How To Maximize The Power Of HR (with Marcus Buckingham)

 

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Tim ReitsmaThanks for tuning in to the People Managing People podcast, where our purpose is to build a better world of work.

My guest today, Marcus Buckingham is a global researcher and New York Times bestselling author focused on unlocking strengths, increasing performance, and pioneering the future of how people work. He is the author of two best-selling business books of all time and has two of Harvard Business Review’s most circulated, industry-changing cover articles, and his strength assessment has been taken by over 10 million people worldwide. He now leads People + Performance Research at ADP Research Institute, spearheading groundbreaking studies on subjects like Resilience and Engagement.

Today, we’re going to be talking about one of these studies. It’s a new study about how to maximize the power of HR through the lens of the employee experience.

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Hey Marcus, welcome to the People Managing People podcast. It’s such a pleasure to have you on. How are you today?

Marcus BuckinghamI’m great, thank you. I’m a… yeah fabulous! How are you?

Tim ReitsmaI’m doing, I’m doing great. I’m really excited to have you on the podcast and I’ve been following you for quite some time, and it’s just an honor to have you here. And today we’re going to be talking about your new study. A new study about the HR experience score.

And so I’m really curious about what the study is about and for our listeners, it’s a new study. It’s called the “HR Experience Score: How to Measure the Performance and Impact of HR Through the Lens of the Employee Experience”.

So let’s start off. I’m curious, what led to you to focus on this study? What really inspired you?

Marcus BuckinghamWell, so my background obviously is I’m a psychometrician, so I’m always focused all the way through my Gallup years and now running the ADP Research Institute. I’m a researcher really focused on how you measure things in the world of work that are really important, but then you can’t count.

So, how do you measure engagement? How do you measure strengths? How do you measure resilience? How do you measure people’s feeling inclusion, those kinds of things. I’m obviously we could all just come up with little surveys, but how do you actually design instruments with questions in them that actually predict human behavior? That’s the whole new ball of wax.

So in this context, the CHRO of ADP came to me and said, ‘Look, I’d like to know whether or not what we’re doing in HR.’ And they have 60,000 employees. So, the question was always serving them. What is the right way to see if what we’re doing is working? And when you then go look for measurements, for reliable thermometers, if you like, for the employee experience of HR, you find that we don’t have any.

There’s other ways to measure HR in terms of lost work days or accidents on the job or time to fill a position, but in terms of the sentiment that HR is creating distinct from your manager or distinct from your team or distinct from any other thing that might be part of your work experience. Do we have a way to sort of single out your experience of all kinds of different HR functions from getting promoted to changing your status, the married to divorced, or moving your address all the way to dealing with an employee relations issue, or a family leave issue, and everything in between. That’s clearly in the purview of HR. What are the right ways to measure people’s experiences of that?

And if we can find a way to do that, can we then see what those experiences just of HR? What do they drive? Do they drive performance? Do they drive your likelihood to stay at a company? Do they drive people’s advocacy of the company? What do they drive? And then obviously the other way, like what drives it? So what drives those experiences?

What are the things that leavers, the most powerful leavers that HR has in order to drive a quality experience? So that was really the impetus of this was going, ‘Gosh, let’s build a thermometer.’ And my grandfather was in HR, my dad was in HR, so it’s like a hundred years of Buckingham’s like in HR. And yet we actually don’t yet still have a reliable thermometer to measure people’s experiences of HR.

So that was kind of the impetus to go, let’s help HR have some really reliable metrics that they can bring to the ExCom table, if you like, to talk about what’s HR doing for our people.

Tim ReitsmaYeah. Well, it’s interesting because I’ve kind of stumbled into a career of HR. It wasn’t by design, it was by divine intervention.

I’m not sure how I ended up in HR. And one of the things that’s always come up is how do we measure the impact, measure the impact of somebody in HR? I’ve been the recipient of HR services, I’ve been sitting as a director of people and culture, and that’s been, you know, always around the exact table is, you know, is measuring the impact of HR by turnover or retention, which, you know, HR has a bit of an indirect influence into.

