Sure, Castle HR is technically an HR firm but if you look a little deeper, Castle HR is actually a growth catalyst. Except instead of fancy marketing or a huge infusion of capital, we leverage modern HR strategies to help companies – especially those in the tech industry – grow quickly!
We often get asked, “how exactly can HR help my company grow?” This is very much a question that we enjoy being asked and we get why people ask it. Historically, it has been difficult to accurately measure the impact that the HR function and their people strategy have on the business overall. But this does not mean it is not adding value.
In this video, Tom Nickalls – founder and CEO of Castle HR, discusses how Modern HR can dramatically improve your Employee Lifetime Value and thereby improve your growth trajectory.
When Castle HR first started, we supplied our clients with expert on-demand HR advice and custom handbooks written in their unique voices. Ultimately, this was well received, but we knew we were only scratching the surface. We asked a lot of questions and, more importantly, listened closely when our early clients answered those questions or came to us with questions of their own.
Then one day we had an ‘Aha!’ HR epiphany moment when we came across the Employee Lifetime Value (ELTV) diagram shown below.
This diagram is a simplified illustration of employee output over time and it provided exactly the information and inspiration we needed. When combined with the feedback we had been gathering, we began to understand which HR strategies should be implemented, and when, in order to help start-ups and SMBs scale more effectively. As you can see in the updated ELTV diagram below, there are ways to optimize what you are doing at every stage of an employee’s tenure.
How To Ramp Up Faster?
For companies looking to scale rapidly, the manner in which employees enter the company is absolutely critical. First impressions really do matter. One study determined that 86% of senior executives and HR professionals believe that new hires decide if they want to stay somewhere long-term during their first six months there.
This starts well before they even arrive. Create checklists to ensure that all technology requirements (hardware and software) are ready to go. Map out a meeting schedule and required readings that cover the early weeks or even months. This will ease their entry into the company and take the pressure off them to reach out to their new coworkers or guess what they need to know. Try to set them up with a few “quick wins” to build their confidence and also the team’s trust in them.
To minimize your risks, implementing preplanned probation reviews can help identify mis-hires early to minimize any awkwardness for both parties. The lessons learned here can help business owners make better hiring decisions in the future.
Everything above and much more can be built into a Modern Onboarding Playbook that details the systems, processes and strategies that hiring managers can utilize for consistently smooth new hire experiences.
How To Hire Better?
You will often not know if you nailed a new hire until they have been with your company for months, possibly many months. By that point, the damage done could be quite extensive. Besides the direct resources invested in that person (time and money), you may now be dealing with lost clients and other employees who were negatively impacted by this individual.
It is important to note that you will never hit on 100% of your hires. Especially if you are hiring a lot. Many employers openly admit that hiring is one of the most difficult things that they do, but that does not mean you are at the mercy of blind luck either.
Start with a really good understanding of the role you are looking to fill including what key skills the ideal candidate will possess. This becomes the basis of your formal job description and job posting. When the resumes start to roll in, have criteria ready in advance that allows you to efficiently widdle the pile down to a handful of strong candidates. Lastly, standardize as much of the interview process as possible to remove human bias elements. Just be careful not to go too far and dehumanize the experience entirely.
Hiring the right people is key to growth. A Talent Acquisition Playbook is a perfect way to increase your odds of consistently adding A-players to your team.
How To Upgrade Skills and Careers?
“The only thing worse than training your employees and having them leave is not training them and having them stay.” – Henry Ford, Founder, Ford Motor Company.
Many organizations, and their people for that matter, make the mistake of not investing enough time and energy in further development. Usually, this comes down to a lack of formal performance management processes and systems. This is because these are often maligned by all parties involved. Management may believe they do not make enough impact to invest the time and money. Meanwhile, employees become jaded that they are just for show and nothing ever comes from these discussions.
The reality is that if this is you, a significant opportunity is being missed. Companies that invest in teaching their managers how to coach better, properly link each employee’s goals to business priorities and differentiate compensation based on performance see 84% of their employees rate the performance management system as effective.
Modern Performance Reviews, when conducted regularly (we suggest a quarterly basis), will help your employees understand where they stand, identify where and how they can improve as well as chart a path for career advancement.
How To Increase Retention?
In this world, nothing can be said to be certain except death, taxes and employee turnover. Unfortunately, if you are leading a company for long enough, it is going to happen. Sometimes it is out of your control (e.g., an employee wins the lottery) and sometimes it is what is best for the organization (e.g., toxic employee). However, it is the instances where you have some level of control AND it is not for the best of the organization that you must avoid.
Today’s average employee stays with an employer for about four years. It is important to note that is the average. Companies that invest in their retention efforts can push that to five years or higher while those that do not are often at three years or less. That can have a massive impact on profitability when you begin adding up the costs associated with onboarding and offboarding employees.
Retention comes down to the culture you create. People working at a place they enjoy showing up to, with like-minded people and in alignment with the vision and values of the company will ultimately stay longer.
This is why it is so important to intentionally define your Company Culture and then build around it. Your Employee Handbook, Talent Acquisition Playbook, Onboarding Playbook and approach to Modern Performance Reviews must all be built to reinforce your desired culture.
“Align your culture, so that when employees leave, they do so with a handshake…not a lawyer!”
How To Reduce Exit Costs?
As previously mentioned, people are going to leave and you cannot control that. What you can control, however, is how prepared you are to facilitate a graceful exit for that individual. The only thing worse than a good employee leaving is a good employee leaving in a manner that has their former coworkers scrambling to pick up the pieces.
The cost of losing an employee can range anywhere between 25% to 200% of their salary. Generally speaking, that percentage actually goes up the more senior that employee was. Of course, avoiding turnover is your first remedy, but some turnover is inevitable. When the inevitable happens, it is essential to be ready.
Having a strategy in place for both voluntary (i.e., resignations) and involuntary (i.e., terminations) employee exits is crucial. The timing and people involved will vary by case, but this will include meetings to ensure a smooth transfer of responsibilities and a review of the processes, products or relationships owned by the outgoing individual to ensure everything is up to date. We have even seen some companies have the person who is leaving rewrite their own job description in a manner that increases the next person’s odds of success.
Exit costs will be lower if you have amazing Expert HR Advice to tap into when an employee resigns. (Or needs to be let go.) If people are exiting amicably, or at least in a dignified manner, and your turnover rate is low-to-average, you will experience less turbulence within the day-to-day operations of your business.
To put it simply, implementing strong Modern HR Strategies is a WIN, WIN, WIN situation. You will win, your company will win, and your team will win.
Growth is not simply a matter of increasing headcount either, but rather, improving efficiency. Efficiency and productivity mean that you continue to grow in a profitable, sustainable way. And, just because it is not always about headcount, does not mean growth is then a matter of squeezing more and more out of your team, either. Growth means guiding your team toward a path of success and putting them in the position to excel at what they do. At the end of the day, that is what they want! When done right, growth happens organically.
Remember, if you fail to communicate and implement a crowd-pleasing HR strategy internally clearly, your employees will seek that externally. This will make scaling a challenge.
Your Modern HR strategy must be all-encompassing, helping you to identify hiring prospects with a higher chance of success and then onboard them into the organization more smoothly. They will experience your culture first hand, one that should match what they were looking for, and further develop with effective performance management. Finally, you will retain your A-players longer and in the rare event they do leave, it will be with minimal distractions or interruptions. That is how great HR strategies provide a catalyst for growth.