Working Anywhere Means Elite Cities Are Being Shorted...

How's COVID going for you?

I know, what a freaking mess. Nice post by Paul Hebert today over at Fistful of Talent, who's Gostalking about the need for HR Pros to become polymaths, individuals whose knowledge spans a significant number of subjects, known to draw on complex bodies of knowledge to solve specific problems. 

Sounds a lot like what we need in an imploding world are great HR Generalists.

Let's talk about one trend specifically - the idea that people can work anywhere (white collar jobs) in a Post-COVID World.

Do you believe that? If you do, then as a great HR pro, you must adjust your world view to de-prioritize elite cities as a "must have" location for your organization. One company of many - Stitch Fix - is making the move that many of us must contemplate as talent professionals. Stich Fix is getting the hell out of California. More from SFgate.com:

San Francisco-based online personal styling service Stitch Fix is laying off 1,400 stylists in California between now and the end of September, affecting 18% of its workforce, per a statement released on Monday. The online retailer said that after the cuts are made, it will look to hire back in lower-cost states.

The company's model, built around stylists helping subscribers select clothing that is then shipped to customers each month, has been one of the few major success stories in the subscription shopping world.

CEO and founder Katrina Lake, who started the company in 2011, said "all of our California-based stylists will be offered the opportunity to relocate to the new roles in other states."

The company said that the cost of operating in California was becoming increasingly difficult, and plans to hire stylists in other lower-cost states such as Minnesota, Pennsylvania, Ohio and Texas.

Man. If a company like Stich Fix - fashion, style, etc. - is getting out of the Elite City/Elite State game, then you probably need to fire up Talent Neuron from Gartner and figure out where lower cost talent is stateside as well.

Simply put - if people can and will work anywhere, then your ability to find more talent and potentially pay it less grows exponentially. Facebook made a similar move recently - not by firing people in California, but by acknowledging if people choose to work remote and move to a lower cost area, their salary would likely be adjusted for the labor group/area in question.

It's Comp 101. Covid just accelerates the fact that "place" and "location" matters less (note it still matters, but less). We did a decade's worth of transformation in 3 months. 

With this change in mind, the woman who just graduated from Valdosta State (GA) with a degree in fashion and doesn't want to/can't move to an elite city now has a chance to get a job with a premier company.  Same with Facebook - if you're a great developer, you now have a better chance at working for an elite company - without moving from your podunk little town.

Start firing up the research on lower cost talent with the same skills, HR pros.

Side note: My understanding is that Stitch Fix stylists have to serve men looking to upgrade their style. That reminds me of Crazy Stupid Love, with Ryan Gosling but instead featuring a remote stylist trying to convince a 55-year old accountant to give up double pleats. 

Maybe hazard pay for those stylists. 

(Clip with Gosling shopping with Carrell below, email subscribers click through if you don't see it).


Glassdoor Says I'm Worth 8K Per Year...

Damn you, Glassdoor!  

Quit toying with me. I have enough s##t going on without you cratering my expected value.

A couple of years ago we were recruiting software sales pros at Kinetix and SF was a target market. So I used my Glassdoor account to confirm that the Bay area was an expensive place to hire hunting sales pros, listing my occupation and location to match the target. I never changed it.

I expected my value to fall a bit during COVID, but c'mon. See my estimated market value as a sales pro in San Francisco below (email subscribers click through if you don't see the chart):

Glassdoor
Summary:

--Glassdoor is really good at some things, like aggregating a marketplace for people to leave reviews on companies, rate confidence in CEOs and give you a general sense of what you might be walking into when you consider joining a new company.

--Glassdoor isn't great at most of the things they're trying to do beyond that, as evidenced by my projected worth displayed above, the fact that I get whacked out job recommendations they think I'd be interested in (spot welder? sure!) or the fact that when I check the job scrape for companies I'm super familiar with, it seems to lag weeks, if not months behind while the non-paid scrapes of LinkedIn and Indeed that look to happen daily.

Glassdoor aggregated the eyeballs, but their execution in what they want to do with those eyeballs once they have them is lacking. I'd assume that's not going to improve with the COVID caused layoffs that just happened at the company (300 employees or 30% of the company let go).

Me? I'm just going to figure out how to make it on 8K.


You're Employed and Confident, Awesome - But Stay Lean, My Friends...

If you watched the NFL Draft because you were starved for sports, you saw an unusual event. Due to COVID, the entire draft was held virtually, which means we got to peek in the homes of drafted players, coaches and executives.

