HR, We Have a Problem - A call to action for HR practitioners and the critical career balance between soft and hard skills in today’s modern workplace.

[00:00:00] Welcome to the HR Huddle podcast presented by Sapient Insights Group, the ultimate resource for all things HR. It's time to get in the huddle. Hello everyone. Welcome back to the HR Huddle. I'm your host, Terri Zipper, CEO and managing

[00:00:25] partner at Sapient Insights Group. And I'm back for another episode of HR We Have a Problem. On this show, we really like to break down the big and most relevant HR issues of

[00:00:37] the day. We help you make sense of what they mean. And we also talk about what you might do about them. So joining me today is for men Diaz. For men is a C-suite leader, a top influencer

[00:00:52] in Asia and maybe a few other places. A board member, a speaker, an adjunct professor, consultant. For men does a little bit of everything. And he's somebody that I first met during my tenure at Mercer when he was leading the talent business in Asia, the Middle East

[00:01:11] and Africa. And he and I collaborated on HR data and systems at the time. So welcome for men. It's great to reconnect with you. Terri, I'm so happy to see you. Thank you for having me on the show.

[00:01:25] This is awesome. One of the things I do like about this show is that I do reconnect with people that, smart people, thought leaders that I've known from the past who I really think can add value to our listeners. So great to have you. Your experience covers

[00:01:41] a lot of ground from the soft skills to the more technical stuff like data and analytics. I've seen some stuff you've written about chat GPT and other systems. One of the things I understand you like to talk about though is personal growth. And I know there's

[00:02:00] a lot of skills and abilities that you need for a career in HR, but there's also a lot of sort of general level of savvy and sophistication that's needed to add value in the HR space,

[00:02:13] that real soft stuff. So I thought we might get back to some basics for this conversation. Does that sound like a good plan to you? That's amazing. Let's delve into this because I think this is something that HR professionals

[00:02:27] really need to understand that there's a need to mesh the soft and the hard skills in every HR professional. The soft skills are important because we are still going to be mindful of

[00:02:39] the fact that we're working with and for people and that we need to get better at rapport, at empathy, at understanding. We need to have an awareness of things that may not always have readily obvious return on investment like DEI, community involvement and so

[00:02:58] forth. But at the same time we work in companies and companies have a mandate and the mandate is usually about growth and profitability. So we also need to understand how is it that the soft

[00:03:09] variables that we manage lead to hard numbers in results. The best HR people will always be the ones that can understand how to get return on investment and how to add value to companies. And so every HR professional needs to know both sides, the soft and the hard.

[00:03:29] Yeah I work with a friend that likes to tell a story about their time in HR and when and how they learned about how the business makes its money. And yeah this was a fabric store

[00:03:44] that basically what she learned was they were making their money at the checkout where they sell candy and other novelty purchases not making much money at all on the real business. So that was a

[00:03:57] shock right? And a pretty important thing for us as HR professionals kind of understand is how does my organization make money because that's really critical to how they provide value to the business units. That's absolutely correct. One thing I always advise starting HR professionals

[00:04:16] is to learn two things that sometimes are not obvious in the curriculum or in the area of study or even in how we talk about HR development. One of them is finance. The understanding of how the company makes money needs to be tracked through very standard accounting and

[00:04:36] finance principles. The way that business measures itself when we talk about balance scorecards but in reality balance scorecards are not balanced at all they're very unbalanced and they're very unbalanced towards financial results. So if we don't understand revenue and

[00:04:51] profitability and like you say Terry how the company achieves revenue growth and profitability it will be very hard for us to be credible as HR professionals. When we want to go talk to senior management about why we should implement this particular new

[00:05:04] training program they won't believe us. I'll tell you a story, lots of stories over the years or in things that I've done but I once went to when I was running an HR department for here in

[00:05:17] Asia for semiconductor company and it was sort of my first few months on the job and I did my first trip to Japan to go look at our design center and our manufacturing facility in

[00:05:29] Sendai Japan and when they were briefing me on the first day they were very proudly telling me about how they have put all 42 of the top leaders in the country through the companies at the time

