The MHC Blog

Sometimes it is easy to overlook the importance of human resources and compliance. The HR department is normally one of the last functions to develop fully in a growing Company.  This lack of development and focus can create problems and issues for the Company that would not be there in the first place if you had someone focused solely on HR and compliance.

When Companies first start up, the Founder tends to look after all things “people”.  They are probably using the HR documents and policies from their last (often much larger) Company, swapping out the Company name and imported their new Company logo.  Or possibly completed a quick Google search and found something that looks right and will do.

When the Company grows, and their time is precious, the Founder probably handed over the HR responsibility to their Assistant or to Finance as an additional part time task with the remit to “just keep the Employees happy”.

Random HR processes and documents start to creep in, forming a “mismatch” of HR practices, most of which are not aligned to the Company culture or are compliant to UAE Labour law.  They often are the cause for internal Employee issues as they just “don’t fit”, are not practical to the Company culture or compliant to Labour Law.

Mistakes with Employees contracts or how their employment lifecycle is handled can cost a Company a lot of time and money.  Employees are becoming more educated as to local employment legalities and there are many “no win no fee” legal practices that are only too keen to help Employees get more from their ex-employers.

Compliance with Labour Law and implementing HR best practice reduces the chances of an Employee making a complaint, and should they try, by keeping compliant and keeping documents on Employee files gives the Company the confidence to challenge legal complaints.

Here are 5 reasons why compliant HR practices and processes are required in any Company that has Employees.

Ever asked yourself this question?  You spend all this time recruiting, hiring, paying for visas, inducting and training new hires only to see them leave within the year.  What are you doing wrong and what are the consequences to your Company if this keeps happening? 

High employee turnover is often the first indication of an unhealthy Company.  Employees rarely stay with a Company that doesn’t treat them well, value their work or appears to be struggling.  They move into self survival mode, spending their time at work looking for new opportunities then leave with a new job to go to before they believe they will be forced to leave.

Its not just struggling Companies that can see high Employee turnover, but also those seeing their Companies scale and grow.  Growth signals success, it creates new opportunities, brings in more customers and generates greater profits.

However, expanding your business isn't without its challenges, and one of these can be increased Employee turnover as the team may;

• Not be able to keep up with the pace
• Be unable to stretch themselves to grow at the same pace as the Company
• Prefer the smaller Company and dislike the informality of a growing Company
• Be used to work on multiple roles and now are unable to settle into one specific role
• Have decreased morale as they are asked to do more
  
  

Whether your Company is growing or holding stable, having an engaged workforce should put employee turnover on hold and allow you to plan or implement business growth.

But why is employee engagement so important and how do you measure it?

Recruiting for a key position within your Company is a difficult and time-consuming task.  Employers currently have the luxury of many immediately available candidates.  Vacancy adverts on LinkedIn see 1,000’s of CVs pouring in, Companies should be spoilt for choice.  However, this is rarely the case.

Gone are the days where there were huge numbers of highly experienced candidates, just many, many candidates.  Job roles are narrowing and evolving, meaning that there are a smaller number of qualified candidates available.  These “unicorn” candidates are very fussy with many options open to them, making them very demanding. 

This adds to the complexity of the recruitment task.  Recruiters need to quickly find the qualified candidates in the 1,000’s of CV, then work quickly to get them interviewed and onboard to join.  Companies are joining beauty pageants, they need to be the most attractive option available to the best qualified Employee to “win” their agreement to join.

A major drawback of this kind of pressure to hire is that Companies can get so carried away with the need to hire a specific candidate, they put all the best practice recruitment steps to one side and can end up hiring badly.

According to Forbes, the U.S. Department of Labour puts the cost of a bad hire at 30% of the annual salary for that position. In the UAE the cost of a bad hire is much higher as we need to factor in the cost of visa and potentially the relocation costs of the candidate.

McKinsey & Co. states that hiring a ‘top performer’ over an ‘average performer’ yields up to 67% more productivity and profit.

There is a lot at stake every time you fill a position at your Company. Here are six other benefits you will enjoy if you hire the right candidate the first time around.

There is no denying that technology has advanced at a pace, making it easier for Companies to update Company websites and Apps on their own, without the need for external professional help. 

Ordering and requesting services on line is normal, the need for human contact is minimising as the world evolves.  This is often referred to as the reason why the high street is slowly dying as customers look to simplify their lifestyles, ordering food and clothes from the comfort of their own homes.

In a study by Google in August of 2012, researchers found that not only will users judge websites as beautiful or not within 1/50th – 1/20th of a second, but also that “visually complex” websites are consistently rated as less beautiful than their simpler counterparts.

