Long-term deals - Are they for jocks only?

If you work for company in the United States, and are not a member of a Union, it is quite likely your employment agreement is know as 'Employment at-will'.  What is Employment at-will?  From LegalDictionary.com we find:

Traditionally, U.S. employers have possessed the right to discharge their employees at will for any reason, be it good or bad. The "at-will" category encompasses all employees who are not protected by express employment contracts that state that they may be fired only for good cause. "Good cause" requirements are typically a part of collective bargaining agreements negotiated by employee unions; nonunion workers rarely have this form of protection.

But you know what category of worker in the US frequently gets the protection and security of guaranteed employment contracts?

Profession athletes.

These top professional athletes in sports like baseball and basketball can sometime agree to contracts upwards of five years, and the very best can command staggering compensation:

Source - nydailynews.com

Alex Rodriguez of the Yankees recently agreed to a 10-year deal that may pay him up to $305M.

Not bad.

A-Rod is a top player, an all-time great, and it makes sense for the Yankees to lock up his services for essentially the remainder of his pro career. A-Rod can't decide on his own to jump ship and join the Red Sox next season.

But most organizations do not have the same assurances and control over their stars and top performers.  Almost all of your top players are working under Employment-at-will arrangements. The best java developer, marketing analyst, or senior accountant can pack up their desks and march out tomorrow, maybe even to one of your competitors.

 Almost all companies are willing to take the chance that great talent will leave in exchange for the ability to adjust staffing levels, downsize, and have total flexibility in workforce deployment.

However, if the latest economic data is to be believed, the long downturn is showing signs of ending, and leaders will soon be faced with more challenges.

A recent article in Forbes reports that over half of senior executives surveyed are extremely concerned about key employee retention once the recession ends:

65% reported they were highly or very highly concerned that high-potential talent and leadership would leave once the economy turns. And 52% of surveyed executives predicted an increase in voluntary turnover at their companies once the recession ends, four times the number expecting a decrease

The Forbes piece goes on to offer many familiar strategies to help retain high performers: increased engagement efforts, modifying compensation plans, and holding executives responsible for retention. Good ideas, but the article makes no mention of the strategy used in pro sports to ensure the best available talent won't simply walk out the door for a better deal somewhere else.

Contracts. 

Why shouldn't the organization offer two or three-year deals to 'lock up' the very top tier of performers? 

The organization can get the benefit of knowing (for at least a couple of years) that this critical talent will remain with your firm, and the employee gets at least some near term job security, even more important after the job losses of the last two years.

Of course these contracts limit the organization's flexibility to change course, and downsize, but if they are given to just the top tier of performers, then those are the last ones you would let go anyway, right?

And I don't want to hear about any 'double-standard' complaints, A-Rod has a 10 year $300M contract because he is a star, Nick Swisher 'only' plays under a 5 year $26M deal because he's a role player. Nick understands he's no A-Rod, and somehow he manages to show up at work every day and do his job.

So what do you think, time to 'lock-up' some of your star players?

Help You, Help You

Professional sports and agents go hand-in-hand these days. Very few pro athletes handle their own contracts and negotiations with team ownership. Agents like Scott Boras and Leigh Steinberg became famous as some of their clients over the years, a testament to the power and influence of agents.

In 1996 a movie about a sports agent 'Jerry Maguire' put the phrases 'Show me the money' and 'Help me, help you' into pop culture.Flickr - JohnnyCashsAshes

But since you're not a professional athlete and most likely don't have a super agent negotiating your next deal for you, you need to be your own agent. And what do the best agents bring to the table?

Preparation - The best agents understand not only your value and your performance record, but also the history and market position of the company. If this is a salary negotiation with a new company use all available sources of information, starting with the obvious (company website, financial statements), the less obvious (company Twitter accounts, Facebook pages, LinkedIn Company profile), and the most raw (Glassdoor, Vault, and Indeed forums). Walk in to that room knowing you are better prepared than the person across the table from you.

Confidence - This confidence stems from thorough preparation.  Once you have assessed the situation, established your key must-haves (salary, benefits, vacation, etc.), then you have to walk into the meeting confident but not arrogant, firm but not inflexible.  When you truly understand your contribution and the value the marketplace puts on your skills, confidence should not be an issue. You are a star baby, make sure you always understand your own awesomeness.

