Fortify your 401(k)

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sherrie-suski-401kThe middle of the year seems like a good time, albeit, not as good as the beginning of the year, but good none the less, to ensure that you are on track to set aside the maximum amount allowed in your 401(k) plan.  If there is some catching up to do, contributions spread out over the remaining 6 months are infinitely easier to handle than if you wait until the last quarter of the year, which will necessitate such choices as rent versus 401(k) contributions or tasty meals versus 401(k) contributions, in which case the 401(k) almost never wins.  There are many variables when investing and your 401(k) is no different and not immune to any of them. It not always just how much you save that predicts your outcome when you retire, but how you save and what the economic environment looks like.

Your Contributions

The IRS has generously increased the maximum annual contribution limit in 2019 to $19,000, up from $18,500 in 2018. However, if you are moving toward those golden years and will be 50 years old or older at any time in 2019, you can contribute an additional $6,000 in the form of catch-up contributions. This means you’ll be able to contribute up to $25,000, which includes the catch-up contributions. If your employer makes matching contributions, the amount going into your 401(k) could be much higher.

Employer Matching

Any employer match is a good employer match!  Most employers have a 3,4 or 5 year vesting schedule on their match contributions so that employees are encouraged to stay around to actually collect 100% of their match.  This employer match is set aside as you make your own personal contributions, but should you leave before you are fully vested in the company match, you will only receive a portion of it.  Occasionally you will hear about companies with Safe Harbor plans. In this case, the employer match is vested 100% and immediately.  There is no vesting period at all. The reason this is attractive to many companies is that it significantly decreases the discrimination testing that must be done annually on all 401(k) plans and it ensures that you plan will not be found to have to refund dollars contributed back to your highly compensated employees.  Many of whom happen to be your senior staff and C-Suite individuals.

Economic Environment

To some extent this is beyond your control.  Certainly, the economy’s performance is beyond your grasp to influence, but how you react to the economy and the types of investments you make is very much within your control.  Forbes economic advisors are predicting on a 20% chance of a recession this year and a 30% chance of a recession next year.  One of the best predictors of a potential slow down is the US bond yield curve which inverted in March of this year for the first time since 2007.  An inverted yield-curve occurs when long-term debts have a lower yield as compared with short-term debt. An inverted yield curve is generally considered a recession predictor. It won’t be immediate, but recessions have followed inversions a few months to two years later several times over many decades. When you see this economic phenomenon, money market funds, CD;s and short terms treasury notes start to look more attractive.

Your 401(k) should not be a set and forget savings tool but one that is actively managed, at least quarterly, to ensure that the results are what you are hoping for when you do finally decide it is time to retire. 

Mid-Year Crisis

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We have all heard of the proverbial mid-life crisis where people in their 40’s or 50’s start to take stock of their lives, celebrating or lamenting what they have or have not accomplished.  Many of us go through the same feelings, albeit on a smaller scale, when the mid-year hits. It signals that it is time to take stock of what we and our teams have accomplished to date and determine how to prioritize our goals over the course of the rest of the year to ensure that we finish where we want to be, having accomplished everything we set out to do in January.  

Take stock

For those without an automated goal planning platform or for those of you have a platform that you don’t check into and update very often, now is the time.  Review what you committed to in January, update what has been accomplished and decide now what shouldn’t still be on the list. Business priorities change constantly and initiatives that seemed critical in January may not be so any longer.  Or, conversely, there may be projects that need to be added.

Prioritize

Align with key stakeholders in the organization to ensure that you understand not just HR priorities, but organizational priorities.  Where can you make the most meaningful contributions?  Whose buy in do you need? Ensure that you communicate these priorities to your team so they clearly understand which projects have the most visibility and are in a critical path.  

Assess resources and expertise

If there are significant changes to the plans that were carefully laid out in January, you will need to re-assess both the resources you have at your disposal and the expertise that exists within your team. In most cases there will be options.  You will be able to make a case for leveraging external resources if required to get the job done.  If it a training and expertise concern, now is a good time to explore additional training opportunities for your team members to ensure they are better prepared in the future.  

Develop Training Plans

To ensure that everyone on your team is prepared to tackle their new assignments for the remainder of the year, you may need to add “Training Plans” to your own goals. Assigning responsibilities to employees who are not adequately trained is a lose lose proposition.  No one wants to appear incompetent. Remember that training and development is a process that takes place over time. The plan itself is not the end, but rather the means to achieving a skill set or competency.

