Salary transparency is more than a number-sharing exercise

A recent Workopolis article is one of many that argues the case for full transparency in compensation. The basic rationale is that full salary transparency can increase loyalty, improve productivity, and boost bottom lines.

But two questions remain: What exactly does one mean by transparency? And how transparent should you be?

There is a common misconception in discussions around transparency that all employees should know what others earn. This is unquestionably the wrong thing to do, as a person’s salary should be kept private. However, transparency around an individual’s own compensation – including salary, bonuses and benefits – and how that might change based on specific criteria, is critical. 

Organizations should be transparent about how they make compensation decisions, including salary ranges. But a critical, yet often overlooked aspect, is transparency around their methodology and who is involved in making the decisions. This is particularly important, as it not only instils respect for the employer, it helps employees judge the fairness of their own pay.

If an employee understands how salary decisions are made, and accepts the fairness of that methodology, they are more likely to accept that their compensation is equitable, rather than thinking decisions are arbitrary and biased. It stands to reason that when employees believe they are unfairly paid, performance can suffer, and they may end up looking for alternate employment.

Bonuses are also part of the transparency equation. In cases where bonuses are based on corporate performance, the company should provide regular (i.e. quarterly) updates on how the company is doing, relative to their goals. For example, if bonuses are paid out only if the company reaches a certain revenue or profit threshold, regular updates should include a statement of where the company stands in relation to that goal. This does not mean disclosing all financial data – only enough to keep employees informed and engaged.

Conversely if bonuses are based on individual performance, employees should be updated regularly on how they are tracking against it, and more importantly, what they need to do to earn their bonus. Otherwise, achieving their results will be, at best, hit or miss, and there will be no behaviour change. 

Organizations looking to benchmark their transparency practices can start by ensuring they have a defensible compensation program.  An assessment will reveal if they have a good program with a clear methodology, or have a tendency to make arbitrary pay decisions. Once a defensible methodology is in place, the next step is educating employees about the compensation program and its processes. 

Being transparent in compensation matters is key to a productive workplace. However, simply disclosing compensation numbers without explaining to employees what it means to them will not achieve the goals employers are seeking. Transparency has to be done properly, always keeping the employees’ needs in mind.

National Post: How to support your staff to get the sleep they need

A new study shows that close to 40% of Canadians workers say they loose sleep because of work. And when you're tired, you're not as productive as you could be. The good news is that as the boss there is something you can do to help them. I had the chance to speak with the National Post's Denise Deveau about ways employers can support their staff in getting the sleep they need.

Read the full article here.

Globe and Mail: Leaders and HR need to step up their game to prevent sexual harassment

Original Published in the Globe and Mail

In Gandalf Group's recent C-Suite Survey, 94 per cent of respondents said that sexual harassment was not an issue in their workplace.

Notably, 95 per cent of these C-Suite executives in the survey were male. Even in the age of the #MeToo movement – particularly in small organizations that aren't in the spotlight – CEOs often don't want to hear about a sexual harassment issue, particularly if it has to do with a top performer behaving badly. All too often, they turn a blind eye to the situation and find any excuse not to deal with it.

The fact that such an overwhelming percentage of top-ranking executives don't believe it is an issue speaks volumes. Over the course of my career as a human resources professional, I can attest to plenty of situations when a C-Suite executive has refused to believe or act on sexual harassment claims. In one example, I took on a project with a mid-sized firm. When I started the project, the president's executive assistant warned me not to go into a meeting alone with the vice-president of sales. When I asked why this was tolerated, I was told that it was because he was responsible for 50 per cent of the sales revenue. He wasn't going anywhere.

Depending on how senior or how successful the alleged perpetrator is, or how much the company relies on that person, the CEO will either say they don't believe the complaint or aren't prepared to do anything about it. The HR professional then has to go back to the employee and deliver that message.

It's a difficult spot to be in. Employees think the role of HR is to be their advocate and become angry when HR can't resolve issues for them. With so many recent sexual-assault allegations making headlines, many have accused HR of not taking a strong enough position to advocate for the victim. Instead, they are seen as protecting the company and its image – or worse, as having no power to do anything.

In truth, HR's role is to facilitate a work environment in which both the employer and the employee are satisfied and engaged. Much like a mediator, an HR leader does not simply advocate for the employee or the company; he or she is also focused on making informed recommendations for the greater good that benefit both sides. And that role can become extremely challenging whenever those two outcomes are at odds with one another, or when it's the boss himself who is perpetrating the harassment.

Policies only go so far

The Gandalf study also found that leadership is one of the most important factors in preventing sexual harassment in the workplace. Indeed, while probably every company can point to its long list of policies on appropriate conduct and other issues, the reality is that all the policies in the world will not impact harassment. A piece of paper does not alter behaviour on its own. It is the leadership behind the policies, and the fortitude to enforce them, that moves the needle.

The CEO and HR leader each have important roles to play, especially when it comes to allegations of sexual harassment. They need an open and honest relationship with each other that enables frank discussion. Such relationships don't happen overnight or without effort, and both need to work at building trust. This relationship should be forged early on and should consider all employee-related matters, preferably before having to deal with a sexual harassment (or any other) complaint.

