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December 2010

You Think Your Loaded FTE Cost Is Heavy? Try This One.....

Fact #1- many corporate budgets aren't yet final.

Fact #2 - an easy place that the finance folks will come back to on the expense side is the "fully loaded" cost of an employee.  The finance folks are going to come back to this because when the budget doesn't work, they can do one of two things - they can add more revenue or they can cut expenses.  

The revenue already looks like a hockey stick, so they'll look to the expense side on items like "FTE load" first...

You know the fully loaded cost.  That's where you give the finance folks the % load that represents what it's going to cost to provide payroll taxes, benefits, etc. on behalf of your workforce.  If you're a sandbagger, you gave them a number like 30% of the salary load.  If you're painfully realistic and used to living on the edge from a budget perspective, you gave them a number like 18%.  

When they come back to this number, your reaction depends on how much sand is in your number.  

Want to see what a crazy FTE cost looks like?  One that will make your 30% seem like a bargain to the finance folks?  Try the fully loaded FTE cost for a soldier in Afghanistan.  More from the New York Times:

"The estimated $1 million a year it costs per soldier is higher than the $390,000 congressional researchers estimated in 2006.

Military analysts said the increase reflects a surge in costs for mine-resistant troop carriers and surveillance equipment that would apply to troops in both Iraq and Afghanistan. But some costs are unique to Afghanistan, where it can cost as much as $400 a gallon to deliver fuel to the troops through mountainous terrain."

I'm a moderate on all things, so this post isn't anti-war.  I just thought the loaded FTE number for a soldier in Afghanistan was interesting compared to what we're used to as HR Pros.

For all of you with loved ones serving our country this holiday season, thanks for the sacrifice.


3 Practices that Will Drive How the EEOC vs Kaplan (Credit Check Lawsuit) Plays Out In Court...

It's the gift that keeps on giving, right?  Do you have the right as an employer to decline a candidate for an open position at your company based on them having bad credit?

The answer is yes.  There's no law against it.  But - you might think twice about that, because theMo_money_2 EEOC just popped Kaplan Learning Systems with a huge lawsuit.  More from the Washington Post:

"The Equal Employment Opportunity Commission on Tuesday sued The Washington Post Co.'s Kaplan Higher Education unit, alleging that it discriminated against black job applicants by refusing to hire people based on their credit histories.

The federal lawsuit alleges that Kaplan needlessly evaluated the credit histories of potential hires in a way that had a disparate negative impact on black job applicants. The commission said the practice has been in place since at least January 2008."

The EEOC said it is seeking to stop the practice and win wages, benefits and offers of employment for people who were not hired by Kaplan because of the alleged wrongdoing. The commission said it tried to reach a settlement with Kaplan before filing suit.

"Employers need to be mindful that any hiring practice be job-related and not screen out groups of people, even if it does so unintentionally," said Debra Lawrence, the regional EEOC lawyer who is overseeing the suit against Kaplan."

I've got mixed feeling about this.  Do we really need to screen credit on every job in an organization?  I'd say the answer is no.  Should employers have the right to make decisions on how they want to screen candidates?  I'd say the answer is yes.

The devil is in the details, and the details will probably drive how this lawsuit plays out.   Some considerations that will drive this in court:

1. Was Kaplan simply declining people on a credit score threshold?  Can that threshold score be positioned as being artificially high, thus causing the decline of thousands of candidates a court would have deemed credit worthy by a "reasonable" standard?  

2. Was Kaplan simply establishing the threshold as "if you have a bankruptcy, you can't work here?"  My guess is that type of threshold would be seen as more viable by a court - because it declines fewer candidates.

3. Or was Kaplan operating under the "we know it when we see it standard", with wild fluctuations on what was acceptable and what was not?  If that's the case, they're screwed.

It's a powder keg issue, but one thing is for sure.  The Kaplan suit will cause a lot of employers to check their practices during and after the holidays.  

