Martin Low – Why For a Business People are More Important Than Its Technologies

Connect with Martin:

Connect with Dwight:

• 
• dwight.brown@salary.com

Connect with David:

• 
• 
• david.turetsky@salary.com

Podcast Manager, Karissa Harris:

• HRDataLabs@salary.com

Production by Affogato Media

Resources:

• On Plane Consulting
• Compensation Consulting
• HR Data Labs Season 7 Episode 7
• HR Data Labs Season 7 Episode 5

• “[HR] data will do a couple of things for you: . . . it’ll tell you if you really have a problem, and it’ll help you show others that it might be.”
• “If you can [reduce the people cost of a business] by 1 or 2%, it’s night-and-day for the profitability because that can all drop straight down to the bottom line.’”

Announcer 00:02
Here's an experiment for you. Take passionate experts in human resource technology. Invite cross industry experts from inside and outside HR. Mix in what's happening in people analytics today. Give them the technology to connect, hit record for their discussions into a beaker. Mix thoroughly. And voila, you get the HR Data Labs podcast, where we explore the impact of data and analytics to your business. We may get passionate and even irreverent, that count on each episode challenging and enhancing your understanding of the way people data can be used to solve real world problems. Now, here's your host, David Turetsky.

David Turetsky 00:46
Hello, and welcome to the HR Data Labs podcast. I'm your host, David Turetsky alongside my co host, trusted friend and partner, Dwight Brown from Salary.com. Dwight Brown, how are you?

Dwight Brown 00:56
David Turetsky, I am absolutely wonderful today. Good to be with you guys.

David Turetsky 01:01
Is it warm where you are?

Dwight Brown 01:03
Well, you know, it depends where you're originally from. To me it's warm, but you know, we're probably in the 66 is what my

David Turetsky 01:12
66 Yeah, but double what it is here.

Dwight Brown 01:15
Yeah, it's surely by Phoenix standards, but you know...

David Turetsky 01:18
Massachusetts standards that would be a heatwave.

Dwight Brown 01:21
Yeah, that's like bathing suit whether

David Turetsky 01:23
It would be it would be and I would literally go outside the bathing suit if it was 66 Right now, but it is not. But Dwight, we have with us a brilliant person. We have with us, Martin Low, who is the founder and CEO of On Plane. Martin, how are you?

Martin Low 01:39
I'm fine. I'm fine. We're not quite to 66 but we're better than 33. So

David Turetsky 01:44
you're between Third Street splitting

Dwight Brown 01:46
It's in the middle aren't you?

Martin Low 01:48
That's right. So I'm gonna pretend that it's warm.

David Turetsky 01:51
Hey, there you go. Listen, that's a blessing right there. Let's just stick with it. Sunny. So Martin, tell us a little bit about yourself and how you got to this point.

Martin Low 01:59
Yeah. So you know, I didn't lose a bet.

David Turetsky 02:09
Topic notes. Yeah.

