The Missing Employees
Are you missing employees? Where did they go? I just got off the phone with a restaurant owner who temporarily closed one of his locations so that he could redistribute the staff to the other three. I’ve also heard or seen in the last week: A Starbucks closing at 4:00 PM for lack of staff. A director in a large accounting firm reporting that two pay raises in 9 months (for remote employees) are being characterized by the 30-something accountants as “non-competitive.” Apple employees publishing an internal letter saying the company’s plan to require 3 days a week attendance is “unacceptable.” A wire service story noting that only 12% of office workers in Manhattan have returned to their offices. The manager of a new restaurant scheduling 27 interviews, then sitting through 26 no-shows. Wait times for services businesses that are are unworkable for customers. Our tree trimmer offered me a date 4 months out. The pool contractor’s backlog is seven months. Both claimed insufficient crews to handle the business. I talk to at least a dozen employers a week, and all are complaining about the lack of qualified applicants. Several have raised their starting wage rates multiple times, with no discernable change in the flow of applicants. What the hell is going on? To start, I don’t believe that it’s all the fault of supplementary unemployment benefits. It is true that the states which discontinued the supplements have somewhat lower unemployment rates, and that $300 a week is enough to entice a $10/hour employee, but the missing employees are across the wage range. Factors Driving the Shortage and Wageflation One fact is that the economic rebound since 2009 has not previously had much impact on wages. They were bound to catch up at some point. The Federal Minimum Wage of $7.25 an hour is now insufficient to pay for basic apartment rent anywhere in the USA. Supplementary benefits or not, no one wants to put in 40 hours a week and not be able to live on what they earn. Another is the absorption of women into the workforce. For much of the ’80s and ’90s, women working for the first time represented a net addition to the number of available workers. This had a depressing effect on wages, as there were more bodies chasing limited jobs. The employment market has adjusted to this new normal. Remote working has frayed the cultural relationship between employers and employees. Where workers often stayed in a job because they had friends there, or were comfortable with their responsibilities, now salary is rapidly becoming the only factor they consider. The inflationary pressures of deficit spending are shrinking the buying power of static paychecks. The lessening of COVID-19 is releasing a backlog of employees who “wanted to move anyway,” but were hanging on to what security they had through the pandemic. Most importantly, over 50% of the Baby Boomers are now over 65 years old. Generation X is much smaller, so these retirements impact mid-level employees and managers the most. The available pool of experienced people is literally shrinking. Missing Employees and Exit Planning If you are one of the Baby Boomers who are now 21% of the population but still own 51% of the private companies in the U.S., missing employees will impact you in more ways than just on your daily workload. Increased labor costs will have a direct impact on profitability, and therefore valuations. The challenge of retaining employees long enough to develop true proficiency is growing. Higher turnover means you’ll need more people for the same tasks. The long-term commitment of a relationship where someone is in training to assume control of the business becomes in many cases, unimaginable to an employee. Lack of experience in a management team also detracts from enterprise value. In businesses that depend on repeat customers, relationships may need to be reestablished regularly. I saw a cartoon a few weeks ago. An owner is talking to his employees. He says “When we said you were essential workers, we didn’t mean you should be paid like essential workers.” Perhaps they can be forgiven for misunderstanding. In our mission statements, we often say that employees are our most important asset. It looks like we may have to put our money where our mouth is. John F. Dini, CExP, CEPA is an exit planning coach and the President of MPN Incorporated in San Antonio, Texas. He is the publisher of Awake at 2 o’clock and has authored three books on business ownership. The single largest transaction and transition of your life deserves special attention. Are you planning to exit and sell your business? Business Exit planning is quickly becoming a buzzword in the legal and financial communities. Your professional advisors position themselves to provide tax, risk management, wealth management, and contract preparation services. BEST Exit Plan Advisor has been trained to manage your team of tax, legal, business, and financial planners to navigate your exit strategy. Click here for more details and a video on how to get started. If you want to see how prepared you are for transition, take the 15-minute Assessment at no charge: There is one indisputable fact – 100% of owners will eventually exit their business. The Assessment is a multiple-choice questionnaire that does not ask for confidential or financial information. Nevertheless, it is a critical first step in starting the discussion and planning process. Click here for more information concerning our free, no-obligation exit planning assessment.
