time-motion studies and big experiments with working conditions are the legacy of the pioneers in the field. Productivity improvement and real return on investment in human capital were the centerpiece of HR’s value.
Work and job design, now relegated to job description writing and the creation/maintenance of org charts, were the heart of HR. This was particularly true in heavily unionized manufacturing.
Then a couple of things happened.
The Western economy shifted away from manufacturing and purely physical work. Time and motion are not the issue when the product is ideas, conversation and reusable intellectual property. The only thing we know for sure about breakthrough software development is that it seems to involve late nights and a lot of pizza.
Workplace improvement initiatives moved away from the HR/OD team and into the functional organizations. Beginning with the Total Quality Movement in the 80s, the continuous improvement of work became an individual responsibility. While the tools were reusable, responsibility for the actual accomplishment of improvement moved out of HR’s hands. HR’s focus moved towards team building and workplace harmony while the actual work of the company was getting done by the actual workers.
Today, no one in the organization really owns the exploding new toolkit for work design. The discipline that produced great work like the Dictionary of Occupational Titles (which defined job requirements across the culture) seems to be slipping into a transactional coma. The intellectual clout that produced learning organization design, self-directed work group parameters and experiential training is increasingly focused on box checking and gap measurement.
Meanwhile, back at the ranch, things are happening.
A whole host of new technologies for designing, strengthening and improving the quality and effectiveness of work are falling from the sky like the frogs in the movie Magnolia. These tools all emerge from technology but have their practical applications in the day to day execution of our jobs and the work of the organization. Analytics and big data are emerging as the way to discover the opportunities for the use of these new tools.
Individually, the tools are all interesting. But, they are best understood as a tool kit. The optimal workplace design will come from an integrated application. For the near term, we’ll be learning what works and what doesn’t. It’s my suggestion that HR become the central repository for accumulated wisdom on the efficacy of these tools.
We’re witnessing the creation of the 21st Century organization and enterprise kit. It’s part technical, part social and part ongoing experiment.
Here are some of the tools that I’m referring to:
- Agile Methodology
- Collaborative Technology
- Accelerated MultiMedia Learning Environments
- Small Bite Video Education
- Career Transparency
- Flexible Real Time Labor Markets
- Short Burst Status Messaging
- Dynamic Visualization
- Data Driven Job Branding
- Time Scaled Performance Feedback
- Real Time Organizational Feedback
- Informal Learning Design
Over the next couple of pieces, I’ll put some detail under each of these categories. They all have some applicability to some problems. None of them are perfect single point solutions for anything. Over the coming decades, we will all be learning how to use them (and more), how they work and where they don’t.
What’s interesting about this time and place is that HR has an amazing opportunity to take real leadership. Things are moving fast on the planet and there is little time to wait for the traditional uptake from academia. The need is more urgent than that.
The ideas behind this piece have been a long time in gestation. I was prompted to write because of a note I received from Jason Lauritsen. He’s like that. If you have an opportunity to get into his orbit (at a talk or by reading his stuff on line), do it. He’s one of those people who causes ideas to gel.
The New Architecture of Work Series
Big Data. HR Metrics. By this point, I’ve either got your attention or you’ve moved on see if Laurie Ruettimann has posted any new cat videos. Not to be too cynical on the question of HR analytics, but it seems there is a chasm between those who see the value and those whose eyes glaze over at the mention of the topic. Incredibly fascinating or deadly boring? You be the judge.
I’m a true believer. HR analytics can be a crystal ball of sorts. Revenue per employee ratios and speed to competence metrics for new hires can offer key insights into ongoing performance. Dialing in specific metrics that are tailor-made for your organization — such as a hospitality provider that measures the time from placing an order to getting a drink on the table — that stuff is gold, baby.
It also points to the key problem with HR metrics. Developing the right ones, the data that tells you something meaningful about your organization, is hard work. How do you sift through all the data and get to something relevant? Let me offer you a few HR metrics that I’d like to see. A few of these may be a little tongue-in-cheek. Something for the cat video peeps.
An Engagement Metric
- Time-to-Asshole Ratio (TAR): Here’s a little nod to Bob Sutton. How many months did it take from date of hire until a person on your team became unbearable to work with? Ideally, your team metric should be as close as possible to 1. Non-asshole status may be regained by three consecutive months of good behavior.
- The TAR formula = Number of months until achieving full asshole status / Total months worked
A Productivity Metric
- Revenue- Per-Smoker Ratio (RPS): Steve’s Theorem: Your smokers are the most productive people in your workforce. They smoke because of the stress of the work. Exhibit A: Sales guys. They’re all dirty smokers. You know who else smokes? Cops, nurses, and teachers. Good, hardworking, salt-of-the-earth people. In the interest of full disclosure, my perspective is colored by years of working in newspapers and advertising. A healthy (so-to-speak) ratio is a whole number. Just make sure it’s enough to cover higher healthcare costs. Steve’s Corollary: The least-productive people in your workforce are also smokers. You know who they are. Break out the performance reviews and get to work.