Martin Low 02:10
No, it would be much more interesting topic if I did lose a bet. But so my backstory I like, I like business a lot I went to undergrad was an ecom major, and really loved the theory. And what you get out of econ, I also don't love math. And when I started thinking about like, what am I going to do after I get this econ degree? You know, I didn't want to go on into like a PhD in that sort of stuff. I really want to do something that was more applied than that. But I didn't feel like I understood people and felt like it was left out of a lot of the business curriculum. Right. So you had like a, you learn a lot about econ, you learned a lot about finance and a lot about accounting, but I didn't really feel like I understood the people side, I thought, you know, if I can get the people in a business to do what I wanted to do, like I could probably do really well for myself. And so I went on I got a master's in a truck someone understand that better, that I went and worked in automotive manufacturing for a number of years into that for Ford and for LIR who is tier one supplier for Cummins, who makes big diesel engines and, and then I had someone from Amazon reach out and say, hey, you know, we're growing and, and we really need people to help us grow and which can help us in so did a number of different things for them around landing processes and how they would operate that monsterous business that that thing's grown into, and learned a lot there about just, you know, how do you develop talent? How do you manage performance? How do you step building? How do you run and measure employee engagement, those sort of things went from there, we'll repeat back business. And we took that business for X didn't five years, and sold it. But they had all the same kind of issues that that Amazon had, right so they didn't have good process. They didn't really understand how they were going to manage their people in their people were the big reason why we're able to Forex that we're able to sell it for a really good multiple when we did. And so that was like this lightbulb moment. Like there's a lot of people out there who cheer for the HR or the people side of the business for the like, you know, this really important you should really invest in it. But they never seem to have a lot of money. It always seems to be underfunded, right? And this was the first time where I saw like, hey, wait a minute, this company paid up for that company because of the people side of the business and then I made that connection like a there's really money here. So I then I went I worked for Blue Apron. They were done 100 million dollars after four years and they had all the same like Amazon challenges, right? Like so they didn't have all the people side of the business nailed down and it was costing them a lot of money in at that point. I've been doing this for more than 10 years. Same challenge all these different businesses. You know, I was tired one day and I'm like, why are there no consultants that are in here like setting the strategy A GE and like telling me everything that's not right in the business, right on the people side so I can like get in there and prioritize it and fix it. And so that was the start of Vaughn plan. So about six years ago. That's the company that started. That's so cool. Yeah.

David Turetsky 05:16
Now that we know you so much better. One of the things that we always ask our guests is one fun thing that no one knows about Martin.

Martin Low 05:23
Yeah. So so my my random plantain. When I was a kid, we would go up to my grandma's house and she lives up. Traverse City, Michigan, in Traverse City is near Frankfurt, and Frankfurt is right on Lake Michigan. And the interesting thing about Frankfort is is it sits atop of kind of the sandy bluffs. And what happens there is the water comes across Lake Michigan hits the bluff and creates this massive updraft. So they have all these people to fly gliders out of Frankfurt. And one day somebody landed one of those colliders in my grandmother's wheat field. And you know, they're there. They're literally middle of nowhere, nearest towns got a couple 100 people in it. And we're out in the yard and somebody just comes walking out of the field. Where did this person come from?

Dwight Brown 06:12
Sounds like a Stephen King novel.

Martin Low 06:15
Like a Stephen King novel, like, right, like this random person just walking out in the field. Yeah, neighbors a mile away, right? Like people don't just walk out of the field. And she had landed, crashed landed her glider out out in the field, and you know, the hell of us weed out there. And so we to drive a truck out there and get it out. There was this thing that she said, I'm really sorry, I landed in your field. I didn't have a better place to put it down. Come on out. And we'll, we'll give you a cup of glider rides to make up for it. So we're like, okay, cool. So we go out there. And what they do is it's you know, gliders is this kind of small plane that's towed up by another plan, no engine. And so they tow you up to like, 20,000 feet, and then they let you go, right? And so I'm like, this is pretty cool. Some people are like, I'll never do this. And so we get to this glider. And the instructor pilot, now he's like, show me how to fly flying it. And I'm doing my best to like, not crash this thing. Right? And, and, you know, some kind of like, I'm making a small move, it's doing this thing, but I'm not really doing anything big. And he goes, Hey, you want me to fly from Minnesota? Yeah, that'd be fine. He goes, You like roller coasters. I'm like, I love roller coasters. You took the stick, and he would like that. From like, 15,000 feet to 12,000 feet, like it's just like you would with a paper airplane, like you've ever throw a paper airplane down. It goes like this, right? And then the next thing you did is you just crank that thing back and we just gained like 500 feet, just, you know, right out of that. So that was awesome. So I got to go. And he, what he does is he's an instructor, but he also does stop fly. And so I got to ride and a glider was somebody that does stop flies. It's pretty cool.

David Turetsky 07:59
And the reason I'm shaking my head is now you've given Dwight, something else. This guy is a absolute adrenaline junkie. And I could see I can't really see him well, because it's a little blurry. But I can see in his mind, he's going

Martin Low 08:17
100% You should do it. You should? Absolutely I would highly recommend it. It's fantastic. It's kind of surreal.

