HumanMarkets

Housing values are down across the vast majority of the country. How is that impacting the ability of companies to relocate talent? Survey results suggest that the volume of relocation might be down or flat but that expense is up. 

( Two good surveys of trends are: www.gmacglobalrelocation.com and www.atlasworldgroup.com )

One issue of concern for everyone involved is what to do for an employee who is asked to move for a new job and has to sell their home in a down market. If someone bought a house for $300,000 and can only sell it for say $225,000 before they have to pick up and move, should the new job/employer pay the difference?

I have been talking to companies across the country about their policies and have reached the conclusion that there are two basic positions - those that do and those that don’t. (You’re welcome.)

Seems like the optimal position is to have two or three tiers of benefit. With each one pick a limit of the equity that you would make an employee whole to, in the event of a loss and then do it. Reasonable limits might be $25K, $50K and $100K.

Tougher question is how to define a loss. Many employees are going to want to think about the “real value” of their house as “what I know my neighbor got two years ago - and he didn’t even have an indoor fish pond!!!!”; or, what they paid, plus the cost of the capital investment to have the fresco of themself rendered as a Greek diety in the dining room. Right answer is likely, the average of three appraisals, one of which has been selected by the employee. Measure that value against their tax basis.

Key lesson for HR folk: many markets matter. This is the collision of the housing market and the labor market. Your needs (demands) in the labor market may not be met when they have to be optimized against a play in the housing market.

Please comment on what you think makes sense and if you have any words of wisdom for a weary HR marketeer.

I think that the answer to HR being better liked, is that we need to be better respected. The key to being better respected is that we have to work on developing a better more integrated character. By extension - we should focus less on talking about ourselves as professionals; stop looking for seats at tables and even less on strategic business partnering. We should work on improved character. I would like to recommend a book on precisely this point - it is one of the 3 or 4 most influencial books that I have read - certainly regarding “how to do HR” and “how to succeed in business”.

The book is integrity by Dr. Henry Cloud. The sub-title says a lot - “the courage to meet the demands of reality”, “How Six Essential Qualities Determine your Success In Business”.

Cloud defines “character” as “the ability to meet the challenges of reality”. Cloud’s “six essential qualities of character are:

1. The ability to connect authentically (which leads to trust)
2. The ability to be oriented toward the truth (which leads to finding and operating in reality
3. The ability to work in a way that gets results and finishes well (which leads to reaching goals, profits, or the mission
4. The ability to embrace, engage, and deal with the negative (which leads to ending problems, resulving them, or transforming them)
5. The ability to be oriented to growth (which leads to increase)
6. The ability to be transcendent (which leads to enlargement of the bigger pricture and oneself)

The namesake of the book, “integrity” is the notion rooted in the need for wholeness around these characteristics. As Cloud says, “Another way of saying this is that while you don’t need all the gifts that exist in the world, you do need all the aspects of character while you are putting your gifts to work.”

I think that the key for HR is that without a more powerful character in this or another similar model, HR looks functionary; lacks credibility with both managers and employees and loses its abiltiy to be a powerful market actor. People who are successful in markets, have to face reality. They never really indulge themselves with “but it should be this way” - it is always about what is.

Want to be that HR person who the business people like - start by having the firmest grip in the room on facing the reality of the situation; then bring your technical ability and HR instincts to bear on that reality. That’s the killer app for HR. Knowing reality - the full reality which includes the market behavior of people inside and outside the organization better than anyone else.

Want to learn how to do it. Read the book: http://www.amazon.com/Integrity-Courage-Meet-Demands-Reality/dp/0060849681/ref=pd_bbs_sr_1?ie=UTF8&s=books&qid=1210608715&sr=8-1

CAVEAT: Attached is a link to Henry Cloud’s web site. I don’t specifically endorse it even though I am in love with the book “integrity”. The web site is much more oriented to his general counselling business and a religous aspect to his work. Not that it’s not good; it’s just not a topic for HumanMarkets and not anything that I have explored all that deeply. http://www.cloudtownsend.com/

I think HR is like Congress. People kinda hate Congress. Look at this chart from Gallup.com Congress has very low approval ratings as an institution.

At the same time, we keep re-electing Representatives and Senators. We like our individual person but hold the institution in distain. (See chart below from OpenSecrets.org for source info and more.)

Is HR like that? People like, appreciate, and respect the indiviudal(s) they know, but hold the department (institution) in very low esteem. Maybe it’s the faceless policies and programs. Maybe it’s an asssumption about other HR people. In Part 3 of 3, I offer a thought on a better way for HR to be so that we are more respected. The answer is in a book.

