In this episode, Mike O’Neill discusses employee engagement, retention, and empowerment through the lens of Human Resources. His guest, Drew Smith, provides valuable insight into how HR departments have the ability to create a better employee culture, provide actionable insights to C-Level executives, and help retain employees by creating an empowered workforce.
Drew Smith’s Biography
Drew Smith is an HCM at Paylocity and helps HR and Payroll departments reach across the aisle and have important conversations with upper management to drive success and improve employee retention. Paylocity provides HR and Payroll teams with the tools to help provide business insight and intelligence, helping to make decision-making more effective and increase employee productivity and engagement.
In This Episode, You’ll Learn…
- Ways HR departments can effectively communicate with Senior Leadership
- What type of data and analytics HR departments need to use to drive business success
- How empowering employees helps drive company values and increases employee retention
- How HR departments drive communication between senior management and employees
- How to use employee empowerment to save money with less turnover, more employee referrals, and nurture a culture of collaboration
- Drew Smith says, “A happy employee is one who refers friends and acquaintances to positions in their company.”
- Drew Smith highlights that, “Employee referrals save companies $7500 per hire and 45% of them are likely to stay with the company for four years or more.”
- Drew Smith believes that, “HR departments have the unique ability to empower employees by giving them a voice and platform to speak freely and provide insights for actionable plans to increase profits, efficiency, and effectiveness of management”
Links & Resources Mentioned
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Mike O'Neill: Welcome back to the Get Unstuck & On Target Podcast. I'm Mike O'Neill with Bench Builders and we're business coaches who love to help leaders sleep better because they solved their tough planning, process, and in particular people problems. In this podcast, we're talking with thought leaders to get their insights on way to help you or your business get unstuck. Joining me today from Nashville is Drew Smith. Drew is a human capital management executive with Paylocity. Welcome Drew.
Drew Smith: Thanks Mike. Appreciate you having me.
Mike O'Neill: I've had an opportunity to have several conversations with you. I have been looking forward to recording our time together, but why don't we if you could to set the stage. I introduced you as with Paylocity. Let's start with that. Tell us a little more about Paylocity and what is it you do for your clients?
Drew Smith: Yeah. So, Paylocity is a company that we do in to end HCM solutions. And so what that means is we help our clients out from the very get, go as the engagement point with your employees, with recruiting all the way through their life cycle, including payroll, performance management, learning management, surveys, an engagement platform. If you will. We help streamline communication, and help engage, develop, and retain employees for our clients. And that's kind of the role that I facilitate is driving those conversations, so that our clients are able to, develop out their employees in a way that fosters a forward together movement for their organization.
Mike O'Neill: Good answer. You know, Drew, as we explore possible topics, the thing that struck me is you could speak on a variety of topics, but this theme of communication kept coming up and specifically communication with HR and how they communicate with senior leadership. And so what I like to do on this podcast is kind of get your insights on ways that HR can you kind of up their game when communicating with senior leadership knowing that if they can do that, the organization can enjoy better. Decision-making.
Drew Smith: Yeah, absolutely. I mean, that's, that's what really, the key to, to organizations is, is having those communication lines be clearly defined so that you can drive conversation, because at the end of the day, organizations aren't able to move forward if they don't know where they're going.
Mike O'Neill: Have you found in the last 18 months that communication in particular has been compromised due to COVID?
Drew Smith: Absolutely. I mean, that's one of the biggest things that we see. You know, a lot of companies out there are talking about, Hey, we tried to go remote during this. And we realized. Oh, no, we don't have all our employees basic information. Oh no. We don't know how to get ahold of this person that we furloughed to let them know, Hey, we need to bring you back. A lot of the things that we took for granted prior to COVID, COVID kinda exposed for a lot of organizations and showed them. Wow. We don't have a real hub for communicating with our employees and letting them know what's going on with our organization so that they can feel confident in their job security. So they can feel confident in our organization as a whole and feel confident in leadership and the direction that they're taking us and how they're navigating through these waters. During one of the most challenging times we've ever seen.
Mike O'Neill: Drew I know that Paylocity, as well as our company Bench Builders, we work very closely with HR. And though we're going to be talking about HR in particular today. I think what we're going to be discussing would apply to any of the disciplines, but what is it about HR and communication that oftentimes kind of goes hand in hand?
Drew Smith: Yeah. So, so the first word of HR is human. And that's where it all boils down. Is HR professionals have an opportunity to make the largest impact in organizations out of antibody. They also have the most challenging job, they're expected to wear the most hats, do the most things, to be completely organized, structured, and to be able to be fluid in their role as well, because that's another thing COVID did was added more things to HR's plate. And so they're the, they're the people professionals. And so their goal is to really engage their employees and touch everyone in their organization. And it's hard to do without efficient communication.