Rethinking Hiring in Horticulture
Effective Strategies for Hiring in the Horticulture Industry By Harrison Downing, PRC and Senior Human Capital Advisor at BEST Human Capital & Advisory Group Are you excited at the prospect of increased demand in the Horticulture Industry over the next few years? But, on the other hand, are you concerned that you will struggle to supply material to meet consumer demand? You are not alone in these thought processes. Most companies are identifying areas to invest increased revenue in satisfying new requirements. Whether through R&D, new market channels, LEAN manufacturing approaches, supply chain amelioration, or bringing on talent for these and additional departments. When hiring in today’s changing climate, it is important to understand options, strategize a plan, and develop expectations, as the industry’s talent pool is critically thin compared to talent needs. The Process Scheduling interviews can be complicated, especially acknowledging that not only are your team members busy with their responsibilities, but the prospective candidate is likely busy in their current role. The chances of finding a quality applicant who is currently unemployed are slim. Thus, it is imperative to be realistic when setting a start date for a new hire. The traditional “2 weeks’ notice” is often satisfactory. However, occasionally, more time is required for the individual to leave their previous employer, potentially your same customers, and put them in a position for success. None of us want to burn any bridges. It is now a commonly accepted, if not begrudged, belief that quality professionals are not frequenting job boards and applying to postings. In discussions with many companies, posting a job is often more about marketing than actually identifying candidates. Utilizing current relationships to network opportunities, involving HR teams and other departments to brainstorm candidate flow, and inquiring with customers or suppliers on star players they interact with are among the options to identify talent in our close-knit industry. The graphic at right represents a recent mid-level position hire. The hiring project timeline included posting job descriptions on job boards, networking with industry leaders, and actively sourcing candidates through executive search. At a minimum, it typically takes (3) weeks to identify qualified individuals, (3) weeks to interview and offer, and (3) weeks for the individual to transition and start in their new role. For senior-level positions, plan to add a minimum of (2) weeks for each of the three steps. Because of this dynamic and the budgeting process, many companies start their hiring process a year in advance to identify what roles are needed in their organization. Hiring from within is a practical approach as it is quick, cost-effective, fluid with the company culture, and can motivate loyal employees who aspire to grow professionally. These items add up to expose less risk than hiring externally. However, internal promotion is not always the best option. Animosity between internal applicants can arise, leading team members not chosen to question loyalty. Another critical element to hiring from within is succession planning. As one hole is filled, another is created in the previous position. Active cross-training prepares team members for succession, strengthens the organizational chart, and motivates the team. Finally, from a legal and efficacy standpoint, a hybrid approach of external search and looking within ensures all available talent is vetted as there is a lack of candidates in our industry. Positions in Operations, R&D, Supply Chain, eCommerce, Analytics, and Sales are being created as companies match changing markets with innovation. Yet, retirement rates are increasing, reducing what is already a thin talent pool for horticulture. Add to this that CEA, Cannabis, and Hemp are hiring from the same talent pool as Ornamental, Nursery, Landscaping, Turf, and Greenhouse – there is indeed a growing talent gap. Casting a broad and flexible net when sourcing talent is crucial. One strategy includes considering all candidates, regardless of age. Another is compromising the amount of required product knowledge, customer relationships, or years of experience and instead focusing on a professional’s behaviors. This option requires increased front-end work through strategic planning and assessments. However, it will ultimately unlock a lucrative talent pool, allow for culture alignment, and increase productivity based on the candidate’s behaviors. We should not ignore experience and product knowledge. Painting a “purple squirrel” (what we call a perfect candidate) is an important thought project when conceptualizing a position, but how many purple squirrels have you seen? If there are (5) “boxes” that you believe must be checked for a role, it may be worth reducing it to a top (3). If a candidate shows strong behaviors, perhaps they can achieve the (2) boxes they cannot check with proper training and management. Conversely, it is nearly impossible to train or manage behaviors as they are set early in life. Behavior-based hiring dramatically opens the talent pool outside of the industry for the right fit. There will be repetitive conversations in interviews, but developing separate focus areas for each interviewer is integral to moving quickly. This approach also gives the prospect an understanding of potential interactions with the interviewer. Continuing to utilize virtual meeting resources early in the interview process allows for flexibility. One-on-one interviews with senior leaders are expected, but interview