When these types of issues are raised, a CEO has these responsibilities:

• Listen to the HR leader. HR knows what is going on in the company. They hear things and understand the employees better than the CEO.

• Take it seriously. Don’t dismiss the allegations without exploring them. Make it a priority to find the truth.

• Disallow enabling. To say “he was just joking” is not a valid excuse. There is no justification for this type of behaviour.

For their part, HR must present issues credibly and demonstrate good judgment and critical thinking. What they need to do:

• Address the CEO in terms they understand. Listen to the CEO and the specific concerns raised. Ignoring or dismissing these concerns will result in losing credibility with him or her.

• Present the facts. Don’t bring up suppositions or gossip, and make no assumptions. Treat this with the seriousness it deserves.

• Recommend a plan of action. Anticipate what the CEO’s concerns and objections will be, and address them in your recommendation using a balanced approach.

Both CEOs and HR leaders must avoid drawing any conclusions before getting the full picture. They also need to be aware that their own personal relationships are impacted by how they handle such incidents – both internally with employees and externally with stakeholders.

And don't make the mistake of thinking there will be no consequences. There will be.

Left unaddressed, sexual harassment allegations can affect the business in a number of ways: lost revenue from employee disengagement, lost productivity, damage to the company's reputation, an inability to attract and retain top employees and even lawsuits.

Quite frankly, there can't be anyone who rationally believes that harassment is okay. The perpetrator of such behaviour feels entitled, confident they won't be caught or that nothing will happen to them.

I once told a president that I had reason to believe one of his executives was harassing one of the managers. He told me he had asked a couple of the other executives, and they told him that this individual was "just kidding" and that the manager needed to "loosen up." After further discussion, however, he begrudgingly acted on the allegation and fired the executive in question. As a result, employee engagement scores went up noticeably – both related to the company and to his leadership.

When HR professionals take a credible, fact-based approach with CEOs, and when CEOs are open to dialogue and action, they can work together to encourage a respectful culture, giving the problem of sexual harassment the gravitas it deserves. It's not an issue that will be changed overnight, or possibly even within our generation. But perhaps the movement we are witnessing across industries everywhere will finally hasten lasting change in order to stop sexual harassment both in, and outside of, the workforce.

CTV News: Janet Candido on Shaw's voluntary severance package offer

https://www.ctvnews.ca/video?clipId=1327986

National Post: Minimum-wage changes should spur full, concurrent HR policy reviews

Original published in the National Post

Like it or not, the Fair Workplaces, Better Jobs Act is here to stay in Ontario. The good news is, the act represents a shift towards a more equitable workforce where all can earn a living wage. On the down side, business owners will need to plan for higher wages, more sick days and higher staffing costs.

In light of the new Act, businesses that operate in Ontario will need to do a full review of all current human resources policies to determine where changes need to be made and updated to reflect the new legislation. A number of work products and processes may also need to be revised, ranging from pay grids to scheduling.

Before making any changes however, it is important to look beyond the surface level, and be strategic in how you adapt your human resource policies. Rather than taking a “knee jerk” approach, it is essential to take the time to look at your policies holistically in order to avoid any unintended consequences. One major question that you need to consider from the outset is what the potential impact - positive and negative - on employees will be.

Here are some practical tips for addressing these latest legislative changes.

Consider the trickle-up effect

Employers in Ontario have until January 2018 to increase minimum wage to $14 an hour; and up to January 2019 to raise it to $15 per hour. This change will mean more than just an increase for employees currently making minimum wage. Employees earning three to five dollars more than minimum wage will also expect an increase in order to maintain some sort of reasonable gap between their level and a minimum wage role to confirm their status. Not factoring in the needs of those workers could be demoralizing for them, as they will feel unappreciated.

Another important point to consider is that raising the minimum wage  may consume a large portion of salary increase budgets over the near term, leaving little to offer other employees not affected by the mandated increase. This discrepancy may not be well received by employees who . Who will get a smaller increase (if any) as a consequence.

Therefore, pay attention to any resentment among employees.  You will want to maintain employee job satisfaction and engagement. Employees at the lower end of the pay grid will be pleased with the increase, but others we have mentioned will not. Acceptance will very much depend on how well the increases are implemented and communicated.

Don’t let extended leave blindside you

While minimum wage has been the main topic of discussion, there is another aspect of the Fair Workplaces Act that employers need to consider. First is the extension of the Personal Emergency Leave provision to all employers, including those with fewer than 50 employees (who were previously exempt). 

All employees will be eligible for 10 days (two paid + eight unpaid) in the event of a personal emergency per year. Small businesses will be hit the hardest by the provision as they have less staffing flexibility.

Similarly, the Family Caregiver Leave has been extended from eight to 27 weeks. This is an obvious benefit to anyone caring for a family member who is ill, and is especially important as our population ages and more people in the workforce will be caring for elderly parents. Employers for their part need to make sure they have a plan in place when an employee needs to take leave.