[00:05:43] high potential or high profit but I think it was called the high potential leadership program and this is a leadership program that costs around $12,000 per head to put people through a one-week leadership program and they were very happy with it and so I asked what I thought

[00:05:58] was an obvious question great you just spent about a half a million dollars of the company's money what did we get out of it and they couldn't come up with a better answer than well they now have

[00:06:09] gone through the program and they speak the same language as the US counterparts I said well no not really if we just spend a half a million dollars we should see results and if all 42

[00:06:21] of the senior leaders are now better leaders we should see better output did we see any of it they didn't even understand my question which was difficult so over the years then I eventually

[00:06:31] got my team to understand that we couldn't just go around doing things like that just to do training because that's what's on the KPI that we really need to do it in a way to improve so

[00:06:44] in subsequent years we had factories also in Malaysia and in China we changed that paradigm we started talking to the HR staff about how is it that you want to sell things

[00:06:55] and we wanted to sell this new quality assurance program in Malaysia that was going to cost around $800,000 to deploy for about a thousand of the factory workers and in this case I just made it

[00:07:08] very clear before we go in asking for nearly a million dollars worth of money to put this training program let's figure out what is it that is supposed to improve with this training so we

[00:07:18] landed on yield yield is a manufacturing measurement of how much wasted raw material we get on the production side best in class is in Taiwan around 98% yield as they use 98% of the raw materials

[00:07:34] we were at around 91% I said okay can we make a promise that if we train everybody we can get it closer to say halfway 95% now that meant around three and a half million dollars of savings

[00:07:46] but it was an easy sell when you go in and you say 800,000 investment three and a half million of savings we didn't even promise that much we just say how about we improve by one and a half

[00:07:55] percent we get a million and a half dollars of savings you get 100% return on investment the moment you can make your business cases that simple but at the same that powerful

[00:08:05] of course not only we got the money to do it for everybody we got the money to do it there and in China we ended up saving the company more than five million bucks

[00:08:13] but we need to be able to speak that language and HR folks especially when they're starting out they're a bit reluctant to sort of get their hands dirty with finance and accounting and understanding the business they don't like math and they think it's not their job they think

[00:08:29] their job is to make people happy and but I keep trying to tell them is you just have to make people happy and shareholders happy not just people yeah it's one of the challenges I see

[00:08:40] all the time in HR when they're trying to make the business case for whether it's getting new technology or implementing a training program or changing the way they go after talent they don't they struggle with the ROI like what really are the key performance measurements the things

[00:09:03] that we're going to deliver and are they relevant for the business metrics and not just for the HR metrics right because if the HR metrics you can improve your HR metrics but if they don't improve

[00:09:17] the business metrics then they're not relevant I often make an analogy out here in Asia that resonates you may or may not know that Chinese has many dialects the main dialect is Mandarin but there are other dialects the most common one that people know about is Cantonese

[00:09:33] because that's the one they speak in Hong Kong but there are others there Hockie and and East and whatnot so I often say and by the way when they speak in dialect somebody that speaks Cantonese

[00:09:45] only would not understand somebody that speaks Mandarin and vice versa they're that different and so I often make the analogy that the business world speaks only one language and the language they speak is finance that's the common language but that in HR we speak dialect

[00:10:03] and the dialect we speak is a HR language and if we want to be understood we have to learn to speak the main language of finance I learned this lesson a long time ago when I was still a

[00:10:15] junior HR guy working in the oil refinery in the Venezuelan oil industry I was in charge at the time of what was called organizational climate which was sort of the the org engagement survey

[00:10:31] that we used to run a pulse survey every month and I remember going to see the head of procurement and we call the materials management and I had a very nice report about his results and how he

[00:10:43] needed to improve communication and satisfaction and community and motivation at the end of the day the refineries of course in a very remote site and there was a single bar that everybody would go

[00:10:56] to have to work and so that day I was sort of lamenting with the bartender that over a beer that I've had a rough day and who walks in is this very head of materials management and

[00:11:07] sits next to me orders a beer and over the course of the next two beers what he proceeded to tell me was you come to talk to me about satisfaction and motivation and communication

[00:11:17] but my boss only talks to me about dollars and cents I will listen to you the day you can tell me what you want me to hear in dollars and cents don't ask me to do your job that was his point