Mike O'Neill: You mentioned that sometimes communication almost by default falls to HR, but it also means that at least what I have found, folks who gravitate to human resources oftentimes are by nature, good communicators. But you know, what I specifically was wanting to spend some time on is not just the generic topic of communication, but how we can improve our ability to communicate with the key decision makers. Can you elaborate on that.
Drew Smith: Yeah. So the end of the day, HR has an amazing opportunity to sit down with leadership and explain, Hey, do you know this is what's going on in our organization? Oftentimes the CFO's focus isn't on necessarily the peoples, but the numbers. And so that, that communication aspect sometimes gets lost for the CFO, the COO that same kind of concept he or she focused on the operations and not necessarily the people doing the operations, but the efficiency, the effectiveness, and kind of the return on the investment side of the fence. And so HR has a seat at a table where if they are able to provide leadership with precise analytics and precise communications about their organization, and most importantly about the people within their organization, they're, they're sitting in the catbird seat to drive change and really make an impact, not only for leadership for the organization, but for the employees that they're employing as well.
Mike O'Neill: You know, what kind of went through my mind, mine is you're describing that Drew is, you said if HR has a seat at the table, you may not have said it exactly that way, but what you said is at the table, they're expecting numbers, they're expecting data. And my sense is, is. that oftentimes HR sometimes gets blamed for not having that data. It's a little too touchy feely. Is that a mis-characterization or do you find that that's oftentimes the case.
Drew Smith: Yeah, well, it's, two-fold, oftentimes, for HR professionals that data's hard to get, there's no easy access to it. There's no way to just magically pull a report. And so it's a strong ask because as, as you know, numbers are a huge communicator. And so for HR professionals to effectively communicate, they need hard facts that they can deliver at that table and say, Hey, did you know? And then provide it and back it up with real-time analytics or real-time reports that drive those conversations. Otherwise it tends to fall on deaf ears because there's no substantiating evidence for that conversation.
Mike O'Neill: So why don't we start breaking that down a little bit? We won't cover all of it, but did you know, fill in the blank? What are the kinds of information that HR, if they had the ability to report on could and should report on that really does get senior management's attention.
Drew Smith: Yeah. So that's a great question. So, you know, if I say, did you know. I would go with turnover. Did you know the cost of turnover for your organization? Because we've seen unprecedented levels of turnover. We've seen some of the most uncommon characteristics in turnover patterns as well, because COVID all of a sudden you have this giant spike in unemployment and then, how do I compare to everyone in my industry? There's no, this is a common pattern. But the fact of the matter is, is there's things like, employee retention tax credits, and, the cost of actually having to replace those employees that turn over during this time acquainted to a huge sum of money and. Did you know what that number is, is a huge conversation that needs to be had in a lot of organizations either can't have. Don't want to have it or shy away from it just because it's the unknown. But basic statistics show that even in the low side of things, with your lower income threshold to replace that employee it's over 20% of their yearly sale. When you move out to the middle tier, it's over 50%. And then if you look at the C level turnover, it's over 70% of their, a yearly salary that it costs to replace them. And so there's a quantitative number if you know, turnover statistics. Those are the conversations that I, I would, I would encourage HR professionals to have. And sit at that table and say, Hey, did you know how much this is costing us because then that, that speaks to the CFO. And then it gets a communication bridge that HR and accounting, and everybody's on the same page because it's costing the organization money.
Mike O'Neill: You made an interesting point that I really hadn't thought of. And that is, you mentioned that turnover is spiking. And you also mentioned that the nature of the turnover has changed dramatically. It's much more elusive. Let's continue with this turnover thought just for a moment. And that is, I know that you are very active in supporting The Society of Human Resource Management. Matter of fact, that's where you and I first met. You were a presenter at a sherm meeting. You are a panelist. And one of the things that I think you mentioned is what might we be looking at? We're recording this podcast, in late June, it will probably go live, in July, but, I'm reading that there is a likelihood going to be a significant uptick in that turnover. Are you, is that your understanding as well?
