We do not learn from experience… we learn from reflecting on experience.

John Dewey

You or your team hired someone who failed. They may not have had the skills, character, personality, or perspective that the position required.

It’s easy to write the failure off completely to the candidate, setting yourself up to make your mistakes over again.

But great companies don’t make mistakes repetitively. And if we really believe that our people are our greatest asset, a failed hiring process is a big deal. We must not squander those lessons!

Imagine how much more effective your company is if its turnover rate is 1 in 4 hires versus a competitor who may have an average 1 in 2 turnover rate! Over time, that’s a massive difference in energy allocation that is better spent on securing new business and improving product quality.

Companies who build teams better tend to grow at greater sustainable and healthy stress levels. A quick learning pace is key.

H2 heading: LET’S GET THE EXCUSES OUT OF THE WAY

Often the unproductive internal conversation sounds like…
“They didn’t tell us about that in the interview.”
“Their performance was lackluster.”
“They required too much hand-holding.”
“They didn’t fit our culture.”
“They didn’t do the job properly.”
Etc, etc, etc…
Does your team abdicate ownership to the failed employee, and thus fail to learn for the next hire?
When a teammate fails, does the team look retrospectively at the ways it may have failed its teammate? Communication? Training? Encouragement? Accountability?

H3 Heading: STEPS TO ACQUIRING ACTIONABLE INSIGHT

Conduct separate manager and employee exit interviews by a non-biased party. They can be internal or external. Ambassador Search Group can conduct these for you at a nominal charge if you like.
Review both exit interviews sequentially to recognize differences in perceptions and experience. It’s important to ask the same questions for comparable results.
For managers who know how the exit interview will be used, this puts pressure on them to account for the employee’s perspective. Otherwise, they will be seen to be clearly out of touch. Accountability without blame is healthy.

H4 heading: QUESTIONS TO ASK YOURSELVES

Bullet list:

Numbered list:

  1. What did we fail to understand in the interview?
  2. What expectations did we not set clearly enough and achieve mutual understanding on? Setting and saying expectations is not the same thing.
  3. What skills did we not validate well enough? Asking about skills and seeing them borne out in answers to behavioral questions or sample problems is not the same thing.
  4. How could our culture value and expectations been made more clear?

Companies who quickly and cheerfully diagnose and change based on hiring lessons learned have a serious cultural and team-building competitive advantage.

Test button

One of the questions we hear most frequently is where salaries are at across a range of titles, based on open-source data. Such an inquiry is understandable for companies and individuals trying to make salary-related decisions, but trusting this data is problematic. 

We have run large salary surveys that measured tenure, type of work, project budgets, geographic area, job satisfaction, manager relationship, benefits package, historical bonus, and interest in changing jobs.

We were surprised to find the data didn’t make sense. We expected to see a clear correlation between experience and earnings, but this was not the case. Based on our personal knowledge of some of the people who participated in the survey, we could tell there must be more going on in determining salaries than our surveys revealed.

QUALIFICATION

In this article, I will make bold claims based on my experience as a recruiter after working with thousands of candidates, seeing a variety of company cultures, and participating in many hires. I cannot substantiate every claim I’ll make with hard data, but I offer to you my conclusions after these thirteen years of relevant experience. 

LOOKING FOR COMPENSATION DATA MAKES SENSE

Markets are always moving, so it’s understandable that good companies want to do their research, in order to keep up with current trends and pay their employees a fair salary; and of course, employees want to make what they believe they’re worth on the open market.

We are taught to look for hard data to determine the appropriate salaries. It’s everwhere.

HOWEVER

Here are all the important and unique variables that impact compensation. Can you think of more?

  1. the rank of skillset relative to peers from passion for excellent work
  2. degree of proven company loyalty
  3. challenge and cost to replace the employee
  4. problem-solving skills
  5. relationship/influence with peers
  6. management ability
  7. relationship and trust with ownership
  8. customer-facing communication skills
  9. project load and profit potential for the company

The problem is average data accommodates none of these specific conditions. You are not average, you are not looking for average team players, and your products are not marketed as average.