This want for simplicity and ease of use this is where Companies can miss a trick.  Their websites and Apps may be designed on aesthetics rather than customer ease of use.

Let me give you an example from this week that proves the point.  Booking seats at the cinema.

How the mind can wander.  Maintaining concentration whilst trying to work is so difficult in this world of social multimedia and open plan offices.  Everything seems to light up and make different chimes to alert us to updates, its no wonder that the Telegraph published in 2015 a report that showed Employees waste 759 hours each year due to workplace distractions – in the 3 years since the report was published, this figure will only have increased.

The worst mistake I ever made was putting “Facebook messenger” on my phone - today it’s been lighting up every 15 seconds whilst a messenger group I am in (for all the right reasons) records a gossipy conversation that should really have taken place over a coffee with just the 2 people concerned.

Its my own fault, here I am, working from home trying very hard to concentrate on complicated spreadsheet, I should have the phone turned over, or put in a different room, but as its virtually an extension of my left hand that’s not possible and plus, if I am honest, I am looking for a distraction to blame to relieve the brain ache. 

Result, its taking me a lot longer to complete the piece of work plus on rechecking I keep finding silly continuity errors.

So just how do you avoid the distractions that surround us?

You took the decision to quit your full time corporate job to become your own boss.  To make this life changing plan, you probably had an entrepreneurial sprit that was restrained in your salaried job - you took the risk and it worked out!

Today you are now a business owner, taking the new company from an employee of one (you) working out of your spare room or a corner reclaimed in your bedroom and now have grown the Company to include employees, an office, clients, a P&L, VAT returns and a whole heap of additional responsibilities. 

Congratulations, you have succeeded where many have failed.  The challenges do not stop here though.  You are now at the helm of a growing business and quickly approaching a crossroads. At some point in the not too distant future, your business will become too big and will require you to rethink how you direct the Company.

Your leadership style will need to change to keep growing the Company, you can no longer manager the team as a Founder, working in the business by getting hands deep into the day to day work.  You now need to step back, take a breath and start leading the Company onto your intended vision.

But how do you do this? 

Recently Amazon founder Jeff Bezos published his annual letter to shareholders.  After commending Amazon employees for their commitment to excellence and Amazon customers for pushing him and his team to continue raising the bar, he delivered a lesson in how to stay ahead of customer expectations. 

It all comes down to maintaining high standards. 

In fact, Jeff seems obsessed with high standards, reading his memo in full, he repeats this phrase so many times I lost count!  But you cannot argue with facts.  As Jeff states:

“The American Customer Satisfaction Index recently announced the results of its annual survey, and for the 8th year in a row customers ranked Amazon #1. The UK have a similar index, The U.K. Customer Satisfaction Index, put out by the Institute of Customer Service, for the 5th time in a row Amazon U.K. ranked #1 in that survey.

Amazon was also just named the #1 business on LinkedIn’s 2018 Top Companies list, which ranks the most sought after places to work for professionals in the US. And just a few weeks ago, Harris Poll released its annual Reputation Quotient, which surveys over 25,000 consumers on a broad range of topics from workplace environment to social responsibility to products and services, and for the 3rd year in a row Amazon ranked #1.”

Results to be proud of, but how does Amazon do this?

When you think of marketing, you more than likely think of marketing to your customers, how can you persuade more people to buy what you sell? But another “market” is just as important are your employees, the very people who can make the brand come alive for your customers through their engagement with their Company.

Why is employee engagement so important? It is the best way to help employees make a powerful emotional connection to the products and services you sell. Without that connection, employees are likely to undermine the expectations set by your advertising.

When the purpose of your company is "to help create a world where you can belong anywhere", your employees ought to feel they belong in your Company. At least that's what the leaders of Airbnb believe. And this belief explains why they place so much importance on the Employee Experience (EX).

EX is the critical strategy that Airbnb relies on to build its brand and pursue its purpose. In 2016, the company adopted the slogan "Belong Anywhere" to express its brand identity and launched the "#belonganywhere" brand campaign. Airbnb’s leaders believed these efforts needed to represent more than an external idea, the concept of belonging needed to apply inside the company as well.

Promises matter to customers. If your brand doesn’t deliver what you promise, in time you won’t matter. More importantly, in our social media crazed world, disgruntled customers have open media to spread the word over resulting in instant ramifications to the credibility and trajectory of your brand’s perceived value.

Have you ever been promised a level of service from a Company only to be hugely disappointed when they don’t follow through?  The Company may even have incorporated the brand promise into their corporate advertising which may have been the reason why you choose them over the competition. How did you feel when that promise was broken? Upset, disappointed, angry?