Drew Smith: Yeah. So there's a couple of really exciting things that I'm having conversations around. And then there's a couple of things that I'm having conversations around that are big red flags. And one of those is something called the great resignation, that a lot of HR professionals believe is kind of coming down the pipeline. Because everyone has been focused so heavily right now on recruiting, recruiting, recruiting, how do we become better recruiters? It's hard to fill positions. Let's get better at recruiting. And what's going to happen is essentially you have all these people entering back into the workforce. You know, there was over 10 million unemployed, individuals in early January. And now we're looking at the starting to come back in to the workforce as states, get rid of unemployment incentives, et cetera. And we're going to see a lot of players in these different roles that say I want a different job and those people have been recruiting. And so you're going to have a lot in that in, in, especially in the HR world of dealing with turnover from resignations. And so that's a huge conversation we've been having. The other one is. People are entering back into the workforce. And so that's the exciting piece to that. But the other piece is because we've been so heavily focused on the recruiting, there's going to be a repercussion if you will, of, of what's going on because instead of communicating with the employees we have, we've been focusing on the employees we don't have.
Mike O'Neill: Interesting. You know, we've talked about turnover as a metric that gets the C-suites attention. What might be another metric that we need to be paying more attention to?
Drew Smith: For the C-suite specifically? Labor costs has been a big conversation, of, you know, especially running at thinner margins and some of the things that COVID brought about, but also knowing what's important to your employees. One of the biggest things that a lot of my clients are doing is sending out engagement surveys and, and trying to drive a culture and drive communication that empowers employees and for C suite to buy in to that, there has to be once again, that quantitative number there has to be those quantitative facts. Hey, this is something important. We need to have conversations. Because it's all correlated as you know, everything in the HR world, is connected through communication. Whether it be recruiting, onboarding. You know, development of current employees. And so having conversations around what your employees value, where they see your company going and the vision that they have, not only for themselves, but for the company and driving those conversations, because if you're in leadership and you don't know those things, you might make a decision about which trajectory to take your company, but the people that help move it don't don't believe in it and don't buy into it. And so there's a big gap that needs to be bridged. And so that's one of the biggest ones is the leadership employee gap in general.
Mike O'Neill: You know, we use this term engagement and sometimes we use it so often the meaning of the word engagement could get lost. So when you're talking to clients about engagement, what does engagement mean to Paylocity?
Drew Smith: Yeah. So I, I appreciate that sentiment because I agree the word shouldn't be engagement. It should be empowerment. Because at Paylocity, our mission statement is forward together. And for you to do that, you actually have to empower your employees by giving them a voice. By giving them a platform to speak freely so that you know, the intricate aspects of your organization. And so at Paylocity, we believe that that is more so not engagement, but empowerment, by doing things like, Hey, tell us what you think of our organization. Tell us what you think our core values are, because if you have a bunch of people in leadership that say, Hey, here's our five core values yet they're not doing the daily grind yet. They're not getting into the pits with everybody. How can you assure that the buy-in of those values are what the employee sees those values. And so those thats what it means to us is empowering your employees to have a voice and to help guide your organization forward. And that's what we believe at Paylocity. And that's why I love what I do is because I have a voice in my company. I'm able to speak freely and I'm able to offer insights and opinions, and they're heard, and then they're acted upon, which makes it even more powerful.
Mike O'Neill: You know, when we were talking about communication and the role of HR and communication, and you mentioned values, what could be the first thing that comes to mind is how effective are we at communicating our corporate values to our employees? You just kind of turned that whole notion on its head. And that is by asking through empowerment surveys. What are the values that you see? That is a real reality check. Is it not?
Drew Smith: Absolutely because it, instead of taking a top down approach is taking a bottom up approach and saying, Hey, this is what we believe in. Because if you can get your employees to believe in something, the higher percentage of success, the, the effort, all the things that you look for in a quality employee. Start coming to fruition because it's something that they're passionate about. And when you can instill that from the ground floor up, it just builds the momentum and builds the excitement as you go through the organization.
Mike O'Neill: You know, we keep coming back to this term data, but it sounds as if what you're saying is this, is this not just a bunch of mumbo jumbo words. These are metrics that in fact can be measured. You can look at is the needle moving or not? So we've discussed turnover. We have rephrased engagement with the term empowerment. Might there be any other things that you feel that HR professionals for that matter any of the disciplines needs to be pay a little more attention to?
