Saturday, July 02, 2005

Employment Act - Illegal terms of contract of service

In two days, my eldest will be free from an onerous contract she signed with an SME as a retail staff earning all of S$5 per hour. Retail hours are irregular and long. For all my insistence that the contract she signed was unforceable, she chose to see it through. I cannot fault her. At least it shows committment and tenacity. It would teach her to be more mindful the next time she signs anything.

For those who want to know more, the employment act can be found in www.mom.gov.sg (employer/hr matters). The two relevant clauses pertaining to those under 21 are:

Illegal terms of contract of service.
8. Every term of a contract of service whether made before or after 15th August 1968 which provides a condition of service which is less favourable to an employee than any of the conditions of service prescribed by this Act shall be illegal, null and void to the extent that it is so less favourable.


Contractual age.
12. —(1) Notwithstanding anything in any other written law, a person below the age of 21 years shall, subject to the provisions of this Act, be competent to enter into a contract of service.

(2) No contract of service as an employee shall be enforceable against a person below the age of 21 years and no damages or indemnity shall be recoverable from that person in respect of the contract of service unless it is for his benefit.

I suppose some people will always try to scare the un-informed or the meek. And some do get away with it. At least in the short term. In the long run, the damage to the company as an unequal and unfair employer will be difficult to repair.

Jones or the marathon man?

Tuesday, June 28, 2005

Good Hiring Practices

Benefits of Good Selection Practices

The long held ‘rule of the thumb’ figure for the ‘cash’ cost of replacing an unsatisfactory employee is around 1.5 times the salary. This is a conservative estimate - its often is much more, especially when the ‘intangible and indirect’ costs are considered, or if the role of pivotal for the organisation, or when it is difficult to find a replacement.

One mishire can cost a company 14 times the salary of a manager making less than $100,000 a year, and up to 28 times the salary of someone making $100,000 to $250,000 a year, according to Smart’s 1999 book, Topgrading: How Leading Companies Win by Hiring, Coaching and Keeping the Best People, based on 4,000 interviews with people at public and private companies. By that estimation, firing a single ineffective top manager making $200,000 a year could cost a company roughly $5.6 million. "It could be even more than that," says Holst, "if you hire someone like a sales manager who alienates all your customers and then leaves after six months. That [cost] is hard to measure, but it’s huge."

Workforce Management, May 2004, pp. 70-72
Screening Out Bad High-level Hires
By Michelle V. Rafter


A good (accurate) selection system will, in contrast, have many positive effects:

• Generate support for the process from both successful and unsuccessful candidates
• External clients and candidates will both have a more positive impression of your organisation
• The best recruits can be up to 5 times as productive as the worst
• More capable people move more quickly to their optimal levels of performance in new roles
• High performers often ‘self develop’ and need less training
• Excellent employees contribute more and better ideas that improve profitability
• Capable staff need less attention from management
• Excellent people help inspire, develop and help retain other staff
• High performers provide superior customer service, thereby generating higher customer satisfaction
• Better staff have a better retention rate

Costing Turnover -Exercise

Costing Your Turnover. Are you ready?

Salaries are a large part of any business’s overheads. Add to this the cost of recruiting and training staff and accurate selection is key to business profitability. Using the table below, enter conservative estimates. You may be surprised...

Your Analysis of the Costs of a Bad Hire

Advertising – Number of advertisement x cost of each

Administrative costs to process candidates – Number of candidates (A) times hourly cost (including overheads) (B) times hours per candidate (C), NOW multiply A X B X C
Candidate travel costs – Number of interstate/overseas candidates times the costs of travel, accommodation, taxis, meals, etc.
Interviewer costs – Total number of first and second interviews (D) times 1.5 hours @ the hourly rate of the interviewer (E).
NOW multiply D X 1.5 X E
Opportunity costs – The costs of temporarily filling the position, inferior performance, less effective customer service, and lost sales.
Relocation costs – These can apply and can be expensive but in this case we will assume a local candidate is successful
Time to reach full productivity – Moving from zero productivity on day 1 through to full productivity after 6 months. The average would be 50% productivity at $_________ (salary for 6 months). This ignores the indirect costs, of course… (calculate 0.25 x annual salary = wasted in first year)
Training and Induction programs: cost x number
Recruitment Consultant / Search Firm Fees
Performance discussions – The HR and Management costs of preparing for and holding performance discussions (because we have employed an unsatisfactory person) – three discussions @ $_________ each
Severance pay – Assume 70% chance of having to terminate the unsatisfactory person, as oppose to voluntary departure (eg 0.7 x typical severance pay and arrangements )
Total costs of just one instance of poor selection
Sources for this methodology:
• Wayne F. Cascio, (1999), Costing Human Resources, South-Western College Pub.
• Jac Fitz-Enz (2001) How to Measure Human Resource Management McGraw-Hill.

Costing High Turnover

The challenge for HR managers is to hire right-first time, every time. But what if it was the wrong hire?