July 1st, just like January 1st, is a time to take stock of what has been done and what is still to come.  Re-assessing our priorities now assures that we finish out the year proud of what we and our teams have accomplished on behalf of our organizations!

(Forbes) – “Meet the New Breed of Inspirational Leaders”

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Sherrie Suski was recently featured in Forbes, commenting on the next generation of inspirational leaders. See below for an excerpt of the piece, and click here for the full article.

 

“In an organization, the word ‘mentor’ conjures up the image of a wise person offering sage advice — someone who has lived through ups and downs while learning valuable lessons along the way. Those early in their career are frequently told to seek out a mentor, someone experienced who could take them under their wing and provide the tutelage needed to navigate the fast track to success, while sidestepping the landmines.

While mentors still have a role in the workplace, the concept is giving way to a new breed: the idea of the inspirational leader. Employees today are looking to be part of companies that are giving back, and not just to employees, but to their communities and to society as a whole. The inspirational leader brings that broader impact and perspective.”

Continuous Feedback

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sherrie-suski-reviewAn increased number of organizations are moving away from the annual review process to a feedback process that incorporates more frequent or real-time feedback. How frequent the review process depends on the scale, culture, and needs of the organization.  Although the process sounds simple enough, there are a number of considerations to be debated prior to implementing this type of change, from systems and platform changes to training associated with the new process.

Quarterly Feedback

Some companies choose to take an interim step between annual reviews and real-time feedback.  Enter the quarterly review. Quarterly reviews can be as simple as creating a comment box where each of the managers composes a brief summary of accomplishments for the preceding quarter or as complex as an annual review process, with ratings against core competencies, and comments for each conducted quarterly instead of annually.  Whether simple or complex, this process alleviates the employees’ common concerns around being surprised at the end of the year with feedback that they had never heard.

Real-time Feedback

The end goal in giving real-time feedback is to be able to provide continuous feedback to the employee so they can course correct in real time.  Normally this will be a two-way street where the manager can give feedback and the employee can ask for feedback on a specific project.  Many real-time systems will also provide an avenue to create Individual Development Plans ( IDP’s) in conjunction with the feedback to address any skill gaps that are identified so that training needs can be identified and a plan built to address

360 Feedback

Moving to 360 feedback, which entails feedback coming from the employee’s manager; peers; and subordinates, and is the most comprehensive of the feedback systems.  360 reviews should never be introduced without a training plan that encompasses all levels of the organization. Employees need to be coached on how to solicit feedback, how to give appropriate feedback and how to handle the feedback once it is received.  Criticism that is not truly constructive and offered with a pure heart, is almost never internalized.

Compensation

Organizations are frequently perplexed when it comes to implementing compensation reviews without an annual rating process that drives a matrix to calculate the percentage increase earned. After all, pay is one of the primary reasons employees show up to work each day. If you’re fundamentally redesigning how you determine their pay, then you need a clear plan that’s clearly communicated.  Many organizations have moved to a simplified approach where each manager is given autonomy to make pay decisions. Each manager is allocated a budget and is responsible for determining the pay/bonus of direct reports.

Ultimately, whichever review process and compensation model you choose to implement, your people leaders need to be trained to take an increasingly more active role in the management of their teams.  They need to understand that managing their people to be the best they can be is fundamentally what leadership is all about!

Driven to Succeed

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sherrie-suski-motivationWhy do some push themselves to deliver the best and others are good with good enough?  What is it about the human psyche that pushes some to strive beyond good to excellent? Psychologists tell us that it is a convoluted web of past experiences, motivation and neurological make-ups that churn out individuals who constantly go above and beyond in every role they have in life, who are driven by achievement and being the best.  There are multiple reasons for this drive to excel and not all of them may be what you would initially think. 

Some psychologists tell us that these individuals are not so driven by the need to succeed, but by the need not to fail.

In fact, it is not the actual failure that they are so opposed to, but the shame that accompanies it.  These are individuals who usually care deeply about what others think of them. Certain messages are conveyed to the self when failure occurs, which motivate success in an attempt to avoid acknowledging them. Failure can lead one to have a sense of unworthiness and an expectation of abandonment or an unrealistic fear of complete ruin. In a paradoxical way, the desire to avoid a negative state or emotional experience is the impetus for achievement of your goals and great success.  