Merry Christmas.  Watch the credit card debt you take on while buying last minute presents, and don't let the number of times you fail to make a payment on your credit card exceed 4 times in 2011.


Cursing at the Executive Level: It Just Makes You WAAAY Too Comfortable...

My friend, Mike Haberman, recently riffed on the use of profanity as a leadership tool, so I thought I'd do "story time" today.  One of the kooky things about the life of KD is that I've been in one or two industries where cursing was the norm.  I'm not talking about words like hell, I'm talking about the big words - combos included as well. Implications for actions towards parenting types all around. Hourly.  Good times.

What's an HR executive to do?  Well, if you didn't pick up the rawness in your interviewing process, you better get past your sensitivity and play it where it lies.  The worst thing you can do in that type of culture is try to force manners on Carlin the caveman.  The caveman isn't going to change.

A better question is figuring out if you are going to start launching expletives as part of the dysfunction. If you choose to, sometimes it works out, sometimes it doesn't.  From a reader I'll call Jack Bauer:

"A number of years ago, working in Omaha as a Regional HR Mgr, I had Mutual of Omaha ask me to play in a golf outing in another state, for a big charity thing – they would pay for the whole thing, but I had to find my own way there.  So, happens the CEO, COO & CFO were invited to the same outing and were planning on going on the company private jet.  I was in good with the COO – we traveled together frequently out to markets together, so he said “hey, just come with us on the jet.”  Great, done deal – I’m flying corporate and playing golf – it’s going to be a good week!
 
The CEO’s admin makes hotel reservations, we are all staying the same place, sharing a car – basically it’s the senior leadership and Jack for 3 straight days – as an HR Pro could you ask for anything better!?  Day of golf outing goes well – I take off with the vendor and hang with them all day, same at dinner – at the end of the night I hook up with my buddy the COO who is a huge drinker, and has been drinking all day and all night – he’s completely bombed and I join in and get past where I need to be.
 
The CEO decided it’s time to go and everybody needs to get into the van to go back to the hotel. The COO wants one more for the road, and thinks I should have one too – as we walk out to get into the van, the CEO says to me “you’re not taking that drink in the van.”  This is after the COO already got in with his drink.  I say “well, yes I am”.  CEO – “The hell if you are.”  Jack -  “F***, if I’m not” – and I get in the van.  We drive back to the hotel – I go to my room and call it a night.
 
Next morning I come down to catch a ride to the company jet – with the group and the COO says – in front of CEO and CFO “ So, Jack, are you going to tell the CEO to F*** off again?”  With that I made the comfortable ride back to Omaha with the senior leadership team!
 
It actually ended up being great for me – after that trip, the CEO would come to me all the time and ask for stuff and get me involved."

So, the environment of "Jack Bauer" had drinking and cursing - big deal.  The real question is whether Jack partakes in either, as they're inherently linked.  Drinking with the execs in a culture with lots of cussing can lead to - you guessed it - telling your CEO to F-off.  While it worked out for Jack, I've seen a Divisional SVP in my career write off a direct report for random comments that were less inflamatory - just because the SVP felt disrespected out of the blue (I say out of the blue since it was in a good ole' boy exchange that included most, if not all, of the George Carlin 7 words.  It was all fun and games until the SVP randomly decided my guy had crossed the line.  Whoops.)

A better idea than Jack's action?  Be in it but not of it as an HR pro, and don't lead the senior team in cursing.  It's safer, and just the fact that you're not bothered by a culture of profaniity as an HR Pro will make them accept you without you lacing one up like Chris Rock.


What HR and Recruiting Can Learn From Groupon....

What can HR and Recruiting Learn from Groupon?  Simple.  If you don't think marketing is a big part of your job, you've missed the point.

Let me set it up for you.  I was on site with a client for whom we're heading a retained search.  Purple squirrel stuff, I was there to dig through about 3 hours worth of work product (the work the right candidate would Groupon_4C produce) so I could be super honed in to what the shade of purple the squirrel would be.