In both cases, employers will be faced with having to make arrangements for someone to cover the work (either by distributing the tasks to other employees or bringing in a temporary employee). At the same time, employers will need to take steps to ensure those employees asked to step in don’t end up resenting the added burden and/or the individual on leave. 

Other important considerations:

In addition to making provisions for the increase to minimum wage and vacation days, there are some other notable considerations for employers in Ontario, such as:

• The Act states that any employee on call must be paid a minimum of three hours, even if they are not actually called in. For example, It is common to have a member of the IT team on call after work hours.

• If an employee is scheduled to work a shift, and that shift is cancelled within 48 hours of the starting time, the employer must pay them three hours of wages.

• Part-time or casual employees must be paid at the same rate as full time employees for doing the same job. In other words, employment status is no longer a valid reason for pay differentials.

While the Fair Workplaces Act presents a number of financial and administrative burdens for employers, there is a silver lining. If executed properly, it affords companies the opportunity to perform a review and update their current policies and work practices holistically to ensure they align with the modern workplace. 

Globe and Mail: Evaluating leadership performance beyond profitability

Originally Published in the Globe and Mail

Anyone who has worked for someone else can usually distinguish between good and bad leadership skills. The reality is that most leaders fall somewhere in between, striking some balance between doing certain things right but often getting others wrong. While nobody is perfect, if you're an entrepreneur, job seeker or middle manager aspiring to climb the career ladder, developing the right leadership skills will be key to your success.

While financial results are often used to evaluate performance, there's a need for leadership metrics beyond just managing a spreadsheet. A cursory read of the recent woes at big companies such as Uber and Google point to the fallout of corporate leaders' shortcomings.

But do you really know what aspects of your performance are being evaluated? Delivering on your quotas or the bottom line may be a given, but beyond profitability it's critical that employees in leadership positions focus on doing what's right, rather than simply doing it right. When you're evaluating yourself or the management team of a prospective employer, you'll need to objectively assess skills and abilities in leadership, strategy and people management – and identify areas that need improvement.

Leadership lessons: Great leaders don't just happen. Most have had the benefit of a good mentor, but also invest plenty of time reading, learning and absorbing the experience of other successful leaders who they admire. While the perfect mix of skills and traits may be arguable, there are several abilities that every leader should have or develop.

Commitment: This is a basic requirement, especially for entrepreneurs. How committed are you to achieving the business's goals? Do you have the perseverance and resolve to carry through with and mobilize others in the pursuit of your or the company's vision? Are you able to effectively sell that vision and keep the momentum going?

Communication: While public speaking and persuasiveness are important, active listening is key to being in touch with what's really going on, especially the higher up you are. You need to be engaged enough to read people and gain their trust. If you have a good person in the right role, but they don't seem to be thriving, take a deeper look at yourself to make sure you're effectively communicating your vision and listen to feedback on how you could improve.

Making decisions: Leaders often possess qualified expertise in one or several areas, but also need the courage to push forward despite uncertainty. Do you have the confidence to take risks and make sound decisions? If you don't have sufficient knowledge or skills required, do you learn them or find others who can provide it?

Developing talent: As the leader of an organization, one of the most important mirrors to your company's success is how the people under your leadership are developing. Are you actively developing and motivating staff? Do you encourage coaching and mentoring among the team? Are you seeing progress and growth in their roles?

Managing people: Employees take their cues from the top, so make sure you're setting the right example and culture. If a leader is authentic, and demonstrates interest in employees' and customers' well being, while encouraging open communication, that is how employees will behave – toward each other and toward customers. A leader who is rude and dismissive will only foster a culture of similar behaviour. Look at turnover rates, success of internal initiatives, employee involvement and other culture indicators. If there is a culture issue, employees either leave or they aren't engaged. If you identify an issue, it likely means you haven't been making workplace culture a priority.

Future strategy: The first question to ask here is, do you have a strategy? To be a leader, you'll need to plan for the way forward. Initially, this may simply be a plan for your own career trajectory, but once in a senior leadership role you'll need to articulate and sell your strategy for the company to the executive team and the company at large. Take a hard look at what you have in place. Can you show progress? Do you have everyone's buy-in or merely lip service? Is there a succession plan, and is it realistic?

Being good at your job does not necessarily translate into a promotion or invitation to the president's club. Many people are effective in their role but don't have, or perhaps aren't interested in learning the necessary leadership skills that can catapult them up the career ladder. By taking an honest and objective look at yourself in these and other areas, you'll be better able to hone the leadership skills that will help you stand out no matter what your position – to employers, staff or customers. Even if your ascent is already under way, there's always something more to learn on the path to leadership greatness.

CEOs: Do you really know how you’re being evaluated?

Uber’s scandals over the past year among the top echelons – along with those of other companies ­– points to a slew of failings at the CEO level. From allegations of sexual harassment and gender/racial bias to legal violations and general bad behavior, the company’s actions have revealed critical gaps in its leadership evaluation, whether that evaluation was self-imposed or external. If it isn’t already, this should a wakeup call for leaders and boards across companies everywhere.