Neurologists provide us with explanations that are rooted in the brain.  When it comes specifically to motivation, one of the most important neurotransmitters is dopamine. Dopamine is one of the chemical signals that passes information from one neuron to the next. When dopamine is released from the first neuron, it floats between the synapses. Since dopamine is released before we ever receive a reward, its real job is to encourage us to act. It motivates us to achieve, while avoiding something negative. A team of Scientists at Vanderbilt found that the “go-getters” simply had higher levels of dopamine in the reward and motivation portions of the brain.

Those who do not hold advanced degrees with the letters Ph.D. or M.D. after their names suggest that the reasons for success are much simpler. People who are successful make decisions and choose to take action more quickly.  This increase their chances of success simply because they have tried more options.  They convince themselves to take on tasks they don’t want to do. Instead of avoiding them, they just power through them.  Inevitably this increases their odds of a successful outcomes. Just getting started in half the battle. Prioritization and focus also play a role.  Those individuals who are able to look down a list of to-do’s and quickly prioritize what is the most important, and then able to focus their attention on that task until completion, again increase their odds of success. Distraction is a key reason many people don’t succeed.  They choose to be a little bit accomplished in a number of different areas, but never follow through to the end on the one important goal.  Lastly, a big dose of positivity can go a long ways to accomplishing what you set out to do. People who are successful see themselves as successful at the beginning of the project.  They begin with the end in mind and have a good grasp on what success is going to look like.

Whether you believe success is driven by the fear of shame associated with failure, the amount of dopamine in certain centers of the brain or by the simple decisions you make on a daily basis, remember, if you are not willing to risk the usual, you will have to settle for the ordinary.  Jim Rohn

Measuring the Employee Experience

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There are many tools on the market that purport to accurately measure the customer experience.  They focus on such topics as action management, customer segmentation, feedback management, sentiment analysis and trend analysis, just to name a few.  Then there are whole CRM systems whose goal it is to manage a company’s interaction with current and future customers. The CRM approach tries to analyze data about customers’ history with a company, in order to better improve business relationships with customers, specifically focusing on retaining customers, in order to drive sales growth.  If we want to understand the employee experience, we have to pursue it with the same gusto and metrics that we do our customer experiences. In general, great experiences don’t just happen, they have to be consciously designed.

We need to start with the belief that a strong correlation exists between the quality of the employee experience and work productivity, which ultimately drives engagement and, hopefully, the delivery of more value to your end customer.  However, there are challenges around measuring workforce experience because no single person, department or function owns the whole experience. Organizations use many tools to understand the experiences, positive or negative, their employees are having — pulse surveys like Waggl, annual employee surveys, quarterly or annual performance reviews incorporating self-reviews, weekly management meetings, talent and succession planning, town hall meetings and so on. The issue is that these tools and the feedback received from them can offer a fragmented and often misleading view of how good the employee experience is.

Forrester has a Workforce Experience Model that is worth reviewing.  It is built around Engagement, Productivity and Impact.  The only issue I would take with their assumptions is that I believe productivity actually drives engagement and not the other way around.  

Productivity

Being able to measure productivity assumes that you have done studies to understand what acceptable levels of productivity are by function.  It isn’t the measuring piece that is difficult, it is understanding and creating the “what” to measure and the scale that makes it challenging. 

Engagement

An engaged workforce willingly invests time and energy in the success of the business and the degree of engagement will impact business results. Everyone has discretionary engagement that they may choose to deploy at their job or elsewhere. Your mission is to ensure that it is deployed at the job to the benefit of the customers.  To my point, Daniel Pink’s secret to high performance and satisfaction  – the deeply human need to direct our own lives (autonomy), the desire to get better at something that matters (mastery) and the yearning to do what we do in the service of something larger than ourselves (purpose).

Impact

The positive business outcome of productive, engaged employees is a loyal customer. Customer-facing employees, customer service, for example, have the greatest potential direct impact on the customer experience and satisfaction. What about those employees that don’t usually engage with customers directly, like Accounting, Finance or HR, where the potential for positive impact on customer experience is harder to quantify? They know how the processes really work in your organization and may be the best ones to identify and rectify problems for customers quickly.