The preceding weekend, I penned a job posting for the position.  I've written in the past about the need to use job postings as a marketing tool.  Still, I was a little wary of giving the founder of a company (who really didn't know the Capitalist style) a renegade job posting.  

Then, I thought about Groupon and quickly came to my senses.  I couldn't afford NOT to go with the renegade job posting.

Here's the link between my search and Groupon.  Groupon has created a new market for daily offer/coupons in the metro areas they serve.  The primary way they've built the business includes one strategy you'd totally expect and one strategy no one else had the creativity to think of.  They've built the business on the back of an expanded sales force (you expect that) and a dynamic editorial group (no one has ever done that in this sector) that is responsible for writing coupon offers that stand out from the crowd.  Here are some notes from a Dig Communication interview with Brandon Copple, Managing Editor of Groupon:

"DIG: What’s the role of editorial at Groupon now, and where do you see it going over time?

BC: Before I took this job, (CEO) Andrew Mason told me that he saw editorial as the soul of Groupon. My boss, Aaron With, the editor in chief, has created this amazing content that’s built on quality, transparency and accuracy. (For businesses that do offers through the site,) it’s like being featured in a magazine, with a funny, clear and compelling description of your business. But we don’t oversell. We don’t use any of their proprietary language or branding… As far as where it’s going, one of my goals is to make Groupon a destination for aspiring writers. I want it to be a place you go because you want to write for a living, because you want to write every day, write creatively and get published on a site that’s widely read and respected.

DIG: So you really view the editorial voice as something that differentiates Groupon from all those new competitors out there?

BC: Definitely. We have this incredible voice that’s unique. Based on humor, creative but clear, descriptive but concise. There’s nobody out there putting as much muscle and intellectual power into their editorial. And our sales reps use it (as a point of difference when appealing to businesses)."

Translation: There's opportunity to differentiate in every job on the planet by thinking more like a marketer, and HR and Recruiting have more opportunity than most.

You can write the same old job posting that everyone else is doing and give the market what it expects.  Be prepared for your opening to be swiftly treated like most - which is to say ignored.

Or, you can be a marketer and try and write something that gets noticed and shared.  It's tough, because when you put yourself out there, you open yourself up to be mocked by the cynical/jaded/those just waiting for the end to come.  It's a risk.

Be like Groupon.  They recently got 6 Billion reasons confirming their content/marketing approach is valued in a way different from all their competitors.


Are People Who Hug Customers Worth More?

My friend Paul Hebert has a nice post up related to people who are huggers potentially being worth more to companies than their counterparts who are... well, let's just say...frostier....

Paul's post covers some work done by Grant McCracken, the Chief Culture Officer (great blog, subscribe now!), who takes the position that once we find a workplace hugger the community appreciates, we should Hug it out figure out how to compensate him or her for that.  The premise is that a warm engaging character in the workplace, especially in a position of customer contact, is worth more than someone who refuses to....

...hug it out....

What about you?  You think that we should automatically pay the warm embracers more for the value they create to a customer contact business (think a 7/11, a grocery store, etc.)?

Me?  I fall on the side of Paul with this one.  While everyone loves to see the interaction that type of person has with a customer base, I'm not ready to automatically say that the person who knows everyone's name, family situation and tolerance for hugs is automatically more valuable.

Some thoughts as to why this isn't as cut and dry as it might appear:

-The value of the person who hugs isn't tied just to the hugs.  It's tied to the emotional connection they create with the customer, who theoretically is more likely to stay loyal to the business with the hugger in question. So far, so good.

-The problem with saying we should automatically compensate huggers is that they don't always use the emotional connection they create to add more value.  Huggers don't automatically try to upsell customers and create more revenue.  Sometimes they just hug.  That's fine, but it doens't always equal more revenue per store/location.

-At times, huggers can actually create emotional bonds with customers that are negative to the business in question.  Did you recently raise prices on some items to increase the profitability of your business?  The hugger is more likely to empathize with the customer, and even share the reality behind the price increase.  Not good for business.  Think Stockholm Syndrome...

