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Right Vs. Wrong Incentives

Posted by Chuck Csizmar | Posted in Articles, Universal Compensation | Posted on 05-01-2012

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It’s fairly common these days to find articles written by those who advocate increasing the eligibility of employee incentives.  Their recommendation is to push inclusion further and further down the organization’s hierarchy.  The argument is that all employees affect a company’s success, that every employee will chase the almighty dollar of variable pay, and that the opportunity for ever larger rewards will motivate them to do great things.  All of which would in turn deliver improved financial results for the company’s bottom line.

Maybe.

And maybe it’s not such a good idea after all.  Perhaps it’s a bit of a crap shoot as to whether higher compensation costs (which would be a certainty) will result in improved financial gains (possible, but not guaranteed).   Let’s take a look at the challenges to be faced when you consider a broader eligibility for your annual incentive program.

What’s The Plan?

Start with a re-examination of the basics.  What do you consider an incentive element when designing a compensation program?  My definition is a reward for performance that goes above and beyond the norm, beyond what is expected.  Thus it shouldn’t be a reward for performance that would have occurred as a matter of course.  The intent for offering an incentive is to prompt a change in behavior, to get employees to do something they wouldn’t ordinarily have done, and to get them to do it because they have been offered a financial reward.

That should be the plan.

And because these objectives are noteworthy, you would expect that they would differ from year to year as the needs of the organization evolve and adapt to changing business conditions.  This emphasis on annual objectives reinforces the intent that incentives should be designed to reward effort above and beyond those duties listed in the job description.  They should not be repetitive, year upon year.  That’s what the job description is for.

Incentive rewards should also not be provided simply because an employee performs their job well.  That particular carrot should be the role of the annual merit increase.  In fact, such an exercise would be considered “double-dipping,” paying for the same performance twice.  You should not be using an incentive as an inducement to get employees to perform their expected duties.  Again, that’s paying twice to reinforce the same behavior.  It’s also using compensation to replace the leader’s own responsibility to manage their staff.

Some would consider this using pay as a babysitter.

Is There An Advantage For The Company?

When deciding on whether to add a variable pay opportunity to an existing base salary compensation model, you need to ask yourself, “what will the company receive in return for the increased costs (variable pay) of an incentive program?”  If you are planning to increase your targeted compensation costs by 5% or 10% of the base salaries of an affected group, how will you answer the ROI question?

Caution:  You had better provide a business (financial) rationale, and not subjective phraseology like “survey says” or “everyone else is doing it” or even “it’s the right thing to do.’  Management tends to frown on such trivial rationalizations.

It’s also worth noting that employees lower in the hierarchy have a greatly reduced line of sight between their actions and business success.  This entails having to create quantifiable objectives for performance (you are quantifying, right?) that should integrate vertically with department, functional and / or organization objectives.  If you don’t integrate what you’re telling employees to do, you may find yourself paying out incentive rewards when the company as a whole has not been successful.

As a counterargument to the eligibility question I’m often asked about Gainsharing programs.  These initiatives can be a useful method of introducing incentives to select employee groups who have a direct line of sight to potential savings.  They can affect real change.  However, successful plans eventually kill themselves off as viable gains are achieved (low hanging fruit) and payments decrease after the easy pickings are collected.

So, to recap, let’s review the business urgency for lowering incentive eligibility to below the management ranks.

  • Is the employee line of sight (performance / business results) direct, or remote?  If remote, what are you paying for?
  • Can you quantify the expected ROI?  The wrong answer here suggests a giveaway.
  • Can you balance the increased compensation costs against hard financial gains for the company?  Are the bean counters nodding their heads?
  • Would the variable pay become strictly an added cost, or would any portion of base salary be at risk?  “No pain, no gain,” or “no risk – icing on the cake?”

If you have a reasonable doubt on any of the above points, I suggest you think long and hard before implementing such a program.  It would be very difficult to dig yourself out of that hole.

