AARON & SCOTT EPISODE 1 (PART 1)

The Other P&L: Podcast Section (Scott and Aaron Episode 1 Part 1)

Aaron: (00:03): So Scott, in this day and age, the back office, we have finance, we have HR, a lot of times we think about things as offense defense and when I think about that from finance, we’re thinking about compliance and strategy, talk to me a little bit about how the world of HR is from a strategic standpoint, much less how it’s dynamically changed over the course of time.

Scott: (00:33): Yeah. So I think we don’t have to look very far into the past. Let’s say 24 months with COVID right. And all the changes that have happened with, how do you keep a productive workforce? How do you have a great culture? How do you meet the company goals? All that stuff is strategic HR. We talk about the great resignation and retention of employees and how we fill critical jobs for us. That’s on a very high strategic level that affects every part of the business. And every part of the business, especially senior leadership is involved in solving those issues or the company can’t grow and won’t be successful.

Aaron: (01:13): So when I think about retaining people that get to be, having managed many people over the course of time, much less supportive people where people take different career opportunities or leave the company for various reasons. there’s a strategy to this, right? There’s a lot of things that we can look at as executive leaders to retain talent talk to me a little bit about we just paid people a lot of money, right. We just throw money at it. That’s the solution, right?

Scott: (01:50): Yeah. It sure is. A lot of companies do think that way. And so I used to work in the auto industry many years ago. And the interesting thing is people would always ask why they paid so much money to people just putting screws on an engine, going down the assembly line. And back when the auto industry was going full bore, there were comments from people that said they would hire anybody, even if you could just fog up a mirror. All right. Now that was back then, right back in the heyday of the auto industry. And what’s really interesting is they paid that kind of money to pull people to Michigan from all around the country. People would go there for high-paying jobs. Right. And so the idea was if you just pay them more, you’re gonna get the talent, but we’ve changed so much during those times right now, people, yes, they wanna be paid for, they wanna be paid well, but they don’t necessarily wanna be paid at the top of the level right.

Scott: (02:52): Of the salary range, what they’re looking for more than ever today. And you see that in a lot of different surveys is they wanna have good leaders. They wanna work for a good team. They wanna work in a good culture, right. They wanna have a purpose in what they do. And they wanna be able to grow from a career standpoint, not only up the career ladder, but across, so picking up new skills and experiences and companies that do that well will be able to recruit and hire and retain their people much more than the competitors. Just think about the opportunity for people today’s candidates to know about the employer brand of companies by looking at Glassdoor or LinkedIn, or Facebook, or just news about what companies are all about. And we’ve never had that before.

Aaron (03:50): Yeah. The information that’s out there right now. LinkedIn is a great source, a lot of professionals are on this and you can get the sense for a company pretty fast. And then Glassdoor, like you said I think it’s interesting as a company, how once you have the employee in-house, how do you maintain that particular culture? Obviously, compensation’s key component, paying people an adequate wage or a competitive wage is important. We don’t do this for free, but it’s not just that in my experience when we’ve thrown money at people or hired someone, it if that’s the only lever we found that, eh, it doesn’t really have the law long term effects of retention that you want. What when we think of beyond the money, right? When we think about good leaders or the culture, what are some of those things that executive leaders do, what we can target, and what are those things that can be something that people can get jazzed about that make wanna stay longer?

Scott: (05:02): Yeah. So you, Aaron, you’re perfectly right on when you said about paying people more money and we know there are jobs that we would absolutely hate doing. Think of it, just take a minute or so, and think about that job. You say I would absolutely not wanna be a toilet plunger full time and plunge toilet. Right in a very, dirty place. But if you were paid $500,000 a year to do that, you would say, you know what? I don’t like my job, but I will do it for $500,000 a year. So that aside what I would say and a lot of companies, by the way, they say well, we’re losing people. Just pay them more because it’s simple. Right? And they said, well, that’s what our exit surveys say. We’re losing people because Joe, Julie, and George went to another company and they got paid 10% more.