And yes, that means you got to peak in the home of Arizona Cardinals head coach Kliff Kingsbury. Yes, he spells his name that way. Yes, his home is fabulous. Yes, those are designer shoes with no socks while other coaches shown had dip cups and sneakers.

Take a look at this photo of a live look-in from the Draft (email subs click through if you don't see the photo), then let's discuss.

Cliff

What a spread, eh? FANTASTIC.

I show this as we enter into a recession. It's a well known fact that 30M+ people have filed for unemployment in a span of 6 weeks.

Then there's everyone else. I hope you're feeling good about your situation, but here I am - Uncle KD - encouraging you to stay lean for what's to come. 

The connection to the picture of Kliff?  I'm a fan of the Ryen Russillo Podcast, and on a recent episode in the last month, he recounted a story that Kingsbury told when he had him on as a guest late in his first season with the Cardinals (2019). Kingsbury had righted the ship after a tough start, and Russillo playfully asked him what he was thinking in a game earlier in the season when he was down 20+ points.

Kliff Kingsbury's Response?

"I wished I wouldn't have bought that f**king mansion."

LESSON: There's no better leverage for any situation you face professional than staying lean and not running up a lot of debt.

Stay thirsty and lean for the rest of 2020, my friends.


When Employees Want COVID Unemployment Over a Job at Your Company...

This post is for the business owners (and the HR pros who support them) that have lower paying jobs that have been thrown into turmoil by the COVID lockdown and the resulting recession. The company I'm a part of isn't part of this situation, but I've been following the news closely.

As expected, federal enhancements to unemployment meant to aid the unemployed is causing confusion and frustration among some business owners, laid-off workers, and the employed, according to interviews.

The federal program pays $600 weekly to the unemployed, in addition to state unemployment payments. With the extra federal money, workers in more than half of US Unemployment states will receive, on average, more than they were earning while employed, according to an analysis detailed by The New York Times.

If you go read the article, you'll see those who got a raise (or could) through federal unemployment analyzing it like this:

"Marcus Anthony, a 48-year-old warehouse worker in Macon, Georgia, said he was receiving $300 more weekly in unemployment benefits — for a total of $730 after taxes — than he would with his regular paycheck.

He said he's feeling conflicted about his eventual return to work.

The extra money "will undoubtedly come in handy during these uncertain times but will be missed when I'm called back to work because I make far less," he said. "On the upside, I guess after the pandemic I hope to return to a life of normalcy with a full-time job with full benefits."

And this:

"Miriam G., who requested that her last name remain private, said she initially felt relieved when she was spared from layoffs at the public-relations firm where she worked in New York City and instead given a pay cut.

Now, she's thinking her laid-off colleagues might be better off.

"I'm trying to decide how is the best method to go about the conversation with my management about how unemployment benefits are more supportive right now than my steady paycheck," she said. "

Add to this employers who thought they were heroes by getting a loan to continue operations through the Payroll Protection Act, only to find their employees pissed that they would get employment protected rather than go into unemployment due to the pay differential, and it's clear - employers have a lot to consider (click on the link if you haven't seen the story, it's a doozy).

So what do you do if you're an employer and you have the following?

1--Employees who don't want you to protect jobs because unemployment is richer, or 

2--Employees who have been furloughed but are signaling they don't want you to bring them back for the same reason.

My advice? First, understand and be empathetic to the fact that some may actually be prioritizing their safety over the money.

Now that we've got that out of the way, let's get real. I offer up the following quote from Don Draper on Mad Men for all the business owners who feel slighted and under-appreciated by these circumstances:

People tell you who they are, but we ignore it because we want them to be who we want them to be.” 

Simply put, when people who are working full schedules (or you're paying in full while you try to wait this out) want to get the compensation provided by the Federal unemployment benefit - or want to stay out and not return to work if you furloughed them and want to bring them back, they're telling you what they value most.

Money in the pocket during a recession is key. So you can't blame the people who view the world in that way, right?

Right.

But you can prioritize the people who didn't feel that way for the rest of your company's existence. You know the ones I'm talking about - the ones who never blinked, who never considered that going on unemployment is better than working, regardless of the compensation of both paths.

Simply put, the people who never blinked and valued the job over the unemployment compensation are the building blocks of your company moving forward.

There's a work ethic in this group. If you find yourself in this situation as an employer of folks who net under 30K annually, you should be empathetic to the group that wants to get as much compensation as possible, but you should never view them the same as the folks who wanted the job - above and beyond all else.

At some point, the benefits run out and we are likely still in a recession with employment levels significantly lower than what we knew before March 2020.