David Turetsky 08:24
We've ever done in the history of the HR data lab. So thank you so much.

Dwight Brown 08:31
David just shaking his head. See, I'm a paraglider Martin. So and gliding is definitely on the bucket list. So I'm right there with you, man.

Martin Low 08:40
Yeah, highly recommended.

David Turetsky 08:48
All right. Well, on that note, back to the studio. Now, let's talk about what we're going to actually talk about today. Yeah. So today's topic is going to be a really fascinating discussion around how technology has changed the business, but yet there is still one resource that's really required. And that's its people. So Martin, our first question is, why do people really matter? Why Why can't we just do everything with technology and just use fewer people?

Martin Low 09:28
Yeah, um, well, you know, I think that I think you can use fewer people, but I think the people that you have are gonna matter a lot more. Right. So and I kind of think about this as like, if I were going to dig a ditch with a shovel, right? Like, it's hard. And if I had a ditch digging company only had a shovel, like to use to dig them. You know, wouldn't matter who I got. There wouldn't be a lot of variation and how much somebody could do is hard work. There wouldn't be a lot of value that that person could add, right. But if all of a sudden I have Steve Schultz, right, if my new company now has team shows, they have a tool that can be leveraged, I don't need 100 people to dig a ditch, I might be able to get the same amount of productivity out of one or two. But now there's one or two really matter in the infrastructure around them in the need for infrastructure completely changes in terms of the impact for my business, so you better train them, right before I put them in a big piece of expensive equipment, I better be thoughtful about what I put in there, because the mistakes they make are going to be bigger, or the value they can drive, it's going to be a lot more. So I think that the people that are in those businesses, because of the tools they can leverage with technology, really, really matter. And that's the differentiator, because I can go get the same technology tools, as most other places. It's just the people running them that are gonna make the difference in my business.

David Turetsky 10:54
So when I was just starting out in my career, I think it was my second job. I had taken an interview with a an automobile manufacturer. And this was the time then we were starting to introduce or that we were starting to introduce computers into the world of business. And I went to interview with this company, and I had been a consultant for a few years already. And I had a personal computer on my desk. And I was actually using a personal computer. Don't call it a laptop, but it was like 10 pounds, I could take it with me if I needed to volunteer break my back, I could take it everywhere. Yeah, but at least I had a computer on my desk, and I could leverage it if I needed to remotely or take it with me. Well, when I went to this interview, there was one computer in this HR department for this major automobile manufacturer, and it sat in the middle of the HR office. And I was sitting next I would be sitting next to it. And they said, Oh, yeah, that's a computer that we all share. And I said, No, no, no, where's mine. And the person looked at me as if I had five heads, they're like, We don't need a computer for each of us. We share this because everything was still very manual, then. And that's 30 something years ago, but the same thing applies today is every technology isn't the same. And I think we might be talking about some of the technologies that have been used a lot lately that has a two letter acronym that everybody talks about today, that it's going to take everybody and everybody's gonna get replaced by it. And, you know, we're all going to be sitting in a chair and getting fat and these robots are going to be taken over for us. That's not the case, though, is it? I mean, it can't be that easy. Because we're not at the place that we were back then obviously, where it's 30 years ago, but we're also not at a place where we can get rid of everybody. Right.

Martin Low 12:48
Right. Right. Or, or that you're whether you're necessarily going to want to right, like I think people, I think people need a sense of purpose, right? Like, I don't think people are meant to sit at a pool and just eat junk all day. Like, I like people have...

Dwight Brown 13:04
I've been doing it wrong. You mean, actually.

Martin Low 13:10
But I think there's I think there's certainly an element of over promise there. Right? Like, you know, we were supposed to have when I was kid, we're supposed to, like robots and jetpacks and all sorts of stuff right now, we don't have right now you could make the case that they've kind of chipped away, it's things that we don't do as much of right. So like, you know, automatic bill pay, instead of writing a check and drop it in an envelope or running around town or like, there's stuff out there like that, that you can find, but it's not all going to go away. And I would also make the case that when certain things do go away, they're going to be replaced by other stuff. It's not like there's a bunch of people walking around in corporate America trying to find something to do with their free time.

