Taking care of customers by taking care of employees, Part 2

A few months ago I shared on the blog some details about fast-food giant McDonald's recent improvements in both same store sales, customer satisfaction, and customer service, (think shorter wait times in the drive thru), that were largely attributed by McDonald's CEO to a series of comprehensive hourly wage increases for thousands of front-line staff.

For a quick refresher on that story, here is part of what I wrote back in March:

What if there was another, simpler way to improve customer service that didn't involve 'engagement' at all, but did impact those employees that are on the front-line working with and helping customers every day? You'd be interested in something like that, wouldn't you? What if it was as simple as cutting a check? Well, make that several thousand checks.

Check this excerpt from a recent Fortune piece - McDonald's Says its Wage Hikes Are Improving Service:

The hamburger chain in April announced it would raise the average hourly rate for workers at the U.S. restaurants it owns to $9.90 from $9.01 starting July 2015, with average wages climbing above $10 per hour by the end of 2016. The company also said it would allow those employees to earn up to five days of paid vacation every year following one year of employment.

McDonald’s CEO Steve Easterbrook, who took the helm in 2015, has since moved swiftly, closing hundreds of weak stores, bringing back all-day breakfast, and simplifying the chain’s menu, reducing bottlenecks in serving customers quickly.But improving the customer experience hinges on workers being on board with all these changes, hence the raises.

“It has done what we expected it to—90 day turnover rates are down, our survey scores are up—we have more staff in restaurants,” McDonald’s U.S. president Mike Andres told analysts at a UBS conference on Wednesday. “So far we’re pleased with it—it was a significant investment obviously but it’s working well.”

In October, McDonald’s reported its first quarter of comparable sales gains in two years. The company built on that growth with a huge 5.7% increase in the following quarter.

Wow, is it that simple? A general 10% across the board wage increase and sales and customer service both rise enough to offset the costs of the increased wages? That's it? Man, what took them so long to sort that out?

That was McDonald's story back in March, and if you read the entirety of the piece, you will see that I acknowledge that there were probably some other, and possibly significant factors at play that likely also contributed to the uptick in sales and improvement in customer metrics. But there can be little doubt that the wage increase had an effect as well, and I would argue, the most pronounced effect. 

Let's fast forward to earlier this week where Business Insider shared some details of another massive retailer taking a page from the McDonald's (as well as the Costco) playbook of increasing wages and improving training, and perhaps most importantly, concentrating on employee scheduling, (and not just to 'optimize' staffing levels) - none other than Walmart. What have been some of the effects of wage increases and overall heightened investments in people at America's largest retailer?

From the Business Insider piece: 

Walmart is becoming a better place to shop because it started paying employees more.

For many years, the company was plagued by widespread complaints about poor customer service at its stores.

That was until last year when Walmart, under pressure from investors following several quarters of same-store sales declines, decided to invest billions of dollars in wage increases and training for workers.

Specifically, Walmart committed to investing $2.7 billion over two years in higher wages, scheduling improvements, and employee training, following in the footsteps of companies like Costco.

Walmart's efforts so far have translated into a pay raise of about 16% to $13.69 per hour for non-managerial full-time employees, The New York Times reports.

In the meantime, widespread issues in Walmart stores such as empty shelves and cleanliness have significantly improved.Three out of four Walmart stores now meet the company's own customer service standards, according to the Times. A couple years ago, just 16% of its stores met those goals.

It turns out that paying people more may have made them better employees.

The piece goes on to mention, (like in the McDonald's situation), some possible other reasons for the improved results, and some alternative motivations for Walmart to make these investments in their workforce, but as in the McDonald's case, Walmart's leaders see a clear line between taking better care of employees and taking better care of customers, (and driving better top and bottom line results).

I think after these two cases, you get the idea of where I am going with this. I will end this piece with the same couple of thoughts I used to end the March piece on McDonald's:

Sometimes, maybe most of the time, we tend to over think what it takes to keep people (reasonably) happy, and give them a situation where they feel good about the work they are doing, and the customers that they are serving. 

You might not be able (nor necessarily should you), give everyone on the staff a 10% bump. But there probably is some other, simple, reachable change you can make that would serve the same purpose. It's out there. You can find it.

Just don't call it "employee engagement" and you will be fine.  

Have a great day, and if you hit up a McDonald's or a Walmart today, let me know how it goes.