[00:11:29] that satisfaction motivation communication that's a charge job help me to do my job which is to get my kpi is done in dollars and cents and that was so powerful it was so so powerful to

[00:11:41] me that I went and got an MBA after that about a year later I went to literally go study business so that I could understand how to speak finance language now I don't think everybody

[00:11:51] needs to go get MBAs to learn this but they do need to make the effort to learn a bit of accounting a bit of finance and a bit of number crunching if they really want to be able to speak the

[00:12:02] business language if we want to take it seriously we want to be considered business partners and have a seat at the table which is often what we hear we need to speak the language that they

[00:12:12] speak yeah and it's an interesting time for that too I think one of the things that we uncovered in the HR system survey that we run annually over the last couple years is the experience in HR

[00:12:29] and particularly in HR technology has been decreasing we saw the percentage of people that really were HR experienced HR tech professionals with 10 plus years of experience dropped dramatically and last year more than 50% of that same group had basically less than three

[00:12:48] years of experience in this area so it's pretty dramatic when you think about it I think COVID probably had a lot to do with that a lot of people left HR and the they probably left a

[00:13:03] lot of functions but HR was probably particularly impacted by some of the challenges that happened over that time frame but so people are really there's a lot of new people coming into this space

[00:13:18] and I think that's a really good learning moment for people is how can I go and get some more basics from a finance perspective so that I can start speaking the right language to other people

[00:13:30] in the business one of the things I see Terry in language just said is that even the people that go and study HR they go get HR degrees either an undergraduate degree or a master's

[00:13:43] the the attitude tends to be still too much of well I'm not a numbers person I got into HR because I'm not a numbers person I'm a people person as if they these were opposites they're not really

[00:13:56] all but you can be a people person and a numbers person in fact but the point I make is that you need to be both a people person and a numbers person to be a successful HR person

[00:14:06] I don't know anyone single top HR leader that is not also a numbers person eventually you need to get to understand and be comfortable with numbers the other thing that I see is that often then

[00:14:21] they'll say things like oh but numbers is the job of the HR analytics department not my job that's the other thing I sort of don't understand no it's everybody's job everybody

[00:14:33] needs to be able to answer questions if you're an HR business partner you don't want to go to your HR to your business partner to say oh yeah let me put it on the queue with the HR analytics

[00:14:46] department I'll get back to you in a few months time once they have time to address your question no you want to be able to sit down get some data put in an excel spreadsheet

[00:14:55] check up some numbers put out some graphs and tell a good story to your HR BP and if it grows bigger than that maybe you'll need more help but I figure 80 to 85 percent of any question that we're

[00:15:07] ever going to get everybody in HR should be able to answer with simple analytical tools excel power bi and basic knowledge of like I said finance and statistics yeah should not be afraid of this

[00:15:21] every successful HR professional needs to do this I think people would be surprised at how much and how quickly they could build credibility within HR and within the business just by having some of those basics right and not just saying hey here's the turnover ratio but here's what

[00:15:42] it's costing your department given the level of turnover that you have right it's a simple things I'll tell you questions like is it better to hire from agency or referrals very simple

[00:15:57] questions all right if you're an HR BP one of the things that will happen often as you get a vacancy your your business partner comes in and say so-and-so quit how quickly can we replace them

[00:16:08] do you know where to look or are you going to start from zero oh yes okay let me put in the job requisition let me get your job description let me start it through the process okay you're

[00:16:18] providing service but not as useful a service as if you had already crunched a little bit in numbers I said of the last 25 people that we've hired it turns out that the seven or eight that we

[00:16:29] hire from agency they're still here and they're also doing quite good but the ones that we hired through referrals actually haven't worked out so let me call agency a directly and as opposed to

[00:16:39] starting the process on the beginning if you can do at least that much or things like is it better simple questions again we tend to think of training as if training was the answer to

[00:16:51] employee engagement but not really the answer to add in business value but simple things like is it better to train everybody which would be the employee engagement answer or is it better to

[00:17:00] only train the people who are not very good because in the end the the the bang on the buck is going to be on train the lower performers to get them to perform better because if you train the higher performers their likelihood that they're going to improve