-Some folks just want a mindless transaction.  I'll call this one the pleasantness threshold.  Most people desire a certain amount of pleasantness, but many don't want it to be overboard.  Some folks will shy away from a business with the hugger persona, especially on the low end of the business transaction scale.

Just some thoughts on hugging.  It's the Christmas season, right?  No better time to pitch against hugs.  LOL.


How to Find Candidates On Twitter...

Short post today, but very (VERY!) functional...

Topic - how to find candidates on Twitter using search engines, courtesy of super-sourcer Glen Cathey.  Glen recently did a rundown of the advantages of using Bing (the Microsoft search engine) over Google to source candidates via the web.  Go check out the full post here - it's golden.  Here's a tidbit from the post related to how to find candidates on Twitter using Bing:

"With Bing’s NEAR:x functionality, it is remarkably simple to X-Ray Twitter and target people in specific locations who mention specific titles and/or skill terms in their bios.

For example, let’s say you wanted to find Twitter profiles of user experience professionals who live in the New York area. You could run a search like this on Bing:

site:twitter.com bio near:15 UX location near:3 new york"

Play around with the string - it works like a charm...

If you recruit for a living, I'd subscribe to Glen immediately.  Glen and Kelly Dingee at Fistful of Talent are the gold standards when it comes to sharing digital sourcing advice on the web.


An Obvious Add to Your Harassment Training Platform: Top Ten Lists of Hotness...

With all the hubub about WikiLeaks and the promise that the next big data dump of documents is going to take a major bank down, it's worth a thought to wonder how Wikileaks is going to impact your company.

The answer: WikiLeaks probably won't impact your company, but the emergence of alternative media sources looking to break some news embarrassing a major brand is certainly a threat. Top_ten__waynes_world_

It all comes down to a toxic combination:  The scorned, jaded employee and stupid emails.

Case in point.  The Irish branch of PricewaterhouseCoopers, where a group of guys decided to be complete morons related to female trainees.  Read the following from the Belfast Telegraph and tell me whether you think this could go viral if it happened in your company:

"One of the UK and Ireland's largest accountancy firms last night launched an internal investigation in the Republic after male staff were found circulating emails where they rated the looks of their female colleagues.

PricewaterhouseCoopers (PWC) started the probe after pictures of young women, who had just recently joined the firm, were sent around and nominated for a "Top 10".  The emails were circulated between a group of up to 17 male staff members within PWC before being forwarded to other businesses as the emails went "viral", spreading across the internet.

The 13 women, whose pictures were accompanied by their names and departments, all recently joined the accountancy firm as trainee accountants or "associates" and are expected to train with the company for the next three years.

The initial email sent around by the group of men had a subject line of "this would be my shortlist for the top 10".  A subsequent comment in the forwarded email says: "Great work... have reservations about the last one getting in."

Is it WikiLeaks?  No, but certainly the type of issue that could kill the momentum of a college recruiting program if you found your company in this situation.

Let's just say that if I'm recruiting against you and this is out there on your company, it might come up if a recruit's choice comes down to my company or yours.  How could it not?

WikiLeaks probably won't impact your company, but stupid email certainly can.  Add this to your harassment program so all know there's no such thing as a private email....

 


Twitter Succession: How To Tell When Your Little Company is All Growns Up....

There's a line from Vince Vaughn in Swingers that I love to quote, but my wife hates with a passion.  

"My little baby's all growns up."  ("Growns" up as in plural)  Whenever I give her the Vince vibe with "growns up" instead of "grown up" (he was saying it about Mikey in the movie), it drives her crazy. Esquirecoversm-thumb

You know how you can tell if the cute little company you loved is growns up?  They're kicking out the dreamers and product people and bringing in business people to try and monetize the baby.

Need proof?  It's happening at Twitter. more from Business Insider:

"After Twitter's long-time product boss Jason Goldman announced yesterday that he was leaving the company -- with no next job lined up, at least not publicly -- we wondered what was going on. What we've heard is that there is a major shift going on at Twitter, with the business side playing a more dominant role at the company at the expense of the product side.

