Strategic Human Resources

Strategic Human Resources

People are the lifeblood of any successful organization, and building a team of talented, driven people that work together is a critical part of building a successful company.

Believe it or not, I’ve had people argue that staff are not that important in building a successful company. So, let’s start with a simple exercise.

Think of the best people you have ever worked with? Imagine three of them, and what are the qualities that made them great. Maybe they were excellent problem solvers, great at getting a team pulling together to accomplish a task, or else they had a remarkable ability to charm customers. Perhaps they were able to recognize these qualities in others and hire more great staff to join the team.

Whatever it was, now consider what would it mean for your business to have these people working in your company right now?

There we go, now you realize why having great people is so important if you want to build a great company.

Great Teams build Great Companies

There is a high degree of correlation between successful, high-growth companies and companies with great teams of employees. More top performing staff results in better problem solving, happier customers, and less need for intervention from you as a leader.

It is clear that no matter what business you are in, great people make your business better, and in this article, I want to give a strategy to help you get better people in your company. These strategies have been tested in growing a consulting company from 18 to 425 people, and in each case show dramatic improvement.

Strategic Human Resources

Before you object that you are not interested in playing the role of HR Lead Toby in your real-life episode of The Office, let’s be clear about what we are talking about here.

Strategic Human Resources is bringing the world of strategy to the people side of your business. How will you beat your competitors to have the best team? Business is much like sports, and having the best team usually wins, though it’s not just about talent, it’s also about getting the team working together and supporting each other.

I like to think of Strategic HR around six key Questions:

  1. Recruitment: How will I recruit the best people who fit my team?
  2. Onboarding: How can we make new staff effective in the quickest manner?
  3. Training: How can I help people take the next step in their career?
  4. Remuneration: How should I compensate my people?
  5. Succession planning: How can I prepare for growth?
  6. Culture: How do we engage our team and make them want to contribute?

Strategic Recruitment

Before founding 10Adventures.com, I was COO at a consulting company we grew from 18 to 425 staff. We grew this company during a period of extreme industry growth, and finding great staff was extremely challenging, however it was also critical for our long-term success.

Recruitment was the #1 issue impacting our ability to grow, we just couldn’t find great staff. This was due to two facts, first of all, great people don’t leave their jobs very often, so they’re always hard to recruit. Second of all, there were thousands of open jobs, and competition was stiff, especially for a smaller company with a limited budget.

Rather than just accept that we couldn’t hire great people, I started to research and think about how we can improve how we recruit. The biggest issue was that we had a lot of bad hires, either people that didn’t have the skills to do the job, didn’t have the will to do the job, or didn’t fit our culture. I spent a year tinkering with solutions to our problem of bad hires.

Here is what doesn’t work, and it’s what most companies do for hiring:

  1. Post a job on a job board
  2. Short-list 3-6 candidates who are doing a comparable job in your industry
  3. Interview 1-3 candidates and hire the best interview

The strategy outlined above is almost guaranteed to result in at best an average employee. Why? Because this process gets people to talk about what they have done, but is useless to assess raw talent, desire or ability to learn.

The system I developed took the some of the best recruitment tactics by global leaders to change recruitment into a job simulation. What better way to assess candidates then by getting them to do the job, and see how they perform!

In a simple 1-hour test, I would get great information on how the candidate communicates, their foundational skill set, technical skill set, ability to solve problems, speed of work and more.

And guess what, the best performers on these job simulations were typically not candidates from within the industry, or from a competitor! Often, they were new grads or new immigrants to the Calgary job market, lacking contacts to get the first job in the city. What this meant is that these candidates weren’t dealing with multiple offers!

This was a bonanza, and we found out as we rolled it out across the company that it worked across seniority and job function. We basically eliminated bad hires, and found a great source of talent that gave us a strategic advantage versus our competitors.

By thinking strategically about who you want to recruit, how you assess skills, how you use interviews to assess team fit and more. You can read how I developed a recruitment strategy to vastly improve our hiring success, essentially eliminated bad hires in my article on Strategic Recruitment.

Onboarding

Once you have recruited and hired someone, the process of onboarding is the next critical step in strategic HR. Onboarding is simply getting new team members up to speed, and plays a significant role in whether or not your new hire becomes an asset or a liability.