Drew Smith: Yeah, so it's, it's closely related, but not directly related to turnover. And it's, it's the word retention. It's once again to bring it all back together. It's all about communication. And one of the biggest things that I encourage my clients is be proactive versus reactive with your employees, because if you're driving the conversation instead of reacting to a conversation, you're in a better spot in general. And so it's being able to have a conversation with an engineer. In Nashville I love using engineers because, they're one of the most sought after professionals out there right now. As Nashville grows and expands, they become a hot commodity and companies are doing crazy things just to bring them here. And so when you get them on board, how do you retain them? Well, it's, it's based upon empowering, partially. It's also based upon knowing your turnover trends and being able to drive a conversation of, Hey, our last engineer left because of this, but it boils back to the communication of the aspects of that employee and saying, Hey, are we meeting with them? Are we engaging them? Are we communicating with them in a way that they're actually hearing what we're saying? Because there's a difference in being able to digest, as an employee, what an employer is saying versus just sitting in a room. Right. And so what I mean by that to provide detail is. If I'm in a training, I digest it better if I have visuals, cause I'm a visual person. And so for me, I'm going to do better at a training that has visuals than a training that is someone just speaking. And so knowing those things about your employees, knowing, you know, there's no excuse for even a 5,000 man company, not to know those employees that are valuable to their organization. Because there's inevitably those people. And so having that proactive versus reactive approach to retention knowing, Hey, how far are they driving to get to work? You know, how many supervisors have they had? Because supervisor churn is a real thing. And knowing those kinds of statistics and data points to drive a proactive approach to retention in turn, reducing, turnover and driving up that empowerment that we talked about.
Mike O'Neill: You know I couldn't agree with you more in terms of putting an emphasis on retention and the value of retention. If you were to drill that down a little bit more. You've given us percentages of what it costs to replace an entry and mid-level a senior executive? Is there anything that we need to be mindful of when we retain our employees? What is the value to a company to retain employees.
Drew Smith: Astronomical! I don't even know if it can be, quantified because the reality is it drives your turnover down and it ties back to even the first part of it. A happy employee is an employee that's going to refer you other employees, making recruiting easy. Making the effectiveness of your employees better making your culture better because they now working with friends and having that positive effect, it's it can be exponential. It, it is absolutely the snowball effect. Because you know, just to give you some data there, a employee referral saves organizations on average $7,500 per hire. Those employees are 45% more likely to stay with the organization four plus years. Those are huge stats. That's right there. That's a lot of money and that's a lot of tenure that you're bringing. And the fact of the matter is that employers out there say an employee referral is 82% more valuable to their return. So those are some of the things that help you quantify it, but it's priceless. Because at the end of the day, if you have these things in place, you're always going to have natural turnover. Some people move, people retire, those kinds of things. But if you have a community, a culture, a direction from leadership that they buy into as well, and they take the ground up approach. It's it's so valuable to the organization and the direction that it goes in
Mike O'Neill: Drew as we're kind of reflecting on how might HR improve its effectiveness in communication, particularly communication with the C suite. It kinda lends the next question. And that is more personally, if you don't mind, can you share an example where perhaps you got stuck? And if that in fact did take place and I trusted it, cause we all at times do get stuck. What did you do to get unstuck?
Drew Smith: Yeah. So this is actually one of my family's favorite stories and, I have two older brothers and, my granddad, was, takes us fishing all the time when we were younger. I was about eight years old at this time. And, my older brothers were 12 and 14 respectively. And my little sister wasn't along for the ride on this one, I don't think. But, we went to a local farmers, pond and this pond was where all his cows came to water. They would come down here, but we are using it to fish that day. And there was an island in the middle of the pond and it was just that kind of boy hood mythology. What's on that island. There's gotta be something great. And what had happened was over the years, as the cows came down there, the water area became kind of like a muck where they, their favorite little areas was, and so it actually reached out all the way to the island and my brothers of course love to goad me being older brothers. They said, there's no chance you can get out island. And I was like, I know I can, I'm light, I'm fast. I can do it. And, sure enough, I crawled my way climbed through the mud, got out there and I was like, all right. I made it now I have to get back. And I got about halfway and I started getting tired and I slowed down. And when I slowed down my feet got completely stuck. And by the time it was all said and done, I was up to my chest in the muck. And I started to panic because I was stuck stuck. And so my grandad, you know, being the smart man, he is, he decided, all right, boys, we're going to form a chain and we're going to extend a stick. We didn't have any rope or anything. So they found a long stick that I could get my hands around. And they explained to me, my granddad said, Hey, Drew just remain as calm as possible and start shifting just a little. And leaning forward on your elbows, if you can get your arms free. So I got my arms up above and just started moving a little bit. And by the end of it, I had finally grabbed the stick and they all started tugging and tugging and I lost my shoes, but I eventually came unstuck.