Scott: (05:51): We just need to pay people 10% more. Well, first of all, people do not leave for another job unless they’re getting a pay increase, but that may not be the reason they decided to leave was because of the pay. It could be because of their leader. So now let’s talk about leaders. Leaders are what the employee thinks of as the company when they describe the culture. When they describe the opportunity they think about their leader, not about the CEO, not about the other business unit. That’s halfway around the country. They think about their leader. Now let’s think about our leaders for a minute. In the last 24 months, they are in the middle. They’ve had to, they’ve had a lot of pressure from above. They’ve had a lot of pressure from below. They might have open busy. They haven’t filled them. So what are they doing?

Scott: (06:40): They are now doing the jobs of the people, working for them. Number one, number two they’re completely stressed out, which means they go to autopilot, which could be very directive, which is then resulting in losing people potentially. So one of the things that I would say is having effective leaders that know they’re being supported by the senior level management is critical. And sometimes we have leaders in roles that we just have as leaders because they’re technical experts or they know about the company or they know where the skeletons are varied or whatever. Right. But you also, that is also the critical piece of what attracts somebody to a company and helps them retain.

Aaron: (07:27): Right. So as we think about the overall wave of people coming in and now, right, this is new, right. I mean, this is something that it’s just happening because of COVID or inflationary pressures or whatever the headline is today. Right. We’re seeing, if I look at my email, I see he great resignation right? this feels like a new phenomenon, but I have a few gray hairs employee retentions that this is not a new thing. Right. I mean, tell me a little bit about what you see as far as being the trend. are you seeing that, Hey, this is an unusual spike that we’re seeing with people saying I’m done with this particular role and I quit, or is this, do you see historical patterns?

Scott: (08:37): Aaron, I would actually say if you look at the reasons for turnover and you would go back to 2018, or even before that, there’s a lot of similarities to what they are today, but let’s just face it. Our world has changed to where it is today. Right? You can work remotely you have more jobs posted than ever before. people can come in and outta the workplace, they can do different jobs that they want. There’s not as much loyalty to individual companies. There’s not as much loyalty from a company to an employee. So the whole flex flexible workplace, the whole gig economy is turning things that upside down where companies are actually being encouraged to think about their workforce from a gig standpoint, from a freelance standpoint, where you might come in, do something and then get out. That’s what employees are thinking too. Why don’t I go in and do this work for this company? I’m gonna go over here and do this with another company and that sort of thing. So I think that people have more opportunities than ever before, which is why it’s so important for companies to have such a great employer brand and have great leaders and really be able to retain, to motivate to inspire the people that work for them.

Aaron: (09:57): I’ve seen that very acutely in the last few years now I’ve worked at home for different stretches of time, I think maybe over the last five-plus years. and so when this whole pandemic thing hit with whole COVID thing hit, and people started working remotely, first off people say Hey, Aaron how you doing with this big change and working remotely and working from home, I was like, this is what I call Monday. Right. And, and so that said the change happened for so many people, especially in people, in our fields, HR, finance a lot of the people that we support that don’t necessarily have to be on the front lines, in the healthcare industry or in the foodservice, or the actual physical production like saying the supply I changed. But that said, right, that flexibility where I can talk with you, Scott, and you can be anywhere. And it doesn’t really matter so long as we’re able to share a thought, right. So, that expansion of not having to go to the brick and creates a wealth of opportunities, both for the employer and the employee. But I believe at this point it is tipped into the employee favor because I can work over here. I can work over here. It just comes down to how qualified I am. I right.

Scott: (11:36): Yeah. And, and not only that era and, but people are actually choosing careers now or making changes in their career and what they focus on the right. Because of the opportunity to be able to work remotely and have more flexibility in their job. So for example, healthcare, you have to really like going into the office, quote, unquote, hospital, whatever to be in healthcare. But there’s a lot of other careers that may not be healthcare that you might decide, what, I don’t wanna do that. I’m gonna go over and do this over here or pursue a career over here. So we’re also seeing people change their career, not only the company but change their career to offer more flexibility in what they do.

Aaron: (12:22): Yeah. absolutely. I mean the flexibility of working at home is it’s invaluable I think this is a good point to stop. .

Scott: (12:39): Good. That was awesome. That was good. Figuring, okay.