[00:17:13] that much is going to be marginal and maybe the cost is not there these are very simple things now it involves maybe doing regressions or doing tea tests and then a lot of people

[00:17:24] start freaking out oh my god he's saying dirty words like tea they are very simple things excel can do all of the you don't have to know how to calculate any of it you just have to know

[00:17:36] where in excel it is so that you can take your seed put it together and draw it up and do a chart it's not that hard most people can learn how to do this in a two day course yeah and

[00:17:47] I find that when I think this is especially for people who think they're people persons make friends people in finance would love to help you figure out the numbers right when if you've got the data

[00:18:02] that says here's what's happening they can help you figure out the numbers right the cost or whatever it is you're looking for your friends in analytics right make friends with the people

[00:18:13] in analytics know what they're doing what they're looking at ask questions there's lots of ways to get at this you don't have to be an expert but you need to know where to go and who to talk to get the

[00:18:26] information make friends also in places like sales and marketing figure out how the business actually happens yeah manufacturing know how it's built one of the things I've always done as a

[00:18:39] matter of practice and I've always advised everyone in my HR teams to do is to go spend time on the ground go on sales routes with sales people just spend a week if you can with different types of sales

[00:18:55] people figure out how the business actually work how does the customer feel about our products how does the customer feel about the competition you will learn so much no amount of training will ever replace this kind of go to the manufacturing side and spend time understanding

[00:19:11] all every manufacturing side will have lots of charts and graphs that show this and that spend time understanding what they mean so that you get a better sense of what they're trying to achieve

[00:19:21] in terms of quality in terms of production and how it all works the HR people that only spend time with other HR people tend to be very insular and they only end up talking about engagement and retention rates as if they were the only reasons for HR's existence

[00:19:41] the more you spend time understanding how the business ticks how you say how the business makes money the better of an HR person you'll become so there's no substitute for this yeah I tell people spend some time in payroll if you want to really see what's happening

[00:19:59] out in the field directly spend some time in the payroll department spend some time as an HRBP and I love your idea of don't and don't wait for somebody to approve it or don't wait until you

[00:20:13] can get somebody to agree that you should get this training if you will you would be surprised at how much the sales teams and other people would love to have you come out and spend some

[00:20:23] time with them in my years at Pepsi for instance I did Pepsi roots to sell Pepsi in supermarkets sell Pepsi at mom and pop shops I spent time at pizza hot stores chopping up tomatoes and

[00:20:38] putting cheese on pizzas and I spent time at Taco Bells at the cash register I spent time on the Frito-Lay factory floors trying to figure out how potatoes are peeled I did all kinds of things

[00:20:51] but one of my happiest days in my HR career I was doing a sales route in Manila in the Philippines with Frito-Lay guy and we ended up at lunch typically of course lunch would have to be

[00:21:06] at a Pepsi restaurant and so we ended up at a KFC and the supervisor met us at the KFC store and he had a chat I could see that he had a chat in Tagalog with the sales guy that I was

[00:21:17] with they chatted for a few minutes they pretended that it was just trying to get the menu of what they were going to order for lunch but I could understand enough of what the gist of what they

[00:21:26] were saying that they were actually talking about what was I doing and how well was he doing against what I was doing I wasn't doing anything really I was just trying to spend time

[00:21:34] understanding the Philippines market when he sat down he looked at me and said you're really not in HR right you're really a sales guy from headquarters pretending to be an HR person

[00:21:45] right that was my that I could actually make someone believe that I even though I told them the absolute truth I'm an HR person that I could actually make them believe that wasn't true that

[00:21:57] what was more true is that I was actually in sales that meant that they thought I really understood the business and and really knew what I was talking about the amount of credibility I had

[00:22:06] with that team was amazing and we ended up changing for instance their sales compensation plan which is one of the key thoughts that I had after that trip because I figured that they were

[00:22:17] not doing enough on the sales come front great impact for the business again they managed to take market share back from some local competitor that they have and then HR can walk on water

[00:22:28] because we added value to the business then they love us they say come back what else should we do yeah yeah the importance of influence and just understanding of the business I just think we totally underestimate that in the HR function and especially when these larger organizations