Most businesses ultimately exist to create a profit, yes, but businesses are built on people. Leaders have a clear understanding of the financial metrics that they need to meet, often focusing on these as the primary indicator of the company’s health. But with a single mindedness on the numbers, you might not be giving enough thought to the other aspects of your performance that your stakeholders, board or advisory committee are taking into consideration. In an era of fraud, ‘bro culture’ and persistent gender or racial inequality, there are critical performance metrics beyond finances that must be measured if a company aims to succeed in the long run. And for a CEO to truly define what great leadership is.

So do you really know what aspects of your performance are being evaluated? It’s not uncommon for a CEO to feel blindsided when they are evaluated beyond the financial metrics. But beyond profitability, a critical role for the board of directors is also to determine the values to be promoted throughout the company, as well as act in the interest of the employees.  Here are some of the other aspects of performance that a good board is – or should be – evaluating for:

•  Developing Talent: Are the members of your executive team being developed?  Are you seeing progress and growth in their roles? Are they being encouraged to coach and mentor their staff? As the leader of an organization, one of the most important mirrors to your company’s success is how the people under your leadership are developing. Communication is important, but so is listening. You need to be engaged enough to read people and gain their trust. If you have a good person in the right role, but they don’t seem to be thriving, take a deeper look at your own leadership to make sure you’re effectively communicating your own vision.

•  People Management: Look at turnover rates, success of internal initiatives, employee involvement and other culture indicators. If there is a culture issue, employees are either leaving or they aren’t engaged. Culture starts with you at the top. If you identify an issue, it likely means you haven’t been making workplace culture a priority. Turnover and low productivity will cost you in the end, so make changes now to keep your organization running smoothly.

•  Future Strategy: First question to ask: do you have one? As the senior leader in your organization, having a plan for the way forward, and communicating it effectively is your primary goal. Take a hard look at what you have in place, and whether your people know about it.

Without these performance metrics a CEO, and the board, are not doing their job with due diligence. And ironically, with an eye focused solely on the finances, profits will soon take a dive, as Uber learned, ending Q1 with a $700 million loss. And it doesn’t take a lot of evaluation to know that’s not a good thing.

Globe and Mail: The Shifting Landscape of Human Resources

The following article was originally published in the Globe and Mail

When I network with young people who are considering a career in human resources, I always ask them why they are interested in HR. What attracts them? What do they hope to accomplish? The answer is, most often, “Because I want to help people.” At the other end of the hierarchy, I was once told by the chief executive of a global firm that, after having been encouraged to add a woman to his all-male leadership team, he decided to create a vice-president of human resources role, because “that’s a nice job for a woman.”

A woman’s role?

The perception of HR as a woman’s profession persists. This image that it is people-based, soft and empathetic, and all about helping employees work through issues leaves it largely populated by women as the stereotypical nurturer. Even today, these “softer” skills are seen as less appealing – or intuitive – to men who may gravitate to perceived strategic, analytical roles, and away from employee relations.

On the upside, the propensity to equate female attributes to human resources has made it the only profession where women have outpaced men in the upper ranks – at least in number. According to an HR study in the United States, women represent 73 per cent of HR manager roles, and 55 per cent of C-suite HR executives – just edging out men. But that may be the closest to gender parity we’ll get, given 2014 statistics from the U.S. Department of Labour that reveal men earn up to 40 per cent more than their female counterparts in HR, for similar roles across both junior and senior levels.

Radical shift

The downside is that the HR profession has suffered from a lack of credibility – until now, that is. The times are changing, something both women and men studying or working in HR need to understand. As with nearly every other industry, HR is not immune to disruption. Business needs are changing radically, as are expectations of HR from within the top ranks at large, well-run companies. This change has created an opportunity that places HR in a valuable, new leadership position. As the 2017 Deloitte Global Capital Human Trends survey highlights, thanks to the digital age and an agile mindset, employers are demanding new skills from HR professionals, through the leveraging of technology for more data-driven insights and talent analytics, and employment experiences. These skills are imperative for HR to deliver value to the business – and across the organization.

A quick scan of recruitment ads for senior HR roles already reveals this shift. Reskilling the stock of HR talent is critical and may be why an earlier Deloitte report found an increasing trend for CEOs to bring in non-HR professionals to fill the role of chief human resource officer. This supports my own experience that often when a male executive is responsible for HR, he didn’t get there through the HR ranks and may in fact have no HR background, but got there because of his business acumen.

While these new skill requirements will surely appeal to a wider male audience, the reality is that HR professionals will need to combine both those “softer” people skills with “harder” business and analytical skills, not one or the other. Men and women in HR need to elevate their performance if they are to succeed moving forward. For example, performance management, including coaching and developing top talent for leadership roles, is more important than ever. Balancing intuitive ability with strong analytical skills and fluency in business strategy will be key in making recommendations at the board level.

So how can we attract more men and women to the profession who possess the necessary business and analytical skills, in addition to people skills, and who are interested in contributing at a strategic level in order to effect change? How can we support women on the path to the C-Suite? And how do we reposition the role of HR in many organizations to be more strategic?

Raising expectations

Companies of all sizes would benefit from education and direction on how to use and maximize their HR employees, from the junior level up. Start by putting an HR consultant on the board and an HR person at the leadership table. Demand strategic vision from both and the use of hard metrics to provide relevant insights to the business.