Are You A Minimalist Employer?

Posted by Chuck Csizmar | Posted in Articles, International Compensation | Posted on 25-07-2011

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In recent months I have dealt with several US clients who faced an overseas challenge of high employee separations coupled with difficulties in recruiting qualified staff.   These companies were at a loss to understand the cause of their problems, as each felt that they were already paying out a great deal more in Total Rewards (compensation, benefits, etc.) for employees then they were accustomed to in the US.

A quick study revealed that, while the client’s international employees were indeed receiving a great deal more than their American counterparts, in many areas they were in fact being given no more than the minimum benefits mandated by statutory requirement.  How do you attract, motivate and retain quality staff when the message of your actions is that you are only willing to offer what the government says you must?

You don’t.

One client bemoaned having to grant four weeks of vacation upon hire, because it was the law in that particular country, only to find out that the normal practice granted five or more weeks.   By focusing on only statutory requirements and ignoring competitive practice they found themselves paying a steep price in struggling to build a quality staff.  They had also earned a reputation in the local market as a “minimalist employer”.

And like first impressions, a company’s reputation is hard to change.

Human Resources to the rescue?

When American companies first establish operations overseas Human Resources faces a number of challenges that they are unaccustomed to back at home.  Every country is a separate and unique entity, with differences in HR policies, practices and statutory requirements, each of which must be acknowledged and addressed in order to maintain a successful operation.   On top of that you will find that the myriad employment laws (little standardization here) is a major cost and operations consideration, both in complexity, strictness and required documentation.

In addition, you must deal with the vagaries of the competitive compensation marketplace, where the same job is paid differently from Rome to Oslo to Buenos Aires – usually coupled with social charges and benefit distinctions as well.

Operating under the guidance of U.S employment law and US-based corporate practices is a failed strategy.  Maintaining such a US focus (usually for ease of administration) will bring you grief; grief from your employees, from those you hope to hire, and most of all from local governments whose laws you have ignored or bypassed.

If you decide that your business strategy requires you to maintain a staff presence in a particular country, then I would advise you to treat that operation the way you would its US counterpart; provide competitive terms and conditions that will attract and retain the right caliber of employee in that country – and ignore how their reward packages might compare with US or other country counterparts.  If you are not willing to make that commitment, from an HR perspective you would be better off not to engage employees in that country.

What Do I Do Now?

Posted by Chuck Csizmar | Posted in Articles, Universal Compensation | Posted on 19-05-2011

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When it’s time to fix your Compensation program, and you’re the one in charge, what do you do?

Suppose you’ve just been promoted to the Compensation leadership role in your organization, or you’ve just been hired and inherited someone else’s legacy.   Perhaps you already have ownership, but have recently experienced an epiphany that demanded corrections and adjustments, or maybe you simply have the boss’s enraged shouts still ringing in your ears.

Whatever the catalyst, suppose you suddenly face a situation where you need to fix your compensation program; how would you go about it?  Where do you start?

What would you do?

Check your points of pain

First things first; where does it hurt?  The clarion call of action is coming from . . . somewhere, so find out and determine what those burning platform issues mean for your business.

Typical problem areas would include the following favorites:

  • High turnover: have your avoidable separations (excluding deaths, retirements, relocations, etc.) reached a level that has attracted senior management attention – and concern?
  • Recruiting: has the Staffing section complained that it’s become increasingly difficult to attract the right caliber of candidate?  That you aren’t paying enough?
  • Payroll: is the cost of labor considered too high?  Too many FTEs?  Cumulative employee expenses are out of control?
  • Morale: has your organization flunked the latest employee engagement survey – and fingers point at Comp?

Or is it something else that is poking you in the eye, causing the organization to consider its compensation programs as more a problem than a solution?

Look and learn.  It’s the first step toward a solution.

Take a health examination

Next, extend your research beyond the obvious and look under a few rocks for what you aren’t being told.

