Your house is getting older, your circuit breaker often trips and the living room lights flicker when you use the microwave.
You know it’s time to get your house rewired. So, you pick up the phone and call … your landscaper!
You’re probably thinking: “Ed, why would I want my landscaper to rewire my home? They might do it much more cheaply, sure, but they have no idea what they’re doing!”
Your landscaper does gorgeous work. He gives your home curb appeal. He has in-depth knowledge about plants and fertilizers and design.
But why would you ask your landscaper to do electrical work in your home?
You wouldn’t because you would never trust the wiring of your home to someone without specialized knowledge, experience and expertise.
So, why in the business world do we do that exact thing?
Why would you ask someone who doesn’t have HR expertise to manage your HR needs?
I’ve had way too many chats lately with folks who think anyone can do HR. They tell me that their CFO has a good handle on their HR processes. They tell me their office manager handles HR. They tell me their marketing person stays up-to-date on HR issues.
How is it possible for someone to effectively “have a handle” on HR when that’s not their primary job responsibility?
I’ve been an HR professional for 25 years, and there are days when I don’t feel like I have a grip on all things HR because of the sheer speed at which things change!
This is why your landscaper shouldn’t be your electrician.
HR items typically represent about 30% of an organization’s budget. Think employee salaries, benefits, taxes, and every other expense associated with people.
For most organizations, HR is the single biggest line item in their budget. Yet we put someone with no professional HR background, whose main job responsibility is not HR, in charge of 30% of the budget!
That just doesn’t make sense.
I had a call last week with a prospective client who wanted to discuss an employee incentive program related to production. I love to do that type of work, and we had a great conversation.
The woman asked me what fee range she might expect for something like this. I told her, and her response was “Oh, I’m really only willing to pay about half of that.”
If I do my job and get her people properly incentivized, her organization will see higher levels of production, higher levels of quality, better customer service and faster shipping time—all of which translates to the bottom line.
But she’s only willing to pay a couple of dollars for that?
Clearly, this client wasn’t a fit. I look at this work from a value proposition and return on investment (ROI) perspective as opposed to cost. I find that there are some business owners and executives stuck in a mind-set of “I can’t afford to do that.”
The real question they should be asking themselves is, “How can I NOT afford to do this?”
Another client of mine had an unexpected resignation of a member of his leadership team. I presented an option to the director: outsource that function at the cost of 65% of what the position’s salary would be, not including bonuses, benefits and other perks.
After he had a discussion with the outsourcing entity I recommended, he said he couldn’t afford to do it.
I said, “Wait, aren’t you still saving money?”
The person I referred him to had vastly more experience than he could ever possibly afford to hire in-house, and it would cost two-thirds of what an employee would cost him. How does that not make financial sense?
It’s a mind-set of cost versus value.
We need to get out of the mind-set of HR as a cost center. Just like everything else we do in business, HR should be providing your organization with an ROI. If you spend $50k on a new piece of machinery to increase production rates, aren’t you going to conduct an ROI analysis on that?
Business owners and executives: start viewing every HR decision in that same light.
If you spend the money, how does it help you recruit better talent, and retain and motivate the talent you already have? That’s at a very basic ROI determiner on the people side.
People really miss the boat when they think of HR in terms of compliance with the law. That’s the easy side of HR, checking boxes for necessary posting and overtime and dealing with the employee handbook.
The hard side is the side of workforce planning—how do we recruit, retain, and motivate the key talent we need to move the organization forward?
That, in a nutshell, is HR’s job, and those of us in this profession spend decades working 40 hours a week trying to figure out that magic solution.
There is a huge potential for ROI in HR to an organization, so why do we take HR for granted in our businesses? Why is it that we don’t want to have true HR professionals influencing our business decisions—those same decisions that are related to the line item that represents 30% of our budget?
I can’t help but feel like there’s a sense out there that “anyone can do HR.”
To a certain extent, sure, anyone can check a box on compliance to say that they’ve reviewed the information with their attorney and the organization is compliant. To me that’s like saying that because I can balance my personal checkbook, I can step in and be the CFO of your organization. It doesn’t compute.
A lot of businesses rely on their employment attorney for HR expertise. I’m not an attorney, and for certain legal matters you certainly need an attorney. But this comes with some caveats:
1. Is the attorney you’re consulting a labor law specialist? If not, you could be getting bad advice. I’ve seen this way too many times.
2. An attorney knows the law and can guide you on legal matters and compliance matters. What’s missing here is that even labor law specialists aren’t HR professionals.
They only have expertise on the legal side of HR. They don’t know how to build your succession plan, implement compensation and performance management systems, train and develop employees, recruit talent or lead workforce planning.
I’ve spoken with a number of labor law attorneys, and nearly all of them say that their clients need a true HR person available to them. They don’t want to be the one advising business owners on what to do when Joe calls out three times in one week. Most attorneys will tell you that they don’t want to take those kinds of calls! They want to focus on bigger-level legal issues with their clients.
By having a good HR professional in your back pocket who can work together with your labor counsel, you accomplish 2 things:
1. You save a lot of money on legal fees.
2. You get a true team approach. You’re able to get high-level legal advice when you need it, but more importantly you get the HR practical advice you need on a routine basis.
The bottom line is this: if you’re relying on an employment attorney or someone without a professional background in HR for your HR needs, you’re letting your landscaper rewire your home.
We all know that won’t end well.
You might think you have HR handled in your organization.
But if you haven’t talked to an HR professional, how can you be sure?
If you really want to know what you’re missing when it comes to your HR investment, and if you really want to know the opportunity you have to get the most out of that investment, call me at 717.925.3270 today.