Gerry is the CEO of a mid-sized pharmaceutical company.
Concerned by the volume of recent promotions within his organization, he reached out to human resources at the company’s monthly meeting to learn why.
He became frustrated by their inability to adequately answer his questions so he ordered the formation of a special committee to take a closer look.
Before any promotion would be approved, a committee comprised of HR leaders and C-Level executives, would have to review it. When a promotion was approved, the employee would be required to receive a favorable rating at their next performance review before receiving his/her new salary.
Gerry’s initiative proved successful, so he thought. The number of promotions and salary increases declined, but there were undesirable consequences. Valued employees became discouraged by the lack of promotability within the organization and left to work for the competition. Turnover skyrocketed and the cost to hire and train new employees to fill these open positions far exceeded the cost of the promotions.
What we’ve got here is failure to communicate
The above is a fictitious scenario that illustrates the consequences of not asking the right questions. Gerry had good intentions. He identified a potential problem and went to HR address it.
Without sufficient information, he implemented an unnecessary process that turned out to be detrimental to the company.
The concerns of HR are different than those of C-level executives.
CEOs are focused on profitability, while HR is focused on talent. The secret to effective communication is to ask the right questions to get the information you need to make decisions that are in the best interest of the company.
Here’s what the CEO should be asking HR at every meeting:
“How are our recruiting efforts coming along?”
According to SHRM’s 2016 Human Capital Benchmarking Report, it costs an average of $4,129 to recruit for and fill an open position. It’s no wonder that the talent shortage topped a recent World Economic Forum’s list of worries keeping CEOs awake at night, noted by 77% of the CEOs surveyed. To get the full picture, CEOs need to ask:
- How many openings do we currently have?
- Are these openings impacting our overall productivity?
- What will be the cost to fill these open positions?
- How long does it typically take to fill these positions?
“What strategies do we have in place to retain our top performers?”
With such a high cost per hire, you want to ensure you’re providing your top performers with enough incentive to stay. To evaluate the situation you need to ask:
- What is our turnover rate?
- How do we recognize our top performers?
- What programs do we have in place for employee development?
- Are we offering competitive salaries?
“What are we doing to ensure a favorable employee experience?”
The employee experience encompasses your employees’ physical surroundings, the technology available, and the organization’s culture. A great one can attract and retain top talent while building a deeply engaged workforce. HR is responsible for many of the tasks that contribute to the employee experience. To learn more about their efforts, you should ask:
- What is our process for onboarding new employees?
- How do we coach, develop, and support our employees?
- How do we encourage employee advocacy?
- What is our communication strategy?
“Show me the metrics!”
CEOs need to know the big picture.
If your HR department is delivering reports in multiple spreadsheets pieced together from various systems, it’s time to consider using human capital management software. Cloud-based HCM systems, like Balance Point’s solution, leverage data, dashboards, and reporting capabilities to offer helpful insight in order to make strategic choices about talent, scheduling, and other workforce needs.
Another benefit to the CEO is the Executive Dashboard, a visual representation that provides a quick and easy way to view the company’s labor trends and metrics in real-time, without needing to run reports or export data. User-friendly graphs and charts present all the information needed to make financial and compliance decisions in one place.
Dive Deeper With Your Free CFO Guide To HCM
Want to take a more strategic approach to managing your workforce? This guide will give you what you need to for better collaboration with HR, attracting and retaining talent, and identifying soft costs, and of course several other key topics for CFOs.