Start asking questions of key management personnel regarding their views about how healthy (effective, efficient, performing as intended, etc.) are your reward programs.  Talk with line managers (those who operate in the trenches) to gain a perspective from the other side of the desk, where employee friction points make the most noise.

Then review your compensation metrics (you are using metrics as a statistical aide, aren’t you?) to determine whether the numbers are telling you a story that you might not have noticed before.

For example:

  • How competitive are your actual pay levels?   When was the last time you conducted a competitive analysis?  What did it tell you, and more importantly, what did you do about it?
  • Is grade and title inflation boosting costs without adding value?  Bogus titles and inflated evaluations, often used to salve an employee for whom you can’t provide cash rewards, are not  harmless gestures.  Those backdoor tactics cost real dollars, without providing a corresponding return in performance, productivity or engagement.
  • What is the average performance rating, and how does that correlate with the success of the business?  If the employees tend to be rated as above average performers, while the business is having an average year, that disconnect is costing you money.
  • Do you segment your employee population?  Not everyone’s external value changes at the same rate, nor does the market move in lockstep.  Find out how different employee groups (non-exempt, exempt, professional, management, sales, executives) are being treated (pay rates and trends).  You may have problem pockets, not universal trends.

Chances are that the statistics from your metrics database will validate the concerns raised from your interviews – and focus your corrective actions.

Reinforce the existing infrastructure

Likely you already have in place a salary structure, complete with grades and salary ranges.  You may even have multiple structures, based on employee segment, specialty departments or geography.  Make sure they are up-to-date.

Consider preparing a Compensation Administration Guidelines document for your managers, as a aid in applying standards of consistent treatment for your employees.  These guidelines would lay out in a single voice the policies and procedures to be used in managing your reward programs.

When are performance reviews conducted, how large are promotional increases, how are exception requests processed?  How are jobs evaluated, who is eligible for incentives, and how do you use geographic differentials across the country?  Who has to approve what actions?

And what are doing about Management training?  How do you ensure that those empowered to spend the company’s money (hiring, promotions, performance increases, etc.) actually understand the intent of your compensation programs?  Or are they making a series of well-intentioned emotional decisions that spend the company’s money without concern for financial operating pressures?

One could argue that focused training is a minimal cost solution to the problem of managers wasting the company’s money through ill-advised pay decisions.

Get your message out

Once you have determined where the problem areas are, their magnitude (impact) and the prioritization of gaining solutions, you should consider taking the offensive to make sure that your message is the one employees are talking about.

Note: most other corrective steps are defensive in nature, like putting your finger in the dike.  Survey analysis, salary structure redesign, performance appraisal modifications etc. are all reactive in nature, fixing a problem.  They don’t by themselves attack what could be your most serious challenge – employee perceptions.

  • Explain out competitive you are.  Employees will never assume that you’re paying competitively.  At best they consider you average.  If you’re doing better than that, you’d better be telling folks.  Repeatedly.  Because paying above average rates to employees who think you’re average – is a waste of money.
  • Use reward statements to show how much the company does for employees.  Have you ever added up how much your organization spends for the betterment of employees, for everything – not just cash?  Consider voluntary as well as required benefits, statutory obligations like social security and workers compensation, vacations, perquisites, recognition programs, company-sponsored programs, cafeteria, employee discounts, tuition reimbursement, stock purchase plans, community involvement programs, the parking garage . . . the list can be quite extensive.

Get your arms around the issues, identify your pain and priorities, communicate with employees and get started.

Really Bad Compensation Decisions

Posted by Chuck Csizmar | Posted in Articles, Universal Compensation | Posted on 26-04-2011

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I’m often asked at speaking engagements or during webinars what key takeaways, what gems of wisdom have I learned during the course of my career.  Well, like most of you out there I’m still at it, learning something new every day, but I have gained a valuable perspective from what I’ve seen and experienced.  I’ve learned that professional wisdom comes to each of us in two ways; 1) what you learn to do (what works), and 2) what mistakes you’ve seen or made (what doesn’t work).