It's not too early to start planning next year's vacation

Even though it is only mid-October, I found myself spending a decent amount of time this past weekend thinking about 2017 vacation plans. It could be that I am still a little tired from coming off the recently concluded HR Technology Conference, which is for me the busiest week of my year and am still in needing of some R&R. Or it just could be, and now that I think about it I am sure it is this, that if I don't take some active and purposeful steps pretty soon to lock in some vacation plans for 2017, that I run the risk of not actually making it happen at all next year.

Why? Why do I think it necessary to try to plan out some time off 5 or 6 or maybe even 9 or 10 months from now? That seems a little ridiculous. I mean, I normally take a very short term view on life. I don't like to commit to things or events too far in advance, as something ALWAYS comes up. Heck, I don't even buy green bananas any longer. Who has that kind of time to wait? Sure, buy this banana today, and MAYBE it will be ready to eat by Thursday.

The main reason I think to start thinking about and planning next year's vacation now, or at least soon, is that if I don't, and I suspect many of you will be in the same predicament as well, (my USA readers anyway), is that the vacation just won't happen. American workers leave a RIDICULOUS amount of unused vacation days on the table each year. A recent study released by the folks at Project TimeOff, (they maybe should change their name to 'Project We Never Take any Time Off'), concludes that as many as 658,000,000 paid vacation days were left unused by American workers in 2015.

And this unused glut of vacation days comes at a price, to both the workers themselves, (I suppose 'ourselves'), and the organizations as well. From the individual's perspective the benefits of disconnecting from work are real and they are readily apparent - the need to decompress and break away from what is for many a busy, stressful workplace, the chance to spend quality time with family or friends, and even the added and often unexpected benefit of generating new or interesting ideas to solve workplace challenges with the burden of the day-to-day temporarily removed from your mind. And for organizations, they clearly are better served by a workforce that has the opportunity to get away from work once in a while, to recharge, and who generally return from their break more engaged and more energized, (and often with new ideas and perspective). Add in the estimated $272 Billion liability of unused vacation time sitting on American companies balance sheets and you see for organizations there is also a tangiible financial benefit to employee's actually using their vacation time. 

So why don't American workers use more of their earned vacation time? 

The Project TimeOff study offers a few reasons, but the most prominent one boils down to organizational culture - most managers do not encourage staff to take time off, over 60% of managers themselves don't take their allotted time off, most leaders don't encourage taking vacation either, and employees (and managers), don't feel secure enough that needed work can get done if they are off on vacation. 

It all adds up to the situation mentioned above, 650 million unused vacation days and pushing $300 billion of vacation liability on the books.

What can be done about this to reverse these trends? A few, simple things really. Make sure your people are not punished, (or feel like they might be otherwise negatively impacted), by taking time off. Make sure that 'taking time off' is part of the normal year-end or year-start planning and goal-setting processes for every employee. Do your best to stave off the 'hero' mentality in so many workplaces that seems to equate 'time spent at work' with 'high performance' or dedication. There are a few more suggestions in the The Project TimeOff study which is a good, quick read, and I encourage you to check it out, and especially show it to your managers of people as well, they may not realize the influence that they have on staff.

So is it strange that in the middle of the first month of the 4th quarter of the year, often the busiest of times for many organizations and workers that I am pitching for you to think about next year's vacation? 

Sure. 

But if you don't, or if you put if off to a time when you are not so busy, (whenever that is), ask yourself when you will actually take the time to plan for the time off that you know you need. The data shows that most of us are not very good at doing that.

And once I get my travel plans set, I will be sure to gloat about them here.

Have a great week!

The tyranny of connectivity

I am slightly ashamed to admit to having done a fair bit of 'real' work over the long Labor Day weekend, (including yesterday, Labor Day itself). 

Of course I didn't really want to work on Labor Day, or perhaps said differently, I did not want involve other people in said work, mainly by sending out email messages to them on a holiday. But, sadly, I indeed did send a few email notes out, interspersed with the other work that I was doing that did not need to involve communicating to others in order to complete.

And I as wind up the holiday, (I am writing this on Monday night, pretty late), I have three quick observations from my Labor Day spent, (at least partly), working.

1. LOTS of other people were working too. As I mentioned, I did, against almost everything I hold dear, send a few work-related emails on Labor Day. I received replies from almost everyone I contacted. And three or four people replied to me within 10 minutes of my original message. If Labor Day is meant to be a celebration of the working person, lots of working persons I know were also, actually, working.

2. NO ONE I corresponded with over email or chat on Labor Day did not mention the fact that it was, in fact, a holiday. No one questioned why I was messaging them. No one replied, 'hey, it is a holiday, I will get back to you tomorrow', and almost no one failed to get back to me by about 8PM ET, (as I am writing this). 