Client focus - remember who the client is, it is YOU.  As your own agent you are trying to negotiate a deal that will be mutually beneficial to both parties, but at the end of the day you are your only advocate. You have to protect your interests first. Unless you are working for your Mom, the person on the other side of the table almost certainly does not have your best interests as their top priority, in fact they shouldn't. Only you have to live with the outcome of the negotiation, so you better make sure you advocate for yourself every step of the way.

Network - In sports negotiations a good agent is constantly working and maintain contingency plans, in case the deal can't get worked out.  He or she uses their network connections in other organizations and with media to have some idea of where their client can go next, or better still, which teams to try and play against each other to get the best deal. You should be doing the same, staying on top of what the other target companies in your region or your industry are doing. Who may be hiring? What company is expanding?  Is your industry undergoing consolidation or is outsourcing changing the nature of what you do?  The more personal contacts you can make inside your industry and with your local business organizations the better.

Here is what a great (fake) agent can do, are you getting these kind of results repping yourself?

The Cradle of Coaches, or Celebrating your Ex-employees

Note: It's 'HR and Sports' this Friday on the HR Happy Hour show, and in that spirit, I figured I'd try some posts with some kind of sports angle. Apologies in advance, Kris Dunn over at the HR Capitalist does these type of posts way better than anyone else, in fact you should probably stop reading this and click over there right now.

Still here? Ok here goes:

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In American college athletics it is not uncommon for coaches to have some success at smaller programs at lesser-known schools, then move out and up to higher paying, more prestigious jobs at so-called 'major' universities, like Ohio State, Notre Dame, or Florida. It does seem that almost every year one of these highly lucrative positions is filled in this way.

One of these smaller programs is the Miami University of Ohio. Miami of Ohio is known as the 'Cradle of Coaches', based on the numerous legendary coaches that worked there, and then went on to have remarkable success at larger, more well-known universities as well as in professional football. Just some of the coaches that have Miami roots are Woody Hayes, Bo Schembechler, Ara Parseghian, and Jim Tressel.

Ara Parseghian - Time Magazine - Nov. 20, 1964The interesting thing is that Miami is not the only smaller program to have had this experience, but by embracing it, and celebrating the achievements of former coaches once they have left Miami, they have created a kind of sustainable competitive advantage for talent compared to their most likely competitors for coaching talent.

Any candidate for an opening at Miami would absolutely know of this rich history of successful coaches moving on from Miami to the highest echelon of the profession.  And for a highly competitive field like collegiate coaching this is a huge selling point.  Come and coach here at Miami, and we can help you on your path to becoming the next National Coach of the Year at whatever 'big' school you go to next.  They take advantage of this legacy by fully embracing it, in fact they are planning to erect statues of many of the legends that built the 'Cradle of Coaches' history.

How many 'regular' organizations do you know that celebrate the achievements of ex-employees in such an explicit manner? Think of organizations that typically recruit new graduates or early career professionals.  A compelling factor for the best talent among them might very well be, 'What can I do next with the experience I gain here?'  For smaller companies,or ones in the non-profit or educational sector that can't usually compete evenly on salary and benefits, this may be one source of advantage that can be exploited.

Instead of limiting your pitch to the potential career paths within your organization, what about highlighting some of the success stories of people who left and then went on to achieve success in other places, or as entrepreneurs? Instead of just having current employee testimonials on your corporate job site, why not try and include interviews with some of your most famous alumni who would be willing to talk about how their experience with your organization set them up for long-term professional success?

Who is the most successful ex-employee from your organization right now?

Are you using that story to your best advantage?

Ultimate Team Rankings - HR Style

Every year ESPN ranks the franchises in the four major United States professional sports leagues, (NFL, MLB, NBA, and NHL) according to how much the franchises Gives back to the fans in exchange for all the time, money and emotion the fans invest in them.'

You can see the results  here - ESPN Ultimate Team Rankings, (the Los Angeles Angels of MLB led the rankings).

To me what is most interesting about these rankings is the criteria that are used: 

Bang For The Buck : Wins during the past three years (regular season plus postseason) per revenues directly from fans, adjusted for league schedules.

Fan Relations :  Openness and consideration toward fans by players, coaches and management.

Ownership : Honesty and loyalty to core players and local community.

Affordability : Price of tickets, parking and concessions.

Stadium Experience : Quality of arena and game-day promotions as well as friendliness of environment.

Players : Effort on the field and likability off it.