It would be wonderful if your career development manages to stay on the straight and narrow with positive role models and good experiences, but all too often we learn our most valuable lessons from failures, from tactics or decisions that didn’t work.  Or from failed managers whom we’ve worked for, those who made repeated mistakes a personal career choice.

In that situation you find yourself saying either, “yes, I should do that, when the decision is mine” or conversely, “no, I’ll never do that.”  Both experiences can offer valuable lessons and help shape your career.

One man’s gems . . . .

Putting together an all-inclusive list would become an endless affair, given the myriad scenarios, personalities and business circumstances that could be involved.  So instead we’ll try to highlight the big mistakes.

These are provided in no particular order of importance, and only reflect my own experiences.  No doubt I’ve missed a few; thus the never ending list.

  • General Adjustment vs. Merit: granting all employees the same pay raise, instead of varying increases on the basis of performance delivered.  Easy to administer is rarely an effective strategy.
  • Performance vs. Entitlement: rewarding management with a more generous hand vs. other employee segments – simply because they’re management.  Leadership is no more entitled to rewards than any other employee group.
  • Overuse of Discretion vs. Objectivity: or the reliance on subjective measures in lieu of quantifiable results.  When assessing employees on a subjective vs. quantifiable basis management discretion can sometimes lead to abuses (favored sons, “halo” effect, or even discrimination).
  • Abuse of FLSA Exemptions: avoiding overtime by treating non-exempt employees as if they were exempt.  Managers try this tactic all the time, for numerous reasons.  This is when you need to put on your policeman’s hat.
  • Surveys says!: using a title and a generic catch-all write-up for matching jobs against “the market”.  It’s the easy way.  Anyone can do it.  There’s nothing to interpret, is there?  And then there’s the matter of quality surveys vs. . . . the others.
  • The Performance Distribution Curve: using a process that assigns individual assessments of employee performance in a manner set to adhere to a bell-shaped graph.  The operative word here is “assign”.  Nobody likes this tactic, except perhaps the lawyers.
  • Ignoring Internal Equity: hiring new employees without consideration of how other like-qualified employees are paid.  There are no secrets, so pleasing one while angering two is a dubious strategy.
  • Title Inflation: that meaningless “bone” you toss employees whom you can’t otherwise reward.  This tactic will raise fixed compensation costs without providing a corresponding benefit to the company.  You will eventually regret the decision.
  • The Absent Safety Valve: it’s often said that a good Compensation program should cover 85% to 90% of contingencies; and that for the remainder a degree of flexibility and common sense should guide the decision-maker in a different direction.  For those more rigid in their thinking, for whom the policy manual is gospel, or those who avoid stick-out-your-neck decision-making, authorizing of exceptions can be a struggle.

To be successful over time, your program should be able to bend, but not break.  This means that sometimes exceptions have to be made, for good business, compassionate or even political reasons.  Not every circumstance will fit into your mold.

Can you see possible rationalizations for each side of the above?  Of course, depending on a litany of possible circumstances, individuals and . . . whatever.  Just have a care that your rationalizations don’t become a pattern of excuses, and that you document.

Another man’s errors

Then there are those decisions that over the course of one’s career you continue to regret – wishing you had the time to reboot your thought processes.

  • Hiring a friend / relative: if you would hesitate to sell them a used car, why would you ever think that hiring them would be an idyllic experience?  Correcting this mistake can be painful.
  • Ignoring Office Politics: “I’m not very good at politics” is a poor response to an important reality that all managers need to deal with.  It’s all around us, so to pretend you’re above it all, or otherwise ignore it, is likely counter-productive.
  • Performance will take care of everything: no, it won’t.  Not anymore.  In today’s work environment image and exposure have grown in importance, to the extent that just doing a good job is no longer enough to ensure career progression, or even longevity.
  • I was too busy for networking: I usually hear this from people in transition, from those who failed to connect with colleagues, peers and industry insiders while they were still inside themselves.  You build a network when you don’t need it, so it’s there for you when you do.