David Turetsky 13:49
Right. Absolutely. Absolutely. That's how I like to see these things as productivity tools. Right. Yeah.

Dwight Brown 13:55
I mean, you think about that transition from manual to computers, and the workload that we've taken on with computers, because we can it's more efficient. You know, yeah, the paper filers may have lost their jobs, but the rest of us, we just took on more workload. That's kind of the way to work.

David Turetsky 14:15
But even Dwight even saying that, you know, back then we were taking those manila envelopes was very secure manila envelopes. With a little twisty tie thing. Yeah. With the white with the red ties. Yeah, we were we were processing those personnel change forms, right. Yeah. PCI, PCI officer, whatever they were called. And then, you know, we would write all the really confidential stuff like what's their current pay with their new pay? What's their current grade? What's their new grade? What's the promotion? How cool is that, that they're getting promoted? Okay, well, now everybody in the mailroom knows that that person is getting promoted. Right. But, but that stuff still happens sitting in fact, we were just Prime Now the CHR o of this company, and we're still processing changes on a PCR personal change requests still happen. thing today, although it's all electronic, it's not workflow electronic, we're still sending those via email, not an envelope, thank goodness these days, but it's still replicating that same old crappy process that we're doing back then.

Martin Low 15:12
That's right. That's right. Well, and here's the funny thing about that, for me is, you think about the high value activities that a company should be doing for their people, whether that's training, leadership development, having good development, conversations, mentoring, like those sorts of things. And they don't have the resources to invest in that, because they're spending a bunch of time paying somebody to move a TPS form around refait, right. And like that sort of stuff, like if that if that gets sped up, and if that goes away, you can take that time and energy resources that are invested there and start to shift them up into the organization.

David Turetsky 15:51
Well, and everybody's worried about being eliminated, and to me, not going to happen. It's not really about getting eliminated. It's about gaining new skills that enable you to do different things. So even if we're talking about that acronym, you know, there are a lot of people who don't understand how to Okay, I'll say it artificial intelligence. Sorry. Just had to go there. Didn't you had to go there? Yeah. But even that, you know, to be a person who understands how to build prompts. You're getting really, I mean, that's a great skill to have these days, because those people are getting huge premiums. You know, I know somebody who has one. Wow, that's really cool. You really know. Yeah, great. Okay. Wonderful, right. But now they're, they're valuable.

Martin Low 16:32
Yeah, no, absolutely. There's some some really interesting studies out there there was it was Deloitte did one, maybe in 2018. And they basically said, like, hey, look what happened when we went from typewriters to computers. And they have this visual of like, what happened to labor force, and, you know, these jobs went away, and these jobs came in. And the interesting thing for me about this is, is the skill change, right? So like, the first thing that could go to is like, oh, my gosh, all those jobs are gonna go away. True, right. So there's a whole bunch of people that used to work in typing pools that don't have that job anymore. But what opens up for them, right? So all of a sudden making move into, you know, computer programming. Well, how much am I going to pay a computer programmer? versus how much am I going to pay somebody that's typing in a typing pool? Right? Significant premium on pay. And when you looked at the, the difference, right, so there were I don't know, making, trying to remember the numbers, but it was like a, like a one to five kind of shift in terms of employment into a similar industry because of the increase in demand. Because the lowering of the cost of getting stuff done, right. So for every one ish person that came out of that typing pool, there were five kind of jobs created by computers, whether it was in manufacturing, or whether it was in computer repair, or whether it was in training, or whether it was in programming, all of those jobs are going to pay more than that person that was sitting in the typing. So like, overall, I think we have a huge opportunity to improve the human condition. As we go through this, we just kind of have a way to kind of help people reskill so that they can move up, you know,

David Turetsky 18:11
and let's talk about that.

Announcer 18:13
Like what you hear so far, make sure you never miss a show by clicking subscribe. This podcast is made possible by Salary.com. Now back to the show.

David Turetsky 18:24
If you do run a business, or you're an HR, so how do you facilitate that change?