teams of 2-3 display company culture for the candidate and expedite the process. Once in interviews, an element to consider is how the candidate will be led based on their personality and responsibilities. The initial conversation with a candidate may be the most important. Spend it listening and learning. Listen 80% of the time and speak 20% of the time. Engage them about experiences, listen to what motivates them professionally, and focus on behaviors illustrated when describing achievements. Do not oversell the position or company as there is no perfect job or company. Accentuate the positives but be transparent about challenges and difficulties in the role. Truly understanding your prospect’s personality traits and professional behaviors will create a stronger relationship leading to higher buy-in, more productivity, and continued transparency. Congratulations, you have hired a strong professional! However, the process of engaging them is
Employee Pay in Focus: Transactional vs Strategic Pay Practices
Differences abound between transactional and strategic human resources, but even if the distinctions are clear to HR generalists, these terms get a little fuzzy when it comes to employee pay matters. Nonetheless, it’s important to understand the distinctions as these can be important to establishing the right pay practices and policies to keep your organization market-competitive. Let’s look at some critical differences between transactional and strategic approaches to employee pay, and answer some frequently asked questions that can help bring this subject into focus: Characteristics of Transactional Employee Pay Transactional employee pay practices tend to be short-term (or, for that matter, often shortsighted). They address situations but don’t address the “big picture.” They tend to be stop-gap in nature; interim solutions that might still need permanent strategic solutions down the road. Here are some common employee pay situations that are short-term and transactional in nature, rather than long-term and strategic: Hiring new employees at just above what they are being paid with their current employer Bringing new employees into the organization at a pay rate above existing employees to make sure the position gets filled Awarding merit increases without performing any proactive analysis just because they fit in budget Utilizing loose descriptions of job functions Using free salary data or letting employees drive the pay narrative with potentially misleading or inaccurate data from the internet Characteristics of Strategic Employee Pay Strategic employee pay practices tend to be longer-term solutions. They take the big picture into account and take the long view toward continuing marketplace competitiveness. Here are some common employee pay situations that are longer-term and strategic in nature, rather than short-term and transactional: Placing new employees in a market-validated pay range and comparing their history to others in the same or similar position for proper pay placement Evaluating and adjusting pay for current employees as needed when new hires must be brought in at higher rates Conducting a discrimination analysis before approving merit increases and address related issues proactively Utilizing job descriptions with clear responsibilities and standards for minimum as well as desired experience levels and education requirements Securing third-party published and scrubbed employer data or using a compensation consultant to secure salary data Answering Frequently Asked Questions to Clarify Transactional vs Strategic Employee Pay Practices Question: How can we bring new hires in using the prevailing market range when current employees are below market? Answer: First, think of your pay range in thirds: The lowest third of the pay range would apply to new and untested employees with little to no experience. The middle level would apply to fully proficient employees with several years of experience. The upper third is for seasoned employees with sustained performance over many years as well as a lot of experience. Obviously, you’ll need to have key information to properly place new employees into the appropriate pay range. For example, how much relevant experience will they bring to the job? Three years of experience? Four? None? You’ll then need to consider your current employees and align the new employee’s pay with other similarly situated employees. For instance, if a current employee has been in the job 4 years and came to you with no previous experience and the new employee brings 4 years of prior experience, you should pay these employees approximately the same. If you need to bring that new employee in higher than the existing employee because the market demands it, keep in mind when your merit awards will occur. If they are just a few months away, the current employee’s pay may exceed the new employee’s pay with their merit increase. If you just awarded merit increases, you may need to increase the existing employee’s pay to avoid creating discriminatory pay practices. You may also have to budget an increase for current employees and then execute the pay increases as soon as possible. You could also offer the new employee a sign-on bonus payable in various payments to keep the regular rates of current and new employees aligned. This leads us to the next question: Question: How can we realign existing compensation to market levels with minimal impact to financials? Answer: Tough question. It helps to budget for market-related increases each year. If that hasn’t been your practice and the pay ranges have fallen behind, you might provide increases