Protect the people who hung with you during this time. They're different. There's something in them that made them value the job over all else. Celebrate the group who hung tight and refused to join the group think that unemployment was better than a job.

They're who you build around coming out of this.


The Origin of the Executive Compensation Industry...

From a book I'm reading - The Firm: The Story of McKinsey and its Secret Influence on American Business by Duff McDonald:

"A small number of McKinsey consultants did manage to stand out from the rest. In 1951, Arch Patton became the first consultant since the founder himself to Arch pioneer an entire field. General Motors had hired Patton to do a study of executive compensation, and he did so by surveying 37 major companies. The results, published in Fortune and the Harvard Business Review, showed something remarkable. Worker wages had risen faster than management wages. Management tool special note of this development, and demand for Patton's help on executive pay packages went through the roof.  Once started, this demand became a perpetual rotation machine, with Patton writing more than sixty articles on the subject over the years."

I'm only 50 pages in, but I've got a highlighter out for this book. Many things we take for granted in American business and management emulated from early McKinsey practices. 

As for the Arch Patton story above, it's a cautionary tale for giving the people what they want, as well as for giving people in power what they want. It's fair to say that this development at McKinsey created a whole segment/industry (executive compensation) that has a lot of implications for where we find ourselves today - regardless of your belief system.

When creating work product, it's always best to create something that more than one person has a need for. Create something - a process, a service, a product - and be capable of marketing it to many.

That's the gold standard. 

What can you create that could be repurposed multiple times in your job or help you get your next job (or two)?  That's the question all of us should be attempting to answer.


Cards Against Humanity Buys Small Company, Makes It Employee-Owned...

Interesting pull from the news for you today with a little Capitalist analysis.

You've heard of Cards Against Humanity. Have you heard of a acqui-hire?  It goes a little something like this: Clickhole

ac·qui·hire
/ˌakwiˈhīr/
noun
noun: acqui-hire
1. an act or instance of buying out a company primarily for the skills and expertise of its staff, rather than for the products or services it supplies.
"this would appear to be a straight acquihire to pick up an engineering and product design team"

The art of the acquihire is alive and well for companies like Google with unlimited resources, who often buy companies strictly for a key group of talent - often 10-20 key employees - even though they think the product of the company they are buying is trash. Put some wealth in the pockets of the targeted talent, lock them in with employment agreements and slowly push them towards projects/lines of business you think have more value.

Back to Cards of Humanity - they're in the news with an acquihire, but with a twist - they're giving a large part of the acquired company to the employees of the company. More from BuzzFeed:

Cards Against Humanity, the card game company, purchased ClickHole.com from its owners at G/O Media on Monday for an undisclosed amount in an all-cash deal, BuzzFeed News has learned. ClickHole’s employees will become the majority owners of the site. Although terms were not disclosed, the Wall Street Journal reported in November that the sale price was likely to be less than $1 million. The Onion, which created ClickHole, will remain a part of G/O Media.

Max Temkin, the cofounder of Cards Against Humanity, told BuzzFeed News that the deal will allow ClickHole to bring on additional staff — it currently has only five full-time employees — and explore new revenue streams. He also said the site would operate independently, with financial support from Cards Against Humanity. ClickHole staffers will not be involved in writing any Cards Against Humanity content.

“We’re giving them funding, and if they ask us, we’ll be an advisor,” Temkin told BuzzFeed News, saying that the ClickHole team will operate independently, with financial support. “We just want to give them a chance to do their thing. They’re really capable — really smart and innovative. And I don't know if they’ve had that opportunity before to try all these creative [ideas for the site].”

The Onion launched ClickHole in 2014 as a send-up of sites like Upworthy and BuzzFeed. It moved on to satirizing online political discourse with PatriotHole and ResistanceHole. Yet it has consistently transcended mere parody and created its own sublimely absurd universe. Quizzes like “Which One of My Garbage Sons Are You?” or its running series of fake banal quotes from celebrities earned it a loyal, independent following.

Cards of Humanity is doing an acquihire with a twist with this acquisition - they found a troubled company for sale, and believed in the talent that existed. BUT - this form of acquihire transfers wealth to the talent not directly to their bank account, but by giving them ownership in the company.  That's a powerful retention tool, and if for some reason they can't make it work, the talent is sure to remember that Cards gave them a chance to save the company and turn it around through their investment and subsequent transfer of ownership.

Moving acquired talent to ownership positions is a powerful play.  And by "talent", I mean people that make up quizzes like "Which one of my garbage sons are you?" It's 2020 - quizzes like these matter!