This seems to have occurred as Dick Costolo (a business guy) took over as CEO, replacing Evan Williams (a product guy).  One story going around about Jason Goldman's departure is that Ev basically got demoted and that Goldman -- an "Ev guy" -- was annoyed enough that he wanted to leave.

A plugged-in tech executive says he is "now worried about Twitter." He adds, "this is the kind of sh-t that makes people want to configure their boards" the way Mark Zuckerberg did at Facebook, "so that the business side can never oust the product side." But, he thinks that if Kleiner Perkins gets involved in a big Twitter funding round, "they will probably fix it."

On the other hand, as far as Twitter's investors are concerned, it's probably a good thing that the business side is playing a bigger role at Twitter. Despite its enormous global growth, Twitter still doesn't know what it wants to be when it grows up, and it's time for the company to figure that out. Facebook when through a similar progression a few years ago, and it certainly worked out well for them. In Facebook's case, the fast-growing user base fueled much of the company's increase in value, but the business side of the company has also made huge progress. If Facebook's ad business were still a dud, it would be worth a fraction of what it is today."

Succession is an interesting thing, especially when you think about a company with killer intellectual property that hasn't capitalized on the promise yet from a cash perspective.  If you find yourself in that situation (great tech, no profits and outside investors), look around, because one thing is for sure: The senior team you have now won't be the same in 12-24 months.  Help is probably on the way from the outside.

The people who built the product aren't usually the ones who monetize it.  While Facebook is shown as an example where the product person held onto control (Zuckerberg), it's fair to say that he's surrounded himself with business people who know what's going on from a business perspective.  

The great tech, limited profits company.  About to be all growns up at an office park near you.  It's how evolution works.


Real Men of Genius: Mr. "Email Volume Objector"...

Lord knows I've made some critical email snafus in my career, so I shouldn't throw stones.  BUT, I will say this:  I've grown a bunch in my career related to the use of email.  I don't send as much junk as I used to, and dare I say - it's pretty much impossible to get me in an email pissing contest - either one-on-one, or with others witnessing the carnage.

All signs of growth.  Young KD loved ripping off long rant emails designed to decapitate someone's Bud light career.

Older KD?  Not so much.  That's a good thing...

But let's be a little bit superior and talk about one thing I've seen multiple times in the past couple of weeks that's driving me crazy and defies logic...

Situation: Someone sends an email that clearly should not have listed all the recipients.  A great time to use the BCC function. Maybe some dialog starts and people are comfortable using the "reply to all" function to chat informally, meaning you're treated to the ongoing dialog of those commenting to the group.

Reaction: Someone in the group is offended that their email box is getting filled up, so they do what they think is reasonable to call attention to the infraction: They reply to all with a message that looks something like this:

----------

To: Reply to All
From: The Superior One
Subject: RE: Can I get your address for my Christmas Card Mailing? 

People:

This email should have never included all the email addresses in the "to" or "cc" line.  When you "reply to all" you are filling my email box with junk.  Please stop replying to all.  It's a clear breach of reasonable use of email.

Grow up.

-----------

At some point, someone in the group of 50 people replies to all to the person objecting, either in innocence or in a challenge to that person's holier than though attitude.  Which causes a run of 5-10 additional "replies to all" as grumpy guy reminds him of what he just said in a.... you guessed it... reply to all....

Dude, you just increased worldwide email traffic by a percentage point by becoming the person you hate... The irony...

Bud Light Salutes Real Men of Genius: Mr. "Email Volume Objector"...

Just delete the incoming emails, Einstein...


Anti-Lebron: The Best Talent Culture In The NBA Is...

Editors Note: If you're not sick of the all the Lebron/Miami Heat hype by this point, you're either not following sports at all (which is fine) or you're wearing a Lebron James jersey - right now.