Why would average salaries prove useful?

Furthermore, average data can work against you as easily as it works for you, on either side of the negotiation. If you are comfortable asking for a raise or making a lower offer due to average salaries, are you also amenable to being similarly moved by market conditions out of your control?

Of course not.

10 REASONS INDUSTRY WAGE DATA DOESN’T HELP

  1. It is difficult to prove the accuracy or inaccuracy of salary data. Salary data is gathered only from those companies and individuals willing to share their information. The employees who share salary information have an incentive to provide exaggerated data, in order to drive up the averages. Likewise, employers may provide lower data to drive averages down and limit their employees’ ability to negotiate higher salaries. There is no comprehensive audit to confirm the accuracy of the information collected.
  2. Specific needs sometimes necessitate overpaying an employee. There are times an employer is desperate and must overpay, in order to fill a role, such as after the loss of a key employee, driving up averages. 
  3. An employee’s relationships and organizational trust greatly impact earnings. Sometimes people get paid more for who they know than for what impact they have on the overall earnings of the company. 
  4. Years of experience impacts compensation, but not as much as raw performance. We’ve seen many long-tenured but incompetent employees far outshone by less tenured but conscientious and diligent professionals. Salary surveys focus on tenure as a greater indicator of value, which is often fallacious.
  5. A person’s job satisfaction is based on more than salary. Many have left a higher-paying job due to the brutal work culture for a lower wage to enjoy the better lifestyle that went along with it. People remain happy in their jobs for any number of reasons, including organizational pride and appreciation for their employer, relationships with coworkers, self-respect for their work performed, and optimism for the company’s future. 
  6. Benefits packages provide additional monetary value, often inadequately accounted for by salary surveys. Many people don’t realize what their benefits package is worth, much less detail its value on a survey, but not every benefits package is of the same value. Many surveys don’t even ask such questions. More importantly, regardless of the actual financial cost to the employer, employees place a different subjective value on their benefits. 
  7. Bonus structures vary greatly from company to company. Bonus structures reflect a distinct entrepreneurial approach to sharing the risk and rewards with employees. Companies that encourage employees to “own” their work accomplish this by creating a generous bonus structure, in which case salaries are lower but overall compensation has a higher earning potential.
  8. Salary data cuts both ways. Salary data is collected by people using it to justify higher salaries or by companies trying to keep salaries lower. When averages run higher, employees point to this data. But when times are tough and profits are down, the same employees don’t want to point to that data. People and companies tend to use data to serve their own ends without much concern for the good of the other party.
  9. Personal perspectives on salary ranges are not trustworthy. Even highly experienced recruiters see the impossibility of making sweeping salary-related conclusions based on simple statistical data.
  10. Salary data is no replacement for taking careful stock of an employee’s actual contribution, loyalty, and growth potential. What will it cost to lose them? What will it cost to replace them? What will be lost until they are lost? Salary survey-driven compensation structures lead to organizational structures out of touch with personal contribution and value.

WHAT TO DO INSTEAD?

Comparing even two people’s skillsets, benefits packages, salaries, bonuses, goals, commitment, and future potential is hard; doing this for a whole industry is impossible.

Companies often do not have the resources to evaluate their employees’ individual contributions specifically, so they fall back to salary data.

The question which must be asked is, what is this person worth to the organization?

Great companies build great teams by paying higher-than-average wages because the exceptional performance of their team produces great financial profits.

It should be noted that great performance must be hired and inspired but cannot be simply bought or demanded. Great performance is driven by personal ethics, respect, and tangible reward.

Employees who seek to earn significant compensation should contribute maximally to the company’s success and continuously improve the value of their contribution. They should not look horizontally to see what others are earning, then complain.

The best employees will set the earnings standard by performing well, rather than chasing the earnings of others.