For great point of view on all things employee ownership and ESOP, follow who I do - Jennifer Briggs.


In Defense of Not Broadcasting Salaries in the Jobs You Post...

When you try to optimize your openings for Google Jobs, you'll turn to the Google Jobs schema for guidance. If you've already been working on this, you'll find that most of the world has two remaining opportunities:

--Address information for individual openings, and Accountant

--Salary Information about the job.

Optimizing location/address information for Google Jobs is a transaction/project. You either have an ATS that can accurately index this information or you don't, and you either want to do the legwork to get location/address info broadcasting or you don't. No big deal. Either do it or don't.

But providing salary information about the job?  That's a whole other can of worms, my friend.

Most of my HR friends doing the work would agree with this statement. They know they can't broadcast this information at their company due to compression issues, company culture and more.

But their's a growing voice in the world that says we should be more transparent about what jobs pay, and even what everyone earns inside our companies. The reasons for this call are legit - there's a lot of inequity across workplaces when it comes to gender, race and other factors. 

We should fix those things.  I personally like moves like the one Salesforce made, where they made a big push towards pay equality. Sure, they promoted the hell out of the move, but they took action, and their company is stronger for it.  Let me say it again - WE SHOULD FIX PAY EQUALITY.

Now let me give you a reality. I think posting salaries in the recruiting process is a weak play.

When I post a job, I'm entering a marketplace. There are overqualified people (code for old people, but that's another post), people who are a direct fit for the job, and people who don't have what it takes, but on livin' on a prayer.

When you post the expected salary for the job, or its weak cousin - the salary range - you're narrowing your marketplace. People with great experience won't apply because you're 10K light. The rest of the people come in with a clear expectation of what you're going to pay.  That sounds fair, right?

Not really. The interview process is a marketplace. When I post a job, I'm looking for the best person available.  Here's a couple of scenarios that happen when I post the $$ for a job:

1--Person with great experience doesn't apply. I never get the chance to feel the experience, see the match and go to bat for the extra 15K I need to sign her up.

2--Person who is a fit comes in expecting the offer to be 80K, but as it turns out, they don't have the experience I need and they're not a true fit. They're actually worth 70K in my eyes, but I never get to make the offer because the negotiation is done once I post a salary.

3--The person with no experience who applied and was lucky enough to catch my eye with that project they worked on in their first job? Well, I can't hire them because they applied for an 80K job, and they'll always think I screwed them by offering them 55K.  I'm actually filling the FTE with a different job, but it doesn't matter, the damage is done.

I won't even bore you with the fact there are a ton of sites that provide research on salary levels that candidates are using that may or may not match up with the salary info you provide (See Glassdoor screenshot at the top of this post). There are a ton of stupid people out there who are horrible human beings. I'm not one of them, and neither are most of you.

I believe we can be trusted with pay equity moving forward. If you have issues in your company, do what Salesforce did - invest and solve the problem.

But stop telling me we need radical transparency in areas like listing salaries in job postings.  You think you're promoting equal opportunity, but the unintended consequence of this action is you're actually making it harder for great people to find their next job.


Why Paying 100K for a Taco Bell Manager Makes Complete Sense...

Taco Bell is going to pay managers 100K per year.  Insert your joke <here>.

The home of Doritos Locos Tacos says it’s going to test paying managers $100,000 a year at some company-owned locations in the Northeast and Midwest Taco bellstarting later this year. Taco Bell/Yum announced the plan Thursday and also said that as of Jan. 1, 2020, all of its company employees “can become eligible to receive” at least 24 hours of paid sick time per calendar year.

Translation - the job market is really, really tight. The people we see landing in our store GM roles aren't what we need them to be.

But 100K to run a Taco Bell location?  That's crazy, right?

Not so fast, my friend. It's not crazy. Let's run some numbers.

Taco Bell said it will start the six-figure salary pilot later this year, but did not name an exact date. The company does not yet know how many managers at its 450 company-owned stores will get the $100,000 salaries or how long it will offer the higher salaries. Current salaries for general managers at Taco Bell’s company-owned stores range from $50,000 to $80,000, a spokeswoman said.

According to Statista, the average per unit sales for Taco Bell restaurants in 2017 was $1.5 million.  The average reports have found that average pre-tax income for franchisees in the food and beverage industry is roughly $90,000

Let's say you own a string of 10 Taco Bell locations, and your stores average 1.5M in revenue per year and 90K in pre-tax income. You replaced 3 of your managers last year, and you offered a salary of 70k. You were concerned about your inability to find good people.