The conventional eNPS  (Employee Net Promoter Score)  is a standardized tool that you could benchmark your organization against year over year and,  benchmark your ratings against other companies of your size or in your industry. The issue is that it is one question and for most of us, does not really provide value when wanting to delve into the specifics.  There are also multiple surveys you can conduct through Fortune, OC Register or other organizations, but they are quite expensive and questions can be tailored so they do not provide an apples to apples comparison across organizations.  Eventually, it would be great to have an industry accepted employee engagement scale that could be used to drive the employee experience and, ultimately the customer experience.

Workplace Certifications

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We recently embarked on a fact-finding mission around workplace certifications.  I felt strongly that we had done an amazing job internally creating a world class work environment for our employees who are spread out over 10 states and 19 different locations, but few outside of the company were aware of that.  In today’s competitive global job market, being a well-known organization or having a famous consumer brand name is not enough to attract and retain top talent. Organizations need to build an agile and connected workplace, create amazing employee experiences, nurture feedback and dialogue, actively focus on innovation, and embed their businesses into the future.

Types of certifications

Great Place to Work

This is a certification connected to Fortune. The survey is actually conducted by their research partner, Great Place TO work.  The survey is made up of about 60 questions and an additional lengthy questionnaire needs to be completed by Human Resources.  They tell you 4 hours, but we easily spent 5-10X that. Should be fortune- ate (😊) enough to be certified, this opens up the door for you to participate throughout the year in a number of other certifications including:  Top 100 Companies, Best workplaces for Diversity, Best Workplaces for Parents, Small & Medium companies, People’s Companies that Care Best workplaces for Millennials, just to name a few.

Aon Best Employers

The program salutes the achievements made by organizations that create sustainable competitive advantage through their people. Aon Best Employers program looks into the health of your organization from the inside, using the most objective measure possible – your employees’ opinion. Backed by more than 18 years’ worth of data on employee experience, Aon Best Employers program measures and recognizes extraordinary employers. It differentiates on people factors which are the key to success: high employee engagement, profound agility, engaging leadership and maniacal talent focus. Aon looks at 4 key areas:  Engagement, Agility, Engaging Leadership, and Talent Focus. They offer both a ready to use on-line survey, as well as a tailored engagement survey that you can customize.

Glassdoor Best Places to Work

Although considered a necessary evil by many to whom I have spoken, there is no arguing that prospective employees turn to Glassdoor to see what others are saying on the inside.  Glassdoor automatically selects those employers that obtain the highest average number of stars given in the reviews by their own employees.  I am proud to say we are at a 4.6, but 1/10th lower than we needed to be to win a Best Small & Medium Places to Work for 2018.  

Next time we will talk about the reasons why, both internally and externally it makes sense to participate in Work Place certifications.

2019 – The Year of the Millennial

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sherrie-suski-millennials2019 is the year that the Millennials, or Generation Y as they are sometimes referred to, will overtake the Baby Boomers.  Their numbers will top 73 million while we see the Baby Boomer population in the US decreases to 72 Million. Those staggering realities have far reaching impacts across consumption trends, housing and employment, just to name a few.  It is less about being classified as the generation who wants to know “what’s in it for me” than about the impact their shear numbers will have on shaping our economy.  

Morgan Stanley recently published their research in the ReShape US Housing brief that outlines the dwindling demand for single family homes purchases and the uptick in the long term rental markets, especially the single family home market, as the Millennial population moves through their lifecycle from the freewheeling singles to the couples with kids, looking for a little more space.  The millennial population has long been thought to diverge from the baby boomers in their lust for purchasing a “permanent” home. This generation seems content with the flexibility that a rental home provides, and while many will start out in apartments, as the generations that preceded them did, most will eventually be in search of a single family home to rent.  The lack of permanency that is dictated by the desire and decision to rent instead of own has implications in the workplace as well. The millennial generation is less likely to expect to stay in a position for a decade or more. In fact, most millennials expect to have 15-20 jobs over the course of their careers and a full 91% of millennials expect to stay in a job less than 3 years.  Part of what drives that ability to move frequently is their decision to rent instead of own their own homes.

So how do employers provide opportunities to appeal to a generation that does not value permanency, stability and the status quo?  The millennials are the first generation to grow up digesting and assimilating mass quantities of information at a time.   Therefore, it’s important to make sure your content captures millennial’s attention and then keeps it. Communicate through multiple touch points, with emails as a last resort.  Use text blasts, contests and social media sites to communicate.