3. Aside from the aforementioned email exchanges, I spent most of my 'working' time on tasks that did not require outside collaboration, input, or communication. They were just things I needed to do, and were fairly important, but for some reason had not been done. I noticed my ability to get these tasks completed on a holiday, where I was not being peppered every 2 minutes with a new incoming email or chat message was incredibly enhanced. Quite simply, I was probably twice as productive working on these items on a holiday as I would have been on a normal Monday, when I am, like everyone else, almost constantly being barraged by incoming messages and requests. If I changed my working hours to say, 7PM - 3AM I swear I would be two or three times more productive than I am now. The technology and the need to stay 'connected' all the time during the normal workday is killing our ability to get things done.

I am not about to change my official work schedule to 'off hours', but I can't say that I am not tempted. there is something to be said for working when no one, (or most anyway), are not working, and you can be, despite our state of constant connectivity, be more or less alone with your thoughts.

There are thousands of productivity advice pieces that advocate that you consciously disconnect from email and work chat and Slack, etc. during the work day in order to get more work done. But realistically, how many people actually take that advice and feel comfortable and empowered enough to actually not be accessible to work colleagues for large stretches of the workday?

Most organizations, and teams, expect if not demand almost real-time access and response.

It is not until you spend a day, or even a few hours, working when that expectation simply does not matter until you realize how our constant connectivity damages our ability to get anything done.

Having said that, maybe I should not have been surprised so many other folks seemed to be working on Labor Day. They too must have realized that a holiday is the best day to get anything done.

Have a great week!

Three quick 'Gig Economy' links and a warning for HR leaders

There are about 12,238 surveys and data points that you can unearth when researching the rapidly evolving, and probably growing, 'gig economy', i.e. work that is performed by independent contractors, self-employed types, and those that for better or worse, (worse), get referred to as '1099 workers', for the IRS form on which their earnings are reported.

Rather than spit out a bunch of (sometimes contradictory) data on how and where this gig economy is heading, I wanted to share three quick and interesting developments in this area that are worth thinking about and then one more recently released set of survey data that should be a warning to HR and business leaders that are moving towards increased usage and reliance on 'gig' workers.

Item 1 - Atlassian now lets you hire freelancers right from Jira

JIRA, Atlassian’s flagship project management service, is getting a new feature today that will let you easily convert JIRA tickets into job postings on Upwork’s freelance marketplace. “The smartest people will always exist outside of your company,” Atlassian’s head of growth for JIRA and Bitbucket Sean Regan told me. For many companies — and especially small startups — it’s also hard to have all the right expertise available in-house to solve every problem. With this new integration, these companies can now click a button in JIRA and get a pre-populated form to submit to Upwork’s marketplace.

Steve here - an example (of which we will see more I am sure), of enterprise technology and management tools integrated with sourcing/hiring platforms for 'Gig' workers 

Item 2 - LinkedIn enters the Gig Economy with an Upwork competitor

LinkedIn has created a freelance marketplace. Launched on Wednesday, "LinkedIn ProFinder" asks employers to submit contract jobs in categories such as design, writing, or financial services and promises to send them up to five free quotes from LinkedIn users in response. Over the last five years, the number of freelancers on LinkedIn has increased by 50%, according to the company.

Steve here - Of course it makes sense for LinkedIn to dive in more heavily into the 'Gig' work space. It's growing, and LinkedIn thinks/knows it has the way to connect gig workers with opportunity

Item 3 - This CEO says he was shut out by tons of investors in Silicon Valley for classifying his workers as W-2 employees

But Josh Bruno, the CEO of senior-care startup Hometeam, said that for him it was always clear that Hometeam's 1,000-plus caregivers needed to be on W-2s. They needed a lot of training, and Bruno wanted to give them the sense that Hometeam was investing in them for the long haul.

But unfortunately, when Bruno was trying to raise money, that wasn't what Silicon Valley VCs wanted to hear.

"I was kicked out of every office on Sand Hill Road," Bruno said, referring to the iconic street that houses many famous Silicon Valley VCs. Bruno said he even had a verbal agreement with a "flashy name" VC, who then wouldn't go through with the investment unless Bruno put his workers on 1099s.

Why? One reason, Bruno said, is because big names like Uber and Lyft were doing it. Bruno's main competitor, Honor, which was named one of Business Insider's hottest San Franciscostartups to watch in 2016, originally used 1099s. It has since switched to W-2s.

But it wasn't simply because everyone was doing it, Bruno said. The deeper reason rested in what a 1099 represented.