Have I missed anything?  Are there other ill-considered practices or policies that you’ve experienced during your own career?  As I said, no doubt the list(s) could be expanded.

Let me know.

How To Change Your World

Posted by Chuck Csizmar | Posted in Articles, Universal Compensation | Posted on 21-01-2011

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You’re in charge.  Or at least you have a say in developing compensation programs for your organization.  That’s a vital responsibility, especially if all is not well in your world.  Perhaps an audit of those pay programs has generated worrisome results, or the latest employee engagement survey showed a large measure of discontent.   Perhaps turnover is rampant, or you’ve just sat through an uncomfortable meeting with a boss upset over the runaway cost of labor.

Something has to be done to better utilize your payroll dollars, because too much money is dripping out of your company like a leaking faucet – and the rest isn’t giving you much bang for the buck.

The challenge, then?  You have to change your world.

How do you do that?  There are program design considerations, costing models, impact studies, external and internal analyses, even focus groups perhaps, but at the end of the day you can’t simply snap your fingers.  Your ideas, your recommendations need to be approved by the higher ups.  How do you make that sale?

Let’s start with the easy part; what not to do.

When facing senior leadership with business-impact proposals the quickest way to be shown the exit is to tell them what they don’t want to hear.  Sounds obvious, but basic judgment errors are commonplace when you’re so caught up in knowing the answers that you forget to focus on the right questions.

A few examples of how not to sell your ideas:

Leading with “it’s the right thing to do” is rarely a good idea.  Using an emotional, feel-good rationale is seldom a strong argument and is easily sidelined by the bean counters or anyone playing the “this is a business” card.

“Surveys tell us . . . “ can be another weak point, because the argument that everyone else is doing something hasn’t worked in a debate since you were a kid.

Over analysis: the more extraneous numbers you throw at senior management, the more you rely on charts, graphs and regressed formula trend lines to make your point, the more vulnerable your proposal becomes.  The risk is in having the numbers become the story.

I’ve seen senior executives feel compelled to ask multiple and often tangential questions about the support calculations, just to show they’re engaged and shouldn’t be taken for granted.   Don’t let your proposal  rise or fall on the comfort level of decision-makers struggling through the details vs. the concept.

Principles of the sell-job

What follows is a series of suggestions you should consider before walking into that critical proposal review meeting.

First and foremost make a business case where your recommendations illustrate that the company will win.  Management’s prime directive is to act for their own self-interest; altruism is over-rated in the boardroom. Once you have them nodding their heads at their own good sense, they’ll be more easily moved to support your plans.

Tell a story; start with a statement of the problem, then augment with a back story to explain how the situation has become so precarious.  Show the impact of inaction, then close out with your recommendation  - highlighting impact, savings, reduced turnover, whatever the goal  - that solves the problem.

Do you know the ROI for your proposal?  You had better have one, as that could be your strongest argument.  Pros and cons?  Are there potential glitches?  Rarely will you have simple, uncomplicated solutions that can’t fail.  So it would be better for you to address any troublesome possibilities early on, to soften the potential “gotcha’s” that could trip you at the worst possible time.

Always have a backup plan, as all-or-nothing strategies don’t work well outside of the movies.  You’ll need a plan “B” in your back pocket, just in case.  Better to get half a loaf today and be able to hope for more later, than crash and burn today because of pride and stubbornness.

Which means you shouldn’t fall on your sword over ideas, but be prepared to compromise.  Proprietary ownership of ideas (I want it my way) should be secondary to achieving the business goal.  But often times pride does get in the way, sometimes derailing sound concepts for the wrong reasons.  It’s not about you.

The numbers rarely speak for themselves; in fact you’re at risk if you use statistics as your main argument.  Instead, paint a picture with text.  Use all those figures only to support the point you’ve already made.  Strategic thinkers balance technical skills with the art of persuasion, influencing others to undertake the desired action.  They don’t throw out a bunch of numbers and say, “see?”