So, we're a fourth of the way through the NBA season.  It seems like a good time to evaluate what's going on and think about what it means for building a great organization.  The Miami Heat go out and grab Lebron and Chris Bosh to pair with Dwyane Wade, and the result is a 13-8 record and early rumblings the All-Star crew was going to run a mutiny and force the young head coach of the Heat out...

Meanwhile, we've really heard nothing about the leaders in the West, which includes the San Antonio Spurs and the Utah Jazz (16-3 and 15-6 respectively).  The 24-hour news cycle on the Miami Heat really tells us everything that's wrong with our society today.  We cover the flash and ignore the quiet excellence... 

Which is why I'm re-running the post below from last March.  For lessons in how to build your company, look to Utah and San Antonio....I've left the comments from last March in, feel free to pontificate about the contrasts to Miami and what it means for our companies...

--------------------------------------------------------------

That's right - a post on the NBA.  If you give me a chance, I'll make a comparison to your organization.  All I need is a chance.  From you.  So keep scrolling...

Think you have a good talent culture?  I'm no OD expert, but I'd tell you that the following things need to be present:Jazz

1. Ownership who knows who it is and what it wants. They don't try to be everything to everyone.

2. Continuity in Leadership positions.  AND - that leadership doesn't try to be everything to everyone.  They've got a system.  It works. If you want to work there, you've got to be a part of the system.

3. A system (including recruiting, performance management, development, marketing, etc.) that is so effective that the organization can survive the departure of stars without a tremendous decrease in business results.

4. Points #1-3 add up to the following:  The organization with a good talent culture routinely outperforms those who spend more on talent than they do. They compete in ways that they shouldn't because of their approach to talent.

No doubt you can list other factors that must be present to have a sweet talent culture.  That's my short list, and the devil is obviously in the details that I don't have space to unfold in a blog post.

So.. Let's evaluate a real ecosystem and determine the winners and the losers....With the factors above in mind, who has the strongest organizational/talent culture in the NBA (pro hoops)?

If you said the Los Angeles Lakers or Boston Celtics, congratulations.  You're a front runner and you've taken the simple way out.  The Lakers have been outspending everyone for decades and have the natural talent advantage of playing in a market where every NBA player would like to play.  The Celtics, while hot recently and holding 17 championships (is it 17?  I think it's 17...), went through such a dry period between Bird/McHale and Garnett/Pierce/Allen that it's hard to say their talent culture is best in class.

If you really evaluate NBA franchises, two come to mind as having best in class organizational/talent cultures:  The Utah Jazz and the San Antonio Spurs.

First, let's examine the Jazz.  The Jazz play in a market that is like kryptonite to the average NBA player.  Salt Lake City is different from almost every other NBA city and is routinely voted near the bottom of the cities in which NBA players would like to play.  Yet the Jazz deliver consistent seasons year after year.  How does the Jazz franchise generate such results?

Let's go down my list of factors.  They've got consistent ownership.  That ownership has had head coach Jerry Sloan in place for almost 20 years, in a league where the average tenure of a coach is about 2 years.  Sloan has the same offensive sets he's always run - the Jazz just execute with precision.  You know what's coming.  You just can't stop it due to the emphasis on execution.  Because Sloan has been there forever, if you don't want to execute what he wants, you sit.  And the owner has his back.

So the factors are in place for the Jazz.  But here's what is really impressive - not too long ago they had two hall of famers playing for them in Karl Malone (the mailman) and John Stockton.  When those two rode off into the sunset, Utah should have dropped to the bottom of the league while they rebuilt.  But they didn't.  Mainly because the primary factors outlined above were in place.

Many would argue that the San Antonio Spurs are in a similar position with organizational/talent culture.  I'd agree, with the following additional thought - when Tim Duncan (the cornerstone of the Spurs franchise) finally retires and the Spurs remain a playoff team for 5-6 years, they'll arrive at the level of the Jazz.

For now, it's the Jazz.  Build your company after the model that they've created.  Strong ownership, leadership continuity, and a consistent system that works when executed.  That's all it takes.