          I am going to do three seperate posts completing a thought. This is 1 of 3.

I am pretty sure people hate HR. People here includes workers, CEOs, line managers and cartoonists. Take a look at this video and tell me it is not a statement of distain for HR. CAUTION - This has some mild nudity. Don’t click if you shouldn’t have this on your computer  - The Countdown - Human Resources

If you are in HR you should be able to give at least a 5 or 6 sentence type answer to that question. Who do we compete with for capital?

If you are in a publicly traded company you compete, on some level, with every other publicly traded company in the world for equity investment i.e., getting people to buy shares of your stock as opposed to some other companies stock. Are you a private company maybe a partnership? Then your owners have alternative places to make investment as well. Think of two questions - do they keep earnings in the company to reinvest for growth and to maintain the business or is capital siphoned off to feed new or other enterprises.

What’s that? You don’t compete for capital because you are a not-profit. Sweet, but wrong - you compete for grants from foundations and the government. That is even without talking about competing with other non-profits for donations. Remember, we know it’s a market for capital becasue capital is a scarce resource.

OK, well isn’t that a problem for the Finance guys - why would HR care? Because what we do drives our abiltiy to compete in this essential market. Every enterprise needs capital.

Here are some things to think about if your organization either competes for capital through stock offerings or if you seek debt through the capital markets (i.e., commercial paper)

How does my organization fit into the portfolio of investors? What are they looking for from us?  Are you a growth stock? Do they want dividends? Are you considered a value buy (your stock is cheap? Do you represent the best of breed in an industry? Are you seen as an opportunity to invest in a new trend within your industry? Are you an international play for an investor who wants to be in your industry. Think how powerful it would be and the deep stirring in the loins of your Finance leader, if HR framed its work in the context of “what are investors are really looking for from us”

A great question is to ask whether your executives are in favor with investors. Henry Manne wrote 40 years about about the “market for managerial control”. It basically says that capital gravitates toward good management. Are you running your HR function in a way that an investor would support, based on what your investors want from the company.

We compete in mulitple markets simultaneously. If as HR people we are only focused on competing for labor, we are missing a vital competition that the organization lives every day - the competition for capital. Focus on it and you do your job better. It is also a great way to be a strategic partner to other leaders in your company. I bet you will find they focus on it more than you think.

Let me know.

 I judge whether or not I should be happy with my lot in life against the realization that about 5 billion people on this planet would take over my life tomorrow if they had the chance.

I have a better go of it than 99.99% of all of the people who have ever lived.

Someone commented that the title of this Blog “HumanMarkets” sounded like it might be about human traffic, or some other exploitive activity. Here at HumanMarkets we are about HR and economic markets.

Trade in human beings is not something that me or my kids have to think about much. I am very thankful of that fact. Here is a powerful piece of video that draws clearly the picture that most of us, in all of our organizations - no matter how bad we think we have it in the markets, have it pretty damn good. I bet you pass the 5 billion people rule; if not, I hope you do soon.  MTV Exit Campaign on You Tube

Neil does HR      Reuters is reporting that a company in Japan is offering a paid leave of absence for people who have been dumped by their boy or girl friends. Wow. FMLA doesn’t sound quite so bad any more.

 TOKYO (Reuters) - Lovelorn staff at a Japanese marketing company can take paid time off after a bad break-up with a partner, with more “heartache leave” on offer as they get older.

Tokyo-based Hime & Company, which also gives staff paid time off to hit the shops during sales season, says heartache leave allows staff to cry themselves out and return to work refreshed. “Not everyone needs to take maternity leave but with heartbreak, everyone needs time off, just like when you get sick,” CEO Miki Hiradate, whose company of six women markets cosmetics and other goods targeted for women, told Reuters by telephone.

Staff aged 24 years or younger can take one day off per year, while those between 25 and 29 can take two days off and those older can take three days off, the company said.

“Women in their 20s can find their next love quickly, but it’s tougher for women in their 30s, and their break-ups tend to be more serious,” Hiradate said.

 You can’t make this stuff up. Read more at this link: http://www.reuters.com/article/lifestyleMolt/idUST8913820080128

I have been in HR for almost 25 years. Over that time I have worked with and for a few greats. (Also some not-so-greats). One of the greatest, a woman in my Business and HR Hall of Fame is Katherine F. McKenzie. Last night I flew from my home in Philadelphia to Providence, RI to be part of a group honoring her upon the occassion of her retirement as head of HR for Citizens Financial Group. About 100 people clapped and applauded her almost 40 years of accomplishments, laughed at her unique and sometimes salty approach to business. There were jokes, songs and tears. Not too shabby.