Now is the time to change your expectations of HR and begin to include it in discussions early – and often. HR needs to be seen and positioned as integral to the business, and employers must set expectations – from women and men – to be strategic businesses leaders, not just coaches or party planners. Employers need to underscore and promote diversity on the path to the top. Men need to feel greater acceptance in a traditionally female environment, but both men and women equally need to be trained and supported in their transition, with executive mentors to follow, in order to be successful.

Workplace Today: Troubled skies: Airlines may have important HR issues to resolve

This article originally appeared in the July 2017 issue of Workplace Today

The airline industry has suffered a spate of negative issues lately, notably the two passenger confrontations on United and American Airlines flights, followed by a seemingly sharp increase of customer complaints against other airlines for similarly poor experiences. While this resulted in a public relations nightmare for those organizations, it may likely point to a deeper, underlying HR issue. What is going on in companies where employees go to extreme measures to enforce company rules and in the process, mishandle customers?

There could be several reasons and, no doubt, there’s always the outliers, from the otherwise good employee who just has a one-off, really bad day, to one with a possible mental health issue or simply a random employee who decides this will be their ultimate form of resignation. But more often, poor behaviour can be indicative of a dysfunctional culture within the organization.

Corporate culture is usually established at the top, and the responsibility lies with senior leaders to ensure that any problems are quickly addressed and resolved. But often CEOs may be so removed from the day-to-day environment, and they may not have the particular skill set personally – or on the board – to anticipate or identify HR issues, let alone how to solve them. Blame is often placed elsewhere and trickles down, which only reinforces a systemic culture problem. Too many policies, procedures or useless evaluations, a lack of candid communication and transparency, or not listening to employee feedback are only some things that can create toxic environments. When it comes to understanding whether you may have HR issues that need to be addressed, consider the following:

Classic conditioning. We repeat the behaviours for which we are rewarded. Whether implicit or explicit, if the corporate culture prizes rules and adherence to them, and those employees who enforce the rules are generally rewarded, then they will more readily apply this to others as well. Rigid rules result in a lack of autonomy and ability to think flexibly. On the other hand, if the culture promotes an inclusive and shared vision of success where employees are valued, they will be more motivated to go the extra mile to ensure happy customers.

Doing unto others. Conversely, if employees are routinely treated harshly or feel that supervisors don’t care about them, most often their resentment may cause them to treat coworkers or customers in the same manner. A focus on rules, process and efficiency that is prioritized above employee and customer wellbeing can result a toxic corporate culture. Managers who focus on supervising rather than coaching or mentoring, and leave little or no room for feedback and discussion, will not foster positive relationships with their staff. Nor do they set a good example for the employee.

Don’t pay lip service. Especially in hospitality, good customer service needs to be seen as a clear priority by the executive team, not just something that’s paid lip service. If you want to ensure your employees provide good customer service, involve them in defining what those service standards are. They are the ones closest to the front line and in the best position to know what matters to your customers and what their pain points are. Through their direct experience, the may know how to best address your customers concerns. Invite them to share their learnings with others on the team.

Prioritize training. Don’t just set an expectation of excellence without supporting it. Ongoing training and support of employees on how to appropriately handle frustrated customers and diffuse charged situations is important. As with anything, practice makes perfect. Establish a regular training program with role-playing, brainstorming, and case studies, so that these skills are constantly honed and updated. A company-wide email reminding employees of the customer service standards doesn’t cut it. Set a standard internally for how mistakes are handled by providing supportive, calm assistance. Berating or throwing an employee under the bus to please a customer will not likely yield a positive result – or display problem solving best practice.

Pay attention. To how your employees are behaving. We live in a world of increased demand, stress and expectation, with an inverse proportion of time, patience and reward. This paradigm is perhaps felt most by those in customer-facing roles, who may deal with hundreds or even thousands of different people, and personalities, each day. Check in with them regularly and when they start showing signs of stress, pull them off the front line and let them diffuse their stress with non-customer facing tasks.

As with anything, you can’t get to the heart of a problem and fix it without talking about it and addressing it truthfully. Culture problems can usually be resolved when management has the courage to face issues openly and provide the right tools, and environment, that will foster real and positive change.

Globe and Mail: How businesses can handle provincial changes to minimum wage

This article was originally published in the Globe and Mail

 Following Alberta’s lead, the Ontario government has committed to raising the minimum wage to $15 per hour within the next few years and, in addition, is upgrading the mandatory minimum vacation allowance for employees. Business owners now need to make a plan for how they will absorb these costs and determine what the impact will be on their business.

While the change to minimum wage is only targeted at those workers earning less than $15 per hour, the overall impact is scalable as the implications for compensation are far wider than simply bumping up the pay. In addition to forking over more for items calculated as a percentage of pay, such as payroll taxes, CPP, EI, benefits and company pension contributions, many business owners will also have to address pay increases for workers who are already earning more than $15 per hour to remain competitive while ensuring that pay is based on value to the organization.