Martin Low 18:29
Yeah, so like, how do you? How do you think about it? I think it starts with just having good data and good information about where you are today. Right? So do you have a good baseline of HR metrics that you can pull from, to say, here's what's happening on the people side of the business, here's how it relates back into the business. And then you can use that to start building that ROI case for why you deserve money that someone else also wants out of the business, right? Why you should get the investment, I think you got to start with some data around that. And those things can target, you know, turnover, it could target productivity, it could target supporting revenue, growth of the business, it could target r&d, you know, all of these things, all of these intangible value drivers inside the business, is what's going to drive the valuation of that business. So whether you work in a public company, that shareholders is trying to increase their value, whether you're working for a private owner, the number one thing they're trying to do is to preserve and grow the value that's in that business. And the number one place that value is going to grow is in intangibles that intangible valuation for the business. So if you have some metrics, and if you have a starting point, then you can start to have a conversation that says, hey, let's take this from here to here. Right? That is going to make us more profitable, more profitable means more value, right? And that means more options for the business and all of those things. So, to me, it starts with data. You And I think the biggest reason why HR teams, and that people function inside of a businesses is underfunded, is because they don't have that ROI case. And so when someone is an owner or a CFO is trying to figure out alright, well, I got $2 million in my budget, where am I going to put it, they're putting it in the place that they can understand the value versus on saying, hey, I want this team to work better. Right? Because there isn't a there isn't a number. underneath of that there isn't a connection back in the funny thing is, from talking to these owners, like when I started this business, I just assumed that like, the PE folks that are out there didn't care about people, or the owners that were out there didn't care about their people, they all care a ton about their people. And in fact, they're just looking for someone to give them a business justification, because they have their fiduciary hat on right there, I'm a fiduciary of this business, I need to allocate this capital in a way that's best for the business. And they may be like, if you're a PE guy, right, you've got LP money, so you're a fiduciary to bring that money back to them, right? They want to do this stuff, they all want to do this stuff, but they don't have a good business case. And so they take the better business case that they have, and they go chase that down. Because they know how they're gonna get that money back.

David Turetsky 21:14
And that's not been a core strength of HR, let's be honest, never been a core strength of HR to build business cases. And even the worse, you when they do build business cases, it's usually a really soft or unproven ROI, where we, you know, we we assert things without actually having really good metrics, or really good statistics behind it. And, you know, one of the big problems is because it's always been looked at as the cost center, that's just the must have, right, whether it's compliance, you know, because of regulatory issues, it's a compliance thing. It's a touchy feely thing, I hate when they call it that, but it's a touchy feely thing, because, you know, you know, they're the people who keep our people happy. So people, now the people, people, and one of the things I found phenomenal, was when I worked at Morgan Stanley, they used to take a lot of business people that wanted to move on and change their lives. And they took those business people in, they put them into HR. And I used to joke with a few of them to say, Hey, what did you do to piss someone off to get demoted? And they're like, you know, what, this is the coolest job I ever, never wanted. Yeah, yeah, I get to help people, I get to do what I love. I know all this about the business. And now I can see it from a different perspective. So, you know, HR people can be business people.

Dwight Brown 22:41
They can, but it's a hard lift for him. It's a total shift in thinking, because they HR people think that by building a business case, you're essentially turning people into widgets. You're deep, personifying them are so many of them do. I mean, I think there are people that given but it's a Yeah, I mean, it's a hard mind shift.

Martin Low 23:01
Yeah, but, but like, let me ask you this, what's harder? Is it harder to stay in this like position where, because I talked to plenty HR people where they're, they're not doing things in the best way they can, where they're, you know, kind of, I don't want to say doing things halfway, because they're not, they're not able to act in an effective way inside the business. That's hard to write, like, I would rather say, hey, if I got one hard thing to do, I'm gonna go to this one that gets me out of it. If I can make a good business case for the things that I want, if I can make a good business case for an investment in a new HR is or cash for training, to get my leaders to be better leaders, so that they stop bringing me all these people problems that they're causing. Let's go good business people. Because yeah, that's hard. But it's not easy being an HR person, if you're not able to make a business case for the things you need. Because you end up with, like, really bad tools and really bad processes, and dealing with the the, you know, dealing with that problem, you know.