For the Company involved, is a broken brand promise that big a deal? You got the business, does it matter if you didn’t quite come up to expectations?  What’s the worst that can happen if you delivered a bit later than you said you would or your customer didn’t quite get the results they expected?

Why is a brand promise so important?

In an age of social media, our new ease with over oversharing and giving personal information to complete strangers without thinking about it, never has personal data management been more in the spot light.  

We think nothing of shouting to the world what used to be deeply personal information.  How many of us have posted how excited we are to be at the airport heading on holiday for 2 weeks, giving no thought to the fact that we may have previously posted photos of our homes or may even have put into Facebook set up screens our home address, homes that are now empty and open to social media searching burglars to empty at their leisure – they know where you live, where you are now and when you are back, by the time you are posting that you are back at the airport heading home your house is an empty shell.

 When was the last time you checked your social media security settings and just how safe is the data we give to sites and Apps?  How much data can Companies gather from our innocently accessing Wi-Fi in coffee shops? Will the introduction of GDPR close down data mining loopholes?

When I was 10, I thought 25 was old.  When I was 25, I thought 50 ancient.  Now I am in my 50’s, I believe you are as old as you feel, however, last weekend I felt every year of my age.  Why? A friend shared with us her 14-year-old daughters YouTube channel where she was eloquently and thoughtfully discussing her thoughts and perspectives on gender equality.

Here was this delightful 14-year-old girl confidently speaking on a highly topical subject which she self recorded, edited, then uploaded to her own channel!  When I was 14 I was devoid of this level of confidence, I found it difficult to string a sensible sentence together in a public situation let alone do all this (not that any of it was even invented then!).

Generation Z are making me feel very old as they adapt to new technology naturally, technology that takes me many hours of reading and watching YouTube tutorials to work out how to use.   

This will have an impact on how we, as potential employers, should behave towards them.  Read further to understand why and how.

Where did quarter one go? 
It feels like only last week we all headed into the new year with a bright and sparkly 2018 business plan, looking to hit the ground running, but here we are, two weeks into quarter two, in the midst of business plan reviews, planning for the second quarter and then of course, for most of us, it’s now time to forcibly look at the achieved financials of the year to date in order to complete our VAT return.

For many of us this will be the first time we have completed this exercise, its new for us and also for the UAE Government, we are all taking our first steps into the unknown. 

As I start the process of committing numbers onto the FTA online VAT return form and discuss the process with friends and colleagues from other Companies, I am finding the process educational from a business point of view, and I wanted to share this learning with you as you may find them useful;

In our blog “Why we need an exit strategy” we wrote about the problems facing the current working population and the issue we face with our pension schemes not predicted to comfortably pay for our planned retirement.

One solution we all have is to stay working longer.  A great idea, however, as recently reported in the national media, traditional jobs of the past are being replaced by automation making it much tougher to find a job to see us financially through to our new extended retirement age.

I remember many years ago this issue being brought to the forefront of my mind whilst I was still at school, with the replacement of humans on car assembly lines. Ford Dagenham opened its doors in 1931, and at its peak in 1953, employed around 40,000 workers, most of whom lived in Dagenham itself.  Slowly, to speed up the accuracy of car manufacturing and to hit high consumer demand, they started introducing robotics to the assembly line, reducing the need for human contact with the car being manufactured.  

The employee attrition at the White House under President trump is the highest ever seen.  Forbes recently reported that during the President’s first year the administration saw a 34% turnover rate – that’s more than one in three Trump administration staffers, and it's not just any sorts of departures, a large number of these were Trump's senior-most staff, some of these senior roles have seen the incumbent replaced multiple times.

For anyone following the issues facing high street brands, it feels like weekly shock and awe as big names start announcing profit warnings and store closures – Carpet Right, B&Q, Moss Bros, New Look, Toys R Us – the list keeps growing. 

Recently I read the completely shocking news of the brand loved by little girls of all ages, Claire's Accessories has filed for bankruptcy protection in the US as part of a move to reduce its debt by USD1.9billion.  Although Claire's Stores said its shops will remain open as it presses ahead with a financial restructure it remains in danger of closing.

Claire’s is the “go to store” for anything to do with, well, accessories – their products suit all age groups, their price point low, they have diversified their product range to include games, phone covers, ear piercings, make up – the product margin is low, the store footage small, store staffing minimal and yet it finds itself is financial trouble.

Claire’s is not an unknown small brand, they have been trading for many years (Claire’s was founded in 1961) and trades worldwide, so what is happening?  What is effectively taking down huge dinosaur brands resulting in emptying high streets and large losses of jobs? And what can every Company learn from these failings?