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Even when the task ahead is daunting, go ahead and take that first step.  It’s usually the hardest.  But if you’re prepared to achieve incremental gains vs. sweeping changes, if you keep your eye on the ultimate goal, you will find the second step is easier, then the third and so forth.

“Rome wasn’t built in a day” is a classic and over-used phrase, but for good reason.  Because it makes sense.  Because it rings true.  So think of Rome when you try to change your world.  Just don’t act like Don Quixote and run off to chase windmills.

The Easy Road to Global Success?

Posted by Chuck Csizmar | Posted in Articles, International Compensation | Posted on 25-02-2010

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How many success stories start with the phrase, “I took the easy road”?

Most companies (@85%) with global operations tend to pay their internationally-based top level executives in accordance with some form of global compensation structure – in order to level the playing field for those with multiple country responsibilities.

However, for the rest of their international population it’s not as straightforward.

The Challenge

Companies with local national employees (hourly, professional, management) face a challenge and a risk when it comes to their decision as to how to reward (pay) in each of their operating countries.    Do they “do as the Romans do” and follow local practice, or do they seek to create a standardized global framework in an effort to equalize pay practices?

For those developing strategies to effectively pay employees across the globe, the headache is in dealing with a diverse collection of economies, cultures and competitive pressures – some of which may be moving in different directions.  However, the strategy of recognizing country-specific differences in pay methodology often comes up hard against the interests of corporate staff administrators, those who traditionally look for the easy way, the simple way, and the one-size-fits all way of dealing with far-flung employee groups.  For many companies and international compensation practitioners it is actually the administrators whom you have to overcome.

The headquarters staff will ask, what difference does it make?  Unless otherwise required by legislative action or representation, why can’t we be fair to all our employees in the same way?  Here are a few metrics to illustrate what they wish to standardize:

  • Value (price) jobs irrespective of locale
  • The pay mix of base salary and incentives
  • Universal date pay increases
  • Average pay increase percentages
  • Pay-for-performance vs. general adjustment increases

Why Not?

Why doesn’t one size fit all?  Why can’t you treat all employees in the same fashion – because they all belong to the same “XYZ Corporation”, right?  You should consider the following before taking out that cookie cutter.

  • Economy:  When you’re dealing with country-specific inflation rates that range from flat to 20%+, do you really want to offer the same percentage salary increases?  What if one country is in the grip of recession (US), while another remains relatively unscathed (Australia)?
  • Culture: in some areas of the world job and income security needs command paramount interest over pay-at-risk, so in the pay mix the base salary dominates the variable portion.  For example, while China has a very aggressive sales compensation environment, in India there is more interest in base salary and their CTC (cost-to-company) package than variable pay-at-risk compensation.
  • Competition: companies react to the cost of labor vs. the cost of living.  If the market they are in rewards in a certain fashion (pay mix, commission vs. bonus, quarterly vs. annual rewards, etc.), companies who provide a different approach risk lower employee engagement as well as a talent drain.
  • Representation: National unions often dictate pay actions that could reverberate up the hierarchy as companies strive to maintain equitable treatment with their other employees.  Works Councils will have their impact as well.

On the other hand, varying your practices according to country-specific conditions could cause a degree of consternation with the back office staff and their computerized systems.  These are folks who like things neat and pretty.  In their defense though, senior management often asks for standardized metrics that may be difficult develop and compare:

  • Tabulating global statistics when definitions or methods vary
  • Identifying global trends based on diverse conditions
  • Balancing the impact of cross border movement

If you force international operating units to convert their practices to an uncommon format and methodology, the result could be more than just confusion and local administrative difficulties.  It could also mean the greater likelihood of over payments in some quarters while paying less in others – all for the sake of sameness and common report generation. This would offer up a combination of hurting employees while also hurting the business.