every six months until you can get employee pay where needed. For employees below pay-range minimums, you can give merit increases first and then make a market adjustment if needed to help them reach the new minimum. Finally, you can use bonus programs, known as “variable pay,” in addition to base pay. Variable pay benchmarks must be re-earned each measurement period based on results. This enables you to hold merit increases in check; this can be important because merit increases permanently increase salary levels as well as benefits associated with base pay, such as life insurance, short-term disability, long-term disability, and sometimes retirement plans. Bonuses, on the other hand, are single pay-outs that do not normally increase base pay levels and related benefit costs for benefits (unless otherwise included per your benefit plan documents). Be sure to check your plan documents to clearly understand the definition of compensation before using bonus plans. Which naturally begs this question: Question: Why is a properly designed strategic pay program important to an organization? Answer: Among the many reasons are that a well-designed strategic employee pay program: Provides appropriate pay ranges for recruitment Promotes accurate job descriptions Provides a basis for determining the external value of jobs to market Provides baselines for reviewing employee performance and rewarding desired behaviors Ensures costs are maintained and managed appropriately Helps reduce turnover through improved employee morale and engagement when pay is not a dissatisfier and there are no pay equity issues The Bottom Line: It’s important to strategically plan your employee pay programs so you can attract and retain your top talent. Recognize that your employees are an investment and not an expense. The time and money it takes
Rethinking Age in Hiring
We recently sent an email to our BEST BRIEFS newsletter subscribers on the topic of ageism, and it definitely touched a nerve. Here is the original email content, followed by some of the comments we received on the subject. Our Original Message On January 20th, President Biden was sworn in and is now officially the oldest President the U.S. has ever had at 78 years old. A few weeks later, a 43-year-old Quarterback, with a 68-year-old Head Coach, and an 82-year-old Offensive Consultant, won the Super Bowl. These events alone should have us rethink ageism, but unfortunately, it is alive and well, and COVID has made matters worse. Studies show that workers ages 55 and older have experienced increased ageism from employers, particularly amid the pandemic. As people start to enter their 50s, they are more attuned to discrimination in the workplace. So much so that 58% of workers aged 50 or older have noticed age discrimination firsthand. Yet they’re known as being the most engaged in the workplace, not to mention the most experienced. Though our article on the topic of ageism (“Focusing on Youth in Hiring is Hurting Your Organizational Health”) was published before COVID, the point remains – it is time to rethink age in hiring, especially in industries (i.e., horticulture) where experience and qualified talent is increasingly becoming difficult to secure. After all, where are the Mentors and Coaches badly needed by younger generations to be found? Comments We heard from several business leaders on this topic, and here are a few of their comments. • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • Personally, I achieved the most in my 50’s and 60’s: I wrote two of my three books, spoke 22 times across Canada and the U.S. won an award for Best U.S. Speaker in Canada from TEC, a Canadian CEO peer group, won five Best Place to Work and two diversity awards for United Way. I believe that individuals have to shake off society’s negative messages about getting older. We have to create our own “the best is yet to come mindset.” Oh, and my last book was all about companies that have strategies to maximize the creativity, productivity, and value of 50+ and previously retired employees. We make our own luck—and that applies to the organizations that don’t waste this valuable resource! • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • You are spot-on for highlighting ageism! It is the 60-year-old elephant in the room. I have been in meetings where it was disguised as “he/she probably isn’t up to date with technology as a reason for not considering an otherwise qualified candidate.” The older generation invented the computer. We darn sure have the intellectual capacity to learn some of the updates. Also, was there when the “Are you sure he/she will fit in with the younger members of our team?” Ageism comes in many flavors and is very active in today’s job market. Employers are crying for skilled workers who show up on time and give their best but overlook an audience right before them, ready and willing to contribute. Ageism is a cancer in the workplace. My new mantra is: I N D Y stands for “I’m Not Done Yet!” • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • Special thanks to those who commented on our piece. Please complete the form below if you wish to subscribe to future BEST BRIEFS newsletters. In this unprecedented business environment and labor market, it may also be time to shift your thinking on recruiting and make an investment to bring on an experienced partner. One that can help you acquire the right talent and put your company in a position to grow. We can help. If your company is ready to strategically address, improve, and invest in the hiring of the most important part of any company – its people — contact us today!