Employers who seek to pay competitively should pay careful attention to profitability, employee contribution, personal loyalty, the potential for loss, or the possibility for reward, then pay what people are worth for the long-term success of the company. This is dialed-in management that helps engaged team members achieve their earnings goals.

If loyalty is cultivated and the mission is worthy, then the company builds a strong foundation and its employees receive fair compensation, irrespective of data surveys.

One thing I’m noticing and watching closely is a growing relational disconnect between employers and employees. This is apparent in the prevailing viral LI posts, media, and our personal experiences here at ASG.

We believe there is something here for all of us to learn from. We also believe this is intrinsically related to the overall leadership quotient in America.

Employees often fail to understand what employers value and perceive as high-performance. Their view is often myopic, considering too much their own interests and not those they work for.

Employers often fail to understand the importance quality employees place on their goals and personal growth. They can treat people as relatively expendable and utilitarian, forgoing the value of personal connection as if work is only about professional performance. Instead of being a mentor, they are a boss.

To be successful as either an employer or employee, you have to care about people, and properly at that. This is a never-ending learning process. It’s complicated, messy, and often exhausting. To be clear, there are MANY fair objections to this broad idea of ‘caring about people’.

To understand more about what I mean about ‘caring about people’ consider reading the book “Love & Profit.” The distillation is that caring about people is entirely connected to holding them accountable, even to the point of letting them go.

I’m willing to say that to lead people well, you must care about them.

Success in the workplace, more than ever it seems, is directly connected to people skills no matter where on the org chart one works. Those that can embrace a mindset of winning and losing together can build or participate in great teams. But there is a growing contingent of the workforce and company leaders who fail to understand how important the other is. Corporate layoffs to prop up short-term stock prices on one hand and mercenary job-hopping on the other. Each is out for their own, to the collective long-term detriment.

We have no lack of books on leadership but are we, Americans, losing our grip on what real leadership and teamwork is in the real world? It’s a big deal. Wars are won and lost on leadership quotient.

“The fish rots from the head”

-ancient proverb

It’s not hard to see other failures of leadership. Our politicians obviously and the increasingly polarized positions, many of our hallowed institutions are constantly rocked by scandals, crony capitalism abounds, and a general decrease in the trust we can afford to place in one another. These are connected.

Leadership is the solution. Turn the org chart upside down.

To those struggling to be better leaders at any level, we salute you.

We need to respond aggressively and wisely to the Covid-19 crisis.One critical element is to keep the economy moving in every way reasonable so that the financial impact on businesses, and consequently the people that work in them, are impacted as little as possible. The cost to the world economy will be measured in the tens of trillions of dollars.Italy is seeing significant economy trouble from their shutdown which is impacting people down to the level of their daily food. https://www.nytimes.com/2020/04/07/opinion/italy-coronavirus-naples.html?searchResultPosition=1

BUSINESSES; keep your gears moving as much as possible. Working from home. Building relationships. Do business development. Develop new products. Double the amount of energy you are outputting to serve your market. Develop your marketing. Find new ways to be of value to your customers. Think about coaching your leaders. Consider replacing chronic underperformers with motivated players. This is not break time, it goes time!

PEOPLE; develop new skills, find creative ways to contribute at work by examining how problems can be innovatively solved, build your relationships, and DON’T BINGE NETFLIX. Unemployment is brutally high and those who can deliver solutions and performance under pressure are going to enjoy the most job security. And, frankly, the world is going to rely on you to pull us out of this. Necessity is the mother of invention, so take advantage of that! Find new ways to solve the problem that you COULD NOT have in easier times. It’s a chilly economic environment out there so we have to stay active.

DO NOT LAY DOWN IN THE SNOW AND GO TO THE LIGHT! We are going to be solving this economic problem long after the Coronavirus has been annihilated. Some businesses are going to do really well because they are staying aggressive and leveraging the silver-lining this crisis offers. This too shall pass.

Predictions are a far cry from prophecy. This is what we estimate from what we see in an ultracompetitive and malnourished hiring environment. But I’ll guarantee one of these will prove true.

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