If you're progressive with how you view the impact the right manager can have on revenue, the decision to test a 100K salary from your current level of 70K is a no-brainer.

BTW - note that this trial is at company-owned stores. My scenario was as a franchisee, but in reality, franchisees ARE GOING TO HATE YUM BRANDS FOR DOING THIS. 

What impact can a 100K person have on a single Taco Bell location? I think it's dramatic impact. 

But you still have to find the right person, then sell them on the opportunity and convince them to give it a try. Simply paying the talent you see now more money doesn't do anything - you have to go out and upgrade the type of candidate you're talking to in order for this trial to have the impact Taco Bell seeks.  And that's the catch - there's work to be done with how you recruit to unlock the potential of this trial.

Me? I'll take 3 Bean Burritos, fresco-style. And a large Diet Mt. Dew with no ice.

No sauce.


How To Know If Your Defined-Benefit Pension Plan Is In Trouble...

I'm not an expert on pension plan funding. But if you're relying on a pension in retirement, you might want to take a look at what % of obligations are funded currently in your pension plan.

Why would I say that? Because while I'm no expert, I can tell you when your pension plan is in trouble. Here's how you know: Ge1

You know your pension plan is in trouble when your company announces they're freezing pension benefits, IN THE MIDDLE OF THE BIGGEST ECONOMIC EXPANSION IN HISTORY.

More specifics from the Wall Street Journal:

"General Electric Co. GE +0.06% said it was freezing its pension plan for about 20,000 U.S. workers and offering pension buyouts to 100,000 former employees, as the conglomerate joins the ranks of U.S. companies phasing out a guaranteed retirement.

GE’s traditional pension and post-employment benefits programs, which were underfunded by $27 billion as of the end of 2018, are one of the company’s biggest liabilities. The company said the latest changes could reduce its pension deficit by as much as $8 billion.

GE is still responsible for lifetime payments to more than 600,000 retirees, workers and beneficiaries. The latest changes won’t affect retirees or others already receiving pension payments.

The company’s pension plan is the second largest by projected obligations, only behind International Business Machines Corp.’s,according to consulting firm Milliman Inc., which compiles data on the 100 U.S. public companies with the largest pension plans.

GE had funded 76% of its projected pension obligations at the end of 2018, according to Milliman, compared with 91% funded at IBM. The median funding level was 89% for the group.

Man. While freezing pension plans has become a common technique to reduce risks and shrink corporate balance sheets, when you're doing it in the middle of the biggest expansion in history, you kind of know you're screwed. 

Let's do story time and look at another classic buy high, sell low type of investment fund for the common good.

My state has a Prepaid Affordable College Tuition program, created by the Legislature in 1989 and managed by the state treasurer. It almost collapsed during the last recession. Imagine the Dow at 14,000 in early 2007. Well, that investment group was struggling to meet the member requirements in 2007, and the Dow went to 7,000 during the recession, at which time they exited securities and went to a cash position. Buy high, sell low.  Great work, team! That decision combined with sharp tuition increases (healthcare costs as a comparison in a pension, anyone?) caused the fund to go insolvent and require a state bailout.

The point? If you're freezing pensions at the Apex of the market and the biggest expansion is history, sh#t's going to get real in even a moderate recession of any length.


FLSA Games: Exempt Salary Threshold Moves from 23K to 35K...

Heads up, HR friends at all levels...

Employees who make less than $35,568 are now eligible for overtime pay under a final rule issued today by the U.S. Department of Labor (DOL). The new rate will take effect Jan. 1, 2020.

To be exempt from overtime under the federal Fair Labor Standards Act (FLSA), employees must be paid a salary of at least the threshold amount and meet certain duties tests. If they are paid less or do not meet the tests, they must be paid 1 1/2 times their regular hourly rate for hours worked in excess of 40 in a workweek.

The new rule will raise the salary threshold to $684 a week ($35,568 annualized) from $455 a week ($23,660 annualized). A blocked Obama-era rule would have doubled the threshold, but a federal judge held that the DOL exceeded its authority by raising the rate too high.

The new rule is expected to prompt employers to reclassify more than a million currently exempt workers to nonexempt status and raise pay for others above the new threshold. 

My experience is that the new law impacts small to medium sized business the most, as they'll have a good number of employees labeled as exempt who have a salary in the low 30k's.  They'll be some exposure to huge companies that still have salaried supervisors in places like call centers in the low 30k's as well.

Feel bad about this?  Remember that the Obama rule was going to raise the threshold to 47K, my friends.

More details here from CNBC.

A good rundown here from SHRM of second-level details you'll need to know behind the broad threshold change.