Creating Your Human Resources Plan: An Interview with Business Strategist Mark Bittle
February 4, 2010
I recently sat down with Mark Bittle, founder and owner of Progressive Impact, a strategic planning consultancy dedicated to the success of small businesses. His new book (Spring 2010) walks business owners through a comprehensive yet easy-to-follow process for completing a thorough strategic plan for success. Our conversation revolved around one piece of the strategic puzzle: the Human Resources Plan.
Q&A with Mark Bittle, Owner, Progressive Impact
In your new book People Who Know How, Will Always Work For The People Who Know Why! you encourage small business owners to have a Human Resources Plan. What are the elements of a Human Resources Plan and how does this fit into the business’ overall strategic planning?
Human Resources is the essential stuff that makes your organization go around, and there are many elements to address when developing this type of plan: Hiring, firing, employee development, training manuals, recognizing your employees, as well as having on file the appropriate paperwork for each person who works within your organization. The Human Resource plan is not something that business owners can afford to do without.
Developing a business through the creation of an active strategic plan must include plans for developing the people within an organization. Aren’t the leaders, managers and employees the ones that help you to accomplish the goals of that strategic plan? Sharing the values, vision, mission, and goals with players within your organization makes it easier to find the right people, put them in the correct seat, on a bus that is going to a purposeful destination.
Having a human resources plan, employee handbook, and updated training materials has alleviated many time bombs in the organizations in which I have coached. This specific plan in and of itself helps to increase the efficiencies and productivity of everyone working “in” the business, and, when done effectively, will increase the profitability of the organization.
What would you say is the worst thing small business employers can do when hiring new employees?
That’s easy… not taking the time to screen them… not only for their skills (via the resume) and personality and attitudes (behavioral interviewing) but also for their “fit” for the job (how they make decisions, solve problems, take action… that is what they bring to the game and what they need to be successful). Small business owners are not experts in all areas. They are doing what they do best, and at some point they decided to take risks to start their own business. Hiring the wrong person is an expensive risk I encourage business owners never to make.
“The biggest fear that most managers have is
to train their employees so well that they will leave.
While my biggest fear as a leader is to
not train my staff and have them stay.”
When a business, especially a small business, hires new employees, it is much easier to train and retain those that are a good fit, than those who are put in the position as a placeholder until something better comes along. I cannot emphasis enough the importance in making sure that organizations take the time to put the right people, in the correct seats, on a bus that is going to the same destination. [Read more about the cost of a bad hire here.]
How important is management training — that is, training managers at all levels in the art of motivating direct reports to perform at their highest level — in the Human Resources Plan?
It is imperative that there is a training and development program. For example, understanding the difference between “managers” and “leaders” is an important distinction that can be addressed with training when the right people are in the right seats. Managers are those who are put in a position to make sure that things get done according to goals and objectives. Managers essentially work “in” the business. Leaders are the visionaries that work “on” the business to shape those goals and objectives, and are able to put together groups to move the organizations forward. A key idea of course is that “managers” can also be “leaders” when trained well.
How important would you say is the relationship between the manager and direct reports to the success of any small business?
Establishing effective group dynamics is often overlooked when hiring people, and is certainly under-appreciated within many organizations. Having positive relationships, understanding the different ways we each communicate and recognizing the value each member of a diverse team brings to the game helps to increase productivity and efficiency as well as to foster a healthier working environment. Intentionally creating an “engaged organization” will have a great effect for every business’s bottom line.
And what about professional development for employees and teams? Is this relevant in the Human Resources Plan?
Everybody wants to be national champions, but nobody wants to go to practice. Hiring a “coach” for the team’s development can often accelerate progress within an organization. Professional development helps on so many different levels including but not limited to the following: employee retention, speed of innovation, customer satisfaction and proactive decision-making. I personally allocated up to 3% of my gross revenue towards professional development, and the results are amazing. Hiring an objective professional to come in and help to overcome personnel challenges and shortcomings is an essential tool that should be considered.
Prep for the Turnaround: Hire Right the First Time
July 13, 2009
RIGHT FIT = SKILLS + INSTINCTS
You meticulously reviewed the resume. Used your best behavioral interviewing techniques. Checked references until you were blue. But the new hire still turned out to be a dud. What was missing? He looked great on paper and blew the interview out of the water. But once on the job he not only didn’t play well with others and ran with scissors, he didn’t fulfill the responsibilities of the job even though his skills indicated he could. What happened?
More importantly, how do you make sure that never happens again?
To quote an article from Landscape Management — featuring friend and fellow Certified Kolbe Consultant Jason Cupp — “There is solid evidence suggesting that defining an employee’s or candidate’s natural instincts will often provide the information you need to make your best job placement decision. While employers can choose from many assessment tools, the Kolbe Index is a simple and accessible tool to outline and reveal a person’s initiating and supporting instincts.”
Bingo! The missing link: instincts.
When a hiring manager can rate candidates in an unbiased (by gender, age, race, national origin…) way based on matching their natural instincts to the instincts required for the job, they have the ability to identify the required methods of operation of the ideal candidate. In addition to skills listed in a resume or motivators discovered in behavioral interviewing. The power to predict performance — based on those instincts that drive actual, observable behaviors — can save another bad hire, which saves an enormous amount of time and financial resources. Can you afford afford not to do this triple-check?
COST OF A BAD HIRE
I’ve read several articles, blogs and tweets recently talking about hiring and the cost of making a bad choice. Some of the information I read included results from a 2007 survey by Right Management reporting that the cost of a bad hire ranged from one to five times annual salary. Twenty-six percent of respondents reported that replacing an employee that doesn’t work out cost their organizations three times annual salary and another 42 percent said bad hires cost two times annual salary.
“How do they figure that?” I wondered, which prompted me to throw together this perhaps unsophisticated yet telling formula:
Total cost of a bad hire =
% of salary paid
+ portion of benefits paid
+ direct management time (supervisor’s time spent with employee face-to-face)
+ indirect management time (time on planning for arrival, coordinating training, etc.)
+ management stress time (time spent not focused on work, putting off the inevitable)
+ IT time for computer, phone, and other systems set-up (and take-down for security purposes after the firing)
+ HR time setting up benefits, payroll, etc.
+ % salary of colleagues’ time spent/wasted on the time-sucker
+ cost of time to rebuild postpartum team morale
Yes, I’d say this adds up to somewhere between one to five times the annual salary of the departed disappointment. So the question then is…
Is it worth investing a small amount up front to ensure a candidate’s fit with the role, the team, the organization?
