by D. Kevin Berchelmann | Nov 28, 2018 | Brazen Leader, Human Resources, Kevin Berchelmann, Miscellaneous Business Topics, Organizational Effectiveness
I received the following question from an HR Director in the midwest:
Contingency Fees: What’s the value? It seems that the fee percentage in permanent placement ranges from sometimes less than 20% to 30%+ of the candidate’s first years salary.
So, what’s the diff??
Where’s the value change between the 20% firms and the 30% firms?
Though I do not conduct contingency searches today, I spent many years in the Director/VP desk wondering much the same thing…
The answer, however, isn’t mysterious.
The difference is frequently just timing. If a recruiter or firm’s current production is down, volume low, or revenue a bit off for the week/month/quarter, a firm may take closer to 20% for that particular search, instead of their customary 25-30%.
Perhaps they already have a couple of ringer candidates in the hopper, and they low-ball just to close a quick sale.
Maybe, they’re new at the business, and right now they just need to pay the bills (surely I don’t have to make all the obvious cautions here…).
Maybe, they’re just stupid. I doubt that, but let’s include all possible answers.
Now, having said that…Here’s the part that really gets me:
I spent a good many years in senior-most HR roles. A manager/company that will quibble over 5-10% on a $100K search for a valuable contributor to their organization, is so colossally short-sided and pound-foolish that it takes my breath away.
A hiring company’s bigger concern should not be whether the fee is 20%, 25%, or 30%; or whether the fee includes just base comp, base plus bonus, etc… The hiring company’s sole concern — SOLE concern — should be “Can this firm deliver one or more solid, successful candidates to fill my serious need?”
If not, then 15-20% is certainly no bargain; if yes, then we’re spending way too much time quibbling over a few thousand dollars.
Just my thoughts…
by D. Kevin Berchelmann | Nov 6, 2018 | Brazen Leader, Human Resources, Kevin Berchelmann
I was speaking with a group of HR folks last week, and the subject of candidate questions (when interviewing) came up. Someone said, “I only ask how much money the candidate wants, not how much they have made. That’s all that matters to me.” Many others agreed.
Say what??? That ranks up there as one of the more ridiculous comments we can make. To enter into a relationship with a potential employee with no idea how much money they are accustomed to making is nearly pure negligence.
First, let’s get something straight: Money matters. Money always matters. It may not be the only thing, but it always, always, matters. Zig Ziglar said it best: “Anyone that says ‘money doesn’t matter…’ well, they’ll lie about other things as well.”
There are a million reasons why simply asking for a desired number is a dumb way to ascertain wage needs. I’ll just rattle off a few randomly, in no particular order.
The candidate heard you paid well. So, they ask for more money than they normally would, hoping for some of that largesse. Oops, priced out of your range, candidate rejected.
The candidate heard you didn’t pay well. But they need a job to pay bills today, so they’ll use your underpaying position as leverage for that better job 3 months from now. Lost another one…
The candidate didn’t understand the role as was described. Lucky you — she underbid it, and you got something for nothing. You are one smart cookie… wait a minute, whaddya mean ‘you’re leaving??’ I gave you what you asked for!!
These (above) are some of the more common, intangible reasons for determining current/recent/accustomed compensation. Want something a bit more logic-based?? Ok, how’s this…
The number one — primo, primera, ultimate, top — source for market-based salary information and data is what organziations today are paying for that position in the marketplace. In other words, you should be constantly gauging and comparing your compensation ranges internally to those in the market in which you compete.
This isn’t rocket science, folks. Candidates expect to be asked, you have a duty to know, and there’s no reason not to… ask the question.
The smart money says you’ll be better for it.
by D. Kevin Berchelmann | Sep 28, 2018 | Brazen Leader, Human Resources, Kevin Berchelmann, Miscellaneous Business Topics, Organizational Effectiveness
Someone recently asked me to give them a general overview of incentives. Never-mind the cliff-notes request format, we simply over-complicate this stuff.