A solid compensation plan ensures that employees are paid fairly, based on that role’s market value and worth to the organization. If those employees who are currently earning less than $15 per hour are bumped up, this will likely create a ripple effect on the entire pay grid necessitating salary increases for those who were already near the new minimum wage as well. 

A holistic review of the company’s compensation policy may be necessary – particularly if the bulk of your employees are paid hourly, or earning a salary of around $30K - $40K per year.

If this is your company’s situation, here are the steps you should take now to make sure you’re ready when the minimum wage policies come into effect:

Start with an audit. It may come as a surprise, but many owners may are not actually aware of the specifics of individual jobs or contract entitlements, and it’s important to make sure you have all the facts before making the necessary changes. Now is the time to review all positions and contracts to determine pay scale, current vacation allowances and job responsibilities. If you haven’t already done so, an audit will help reveal whether the pay structure is aligned with your business structure and plan or if the pay is not being distributed effectively, among other things.

Determine the scope. Depending on your business, if you only have a few employees earning less than $15 per hour, it may not be a huge burden to simply increase those salaries. But if you have many employees and your salaries are spread from minimum wage upwards, you need to consider the compression issue identified above.

Determine job worth. Consider how you evaluate the roles within your organization. How do you establish the worth of each role to the business, especially as it relates to other roles? Does it have a direct impact on sales or new business? Is it integral to customer service or satisfaction? Does it require a higher level of critical thinking?  By asking these types of questions you can determine whether your current system of evaluation is still appropriate. Review each job role to help identify whether any changes to responsibility are required.   

Create a new pay grid. Based on your findings, you’ll now need to establish a new pay grid. In addition to accommodating government regulations, you may wish to increase the salary ranges to give you greater flexibility to absorb the minimum wage increases over the next couple of years.

Communicate changes clearly. Compensation sends a value message to employees as well as external customers who deal with your business. It goes without saying that any changes to compensation can affect employee morale and need to be communicated clearly and early. Yet it’s a step that’s often overlooked – or even mishandled. While an increase in wages is usually good news, it’s an important change that always requires a communication plan. This should happen before rumours can skew expectations, and include consistent messaging, personal interaction and the opportunity for employees to ask questions.

The good news is that both the Ontario and Alberta governments have given substantial notice before the wage increases need to take effect. Use that time to review your full compensation program to make sure that any actions taken are best for your business, rather than a knee jerk reaction to government policies. By acting now, you can hopefully mitigate the impact the reforms will have to your bottom line.

TechVibes: In Acquisition Mode? Make HR a Priority.

This article was originally published on TechVibes.com

In the tech world, where fast-changing businesses look to tap into new markets and lead disruption through innovation, the pace of acquisitions has been blistering.  Many have been successful but, as even some of the largest tech mergers in history have shown, these unions don’t often have happy endings. And while there can be many reasons for this – incorrect assumptions around synergies and revenue generation, for instance – more often than not it comes down to one common factor.

When in acquisition mode, due diligence is a critical first step. Yet one aspect of this, which is consistently overlooked, is in fact the lifeblood of most companies – its people.

Aside from the probable culture shock that you’ll need to work through, there are financial implications of not taking a full view of the human resource picture including liabilities, current policies and cultural fit that could cost you more than you bargained for.

So what can you do to avoid unwanted surprises? For starters, there are several areas that fall within human resources that will require close analysis. These include the cost of any current or pending obligations to the employees such as vacation, bonus and telecommuting, as well as any cultural and financial implications of making HR changes to existing policy. A thorough review of all senior management contracts will often reveal important details and entitlements that may not be discovered until it’s too late. Additionally, make sure you have a good grasp of Canadian labour law. This will be especially relevant for a US company that’s venturing into the Canadian market, as the laws between the two countries have significant differences and implications.

Common Reasons for Failure

As many as 90 per cent of mergers and acquisitions fail to achieve strategic and financial objectives, according to a 2011 Harvard Business Review article, The New M&A Playbook. The reasons are often due to HR-related factors such as incompatible cultures and uncertainty regarding the future.  More recent research from the past five years suggests this is still the case and most M&A’s fail due to people and cultural issues.  Other factors include:

·       Lack of shared vision

·       Leadership clash

·       Loss of key talent

·       Poor communication

·       Poor integration planning and poor management processes in general

The period up to and immediately after a merger or acquisition is the most critical, as this is when employees are most likely to consider their personal situation and best interests. The longer the period of uncertainty, the more attractive any alternatives become. Key employees are often targeted directly by competitors and recruiters, and losing these employees can seriously erode the value of the transaction. At the same time, ensuring a good cultural fit between the two companies is critical, yet one of the most neglected areas of analysis.  Consider if – and how– the cultures can be integrated. 

Consider your obligations

When it comes to HR policies and employment practices, many senior leaders, especially business owners, don’t know what they don’t know and this can easily get them into trouble.  For example, I have come across situations where the new business owners unexpectedly found themselves with millions of dollars in liability because they didn’t think they were responsible for vacation accrued under previous owners they wanted to eliminate a bonus plan, only to be told the plan was not discretionary, and tried to increase the work week from 37.5 to 40 hours per week, with no salary adjustment.