Ensure that both programs and communications are tailored for the individual.  The millennial population is not used to a one size fits all approach. They are used to having campaigns tailored exclusively to them based on past buying or search habits.  Ensure your programs are capable of the same. Jellyvision has a wonderful tool where ALEX, a bot, walks each person through their own health insurance open enrollment based on their unique needs and their answers to questions pondered on their behalf.  Our research has shown not only wide acceptance of these types of tools but that first year participation rates were over 72%.

It is approaches like the above that will both individualize the message and capture the attention of a generation that values an engaging experience over the stability and predictability of the status quo

Candidate Success Models

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Predicting a candidate’s success on the job used to be primarily focused on whether they had experience doing the job you were interviewing for and whether you could accurately discern if they had been successful. Little thought was given to behavioral or cognitive attributes or specific job competencies that differentiated one position from the next.  Fortunately, those days are far behind us.

In today’s world we have a vast array of tools to better predict candidate success including assessments, behaviorally based interview techniques, established company core competencies.  While these tools are valuable in terms of prediction capabilities, we also need a model to evaluate whether our predictions are accurate or not and allow us to tweak the models going forward.

Behavioral assessments

There are many behavioral assessment tools on the market today.  Some have been around for decades like the DiSC. Others are newer onto the scene like the Predictive Index.  Some are a quick 10-minute assessment which give a solid overview of the candidate’s personality match to the position and others, like the Hogan are in in-depth 3 hours assessment that enables employers to assess personality in the workplace. Additionally, these assessments measure personality characteristics, characteristics under stress, risk of career derailment, core values, and cognitive style

Cognitive assessments

Cognitive assessments are not necessarily appropriate for every job. While they are not IQ tests, many measure the candidate’s ability to quickly learn information and to adapt to changing circumstances.  The general pre-employment aptitude test that measures problem-solving abilities, learning skills, and critical thinking. The thought being that the quicker a person can get up to speed in a job, the more quickly they can start contributing to the organization.  

Behaviorally based interviews

Structured or behaviorally based interviewing has long been thought to be a better predictor of success on the job than either yes/no types of questions or those that do not require a candidate to tell you what they did or would have done in a specific situation. Behavioral interview questions focus on how you handled various work situations in the past. Your response will reveal your skills, abilities, and personality. The logic behind this interview tactic is that your behavior in the past reflects and predicts how you will behave in the future

Core competencies by position

Not all positions require the same set of competencies to be successful. That is why it is important that interview guides be developed for each position that specifically state and ask you to comment on and rate a candidate’s suitability for the position relative to each core competency.  

Once the candidate has been selected for the position, additional work needs to be set in motion to assess whether they are truly successful on the job.  Success can be measured by your Performance Management systems, your talent or succession planning platform, which measures potential, or a combination of both.  Once data has been collected over time, you will be able to better predict an individual candidates’ likelihood of success in a particular position.

People Analytics

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sherrie-suski-analyticsPeople Analytics is about using a data-driven approach to inform your people practices, programs and processes. Analytical techniques, ranging from reporting and metrics to predictive analytics to experimental research can help you uncover new insights, solve people problems and direct your HR actions. People analytics can help you to understand how knowledge of social and data sciences can help you make more informed, objective people decisions. The mindset shift that needs to occur is moving from a reporting of lag measures, like employee turnover, to a reporting on lead measures, like employee engagement or satisfaction and eventually to forecasting to being able to predict turnover down to the individual level. 

In a recent Deloitte survey on the topic, they found a mature analytics approach is not possible without data accuracy, security and consistency.  Things that many organizations struggle with. Therefore, your first step has to be to define which data you want to use, ensure that the data is as clean as possible and decide how you will capture that data.   The top drivers of people analytics maturity were:

  • Mature organizations are 2x more likely to have a data council responsible for data governance.
  • Mature organizations are 3x more likely to have strong partnerships with business units and corporate functions.
  • Mature organizations are 3x more likely to have an organizational culture of data-driven decision-making.

The problem is not just “having the data” but “knowing how to use it” and understanding how to explain it, visualize it, and put it into action in front of a business leader. HR leaders and their teams are expected to be knowledgeable enough in the use of statistics to be able to understand the data, determine the trends and make well thought out recommendations to improve the business.

Here is a great example of a trend that HR can be on the forefront of and lead the business!