In reflecting, I realized how rare it is that we really learn something about the profession from a boss. We may get their take on things, we may learn some techique - rarely though do we really learn something about the profession. I learned four things from Kathy. I think that I would have been happy with one - that’s about the average. Here are the four:

1. Being unreasonable is underrated. We always describe “reasonableness” as an unquestioned virtue. It is an obvious goal for most people to be as much and often reasonable as possible. Maybe that is not right. Kathy got a lot from me and others by sometimes being unabashedly unreasonable. It is a powerful thing to do. Which takes us to 2.

2. Learn to wield power. HR people don’t often know how to use power to achieve their goals. We like to work on collaboration, consciencous and convention. All good things. Sometimes however to be a “real executive” you need to know where your base of power is and you need to be willing to use it to achieve your ends. Think about a president who would not be willing to ever use power. It wouldn’t work. Sometimes you play in the market by openning up a can of whoop ass.

3. Look out for the little guy. There will always be sufficient motivation and opportunity to watch out for the big guys - and doing so is important. However, you must make your motivation and find your opportunity to watch out for the little guys. Usually it’s them who make the work of the organization happen - it is they who need stewardship. Kathy McKenzie was unrelenting in looking out for the voiceless and powerless in her companies. She changed the lives of thousands of families across the country because of her integrity, passion and smarts about how to help people. But becareful of 3 without 4.

4. Know the business better than the business people. If as an HR people you do not understand your business model, economics, metrics, and how you really make money you are useless. If you know all of that you are an HR superstar because what you say makes sense and it matters. In 25 years, I never once heard her talk about a seat at the table. Kathy McKenzie was the table.

 There is a market inside your organization. It is a market for the attention, energy, passion and work of your employees. Every minute of every working day, there are other prusuits you compete against for these scarce resources that are controlled exclusively by your employees. You compete with the nagging spouse, Iraq, baseball, the thought of that guy in IT with the cute butt and even - god forbid - Britney. Your employees are present - you already won in the external labor market, they haven’t left you physically or legally. But that battle is the easy one. Its the internal labor market - the market for their mind that matters. That’s the hard one. It is a market too, there is constant changing prices, constant changing demand. “Market” here is not a metaphor - it is a cold hard fact. Scarce resources being pursued by demand. If you don’t think about it as a competitive market exercise you are doomed to loose. Good HR acts as a market player, not a mechanical manipulator of people.  More on this on the days to come.

Take a look at this excellent commercial from the good folks at CareerBuilder.com.

LARRY AND INTERNAL MARKETS

Notice that no external employer is coming after Larry. Only the internal labor market is at play.

When I was young and new in HR I worked for a large department store. I was on my second assignment in a proscribed career path and working in a suburb of Baltimore, M.D. It was about 6 p.m. on a Friday and I was the only HR person in the building. The phone rang it was Security - they had “caught someone stealing and wanted him fired immediately!”

This is not uncommon in retail - many retailers experience half of their theft at the hands of their own employees. The internal security measures and the need for swift, effective disciplinary action is important for the orderly running of the company. Perversely, it’s one of the reasons that retail is a great place to start an HR career - you hire, fire, counsel and interscede - a lot.

Back to this call… I asked what happened. They tell me that an employee was working on the sales floor and took a camera from stock and moved it back into the storeroom but to a place that cameras are not normally stored. In fact he seemed to hide it in the back of the store room. A “stash” if you will where he would be able to put the camera in a backpack.

So here’s my problem… Security picks the guy up for questioning before he puts the camera into any personal bag. It really is not so clear that the camera was in fact hidden, it was put on a shelf and the employee says he was holding it for a customer (the camera was on sale), he meant to write it up as a hold but got busy and hadn’t gotten back to it. Security is adament that HR needs to support policy and that this is stealing because this is not proper procedure. What to do?

I call Corporate HR and thankfully get the top Employee Relations guy in the company - John Witherington (one of the great HR guys of all time). I tell him my story and ask what to do. He gave me the best HR advice I have received - even up to this day.

He waited until I was done telling him my story and he paused. For a long time he paused (I was sure that I had presented him a difficult decision, even for the great John Witherington.) He said, “Bill, this is not black and white - it’s gray. If it was black and white Security could look it up in a book. That’s what you are there for. Make a God Damn decision.” Then he hung up.

It’s been over 20 years since I made a decision that night. Some have been better than others - most importantly however, I have only a very few times, avoided making some decision.