Not only is onboarding important to get a new team member up to speed, it’s also setting the relationship on day 1. A company and manager that focuses on onboarding is saying to the employee “You are important to us, and we are going to spend the time to make sure you are successful.”

Consider this worst-case scenario: A new staff member is hired and arrives for his first day. Her manager greets her, hands her a few pieces of paper, then doesn’t check in again for 6 weeks. During that time, she is never offered any help nor support and has nowhere to turn with questions. The next time this employee has any contact with her manager, she’s been working at the company for 6 weeks. The manager contacts her to let her know her work is unsatisfactory and the manager is recommending terminating her employment.

This scenario might seem appalling and impossible, but I’ve witnessed this exact scenario first hand. Managers often forget about an employee once they have been hired, and the reality is that a potentially wonderful new employee can turn into a bad hire entirely due to bad leadership.

Since direct managers have so much influence in how new staff develop, be sure every direct manager has a few key onboarding practices so that managers and employees alike are successful.

  • Direct managers should either lead or be highly involved in the recruitment and hiring process. They should be invested in this person and his or her success.
  • Managers of new employees should be available for approximately 1-2 hours each day for the first 2 weeks to mentor and support a new employee through the process of coming onboard and getting up to speed. Consider this a long-term investment. After 2-weeks, expect to have at least a weekly meeting to help the new team member.
  • Managers must have a written list of expectations for the new team member that is clear and tangible. This list should be broken down by tasks completed, skills or tools learned, vital relationships formed, etc. This should be shared with the staff member on the first day and referred to regularly.
  • Informal performance reviews should be done by the manager regularly. I recommend weekly reviews for the first few weeks, then every 4 weeks after that during an agreed-upon introductory period. Regular, clear communication eliminates any surprises or misunderstandings about how things are going or how employee performance is evaluated.

Much of the responsibility for successfully onboarding new employees rests on the direct managers, though I’ve found the best managers also use other leaders within the company and their team for support.

Training

I feel like a lot of training is wasted money. How many courses have we been on that resulted in little to no value to you, your team or the company?

For this reason, I like to look inside the company for the first step of training. While it’s easier to buy a course, it’s more valuable to make sure your staff are well-trained about your company.

This internal training can be something as simple as the procedures and policies in their department, or learning about how other teams in the company work and how their work fits together. It could also include simple things like sharing the company culture, or spending time talking about work expectations, or company strategy. This type of training should help your staff improve in their field, but it is even more valuable if your training produces staff who are experts on your company.

In fact, I think the best training for strong performers is to give them the opportunity to take on a new task, ensuring they have a lot of support and feedback. This is useful as it’s essentially one-on-one training, where the team member gets to work on something new, develop new skills and get high value feedback on what they do well, and areas to improve. Often the mentorship in this type of training is only a few hours spread over a few weeks, but is fantastic in developing a great team member.

Remuneration

“Show me the money!” However much people enjoy their jobs, the fact remains that quality employees expect to be well rewarded for their time and skills.

One way to recruit excellent staff is to pay above-market wages, though I don’t think this is the best strategic solution, as focusing purely on financial reward misses the intrinsic reason of why we come to work each day. In addition, for start-ups, it’s simply not feasible to pay the highest wages, so you will need to be more creative in offering potential employees great incentives to come and work for you.

I like to look at three things that are important in recruiting beyond just pay:

  1. Role: Can I give a more interesting role that allows a candidate to develop skills that are going to valuable, and allow them to earn more down the road. The smartest candidates aren’t looking at a job as a one-year scenario, but are thinking about long-term, and will assign a value to learning critical new skills.
  2. Non-Cash Benefits: Non-monetary benefits can be worth a lot and help you recruit a high-performing team. I have used schedule flexibility and remote working effectively. In addition, look at what problem your company is tackling, and find people who are interested in that problem or industry. These candidates will value a job where they can contribute to something, they find meaningful.
  3. Non-Salary benefits: For growing companies, it’s useful to consider non-salary benefits, though in my experience these benefits are discounted compared to pure cash in the form of salary. A bonus plan works great to incentivize company performance, though can be difficult to quantify contribution as your company grows. Equity, or stock options, can be an enticing offer, but this should be approached carefully, since equity is long-term, and will continue to be owned even if performance begins to suffer, and it continues long after an employee has left the company.