Employees will have signed an employment agreement with their current employer, and they are bound by those terms and conditions, and current HR policies.  The new employer is also bound by these same terms and policies, so if employees currently enjoy a more lucrative vacation allowance, higher base salaries, bonus potential, etc., these terms must be honoured. 

If you want to change the terms and conditions of employment, the employees will need to sign a new agreement, for which they must receive a financial consideration such as a salary increase or one-time bonus payment.  For this reason, it is wise to review current agreements to understand what the terms and conditions of employment are during the due diligence phase of the acquisition.  A lot of information can be gleaned from reviewing contracts and executive compensation plans but don’t stop there.  Review the policies, employee handbooks/personnel manuals, benefits packages, as well.

Doing so will also provide insight into the culture of the organization and help you understand the work environment supported by those terms and conditions, and give you a better sense of whether there is a fit.

Implications of HR changes

The implications of making changes to the existing culture can be significant.  If the employees are used to a liberal work environment (short work week, telecommuting opportunities, generous vacation policies) then they are not going to react well to changes that will eliminate these benefits, especially if they are attached to the current management group.  If these types of changes are necessary, it’s advisable to initiate a carefully staged culture change process to reduce the potential fallout.

Of course, HR changes also come at a financial price. For example, you’ll need to factor in severance costs for non-compliant or downsized employees, or those costs associated with having employees sign new agreements. Additionally, if employees don’t like the changes being made, morale usually suffers and this often results in a drop to productivity, which can affect the bottom line.

Ideally, you want to employ a methodology to assess the company culture, skills inventories and competency assessments.  A cultural scan will identify similarities and differences between values, management styles and approaches.

Lay of the land
A common mistake I see when foreign companies acquire businesses in Canada is that executives are not sufficiently aware of the labour laws, or assume they are not enforceable. In fact, the labour laws in the Canadian market regulated, either federally (government, transportation and telecommunications industries) or provincially, and have significant differences from those in the US. The laws even vary among provinces. Not understanding these can have financial liabilities and even lead to the failure of the acquisition.

It’s advisable to get specialized legal advice around employment and labour issues to better assess any risk areas and minimize liabilities, especially when dealing with foreign transactions. This can range from wages and terminations to non-compete agreements, union collective bargaining, immigration matters and discrimination issues.

As a new business owner, you want to be sure that you are purchasing something of value that will enhance the current business, but also that employees will be excited about the new company.  Ensuring both of these things takes work – and a focus on the people behind the numbers.

Globe and Mail: Why HR expertise is a critical addition to your Board

This article was originally published in the Globe and Mail's Leadership Lab

For most public companies, the board of directors is usually comprised of experienced, senior leaders who focus on high-level issues such as finance and strategy, believing these two functions, specifically, to be the foremost way to protect the interests of the shareholder. But an often-overlooked – yet equally important – role among Boards is that of HR leadership, an increasingly popular point of view that’s also widely advocated by Richard Leblanc, professor at York University and expert on corporate governance.

As an example, I was recently approached by the Chair of a Board of Directors to review the results of an employee engagement survey they had undertaken, which was prompted by a number of emails from senior employees. The emails were disparaging of the company’s CEO, and the issues raised in the survey were devastating to the Chair, as they pointed to a complete lack of confidence in the CEO’s leadership.  These issues, which included being dismissive of employee complaints, expecting unpaid overtime (so his budget looked good) and an unwillingness to accept accountability while blaming others were unknown to the Board, and the Chair felt they should have been more aware.

In fact, they should have been more aware.  While the directors are all very competent professionals, well versed in their areas of specialty, they had never thought to question issues of human capital. They focused on the business side of things, believing that the CEO was on top of the people issues. There was no HR expertise on this Board, a mistake that led to some costly missteps. Had an independent HR leader been involved, he/she would have seen the signs: increased turnover, difficulty hiring top talent, an apathetic leadership team, and missed deadlines. Eventually, this resulted in lost productivity and revenue, as well as damage to the company’s reputation, a situation that is much harder to fix – and takes more time.

If the board is there to protect the interests of the stakeholders, part of doing so requires an understanding of the culture, and the depth of talent within the organization. Attention must be paid to employee engagement factors. In their course of duty, boards discuss issues and make decisions, but understanding the impact that these decisions will have on the culture is critical.

Board members may not know exactly what information they should be getting and discussing when it comes to people issues, or even how to evaluate that information once received, but the best way to change this is to stop assuming and start asking questions. Are they comfortable with the depth of talent in the organization as relates to the ongoing operations, as well as specific initiatives that the board is considering? Are there enough skilled people in place? Is the leadership engaged and committed?  Do they have the confidence of the employees? Do employees understand the objectives of the company and do they feel good about where they are working?

Without this information, any board debates around strategy cannot be complete.  The strategy being discussed and proposed can succeed or fail on the strength of the human capital, so this must be a consideration.  And the Board needs to understand where the organization is vulnerable.