If your selection methodology is not robust, your selection decisions will result in the hiring of some sub-optimal people. Over the years, this rapidly accumulates to being a very sizeable and costly problem.

Negative Impact - Let us count the ways:

• Average and lower performing employees require more training and more time and attention from their managers. This time is in itself costly, and the knock-on effect is a reduction in management effectiveness in other crucial areas;
• The best employees produce 2-5 times more revenue than the lower performing employees. How are your most recent hires doing?
• With high turnover – the reputation your organisation has with both clients and prospective candidates can be harmed;
• Customer satisfaction is directly impacted by errors, ineffective customer service, loss of ‘corporate history’ and knowledge;
• Mediocre staff take time to become productive – the best staff will ‘hit the ground running’, quickly assimilate new skills and knowledge, and will be fastest at reaching their top performance;
• Your “Competitive Advantage” is negatively impacted by the “lost opportunity” of not having the best person in the job. Think of a underperforming new employee. Where would your company be now if you had hired the best employee in the first place? What amount of lost revenue and productivity does this represent?
• High performers in a team may resent having to ‘carry’ average or poor performers. Also, managers may have less free time to spend developing their ‘top talent’. This impacts morale and retention of the best people, especially if they are not developed and recognised.
• Higher HR costs are associated with time spent in disciplinary interviews, terminations, exit interviews and new recruitment activities.

Adapted from article by Alan Le Map of Latitude Organisational Consulting

Sunday, June 26, 2005

Staying Employable

A couple of articles in today's papers (other than Microsoft and RSS) provided the inspiration for this. One is from Evelyn, a 30 something secretary who is concerned that with bosses becoming more independent, her work will go the way of the dodo. The other is about a Get Real documentary, hosted by Diana Ser, on cleaners.

So what does it take to remain employable?

Mindset Change. Would you work as a cleaner with it's lack of recognition, long hours and low pay? If the answer is YES!, congratulations. You are quite ready to get out of your comfort zone. Whether or not you actually become a cleaner is moot. Surely you want and can do better.

Self reliance. No one owes you a living. You earn one for yourself. Just because you have spent time, money and years getting an academic qualification,(I am educated, pay me) or otherwise (I am uneducated, feed me) does not mean others have to look out for your welfare. Anyone who really wants to work can find a job.

Stay fresh. Whether you are 30, 40, 50 something or older. Keep current and young at heart. Find joy in simple things, a trip to the zoo (pack a picnic), take a walk in the park, clear the clutter (clothes that no longer fit can go to the Salvation Army) - it clears the mind and does wonders for the spirit.

Sense of Humour and Humility. Be ever so humble and don't take yourself too seriously. Everyone wants a pleasant co-worker, a team-player. As a professional recruiter, I can tell you "Evelyn has a pleasant personality, strong communication skills and is a team player" will get Evelyn an interview and ultimately a job.

Smile!

Wednesday, June 22, 2005

Costing Low Turnover

Do you have low turnover in the office and proud of it?

Have your front-line/operational staff been with you through the last five years? Was that a sign of devotion and loyalty or was it simply because the job market was soft and they did not want to risk being unemployed? What of their salary? Are you paying more than the market average?

Ok, so you saved on the need to re-hire and re-train a new employee. And you can take some comfort that the incumbent has been on the job for a while now and would be able to handle the work with eyes closed? Really?

Or do you have low performing employees, doing the least possible and coasting on the job?

Turnover is a HR issue. Costing is an accounting function.
To make cents (sense) of an HR issue, you need a numbers man.

Think Strategy!

Friday, June 10, 2005

Competencies

Organisations need to articulate the competencies they want in their people – integrity, discipline, creativity, communication skills, ....

CORE COMPETENCIES


Committed and mission-centred. Displays integrity, exercises self discipline and seek ways to develop themselves.

Adept at creative problem solving. Demonstrates the courage to challenge and improve on the status quo. Embraces change and capable of capitalising on it to generate innovative solutions and alternatives to solve current and anticipated issues..

Has a genuine desire to serve both internal and external clients. Strives to exceed expectations by anticipating needs, engaging in continuous improvement and communicating effectively.

Plans and manages resources effectively to bring ideas to fruition. Self-directed and decisive, even in the face of multiple demands and shifting priorities.

Collaborates and coordinates with others as well as resolve conflicts to create win-win situations. Actively shares information in a timely fashion.

LEADERSHIP COMPETENCIES

Possesses helicopter quality. Develops and refines roadmap for his/her team, he/she is also able to deal with the specifics needed to implement the roadmap successfully.

Conducts himself/herself in a positive and dynamic way that motivates and empowers others to be committed to the chosen path of action. Shows genuine concern and respect for people.

Implements progressive human capital management practices to acquire, develop and retain talent. Demonstrates a genuine interest in developing the individual to his/her maximum potential and helping him/her succeed.