Remember that ease of administration is rarely an effective rationale for making good business decisions.

Do You Need A Compensation Consultant?

Posted by admin | Posted in Articles | Posted on 28-08-2009

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The time will come when you find yourself between a rock and a hard place at work.  Your ability to produce project deliverables will be challenged by staff shortages, multiple projects simultaneously coming due, or the requirement of particular skill sets not possessed by your existing personnel.  And while you are stressing out Senior Management will not let matters slide until circumstances are more convenient.

You need help.  You need it now.  But do you need a hired-gun professional, a consultant?

You could try to find a temporary Compensation Analyst to run some numbers for you, and if that will solve your immediate dilemma you need not read any further.

However, if your challenge is deeper and broader than simple spreadsheets, a proven strategy to ensure success is to obtain the services of a seasoned expert, one who can provide hands-on advice and counsel, who can take data from the analyst and advance your agenda: What does this information tell us?  What can we do now?  What corrective strategies can be employed?

The following circumstances would encourage the use of outside expertise:

  • Technical knowledge is not currently available to existing staff (i.e., international, executive, expatriate or sales compensation).  This may not be the time for on-the-job training.
  • When the current staff is overwhelmed and you need temporary assistance to take charge and drive your project(s) forward
  • Interim replacement for absent staff (separation, leave, etc.).  Someone to fill the gap, holding things together and advancing the agenda until the replacement is secured.

External professionals have the experience and broad perspective to impact your business, not simply report on it.  If used properly and in a focused manner subject matter experts will save you time, money and sleepless nights.

Caution: many professionals currently between jobs (“in transition”) consider themselves temporary consultants while continuing their job search.  Dependent on your time line these individuals may not be able to provide the focus or dedicated support (staying power) that you need.

As you would expect, specialists cost more than general labor, on account of their broad and deep capabilities that are available “on demand”.  However, you should consider whether the expense is justified before you commit.

  • An improper one-time “fix” will cost a great deal more over time (dollars, morale, turnover, training etc.) than if the problem was properly corrected in the first place
  • Consultants have the seasoning and long service expertise to look past the figures to the root causes and underlying issues
  • Someone who has a broad background working with diverse industries, geographies and employee segments will provide a richer perspective as to how best to approach your particular challenges

Of course you can decide to do the work yourself, but that strategy often presents its own challenges.

  • Your staff may be slow to focus on projects additive to their full time job, plus they will need to overcome numerous day-to-day distractions.  Project time lines will be drawn out.
  • Internals tend to focus on easy-to-achieve short term improvements, like low hanging fruit, vs. what core issue decisions are needed to affect a permanent solution.  This is not solving the problem, but shoving it into a closet – with the other skeletons.
  • Managers are often in a hurry to check off the project (problem) as completed (fixed) or “addressed” – the so-called “check mark” management style.
  • Internal staff is often restrained in their thinking by experiences limited to the What and Why of their company.  They may not be able to see out of the box into the wider universe of possibilities.

If you have decided to bring in outside experts, exercise care that you utilize them effectively to gain the maximum value:

  • Proper scoping of the project saves time and money.  Understand the challenge you need addressed, as confusion here leads to greater expense and longer time lines.
  • Scrub your data before handing it over; otherwise you’ll be paying for “grunt” work easily completed by inside staff.
  • Monitor work progress, lest you end up with charges for unanticipated (though not specifically prohibited) work.  The grey areas will cost you every time.
  • Avoid consultants who are incented by billable hours; they may encourage additional steps that render your project(s) more complex / expensive.
  • Be cautious of fancy report formats and four-color charts; you are paying extra for the fluff.

Seasoned external experts have the advantage of concentration; they focus on the project at hand, while avoiding the trap of non-productive time (socializing at work, interruptions, meetings, other distractions from the work at hand).

If you need Compensation expertise to help address your challenges, help you achieve your objectives and partner with you to success, take the step and make the call.  It will be worth it.