5 Classic HR Mistakes That Are Costing Your Company Tens of Thousands!

Susan James* is a successful leader and business owner in Houston. She built her firm from the ground up, moving from solopreneur to running a successful firm with 36 employees. For more than 16 years, her business grew steadily and maintained the kind of profit margins that made her wealthy and rewarded her employees handsomely.

But by mid-2016, something changed.

Susan began to observe a slowdown in her company’s growth, at a time when the economy was expanding and others in her industry were thriving. She was experiencing higher than normal customer attrition, her salespeople were closing fewer deals, and the number of customer complaints was rising.

Over the same period, her company was also experiencing employee turmoil; regular conflicts erupted between her senior leaders, departments weren’t communicating well with each other, there was a modest uptick in employee turnover and she sensed that morale was low.

It was clear to her that these people-issues were actively holding her business back.

Being the results-oriented leader that she is, she took action.

Susan quickly hired her company’s first HR Manager, John*, towards the end of 2016. John is a six-figure, seasoned HR professional, with deep expertise. His top priority was to turn down the dial on employee turmoil so that employee morale would improve, which would in turn contribute to business growth.

John got to work immediately and over a period of two years, wisely made improvements in the company’s HR infrastructure:

• He improved the hiring process, reconstructed the firm’s approach to performance reviews, redid the policy manual, created job descriptions and implemented company-wide training.
• John also implemented a rewards and recognition program to boost engagement, introduced new health benefits, hosted fun company activities and sent the company’s managers for leadership development workshops, among other HR initiatives.

But it didn’t work. Why wasn’t HR delivering sustained results?

You can imagine how dismaying it was for Susan when almost two years later, having hired a 6-figure HR professional, spending more than $47,000 in traditional HR best practice solutions, and investing significant time and people resources, the problem was still unresolved and still stalling her company’s growth.

Desperate for a permanent solution, she called me in December 2018, and we got to work.

After assessing the current state, I observed a few things that explained why the traditional HR best practices were failing to permanently address her people challenges, even though they appear to work in the short term.

Costly HR Decisions

Like many other SMBs, Susan’s company was making these 5 classic and extremely expensive mistakes:

1.     Hiring more people to address workload issues: Susan’s company had significant roadblocks to employee productivity that were unaddressed. Over time, these roadblocks became more pervasive and her employees less effective. This ultimately cost her close to $150,000 more in annual salary expense than she needed to spend.

2.     Paying higher wages to combat turnover:  Had they tackled the turnover issue at the root, Susan’s company would not have needed to pay higher wages in order to attract the right talent. It turned out that ineffective leadership and the lack of a culture of accountability were the root issues that needed to be addressed.

3.     Using financial incentives to address low employee morale: It turned out that the real problem was that her employees, who were primarily millennials, did not find meaning in their work. Her financial investment was wasted because it did not drive up employee morale over the long-term.

4.     Disciplining employees for low productivity: Some poor performers were exited from the business yet the new hires, who earned higher wages than their peers, were still failing to meet her expectations. In their case, a structured performance improvement process did not result in higher productivity, because a mechanism for delivering continuous performance feedback for all employees, was not in place.

5.     Providing employee training without a plan. Over-training employees without a plan to develop them into more complex roles failed to engage and excite her employees. This approach to employee development failed to deliver the expected gains in employee performance or to build a pipeline of successors.

The past two years were a taxing and avoidable mistake. Despite spending a significant amount of time and money, her company's growth was continuing to decline. Susan was perplexed.

Why weren't traditional HR Best Practices creating the impact she needed?

They Were Fixing the Squeaky Wheel: How often do you jump into solving your people-centric challenges before conducting a thorough root cause analysis? Susan's HR solutions failed because they only solved at the symptom level. 

Veering Off Course: Can you see a direct correlation between your HR initiatives and business outcomes like growth and profitability? Like many failed HR programs, they started with top business outcomes in mind, then lost focus of the company's top goals when fleshing out the specifics.

Treating Employees Like an Afterthought: How do you gain deep, real buy-in from your employees? Without a plan to get her people invested long-term, their HR initiatives faced a tragic death.

Not Knowing Their Numbers: Do you measure and have a clear idea of what's working (and what's not) in your people-centric programs. Without quantitative indicators, Susan was sinking good money after bad solutions for far too long.

Susan needed immediate and sustained outcomes from her HR initiatives.

In January 2019, we began using a new, systems thinking approach to hone in on, and then permanently solve her most important people challenges.

We created micro-teams that were tasked with understanding and defining the problem, conducting a root-cause analysis, clarifying the desired business outcomes, and developing three kinds of corrective solutions that:

1. Stopped the bleeding
2. Solved the problems at the root and
3. Kept the problems from reappearing anywhere else in her business.

These micro-teams were also tasked with and rewarded for creating excitement and engagement around the implementation of the people-centric solutions across the entire business.

Achieving what HR best practices couldn’t achieve.

In just 7 short months, Susan saw tangible business outcomes that 2 years of traditional HR best practice tactics were unable to achieve.

Among other gains, Susan’s company eliminated the need to fill one open position, which will save her company more than $85,000 in annual salary expense.

So far, her company’s Year Over Year customer retention rates have grown by a whopping 9%!

Imagine what a 9% margin improvement, in just 7 months, could mean for your business. That's the power of using systems thinking to solve people-centric challenges in your business.

Is your team or your company missing its big goals? Are your employee initiatives failing to create the impact that you desire?

Trying to solve employee-challenges in your business USED TO BE hard and complicated.

Until now..

I've created a 1-hour masterclass with practical, proven tools that will help you drive up employee effectiveness by 30% in 8 months or less.

If you are a business owner, leader or HR professional that is frustrated by the inability to permanently solve people-challenges, this masterclass is for you.

Stop the bleeding on your costly employee challenges.

You'll leave with tools that will help you avoid costly people-mistakes so that your business can reach it's big goals faster (without hiring more employees.)

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LIVE MASTERCLASS: How to Drive Up Employee Effectiveness by 30% in 8 Months or Less