Mike O'Neill: This is episode number 42. And I've asked this question or a variant this question to every guest. This is the first time I have had a response where you literally got stuck, but the life parallels of the story you just said are just unbelievable. And that is you scooted out there pretty easily. But when you got came back, when you got stuck, you got really stuck. And when you got stuck, what did you do as an eight year old? You did like any eight years. Or 48 year old, you began to panic. Yeah. But granddad was the cooler head. And what I hear you said is that, but he gave you with other family members an opportunity. you basically kind of pulled yourself out with their help. Did you not?
Drew Smith: Absolutely. Yeah.
Mike O'Neill: I love that. Now, you know, we could spend a lot of time just breaking that down. But you look back on that experience. And I suspect that this has kind of worked this way in to the Smith family lore, but I love that language when you said, but I lost my shoes on the flip side I'm no longer stuck. So, is there a pair of eight year old little boys shoes still in the middle of that lake somewhere?
Drew Smith: Absolutely. It is now a really fancy golf course. So hopefully one day, a little boy wonders to look for his golf ball and finds a pair of very old sneakers by now.
Mike O'Neill: Well, that's a perfect illustration. Now. I know I sound like a, maybe a little bit digressed a little bit when I asked for the example about being stuck, but we also know that we all can get kind of stuck, not only, you know, personally, but also professionally, but we've been talking prior about communication and how HR can improve its game and communicating not only to the employees, but also to the C suite. So as you kind of reflect on the conversation we've had thus far, what might be some closing thoughts or takeaways that you would like us to have?
Drew Smith: Yeah, no, I, first of all, thank you for having me. This has been awesome. And, you know, I, the concept of being stuck, is something we're kind of used to, in the south. We call it tradition. And at the end of the day, there's good traditions and there's bad traditions. And I think that we refuse to sometime make changes to get unstuck, from those things. And my biggest thing is for HR directors, particularly in my area, they, they need the ability to communicate the importance of communication in their organization to the C-suite. So that they can get unstuck from things that are leading to higher turnover that are leading to more overhead cost for the organization. And that's what it's really all about is to drive those conversations. They need access to analytics and data that are not only relevant, but consumable and actionable. And that's what, what the ultimate goal for HR is, is they have a unique opportunity to be. Such a helping factor in the organization, when it comes to not only the culture, but the direction. And that's, what's really exciting about that position is, you know the employees, you have the seat at the C-suite. Now, how do you drive those conversations so that you can move forward together and do it in a way that's exciting. That makes people want to get out of bed to come to work. And those are some of the things I think about on a regular basis. Of, you know, why do I enjoy what I do? Well, it's because I'm empowered, by my organization, my voice is heard and I'm communicated with on an, in an efficient manner that lets me communicate to my family about where I'm going in my career, and what the next steps are. And I get excited about those things. And so, that's what I hope for, is that HR professionals hearing this conversation that they don't have to be stuck anymore, that they have an opportunity, to make a change in their organization and really drive important and meaningful conversation.
Mike O'Neill: Drew your passion comes through loud and clear. The fact that you feel empowered to feel as if you have a voice within your organization. And you're encouraging our listeners, particularly our listeners who are in HR, to find their voice, use data, to kind of strengthen your position at the table. Drew I met you probably a couple of months ago, and I've enjoyed getting to know you. If other folks want to reach out to you, what's the best way for them to connect with you?
Drew Smith: Yeah, either on LinkedIn, the only problem is I have a pretty common last name, so it makes it a little challenging. You know, it's Drew Smith on LinkedIn or email@example.com. Those are the easiest to ways to reach me. I'm always more than happy to have conversations. And, I also want to learn, so if HR directors have input that they say, Hey, have you thought about this? Those are things I get excited about, is hearing best practices and, how people are doing things differently from the traditional model to, to move their organization forward.
Mike O'Neill: That's great. What I will also do, we'll include what you just shared in the show notes. So when folks download this episode, they'll have those links to be able to reach out to you directly. Drew. Thank you.
Drew Smith: Yeah Mike. Thank you so much. I really enjoyed this and, I've really enjoyed getting to know you over the past several months as well.
Mike O'Neill: Well, Appreciate what you say, and also want to thank our listeners for joining us for this episode of Get Unstuck & On Target. Every Thursday, we upload the latest episode to all the major platforms. So if you haven't already please subscribe. You know, life really is too short to let business problems keep you up at night. So if you've been listening to my conversation with Drew and you're realizing that something is keeping you or your business stuck let's talk. Go to our website, bench-builders.com or just go to your browser and type unstuck.show to schedule a quick call. So I want to thank you for joining us, and I hope you have picked up on some tips. They'll help you Get Unstuck & On Target. Until next time.