[00:22:48] where there's so many the roles are so specific to hey I just focus on benefits and hey I just do leave of absence and I just do onboarding right I think it is one of the challenges of HR

[00:23:06] and I think it's the challenge of the CHRO to help their organization figure out how they better work within the business right and I think that's a I feel like that's a charge of

[00:23:19] leadership and the management team to make sure that their people and their teams get an opportunity to learn as much as they can and be part of the business where they can that's so true Terry and sometimes we miss the point that everything we do in HR is

[00:23:36] absolutely interconnected and many HR folks don't see that because like you say okay I only have a KPI about how many people are on board or how quickly I get it done as opposed to

[00:23:47] we have an overall KPI and HR that probably has to do with retention or engagement or even adding value and onboarding is a piece of that cog and we often miss that part I see it

[00:23:58] also in things like chat GPT when I go around talk to HR or this is about chat GPT in general what you get is a smattering of maybe 40 to 60 percent of people that say yes they have used it but

[00:24:11] only for their personal use so they use it now for maybe things like writing a better email and what I find is the missed opportunity is that we're really chat GPT could be tremendously useful for HR departments is how to optimize complete processes like recruiting for and onboarding

[00:24:32] but because we don't talk to each other because everybody's just using the tool in their own little way just to write their own little emails we haven't yet figured out but what if we

[00:24:39] what if I find that it precludes us from getting better at what we do that we don't actually talk to each other that we don't see what is the impact that training has on promotions or what is

[00:24:51] the impact that onboarding has on retention three years later now we don't do enough of that and that's to our own detriment yeah yeah and I agree I think AI it's a scary term for a lot of

[00:25:06] people still especially in HR because I think they fear what might be around the corner if they use AI and it gets used improperly or they use the information in the wrong way but I think the

[00:25:19] reality is there's a lot of opportunity to use AI in this area to simplify and take away some of the mundane work that people do so you can free up more time to spend in the business and

[00:25:36] really understanding the business and helping the business increase its value talking about AI and how people find it scary I attended a conference a month or so back early December

[00:25:49] and they had a section on gen AI for the HR world and there was a panel of speakers I knew one of them who was a rather feisty speaker on many topics and in the end the overall tone of the other folks

[00:26:04] on the panel as well as the moderator was that all HR professionals should go into this of wearily and carefully and slowly and I find this to be at least in the context that we are here in Asia

[00:26:19] scary in itself it's not that AI is scary it's the fact that HR is refusing to go along with it that's scary I think AI this boat has sailed this isn't going to go away and in fact I think

[00:26:31] probably two-thirds of CEOs around the world according to some data I saw recently are convinced that AI is going to have a positive impact on their business now what they mean about positive impact on their business is usually around I can deliver more for less

[00:26:46] yeah that sounds like HR can I deliver more for less it turns out that the CEOs are already thinking about this but HR is still thinking AI we need to be careful it will happen and the

[00:26:55] change will need to be addressed and we in HR need to know that even before we start thinking about our own HR department we need to think of the fact that it's going to change the business

[00:27:04] how we do customer service how we do accounting how we do many things in the organization and we need to be already aware of the fact that is happening and that we need to be there

[00:27:15] yeah other thing that's happening that CEOs are thinking about but that HR I think are refusing to accept yet is that just as much as they think things like customer service can be automated through gen AI tools they're also thinking things like recruiting and onboarding

[00:27:32] and maybe even training can be automated so just as much as they think we can cut maybe 70% or 90% of my customer service staff they're also thinking hey and we can also cut 70%

[00:27:47] of our recruiting staff and I think many HR folks actually are afraid that this may be true and maybe the reason or one of the reasons they fight the implementation of chat GPT or other AI

[00:28:01] tools is because they fear that their own jobs are going to be on the line yeah these very HR folks that are people that we talked about are also concerned that well is chat GPT

[00:28:13] not human enough I haven't seen studies on HR but I've seen studies on doctors it turns out that the chat GPT scores higher on empathy nearly four out of five than doctors do which is only about 2.8 or 2.9 out of interesting I've seen some chat bots created with GPT4