It is easy to assume the CEO has the operations well in hand.  In most cases, they likely do, but it can be disastrous if not. Even a CEO may not have the specific depth of skills or knowledge to accurately predict or interpret the impact certain strategies may have when it comes to human capital. And the board is not doing its job if it doesn’t take this into consideration.

While an internal CHRO can provide some input, they cannot replace the independent oversight role of a board member or advisor.  An HR leader who does not report to the CEO is not beholden, first and foremost; they will understand the impact of the information provided and the risks, if any, that exist. He or she can identify gaps in the information provided, and any areas of vulnerability. This will result in a more robust debate that provides greater insight to a well-designed, well-executed process and plan.

The Benefits of Hiring Students/Youth

Are you considering hiring a student this summer? Do you need temporary, motivated staff to finish a pressing project? The federal government has shown a commitment to student employment by boosting funding for a variety of youth jobs and co-op placements. Businesses are poised to benefit, as are students. Even a short-term job can give a young person the opportunity to gain skills, learn about a work sector, network and build their resume.

For a business owner, there are numerous benefits to hiring a student, or recent graduate, and here are just a few:

Inexpensive Labour – New staff will add to your bottom line, but keep in mind that the wages of student employees are usually significantly less than those of full-time staff. Additional costs such as benefits may be minimal. As well, there are numerous programs in place at the federal and provincial level to encourage hiring young people (usually for those between the ages of 15-29) and this will help offset the expense. Also, students tend to be highly motivated employees. For example, co-op students want, and need, a challenging job placement to support their studies. Take advantage of their energy by setting up projects and establishing concrete goals for them.

Help During Peak Times – Every company has a busy time, and temporary student employees can be an excellent way to provide support and relief to your full-time staff. If there’s a project that you haven’t been able to complete even though it’s been a priority, bringing in a student can help get it done. Students may be especially interested in these opportunities because it will enhance their work experience and look good on their resume. Consider incorporating student hires into your budget and business cycle.

A Fresh Perspective – Students often come into a new job bursting with ideas from concepts they’ve just learned. Take advantage of this enthusiasm by having them look at your business with fresh eyes. They may help you question your “tried and true” processes and provide insights that will help you improve your business. For example, are you using Instagram or Snapchat? A young person is undoubtedly well versed in social media so leverage their tech savvy skills to promote your business in new ways.

Future Employees – A temporary hire – whether it’s for the summer, a co-op student or an intern – is a fairly risk-free way to test out a person for full-time employment. When you are ready to hire, you’ll already have a sense of their skills, work ethic, and overall “fit” into the culture of your business. And they will also know if they like your workplace. A temporary student hire could be a great investment in building your future staff.

Clearly, there are many business benefits to hiring a student or young person. By taking advantage of the various government programs, you can easily hire someone, even on a budget. Of course, the experience ideally should benefit the young person as much as the employer. Provide them with appropriate goals and help them acquire some new skills while they are with you. A rich experience that involves coaching and mentoring will help shape the workforce of the future.

4 Things Business Owners Should Never Do In Uncertain Times

At one point or another, every business faces situations that create some level of uncertainty. Whether the factors are external and macro, such as the implications of potential US trade policy changes, or more internal to the company, the level of unpredictability created can vary from a little – to a lot. Good leaders will strategize, revisit their business plans and revise projections, but great leaders go a step further. They know that, especially during these times, maintaining and even stepping up communication with employees is key.

If you’re feeling anxious as the business owner think about the trickle-down effect for your employees. Depending on the situation, they may be glued to the news wondering what the future may bring, or they will look to colleagues to extract any information that can shed light on their questions and ease their concerns. When there is an absence of communication, this is the time when rumours ­– and misinformation – runs rampant. And that’s when employee productivity and morale take a nosedive, ultimately with negative effects on the company’s bottom line.

During times of uncertainty, there are four key things a business owner should absolutely avoid when it comes to dealing with employees.

Don’t Lie.  A little white lie might seem like a quick fix, but when the truth comes out employees and colleagues won’t trust you the next time. Business owners may lie in such circumstances because they ‘don’t want to scare people’ or because they can’t reassure their staff they have a plan for dealing with the uncertainty.  The result is more rumours, more concerns and diminishing confidence that the business owner knows what he is doing.

Don’t dismiss their concerns. It might seem like a small problem compared to the big ones that you’re working on but remember, this job is their livelihood; it’s the way they pay their mortgage and support their family. If they are worried about job security, their productivity will suffer as a result.

Don’t blame someone else. It’s easy to scapegoat a customer or an external force, but this only works against you and confirms to employees that you either aren’t in control of the situation, or don’t know what to do. But if an employee has concerns about how things are running, address them head on.

Don’t let your best people get away. While it might seem crazy to explore a pay or benefits increase for employees during a time of uncertainty, retaining your top performers might be your best strategy for staying afloat. While money goes a long way, you can also explore other aspects of compensation including a revamped bonus plan, profit sharing, etc. Taking them into your confidence and telling them how they figure into the company’s future is also a good idea.

Ultimately, without good employees, few if any companies would succeed. While they needn’t be apprised of every detail, ensuring clear, honest and consistent communication as a best practice with employees goes a long way to weathering any uncertainty.