David Turetsky 24:04
And the satisfaction scores with HR reflect that right there. You know, I'm not getting the things I need out of HR Well, HR is going well, the HR as we have doesn't enable us to do this, or we don't have the data or, you know, I don't have people who have the skills to do it. And so it's it's a little bit of self fulfilling, and it further dissipates our view in the business so

Dwight Brown 24:31
wrong when you're living in the middle of it. Sometimes you can't see that there's any other way of doing things you don't know what you don't know. I think that that can factor in too.

Martin Low 24:43
Oh, sure. But but if you go back to that idea of having the data, right, so this first started for me when when I started working with Amazon, I had I had a building that had, you know, kind of had a lot of HR turnover. They never really had processes and procedures Same place. I was at like four months, the longest tenured HR leader that had been at that building for three years. Wow. I mean, it was just, you know, and of course you have somebody leave, it stays open, then somebody gets there, like, what is this, and then they leave and it stays open, you know, and, and so what would happen with that is that, you know, maybe once a week, maybe more often someone would show up at my door with an ass that was a pretty reasonable ask, like the business needed it, it was legit thing the business needed? Well, you know, after a month of that you have more on your plate than you're ever gonna get to. And you can't prioritize it, right? Because it's all coming in piecemeal form, right. And because of that you can't focus. And so you never really get to knock the big root cause stuff out. Whereas if you can get it all into one place, you can say, Listen, there's 40, things that are busted here. I'm going to do these three. And even when your leaders push back and say, No, I want to forgive you like, you got to look at him go, your team can't handle all 14, your team's got a day job, like doing the stuff I need them to do. It's not a supervisor's only priority, right? Let's get this list of 40 things, let's say that it's there, let's all look at it in the eye and know that it's there. But let's get down to like two or three things that we can do a really good job on this year. And you can make significant progress on that. And you can start feeling better as an HR professional, because you're going to move the business forward, your business is also going to start getting the stuff that they really need from you. And they're gonna see that progress in they're going to wait on some of those other things. I mean, that will love it, but they'll understand it. And they'll support it. So yeah, it's tough, but it's tough, right? It's tough. It's tough without any data on because just it's all coming at you.

David Turetsky 26:49
Hey, are you listening to this and thinking to yourself, Man, I wish I could talk to David about this? Well, you're in luck, we have a special offer for listeners of the HR Data Labs podcast, a free half hour call with me about any of the topics we cover on the podcast, or whatever is on your mind. Go to Salary.com forward slash HRDL consulting, to schedule your FREE 30 minute call today. So let's get to question number three. Because I think we might be able to answer that question, right? How do you bring this to life? And what what lessons can you give to the listeners to be able to say, I can make progress? I can do this. What What's your advice?

Martin Low 27:28
Yeah, well, I mean, back to this idea that all starts with data, right? So the, the data will do a couple things for you. If you have a way to kind of, you know, understand it. First of all, what am I key metrics? What are the things that I need to drive? Then how can I get some data rounded in the data will do a couple of things for you. One is it'll tell you if it's really a problem. And two, it'll help you show others that it might be right, so, so what I do inside my businesses, we got a framework and we use that for benchmarking, right. And that was something I never had at Amazon or this Pe Company. In, that's what I really needed is I needed to have something that said, Show me what good looks like, let me baseline to that. And then I can use that baseline to bring it back to my leaders, and say, Hey, here's what we look like, in the moment that you show a leader, that they're not doing some of the things that they think are going really well, but they're not going the way that they want to. They are going to be 100% Behind you. Like you're not even going to have to tell them it's a property, you're just gonna like, hey, what do you think about this metric, they're gonna go, I don't like it, what do we need to do to fix it how much money you need, right? And they'll start to help you drive it, but they'll see that there's an issue, you'll be able to take those issues, gather them up and prioritize it. And then you can start to drive that work inside your business. I think you've got to constantly educate your leaders, because they're not HR people. So for as much as they might, you know, kind of dump on you for not knowing the business or maybe not knowing finance, they'll also if you're good at HR, they'll also come to you go, I don't know this stuff, and they don't want to know that stuff. Right. So if you can kind of take that information, get it down to prioritize stuff, and then just start to pull those things away from them. You're gonna fix those hurts, like really fast, you're gonna build a lot of credibility inside of the business, and they're gonna start to bring you more and more stuff. And each one of those wins, helps you get that funding helps you drive. The next thing helps you get buy in for some of those fuzzy things that are out there, right, where, you know, maybe the first one you do has a lot of really established agency inside the business for what you want, right? Like they'll see in the go, oh, yeah, we all we all know that that's a problem. Let's go fix that. Great. Let's go fix it. Knock two or three of those things off. And then you might get to twice thing that's a little bit fuzzy and a little unsure, and nobody's quite sure if it's really gonna go but you know what the last three things I did for you really changed how this business operates. Let's try this one together. To see what we get, right? And then you can start to move some of those things forward. It's so much fun when when you get a chance to but all starts with it all starts with data to identify the problem, prioritize your problems, and then show that you actually got fixed.