Understanding incentive compensation is simple, and is largely human nature:
1. That which is rewarded is repeated,
2. You don’t get what you want, hope for, manage to, or request — you get what you pay for (as a tenet of compensation, not necessarily a life philosophy), and
3. Simplicity wins.
Exception, contrarian arguments like you mention are just that, and based more on opinion than empirical evidence.
Well crafted incentive schemes will generally work when we can show that:
1. Working harder (bigger, better, stronger, faster) will improve my job performance, and
2. My improved performance will create rewards, perhaps an increase in salary or valued benefits, and
3. I value these rewards.
(oft-paraphrased from Vroom, though not sure his was original)
Again, simplicity wins…
by D. Kevin Berchelmann | May 10, 2018 | Brazen Leader, Executive Improvement, Human Resources, Miscellaneous Business Topics, Organizational Effectiveness
Human Resources needs to get past this, “Do it for one, must do it for all” mentality. It’s just not true, and a lousy way to help a business succeed.
I regularly tell people this about precedents: “Yes, I’ll likely do the same thing, given the exact same circumstances, in the future.”
For example, if I allow an extra week of protected FMLA for a stellar employee in production with 6 years with the company, I may very well agree to do that same thing for the next “stellar employee in production with 6 years with the company.” Change a single parameter and the precedent doesn’t exist.
But even that isn’t the right answer, since decisions need to be made based on current business needs. I’m not trying to create a social system at work whereby all receive identical treatment. They won’t. I’ll do those things necessary, including making nondiscriminatory employment-related decisions, as the business needs dictate.
There’s all this talk about HR’s “seat at the table.” Want to get “kicked off the table” in a hurry? Adopt the inflexible, “Do for one, do for all” mindset. It has no place in business, in my opinion.
Cheers,
by D. Kevin Berchelmann | Sep 18, 2017 | Brazen Leader, Executive Improvement, Human Resources, Kevin Berchelmann, Miscellaneous Business Topics, Organizational Effectiveness
First, understand that “Talent Management” is not some vague concept, but quite simply:
(1) Identifying, sourcing & recruiting talent,
(2) Developing and motivating talent, and
(3) Retaining talent.
It stands to reason that the CEO MUST be pivotal in any successful talent management strategy. I recently surveyed my current and past clients on this specific topic, and “Talent Management,” as described above, is far and away their number one concern moving forward. Above markets, pricing pressures, and even recent legislation challenges.
Specifically:
CEOs are crucial in the identification & recruitment phase; they must establish what skills, attributes and competencies are necessary for developing future key players. That initial
definition – the foundation – must come from the very top. This doesn’t mean in a vacuum, with no input from anyone; it does, however, mean no delegation allowed.
A CEO’s role is also integral to motivating and developing that talent. Once you find a “keeper,” effective skill development (to match your organizational needs) and deployment (right job, right person) are keys to success. Identify the key employee, then pinpoint what skills and behavior that employee needs to lead tomorrow, perhaps even in a different functional area. Then work on “the gap.”
Assuming the hiring process was successful, it’s too arduous and resource-intensive to repeat, hence the CEOs essential input into retention. Key players – those most focused on in talent management – need to know they have a purpose beyond departmental or shorter-range goals. The CEO is essential for that understanding. An effective CEO can retain talent even in the face of lackluster direct management.
In short, the CEO’s role is becoming more defined today as “principally” talent management — along with a lot of other burining priorities. It’s no longer a sideline job. Done correctly, however, it can expand the CEO’s reach, and help distribute that ever-growing list of “must-do” things falling on your shoulders.
by D. Kevin Berchelmann | Jul 27, 2017 | Brazen Leader, Executive Improvement, Human Resources, Miscellaneous Business Topics, Organizational Effectiveness
I coach several individuals; most at a fairly senior level, some in mid-management.
Some are remedial efforts; in other words, we’re trying to get an otherwise-valuable employee to step it up a bit in performance. These are challenging, but it’s positively great to watch the progress.
The rest are for those already operating near the top of their game. Those folks for whom we’re trying to give them that “extra” edge. That 1% improvement for which, in their hands, makes a significant difference in the success of the business.
(more…)