Bruno said that to VCs he spoke with, a 1099 meant a job that was both easy and repeatable. The worker is a part that can be swapped in, which is good because it means the business will be easier to scale, Bruno explained. And it would be easier to get the kind of growth the VCs were looking for.

Steve here - In case you wondered what the general attitude of 'people who have money and are looking to have more money' is towards labor, there you have it. 'Gog' workers are cogs, more or less the same, more or less interchangeable. This isn't a problem until.... Well, let's ask some of the Gig workers.

And as promised, here's your warning, 67 percent of Americans who have worked as independent contractors would choose not to do so in the future (infographic below courtesy of Deloitte).

A recent online poll by Deloitte of nearly 4,000 workers found that 67 percent of respondents who have worked as an independent contractor would choose not to do so again in the future. Additionally, more than 60 percent of employed workers said that their stability would suffer if they moved to independent contract work, and 42 percent worry about sacrificing good compensation and benefits.

Steve here - Lots of interesting nuggets to take away from the Deloitte data, but they all point to the same place - that many, many 'Gig' workers are not at all happy to be Gig workers, and that most organizations are doing a terrible job managing and engaging these gig workers. it's almost as if the Silicon Valley VC attitude towards labor is taking hold and becoming more common.

The danger is at the same time you as an organization make the strategic move to increase your use of Gig workers, and the tools and technologies are making it easier for you to incorporate Gig workers into your processes and workflow, that the way we value, treat, and support Gig workers seems to be getting worse. And lots of Gig workers are not happy.

Plenty to think about here as the next few years play out.

Have a great week!

Vacation wrap-up: What I did wrong, did right, and what I'd do differently next time

I am just back from a super week of vacation/holiday spent in the wonderful state of South Carolina (Note to self: If I ever get my feet back in South Carolina I am going to nail them to the ground), and wanted to take a few minutes before diving in to my hopelessly full email inbox to reflect on the break with respect to how I did or didn't handle 'work' and 'work/life' issues during the week.  I had not taken this many consecutive days off (outside of the end of year holidays), in some time, so it was an interesting and revealing week for me as well. And also kind of sad in a way, that simply taking one business week off, (and the weekends on each side of that week), creates such a challenge for me, and I would expect, many of the folks who read this blog. It just shouldn't be that hard, if you know what I mean.

But in the interest of 'I need to get back to watching Sharknado 4', let's get on with the idea for the post.  Here's what I did wrong, did right, and the next time I take a week or more offline, what I would definitely do differently.

What I did wrong:

By the time I had left for the trip I had one pretty important work item that needed to be completed, and sadly, was not. So I rationalized that I would work on said item on the plane ride down, and then it would be all set. But alas, said project took longer than I had anticipated, and I had to revisit it two other times during the trip before it was completed. What I did wrong was not finishing this project, no matter what it took, before the trip. There's no way to leave on a vacation with everything completed, but I should have realized the importance of this one thing and made sure it was done. It was completed by mid-week or so, but it did bug me for the first half of the trip. But that was on me, I needed to do a better job at prioritizing projects before I left.

What I did right:

Today is Monday, the first day I am back 'in the office', and I smartly have zero 'official' meetings or calls today. I knew that attempting to wade through the Inbox would pretty much be the only thing I would be able to attack today, and I made sure there were no other conflicts to allow me to attempt to catch up.  The other thing I did right, and I was not sure about this at the time, was actually haul the laptop with me on the trip. It wasn't because I felt compelled to 'work' on the trip, but if I really had to, (see above), I would be able to, and would not get stuck in a hotel business center or having to find a FedEx office location at the beach.

What I would do differently next time:

I will probably set up my 'Out of the office' email auto-response at least one full day before I am actually out of the office. This would create a little more airspace to complete anything that needs to be done before leaving on a vacation, and better set expectations for response time. I would also, similar to what I did today, make sure on the last day in the office that I have no meetings or calls set up.  It's kind of like setting up a DMZ situation one day before and one day after a vacation. The other thing I would do differently is perhaps pick one personal  'work' project, (for me it is this blog, the HR Happy Hour Show), to spend at least some time thinking about or working on. Those personal projects are extremely fun, and often don't really seem like work. I would have loved to come back from vacation with a dozen great blog post ideas or two or three podcasts booked. Alas...

That's it from me. If you have not yet taken some time off this summer, I really hope you do and have a fantastic break. And if you are one of the approximately 489 people waiting to hear back from me, I promise I will get caught up soon. I mean that. Truly....

Have a great week!