David Turetsky 30:16
Martin, what are some examples of those benchmarks that you were talking about before? And where might people get them? Yeah,

Martin Low 30:22
yeah. So. So there's some pretty straightforward ones, there's a million of them out there. But one of the things that we like to use is we like to think about employee engagement. And you can go out simple as just going out to Gallup gallops got a ton of stuff out there on employee engagement. They've got some great questions out there. I used to run the employee engagement surveys for, for Amazon for their operations side. So like from that, like, when we run that, we use a lot of questions that I used at that point, to run those, but you don't have to come to us to those, you can just go out, like, check out a Gallup, there's, you know, a bunch of other great research out there to just start kind of picking off some of those. I think that'll give you a sense for employee engagement, how your employees are feeling, I think that I'm talking to your leaders about some metrics that really matter to them. So they're going to care about turnover, they're going to care about time to fill. Right. So butts and seats mean, I get my work done. butts and seats mean, I can't like not having those people mean, I can't get my work done, which means I can't deliver was a problem for me as a leader. Right. So. So some of the staffing metrics, I think, understanding with them, how productive their people are, if you can start to get underneath some productivity measures, especially in areas where you've got a lot of consistent performance. So if you've got 50, engineers, can you start to understand what the best engineer looks like? And maybe some of the people that are behind? And what makes the difference between the two? Can I start to take some of the things those best engineers do and move those down to some of the people that are in the middle or in the bottom? Right? Yeah, that's gonna pull your performance up, right. So you can look at performance stuff, you can look at financials. So we think that it's really important to look at, what's my overall pupil cost as a percent of revenue, right. And if I can drop that people cost as a percent of revenue, by having better productivity, maybe being faster at onboarding, and how long it takes somebody to go from being 20% effective as a new hire to be 100%. Effective isn't your own. That's a place where I can get it, I can look at things like how are we spending or, or compensation dollars, whether it's variable comp programs or benefits programs, like you'd be shocked at how many times you can dive into some of these programs. And people aren't even aware of the benefits that they have that the company is spending sometimes millions of dollars on, right? Maybe they don't need those benefits, maybe there's a better set of offerings for that. Or maybe they don't understand the benefits that they have, right? And you're spending a lot of money on something that someone does value and just communicating that better. Like so getting a handle on how well do people understand those benefits? And how much are they using those, that's a good place where you can start to kind of take things out of the business, and then take that you don't give it all back to the business, right? So like, if you save a million bucks off that you're not gonna go say, hey, use million dollars, you can say, Hey, listen, I'm gonna save you $200,000, I need 800 To go back to the employees in this strategic thing that everybody's asked him, right? And then you funded it. And you've given people stuff they wanted, all you've done is traded out something that they don't want, or some something that they do. And maybe you saved a little money along the way.

David Turetsky 33:34
While you're proving out the ROI, because you're now measuring it. And you're showing them what the outputs are going to be

Dwight Brown 33:40
tangible numbers. Yeah. Yeah.