- The RPS Formula: Revenue Per Smoker / Revenue Per Non-Smoker
An Efficiency Metric
- Time-to-Slacker Ratio (TTS): With a nod to Peter Gibbons. After coming in late, taking a long lunch, Facebooking, eBaying, just plain spacing out, attending meetings, and leaving early, how many hours of real work are your people doing? How close to 1 can you get?
- The TTS Formula: Number of hours of productive work per day / 8
A Key HR Metric
- The Pastry Ratio (TPR): With a nod to Mr. Burns. Put down the éclair and get back to work. Pastries, cookie bouquets, birthday cakes — the road to financial ruin is frosted with sugary goodness. How do the cost of donuts and birthday cakes bite into a department’s total revenue? How does this correlate to overall earnings? If your result is not a whole number, how are you still in business?
- The TPR Formula: Total revenue / Cost of donuts, cakes, and all other pastries
Nielsen reports that 23% of all online hours are spent on Facebook. There’s little left in the discussion of whether Facebook is a good recruiting medium. The real issue is how long it will be until you get started. Read John’s post appearing on ERE.net this week.
The Actual Cost of Recruiting
or Why Big Name Companies Have a Cost Advantage
I saw another list of the Top 100 Companies that somebody (maybe it was chipmunks) want to work for. I wondered aloud, "Who reads this stuff?" Does it really help anyone to know that Google has replaced Microsoft at the top of another list?
It’s like those long lists of the so-called "Best Places to Work." They’re generally not. On a recent trip to London, I noticed that all of the Kentucky Fried Chicken places were celebrating the fact that KFC was one of Britain’s best places to work. Really, the home of Animal 57 where grease inhalation is a major occupational hazard? Really?
But, here’s the real rub. Big companies with massive budgets can afford to engage in these sorts of shenanigans. In the competition for talent, large employers have a significant advantage (in cost, visibility and attractiveness as an an employer) over their smaller brethren.
Everything works better and cheaper if you’re a large employer with a relatively well known brand. In spite of its reputation, a large player like KFC has a much easier time attracting food chemists, marketers and HR managers. Why? Stability, Benefits, and, the big one, brand recognition.
Smaller operations always have to overcome the "Uh, what was your name again?" part of the conversation. The big boys use that time to overcome objections based on brand perception. In some real ways, it doesn’t matter what your reputation is, as long as it’s big.
Social media works better for the big players. Take a look at the case studies that are beginning to trickle in. They’re all from companies in the Fortune 2500. There’s a fierce competition among the emerging social recruiting giants for the right to claim well known company X as a client. If you run a chain of auto supply stores in Indianapolis and have 1500 employees, things are different.
It’s really simple. Having a big brand acts as a discount on the cost of acquiring talent. Managing that big brand takes time and energy but it doesn’t come out of the recruiting budget. And, the more jobs you post, the harder it is for the other guy to get heard.
If megacorp X is hiring 50 marketing managers in New York city and you’re only hiring one, there is an enormous amount of ground you have to cover to level the playing field. It’s a real David and Goliath problem. Here are the things you need to know to make your small company recruiting operation work.
- The fundamentals don’t change. While it costs a small company more per hire, the actual things you do are the same.
- The key to all great recruiting is knowing who you want to hire (in realistic terms). That means, getting a sense of the supply and demand questions in the market you are targeting. If there are 1200 mechanical engineers and the market needs 1250, while the unemployment rate for those engineers is 4%, you now that at any point in time the market needs 100 while 50 are available. There are effectively 2 jobs for every mechanical engineer.
- In order to use social media, email or some other digital formula, your job is to reach this group of folks who are in the market with your message and some level of excitement. Your goal is to keep them interested enough to come back and visit.
- There are another 10% or so who are predisposed to switch. In order to get them, you have to have developed a relationship with the ones you want. This means reaching out through email or social media in a way that prepares the ground for your ultimate attempt to recruit.
- For each job you are trying to fill, you need 15 to 20 relationships with people who positively recognize your brand and the work you do (in the area of their jobs)
I’ve recently published a white paper on the Basics of Facebook Recruiting. It covers the fundamental mechanics required to make social media work as a recruiting tool.
Can a Dunk the Boss Day or Yoga room at your office make your employees happier and more productive? They’re among the ideas that John discusses in his latest GlassDoor article.