In the last blog post, I talked about the Top 10 employment law mistakes. That blog was focused on compliance. Compliance is not my favorite thing about HR. You do compliance because you have to. It is a cost avoidance/risk management strategy. But compliance doesn't make you money. In fact, it costs you money--you just hope it is less than you would have lost without it.
Today, I want to talk about what types of HR practices can make you money. HR isn't thought of as a revenue-generating activity. It is seen as a cost. And it is true, that by itself, HR doesn't produce any products or services your customers buy. But I can tell you for certain, that your HR practices have a huge impact upon whether your company is successful because people matter.
So here are my Top 7 HR best practices that can make a real difference in your organization's profitability (and make it a better place to work.) My personal opinion is, "Grow Your People, Grow Your Business." Hence the graphic for this blog post.
1. Pay close attention to culture. Culture is what tells people what is really important, regardless of what your policies might say. It is really more of a leadership responsibility, but have no doubt that your HR policies can support the culture you want or they can undermine it. Consider a culture audit--if you are serious about building and sustaining a culture of a certain type, you have got to pay attention all the time. The foundation of a growth culture is trust.
2. Have the right kind of HR. Most HR departments tend to be one of two types. They are either all compliance all the time or they are what I think of as "tea and sympathy" HR--we want to make the employees happy. Most of the time, I don't fault the HR person--they respond with what they think leadership wants. Many companies have additional duty HR. These people were never trained in HR and have other responsibilities. HR is just an extra piled on to an already busy workload. In my opinion, you need people with superior interpersonal skills (especially in the coaching area), strong professional knowledge, and a business mindset. They should be thinking all the time, how can I help this workcenter be more productive? How can I help the employees be better at their jobs? What would have the most impact on revenue?
3. Hire right. If we hired right in the first place, we could prevent the majority of our people problems. I am not talking just about hiring right off the street--I am including internal promotions/transfers in this. None of us have a crystal ball. We are not going to choose the right person every time. But we can improve our odds by using a solid process. The topic for another post.
4. Not all employees are created equal--they are not interchangeable. We tend to treat employees as if they are interchangeable cogs. We treat employees as disposable. Somehow we have developed the notion that we can pick up a spare part any time we need one. That's pure B.S. There are very real differences in knowledge, skills and motivation. If you pay attention, some employees make fewer mistakes, sell more, and are valued by your customers. This is worth something. Don't be afraid to pay for that.
5. Invest in your employees--especially your supervisors. Employees should be an investment, not an expense. I hear it all the time, "I'm not going to pay for that training because Joe could go to the training and then quit. I would be flushing my money down the toilet. Why should I pay for him to find a better job?" First, I pay for it because he will be better at his job while he is working for me. Next, I plan to be the best job whenever possible, so he doesn't leave. If you have limited dollars to spend, the single place where you can have the most impact is at the first level supervisor. If you invest nowhere else, invest there.
6. Listen. We don't always have all the answers. We don't even have the best answers. The people who know the most about what our customers want are those who interact with them every day. The people who know how messed up our processes are do the job every day. Get over yourself. Listen and learn.
7. Be fair (that doesn't mean exactly the same.) Employees value fairness. Management often thinks being fair means treating everyone exactly the same. It doesn't. Treating people exactly the same can be very unfair. If Sally makes you 25% more money than the average worker, why should she make the same amount of money as the loser who makes you 10% less than the average? Fairness does mean I need to lay out my expectations and hold people accountable. I need to tell people how they are judged and what I use as my yardstick to determine how I decide what to pay, but that doesn't mean we all have to be paid the same. I find employees to be okay with different treatment for different people as long as they can make the connection between that treatment and the standard. hey don't trust smoke and mirrors.
So there are my Top 7. Obviously there are a lot of other things you can do. But if you can focus on these, the rest will be easy.