Finally, it is important to ensure your renumeration plan fits who your target employee is. Early career staff will value learning, culture, and less tangible benefits such as the freedom to work remotely and schedule flexibility. Later-career professionals are typically primarily motivated by base-salary, bonuses and stock options, making them more expensive and not as interested in non-cash benefits.

Succession Planning

If you are growing a company then you always need more leaders who are qualified and equipped to contribute to your company’s continued growth.

This means that every person you hire should be viewed as potential future leaders on your team, and it’s up to you to help them get there.

The only way to help your staff develop into strong leaders is to put them into situations that allow them to develop leadership skills. Give them opportunities to make decisions, try new skills, and take on new challenges. Motivated, performance-minded people will appreciate these opportunities and the trust placed in them to make decisions without being micromanaged.

This does not, however, mean abdicating responsibility and leaving them without support. Check in often and anticipate possible pitfalls so you can help them avoid making major mistakes and limit the damage when things go wrong. Be aware from the start that these developing leaders are going to make mistakes, but remember that a great employee will only make the same mistake once. With support from you, they will grow quickly and you will soon be able to trust them with greater and greater responsibility. These leaders represent the future of your company.

Culture

Many people would choose to list culture first, but I’m placing it last on the list because in reality your company’s culture is something permeates everything listed above. Culture is often nothing more than words on a website, and not tied at all to what happens within the teams.

Culture is created by the people you hire, promote and set as leaders. When you recruit and hire the right people, train them well, and promote them appropriately, you are building the culture of your company. Hire the wrong people, and that is also creating your culture.

Company culture can both draw staff together, and also turn some staff off. One area I’ve seen where culture causes a break between staff is accountability. Fundamentally, you need to determine if your team is going to hold each other accountable or not, and this often leads to some team members to leave.

Another area where culture can be divisive is how a person approaches problems. I personally like working with “Can-Do” types of people, who always find a solution, in fact are motivated by solving problems. I’ve been on teams, and it seems more common for people to have a “Can’t Do” mindset, looking at reasons not to solve a problem.

In both accountability and approach to problems, it’s clear that for a growing company, having a team of Can-Do people who take accountability for their roles is a huge benefit. Add to this hiring people who are friendly and transparent, and you have a great start to building a great team.

Your Role as a Leader

If you’ve read this and you’re now thinking that working with the people on your team will take all of your time and make it difficult to do other work, then you are absolutely right and have understood well. Leadership in your company is about getting the team right, not about doing all the work or making all the decisions. Strong leadership means building the right team and facilitating them to work together to complete tasks.

While the task of building a team is onerous, in the longer-term this investment makes your life easier, as the team members become like mini-versions of you, taking over the tasks you have been managing, freeing up your time to continue the work of recruiting new staff to expand your team, bringing them onboard, training them well, and developing even more leaders in your rapidly-growing company.

Leaders Responsibility for Strategic HR

You’d think that with the importance of people to business success, that leaders would be highly involved in HR. Unfortunately, many leaders and managers are only too happy to hand-off all the touchy-feely parts of working in a team to somebody else. These leaders and managers actively want somebody else do interviews, onboard, give feedback, develop and other aspects of managing a team. Often this means that HR is marginalized, forced to an administrative function.

But the best teams have a leader who is actively engaged in all this HR work, often leading from the front, engaged in all this messy human interaction. The best leaders are involved with hiring, onboarding, training and setting the company culture. These great leaders are also planning for their team, considering how the team will grow, how each team members role will grow, and how they can be more successful.

If you’re a middling company, or not striving for growth, then having somebody like Toby from The Office managing human resources might not have much impact one way or the other. If, however, your company is in a period of significant growth, the person who is hiring your teams has tremendous influence over the future of your business and its continued growth potential. When you are growing you need to recruit the best people, onboard them effectively, train and promote, making sure the right people stay and are engaged.

Framed this way, the role of Human Resources is too important to be delegated to someone who is just great with paperwork and really friendly. In fact, I believe that the most important job a leader of a growing company can do is recruiting great people to the team, getting them up to speed quickly, helping them work together and keeping the team engaged.

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