Today brings another installment of an occasional feature of “Five Questions”, in which we ask five questions of a noteworthy person in the employment law and human resources areas.  I’m pleased that Regan MacBain Traub, CPC, SPHR, founder and managing principal of The Human Resource Consortium, was able to take some time to respond to some questions.

Regan has extensive experience in dealing with complex strategy, change management, staffing and retention issues.  She has served as Connecticut State Director for the Society of Human Resource Management and a Member of the Executive Board for the Human Resource Association of Central Connecticut.

As you can see from the interview, she’s got a wealth of expertise and I thank Regan for sharing her thoughts and her time.  Let us know what you think about these issues in the comments section below.  If you know of others who you’d like to see interviewed,  feel free to comment as well.

1) Are companies starting to hire again? In other words, do things seem to be picking up?

We are seeing a number of positive business climate indicators on the HR front at this time. Organizations are beginning to invest in enhancing their human resource management infrastructure and practices again.

Since, unfortunately, many companies still see HR (particularly when it’s transaction-mired) as a cost center rather than revenue generator (when it’s achieved a more consistent strategic and consultative level), this definitely is a positive sign. We also are hearing more firms talking about, and taking action on, hiring again. We’re also seeing some investments in training initiatives. However, I still hear CFOs questioning the ROI they’ve received from significant expense in training in the past so training budgets will probably lag a bit unless they can prove ROI or are regulatory-driven.

2) What’s the hot area in human resources that companies should start to think about?

I don’t know that I could say that there’s only one ‘hot area’ at this point.

• Certainly, many organizations are having to wrestle with healthcare benefits administration as a result of recent healthcare reform legislation and the regulatory changes required by it.

• While many organizations see the clear wisdom of developing a performance-based culture, there’s a significant argument related to the funding of one when average base salary increases of between 2-3% just don’t create enough differentiation in terms of rewards. There are creative ways to facilitate it but the organization’s leaders have to grapple with some critically important decisions that are not easy topics related to performance and rewards.

• As change continues to accelerate and increases in complexity, questions on governance and critical decision-making within organizational networks has become a newer priority.

• While some organizations are still not experiencing forward momentum, assessing and upgrading talent makes tremendous sense. Adept performance assessment and continuous performance feedback conversations by managers are critical in order to be able to effect talent upgrades.

• During the past 2-3 years of our economic recession, recruitment, interviewing, and selection practices have become stale. Sourcing pipelines have stagnated for most firms. And, the ‘word on the street’ about many organizations is less than favorable. Rapid cycle time is going to be in higher demand as business ramps up and staffing levels remain thin. For many of those within top talent ranks, current employers are more focused on their retention.Individuals in top talent also are more likely to consider that making an employment move may prove to increasingly risky – the devil you don’t know may take significantly harder work to effect performance gains when you don’t have the internal networks or know a new organization’s practices. And, unless an organization has a solid track record of moving forward, the LIFO (last in, first out) rule may apply in the not too distant future. Re-tooling staffing systems and practices, re-building talent pipelines, and re-upping interviewing and selection education of hiring decision makers may be one of the more important strategic maneuvers HR can make at this time.

3) The process of hiring the wrong employee can be costly for employers. What steps can employers consider to make sure they’re hiring the right employee?

Frankly, it’s of great concern to me that statistics are telling us that the average turnover rate among new hires is 46% within the first 12 months (eBullpen, LLC), 58% of high priority hires fail within the first 18 months (Michael Watkins, Genesis Advisers’ Chairman), 40% of newly promoted managers and executives fail within the first 18 months of starting a new job (Manchester, Inc.), and 50% of new executive hires fail within 18 months (The Corporate Leadership Council).

This level of turnover is extraordinarily costly to organizations – in terms of performance, finance, and employee morale. With these statistics, organizations need to be doing the math as to the cost of their turnover and looking at ways to significantly reduce it, much as they examine eliminating significant waste within operations.

We’ve just spent the last 6 months designing a higher value methodology to improve clients’ success in making the right hiring decisions. We’re currently working with clients to help them redesign their staffing systems and practices and we’re creating unheard of value in search, incorporating leading edge staffing consultation in every search we do. And, just like our clients are having to perform, we’re doing more, faster, and for less cost than the industry standard.

As far as what steps employers can consider – I see four key recommendations:

1. For the past 25 years, I’ve seen great focus on skills and not enough on cultural and environmental fit. As fast change continues to accelerate, the greater constant will be the culture with skills changing more frequently as a result of more rapid innovation in products, services, and technology, not to mention global competition. Organizations need to carefully define their culture(s) as part of their strategy and ensure that potential hires fit the culture and life cycle stage of the organization.
2. In terms of assessing the opening, we most often see organizations not doing two important things: a) taking a deep enough view of the role they need to fill, and b) not ensuring consensus of perspective on the individual who is sought, resulting in selection difficulty and lack of congruent support to the new hire.
3. On the interviewing/selection side of the equation, experiential exercises, behavioral event questions, and assessments, in addition to intensive interviewing and expansive reference checking with former immediate supervisors are a few practices that should be utilized consistently.
4. If repetitive turnover is occurring, exit interviews and careful investigation of turnover cause needs to take place. Some creative staffing solutions may be in order.

4) Can you explain the concept of “on-boarding” and do you believe it’s important?

On-boarding is a process that takes place for the first 6 to 12 months while a new hire is learning the organization and role. It’s very important – significant resources were expended in people’s time and money to recruit, interview, select, and hire a new employee. Since we know that about 50% of new hires fail, why wouldn’t you do everything possible to ensure a new hire’s success? In today’s economic climate, how could you even consider throwing an important investment out the window?

When organizations moved slower and there was less pressure to perform, new hire ‘orientation’ used to be considered the way to learn about the organization. However, we’ve come to learn during the past decade, especially with increased demands for rapid performance within greater organizational complexity, that best practice on-boarding includes an enriched orientation and adds practices of rapid assimilation (a GE practice) and coaching to navigate the various bumps in the road that will occur.

As far as New Hire Orientations are concerned, employment paperwork should be completed before the first day – there’s nothing worse than watching someone’s enthusiasm for starting a new job diminish during orientation day under a mountain of paper and, it slows the performance curve. Orientations should first provide organizational context – information about the entire organization, it’s history, philosophies/culture, leaders, goals, challenges, opportunities, structure, systems, and who to call for particular needs. Stories of individuals who have excelled in the organization are a plus.

Departmental/functional orientation is next. Hiring managers first need to make sure that the new hire’s work environment is clean and ready for work – essential equipment and supplies in place (it’s amazing how often that’s overlooked).

Next, carefully preparing a focused and well-orchestrated introduction to the department, its people, work processes and systems, practices and norms, key contacts is critical. Ensuring a mentor is in place to provide ongoing guidance, as well as co-workers scheduled to take the new employee to lunch for the first week or so makes a significant difference in a new hire’s morale and engagement.

Managers need to check in with the new hire regularly (at least a weekly basis during the first month and semi-weekly the next couple months) to provide additional support/encouragement and to provide performance feedback in a timely manner so that a new hire can modify behaviors or practices in a timely and meaningful manner. It’s important that the new person in the department feels that the department wants them to succeed.

5) Are there any online resources you can recommend for people who are interested in learning more?

My firm’s website, www.thehrc.com is a place to start. I think one of the most intriguing and somewhat controversial thinkers on staffing who I recommend is Dr. John Sullivan – his website is www.drjohnsullivan.com. There also are plenty of resources – books, articles, bulletin boards, etc. provided by the Society for Human Resource Management – www.shrm.org.