[00:28:32] on HR policy that have more empathy than comparable emails from the HR department and they can answer within minutes whereas usually emails from the HR department require 24 to 48 hours to get responses yeah so lots of things that we need to be aware you're right

[00:28:51] that we need to be aware of two main issues one when you use GPT you need to make sure that it's within your firewall but you're not putting out any confidential information the second one is that if you don't know how to do it properly it can hallucinate

[00:29:08] so you still need to have quality control on it but like I said this ship has to get on it quickly otherwise somebody is going to be deciding for us to rethink our processes yeah yeah don't wait

[00:29:26] so I know you've kind of already said if there were if there was something that you could tell people to do today it would be learn some finance understand the analytics is there anything

[00:29:38] else in terms of just sort of advice or guidance that you'd give somebody who's kind of new in this area something they could do tomorrow right after listening to this show something they could do

[00:29:50] that would start to make a difference for them personally kind of move them in the right direction something they can do tomorrow actually yeah I would say just go into any online course

[00:30:03] that you can find on three topics and you can do that literally over the next three days and you'll be a better HR professional afterwards one is on the accounting and finance you really

[00:30:13] don't need to take a whole course on accounting and be as good as the accountants no you just need to understand basic principles basic principles particularly about revenue and profitability it may sound simple but the business talks about EBIT and EBITDA for instance

[00:30:31] every accountant in fact everybody around the table would know the difference between EBIT and EBITDA many HR people when you ask them this question what's EBIT and what's EBITDA they'll can rattle it off oh it's earnings before interest taxes depreciation and mortisation great the real

[00:30:46] question is do you know when to use what for an incentive system everybody around the business table would know that and you don't so here's one piece of homework just go find out different

[00:30:56] types of profit from gross profit to EBIT EBITDA to net profit so that when they're talking about profits you know which level of profits they're talking about and you know then how to help the

[00:31:07] business revenues a little bit simpler there's only gross revenue net revenue it's not so difficult but profit yes just go and google this it will take you literally 15 minutes to understand profitability that already will make you stronger second thing you need to understand

[00:31:25] is a little bit of analytics now analytics may take like I said maybe a course that you can find on online and what you need to learn on analytics is very basic principles of statistics and those are

[00:31:39] correlations ANOVA's and t-tests okay don't think I just cursed at you I didn't these are very simple ideas again go and google what is a correlation what is an R-squared what is an ANOVA

[00:31:53] what is a t-test a t-test will help you compare a group before and after in other words before you train them and after you train them the performance improve that's the kind of thing

[00:32:04] exactly that we need to do or compare two groups this group has gone through onboarding this group hasn't gone through onboarding is there a difference in whatever now very simple

[00:32:15] things and then the third thing is spend another maybe half an hour online this is also free on what is the analytics or the statistics tool pack in excel I won't even get you into power bi or

[00:32:31] anything more complicated excel which everybody already knows how to use go find out what does the analysis tool pack do then added to your excel just add in the tool pack and start playing with it

[00:32:47] start doing t-tests and correlations and ANOVA's on excel you can do this over the next three days by the end of the week you will already be a better HR professional that's awesome yeah I think

[00:33:00] that's great advice and simple right anybody can do any one of those things and I think we'll appreciate how I think it'll be eye-opening right just to be able to say wow I hadn't

[00:33:14] really thought about the numbers that way so that's fantastic thanks for men for joining us today this has been a great conversation I hope some people walk away and actually do that I'd love

[00:33:27] to hear from them so thank you I know people can find you online and on social they can find you on LinkedIn do connect do send me your questions do ask me anything I'm happy to support

[00:33:41] you anyway I can Terry thank you yeah great connecting it's been great having this conversation thank you I also want to thank our producers brand method media group our marketing team

[00:33:53] and I want to thank you for tuning in that is all the time we have for this week's episode of HR we have a problem if you enjoyed this episode you can subscribe to it on your favorite podcast app

[00:34:06] we'd love it if you'd leave us a review or we'd love to hear more about what other topics you'd like to hear about we will be back in two weeks with another episode of HR we have a problem thanks everyone