Coaching : Strength of on-field leadership.

Title Track : Championships already won or expected in the lifetime of current fans

What if you, as a Human Resources professional, applied those same criteria to your organization? Instead 'fans' think about the categories as they relate to your employees and candidates.

Bang For The Buck : Pretty simple, revenues per employee. A standard HR metric, but are you consistently measuring it?  And not just in total, but also in the context of initiatives like downsizing, merging, or expanding. In your recruiting efforts are you carefully evaluating the cost and return of your ATS, job board advertsing, specialty advertising, etc.  If have dived in to the world of 'social recruiting' do you have any idea how it is paying off?

Fan Relations : Openness and consideration toward fans employees by executives and management.

Are you truly an 'open' organization?  Your executives may claim they have an open door to employees but do the employees truly believe that is the case? What steps have you taken to demonstrate open communication and consideration towards employees, particularly if your organization has gone through reductions in force, or will be doing so soon?

Ownership : Honesty and loyalty to core players employees and local community.

Do the company owners make it a priority to give back to the community?  Do you have some kind of company sponsored volunteer day, giving employees time off in exchange for volunteer activities?  Does ownership do more than just claim to be community minded?

Affordability : Price of tickets, parking and concessions total compensation awarded to employees.

Let's spin this one to your overall compensation package.  I know these last two years have been brutal for comp budgets, but even still your organization's compensation package needs to be competitive to continue to engage and retain the best of your employees.  Even in a recession, these employees could jump.  If as in the case of many organizations, and the cash element of your total compensation is still under downward pressure, are you enhancing or emphasizing other elements of the total package that are of benefit to the staff?

Stadium Experience : Quality of arena facilities and game work day promotions conditions as well as friendliness of environment.

Take a honest look around your offices and facilities. Are they the best you can make them? When employees drive up to the facility what is the first thing they see?  Make sure the grounds are kept up, the parking lots well-lighted and please don't allow the clan of smokers to huddle around the main entrance.

Inside, start with the simple, low-cost elements.  Are the bathrooms and kitchen or break areas super-clean? Make sure folks have easy access to a refrigerator and freezer, and keep the coffee high quality and as low cost to the staff as possible.

Players : Effort on the field and likability off it.

I will spin this one a bit, more toward the employment brand and the image that the company has in the local, national, or global community.  What are your employees saying about the company both in internal communications and forums, and externally on blogs and social networks. How about candidates and their experience and view of your organization?  All these elements play into the idea of 'likability', which is not usually thought about as an organizational feature.

Coaching : Strength of on-field leadership.

This certainly is a awkward one for HR, the frank assessment of the organization's leadership, but certainly a necessary component for a high functioning organization.  HR can take the lead in identifying gaps in leadership capabilities and implement strategies to address these issues. Doing right by employees often means ensuring company leadership is truly able to carry out the company's strategic objectives. Succession planning programs also play strongly into HR's ability to support and improve the ongoing leadership capabilities of the organization.

Title Track : Championships already won or expected in the lifetime of current fans employees

Are you a market leader in your industry/region/niche?  Have you been recognized as a 'great place to work' or a 'Top Employer' by any national or local organizations?  What do the employees think about the short and long term prospects for success?  Are the companies best days behind you, (like the Cleveland Browns, or New York Knicks).  This is critical in sports, as we often see many excellent and experienced players that have their pick of teams to play for choosing the ones that are perceived to be championship contenders.  Simply stated, the best want to play with the best, and position themselves for success. Do you have the kind of environment that attracts the best talent available? And if not, what can you do in HR to try and reverse the tide and get back on top?

FYI - The team that came out on the bottom of the ESPN Ultimate Team Rankings was the Los Angeles  Clippers of the NBA.  Sort of amusing that the best and worst team in the ratings play in the same city.  Perhaps the HR department of the Clippers can try and initiate some executive exchange or cross-organizational meetings to try and learn a few things from the Angels.

So what do you think? Is your organization is more like the top teams in the survey like the Angels, Pittsburgh Steelers or Detroit Red Wings?  Or sometimes do you feel more like the Clippers, Detroit Lions, or Cincinnati Bengals? The kind of teams the general public associates with losing, scandal, and inept management.

If you liked this article (and you must have if you have hung this long), be sure to check out the August 28, 2009 HR Happy Hour Show - 'Sports and HR'. We will be taking sports, HR, and where the two worlds collide.