Is the Development More than Money?
A modern Human Resources department doesn’t just make sure that people get paid correctly and on time for their work. It also makes sure the company stays competitive. It usually does this by making sure that employees develop so that know-how does not corrode. Often, this means that HR has to positively influence the company culture, as we may encounter various insidious obstacles along the way. In fact, the problem of development is usually not the employees, but the management, which is the best at throwing sticks under the feet of the entire organisation. Often, then, cash on hand is a much more valuable and frequent retention tool than some abstract employee development.
HR and managers often have very different views on what is more important. Whether it’s money or the promise of development and a better job. The classic HR mantra is that development is what employees want. Except, this isn’t universally true either. I mean, in general it’s certainly okay, we just need to reflect on what employees really care about sometimes too. And also where we stand in the compensation market. Lest we look like buffoons when we talk about how employees mainly want that training, opportunities for growth, and a kind word from their supervisor.
HR people often forget that any development program has to make sense to people. That means they have to be able to put their finger on it somehow, otherwise they’ll see it as just another empty promise that serves as an excuse not to give me a raise. Employees need to see that someone is already in it and also has already been promoted as a graduate and is doing well. And it also needs to be selective so that I feel like I have something extra that makes it worthwhile to put that higher pay somewhere in the future. That better future should usually be closer than farther away.
On the other hand, managers are clear about that too. They usually come up with the suggestion that someone’s pay needs to be adjusted when there’s already a fire in the roof. And they want Human Resources to extinguish it quickly and miraculously. The employee wants to leave (we usually already have their notice on the table) because they’re being offered more money elsewhere. After all, we have to match or better yet, beat their offer to get the person to stay. After all, he’s on a key project, everyone is watching and we need to act fast.
Otherwise, of course, I’ll blame it on HR. I tried, but they didn’t want to (they didn’t give anything). But then of course it becomes an internal parlor game where I just get a quote and know they’ll match it, right? That kind of flirting may go nowhere, but offering development is also a cakewalk at this point. It’s very dangerous for HR to get dragged into such a game.
The problem is that HR often tends to give too much weight to just one part. And yet they only work well in a shared balance. Someone in the company hears about training opportunities, someone hears about more responsibility and money on hand right away. And every HR Manager should know damn well what’s important to the people in the company. Telling people who can’t get a mortgage that their development is the main thing is going nowhere. You’ll never come to a mutual understanding in a conversation like that unless the HR person realizes exactly who they’re talking to. Conversely, telling those who are over compensated about giving them an even bigger increase in base pay is also pointless.
The strategic challenge for HR is to implement a balanced system that motivates employees and can provide solutions to most common situations. It’s the kind of program that doesn’t need any big advertising because everyone in the company knows that being in it is it. Not only do people learn a lot there, but they also get to work on interesting projects. And when they’re done, they’re going to have that jump start in their career. And most importantly, don’t forget that balance, right?
Do we have a company culture tuned for employee development?
Without a company culture that encourages employees to want more, there’s no point in talking about significant development. Talking about development and not offering opportunities is a proven path to hell. If the company culture doesn’t encourage employees to move seamlessly across the company, the investment in development is lost up front.
It’s an important task for HR to influence other management colleagues because without their support, no development will happen. At most, HR can try to get some sort of program going, but it will lack purpose. This is because employees need to see that others around them are also moving into new positions, that they are being promoted, and that each new position is not filled externally. It’s not about not doing external recruitment, it’s about fair competition being encouraged.
If you only have one story in your company about someone who has moved on and succeeded somewhere that you tell over and over again, then the company culture probably doesn’t support employee development. And then the managers will be right that the money on hand is more valuable than any talent development. Employees won’t trust any program because they won’t feel like it’s the right opportunity for them.
The development program must be credible. We often forget this and are able to constantly change the program without being able to present clear results from the previous round. Let us keep this in mind when we decide to make another major change in the programme. This is where stability comes in.
But what if all we have is the money?
On the other hand, even though the company culture encourages employee development, managers still like high salaries because it makes their lives somehow easier. The harder it is to find a better paying job, the more I’m locked in my golden cage. The mortgage doesn’t ask, it just has to be paid every month. Managers usually know that their subordinates are not happy. The main idea in their proposed solution is that they demand a financial improvement for their subordinates because this way hurts them the least. According to the logic that money will always be found somehow.
An organization where people only work because they get paid very well is already practically dead. Sure, it will work for a while, but employees can clearly see that the company is paying high wages as a trade-off for something that is missing. Company culture is definitely not going to be a strength. Relationships in such a company will be broken and one day such a company will surely pay the price. And employee development will certainly not be a major issue for Human Resources. It will be more about quickly replacing those who have already given up on the plant.
On the other hand, managers are not alone in this. Human Resources has probably neglected its responsibilities. It hasn’t come forward to positively shift the company culture. It hasn’t set up any programs for talented employees. Frankly, having a good development program is not a two-afternoon job. It’s about the consistent work of the human resources department and all managers. And the main thing is the strategic shift in thinking about teams. It’s about recognizing that everyone in the company could lose their best person because they could do even better elsewhere. It’s just, who wants to sacrifice their best horse for the sake of the company, right?
There’s that company culture again. Of course, it’s also about the employees. They have to ask themselves critically why they are being offered a higher wage somewhere. They forget that every extra penny is worth something. And often it’s because the company needs to fix something quickly or catch up with its competitors. The moment that happens, then the employees in question can be sent home again quickly. Let’s learn to ask our employees what is truly valuable to them. And let’s explain that the perfect Holy Grail simply doesn’t exist.
So how do you reconcile employee development and money?
All employee development starts in the CEO’s office. If HR can’t convince him or her that investing in training and having a meaningful program is worthwhile, then all efforts are in vain. So that’s the cultural part that’s the hardest. Then you just have to convince whoever is in charge of finance that it’s really worth it. After all, it is more expensive to keep raising wages than to have one comprehensive development programme.
If the CEO is convinced that a development programme makes sense, he just needs to develop one. And the rule is to start small. And eventually grow. We mustn’t be fooled into thinking that a programme must necessarily be comprehensive. It just needs to work. Each round can get better and better.
Then it’s about getting the timing right. That’s the key to success. I still remember when I finished a big project right on schedule about 10 years ago. It wasn’t easy, I stayed up all night worrying that it wouldn’t work. It worked exactly and it was a success. And as a reward, I went to a big reward conference in London where I stayed in a super expensive hotel. And I didn’t understand at all what was being discussed on stage because the topics that were being discussed at Deutche Bank, Royal Bank of Scotland and HSBC were completely alien and irrelevant to me. I didn’t really enjoy London, where I was all alone. I wanted a financial reward, I didn’t want a trip.
And finally, let’s ask our staff what they would have liked. When I was a junior (in age), we had three HR managers in the company. And our boss wanted to reward them. And she did it exactly backwards. One of them said to me afterwards. She knows I’m building a house and she’s going to offer me expensive training. The other one wants to see how other countries do it and offers her money. Neither of us are happy. And all we had to do was reverse it. It’s a classic example of a missed opportunity. So let’s get on with the fight for better development programmes for our people!