Conducting an Effective Virtual Interview
Tips you can use when interviewing candidates remotely. As today’s workforce moves from traditional offices to remote work, many businesses are adopting a new way of conducting interviews, and in some cases, even onboarding. While this trend is due in large part to the COVID-19 crisis, there are many positives to moving more of your interview process into a virtual format. Virtual interviews are a great way to work around scheduling conflicts or limit face to face interaction due to social distancing. Did you also know: Five minutes of live video interviewing is considered equal to a 200-question written assessment. Data is suggesting that video interviewing is six times faster and more productive than a phone interview. 93% of communication is non-verbal. 57% of candidates prefer live video interviews. (SOURCE: LinkedIn) We have compiled a few useful tips to help you navigate the process of conducting a virtual interview. 1. Test Your Tech Get familiar with the software you will be utilizing. Test your speaker, microphone, and video. Make sure to close out of other applications to enhance the speed of your operating systems. Conduct a run through with a peer to learn the program capabilities and gain feedback. If you do encounter issues where a glitch occurs and you can’t hear the response, be direct and honest. There could be a connection issue, so wait for the audio to resume and ask them to repeat what they said. It is essential to be upfront and obtain the answers necessary to make a thoughtful employment decision. 2. Create a Neutral Space For a professional atmosphere during the interview, it is vital to find a quiet place, free from distractions. Make sure you choose somewhere that people will not be wandering around in the background. Turn off or mute your phone and silence all notifications to give your full attention. An appropriate background should be neutral but not dull. You can still show some personality outside of a plain white wall by showcasing plants, bookshelves, or diplomas and awards behind you. Depending on the software, you can also choose or create a virtual background that is not distracting. 3. Lighting and Angles For a clear video, it is best to utilize natural lighting— facing you as much as possible. If the natural lighting is not possible, considering adding a lamp to your desk or a ring light to the top of your laptop. A well-lit subject exudes trust and friendliness. Have your computer placed above eye level and tilted slightly down. A quick fix is to use books to elevate your surface. This placement prevents the camera from being directed at your neck and nose and appears more natural like it would in a face to face conversation. As in a regular interview, sit up straight and make eye contact with the camera. Body language still matters to emanate a professional demeanor. 4. Keep Your Candidate Informed Notify your candidate ahead of time that the interview will be virtual. Send a calendar invite with a link to the software you will be using and instructions so they can practice ahead of time and test their tech. In the email, be sure to include who will be involved with the interview, their title, and the role they play so they can research ahead of time to prepare. This will allow candidates to become comfortable with the platform and ensure a smooth interview for both parties. 5. Showcase Your Culture During a virtual interview, candidates are not always able to view the office space and coworkers that they could be working with in the future. Consequently, it may be more difficult for a candidate to get a feel for the company culture. To showcase this, spend more time preparing a presentation to express the company’s mission and vision. You can also send the candidate employee testimonials and links to social media posts that capture the essence and spirit of your company. There are software and video options available for you to provide virtual tours of office and production facilities. This investment usually offers a healthy ROI and help you complete a hiring initiative from start to finish in a virtual format. 6. Remain Positive Virtual interviewing can be a first-time experience for you as well as the candidate, and there may be a few fumbles with the transition from in-person interviews to virtual. You are both working through this together and making the best out of the situation. Remain positive and express appreciation to the candidate. After this experience, you may find you enjoy virtual interviews more than other forms. Whether you use Teams, Zoom, Google Meet, FaceTime, or one of the many other video platforms, find the one that works best for your company and allows you to assess body language and professionalism. Virtual interviews also allow for more flexibility in scheduling across locations and time zones, which can help attract more qualified candidates from a broader region. Along with making the right employment decision in this new era of social distancing and stay in place, virtual meetings also have the benefit of lowering travel and venue costs, all of which are beneficial for your bottom line.