Martin Low 33:43
That's right.

David Turetsky 33:44
And that's a key that we've talked about a few times here on the HR Data Labs podcast, that I think it really comes in and hits home when you actually mentioned those specific metrics. Because HR is not really good at, you know, sticking ROI on the front end of any conversation. But when you have something that you can specifically tie, whether it's productivity and, you know, revenue per employee, or or other things, that's something and it's specifically a language that other people can talk to. And so it makes HRs job so much easier.

Martin Low 34:19
Well, and here's the other thing, like, you really want to get a gold star on Monday morning is the HR person. And if you don't know this, like, go figure out, like take the costs inside of the business, take all the costs, and then put them in like the big buckets that finance uses, and then figure out what number is compensation and benefits. Right? So if you line out all of them, right, like how much out of our big expense buckets, you know, so you know, cost of goods, our marketing sales and marketing expense or, you know, we're property plant equipment or whatever they're getting us right so get those big buckets and then look Get your compensation and benefits cost and see where that Pareto is in there. If you stack rank it, it's almost always going to be in the top five costs, almost always, in any business. And if you're a service business, right, so if you're running like an engineering firm, or CPA firm, or legal firm, or a tech firm, it's gonna be in the top, like two or three. And it's not even like the next ones aren't even gonna be close. I was talking to a CFO last night, we were talking about, like, the people cost and how that creators in like, you know, either in their in a service business. And we talked about how much distance there was between wages, which was their top cost, and like the next one, and then we said, well, how much could we squeeze out of that next one that was down there, like, there's nothing left, they've been squeezing all those other kind of quantifiable costs for so long, there's nothing in there to squeeze out of. And even if you get one or 2%, it doesn't matter. But if you get one or 2%, better on the people cost side of the business, it's night and day for the profitability, because that can all drop straight down to the dump bottom line. So if you can start to have that conversation with your CFO, with the person that's watching the money. And it's as easy as saying, hey, where does this Just tell me where it breaks? Like, I'm interested in knowing that sits? It's gonna be in the top five? What do we do with it control those costs, that the way that the business typically controls those costs? As they say, No, you can't hire a person that probably need anyway. But no, you can't hire a person? Or no, I'm not giving reasons. Those are the two ways that they control those costs. Right? You think about like all the other opportunity there is out there? Like, can we make people more productive? Can we make them a little bit happier? How do we get this missionary? Yeah? Or can we make sure that like, we're not doing stupid meetings? Can we make sure that we're clear on what we're asking people so that they don't do all the silly stuff? Can we remove some technology tools that make it really hard for them to do stuff? Like a change form? Right? Like, there's all these great opportunities in this huge bucket of money for the company. So is your is your thinking about as an HR person, if you want quickly build a good rapport with those folks in finance, trying to figure out whether to give you money or not. It's a great place to start the conversation.

Dwight Brown 37:12
Help them understand where the numbers sit. And that's right. Comparison. Yeah. Yep.

David Turetsky 37:18
So the first action I'm going to take after we publish this is I'm going to send it to my CFO, and hopefully she and I can get conversation about it too

Martin Low 37:26
Yeah, I mean, you totally should write in like, hey, what happens if we get 1% more productive? What if we can do 1% more revenue with the same mad cow? And they'll model that and you'll be amazed what that does for the profitability of business?

David Turetsky 37:40
Well, one of the things that we're gonna ask everybody to do is go and try and apply this to your business right now. Come up with some ideas. We'd love to hear about them. And let us know what you think. Martin, it's been fun. Thank you so much for being on the HR Data Labs podcast. We really appreciate it!

Martin Low 38:05
Awesome. Thanks for having me. This was great!

David Turetsky 38:07
Yeah, we'll have to have you back and double click into trying to find the money. CFO friends so much happier. So yeah, Dwight, thank you for being here as well.

Dwight Brown 38:19
Thank you. Thanks for joining us, Martin. We appreciate it.

Martin Low 38:22
Yeah, I'm happy to do it.

David Turetsky 38:23
And thank you all for listening. Take care and stay safe.

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