And so, yeah, I really like how the study has really brought kind of broken down into the five experiences of HR satisfaction. I think that’s what really reminded me of a bit of Maslow’s hierarchy of needs. And it’s like, this is what I need, what makes me feel safe, understand and value me. You want me to grow and I trust you.

And so is there one when you’re conducting the research that really stood out to you as an area of focus?

Marcus BuckinghamSo, yes, what we found is if you start with just under 70 different questions. So we started off with 70 different questions, interviewed about 33,000 people. Just a little under 33,000 people around the world.

So 25 different countries, four or five different samples, which is, you know, if, if you see some sort of statistical correlations in one sample, it might just be spurious statistics. It might be due to chance. So you keep exposing your tool to more and more and more samples to see whether or not the patterns that you’re seeing are really robust.

And when you do that, you keep kind of throwing out all the questions that don’t really work. And by work, you mean they don’t have any explanatory power, they don’t seem to be capturing something unique and distinct. They seem to be redundant. So you sort of keep calling, calling, calling, calling, calling.

And as you say, we ended up with 15 questions measuring five distinct experiences. Three questions per experience. I would suggest that these are the only questions you should ever ask to measure HR, but sure is blazes off to 33,000 people and calling, calling, calling, calling. These 15 do a very good job of measuring five distinct experiences.

It is by the way, whereas Maslow’s hierarchy was a theoretical one. It wasn’t based on data. This is a statistical hierarchy, so you sort of have to hit the first ones before you hit the second ones, before you hit the third one. So it does accrue like just statistically accrue, which is interesting. And as you said, the, the foundational one is, give me what I need.

Are you in HR giving me the stuff that I need? The second one, as you say, is make me feel safe so that if I’ve got a problem, if I’ve got an issue, if I’ve got something that’s confidential, I feel deeply safe, psychologically safe in sharing stuff with HR that I’m not going to get harmed.

And I think those two we’re kind of inevitable. It’s like, ‘Okay, got it. Got it.’ That third one was interesting to me. All of the five, the third one was the most intriguing. It was, ‘Does HR know me? Does HR understand me? Me? Just me as a unique human. We want to go to work and be seen for us.’ And what’s the role of HR in doing that?

I wasn’t necessarily sure that HR would have a role in doing that, because so often you’re being seen by your manager or seen by your colleagues. So I sort of had in the back of my head that was much more of a team thing, but sure as blazes three questions kind of emerge that measured just ‘Do you understand me and value me as a human?’

So that was I think the most surprising, the role of HR and helping a person feel seen, which is huge.

Tim ReitsmaIt is. Yeah. It’s, it moves far beyond what maybe the traditional definition of HR is, or the classic definition of just give me what I need and make me feel safe. It’s how do you understand and see me and value me.

And so that is, I think you’re, you hit the nail on the head, like that is very compelling. And I think, people culture teams around the globe are really trying to figure that out and how they play a role in helping people be seen.

Marcus BuckinghamYes. And I think the important part about this in terms of, as you’ve described your experience, you know, you always try to think, well, what, what kind of value is HR bringing?

Are we bringing value? What is the extent of that value? What’s most interesting I think in the whole thing Tim was when you take those 15 questions and from the people’s answers to those 15 we can, we can see whether you think HR has value promoting. Whether you think HR is just performing, or whether you actually think that HR is value detracting.

The two really big discoveries from having all of those scores on those 15 questions is that if you are a value, if you see HR as value promoting, just, just using your responses to those 15 questions. You are far more likely to advocate the company to friends and family as a place to work. Far more likely. So the experience of HR is a huge driver of your company’s talent brand.

Now we in HR might’ve on some level believed that, but we can never scope it. We can never prove it. We can never put numbers to it to say, Wait a minute, if you think, because of your experience of HR, that HR has value promoting, how much more likely are you to go out into the neighborhood and kind of advocate your company to friends and family? Well, we now know that that, that you’re many, many, many times more likely to be out there talking about the company.

Now, of course right now, every CEO is interested, super interested in what is building our talent brand. So for us to be able to pull apart, and by the way, because we also had eight questions that we use to measure engagement and we’ve had over a million people take those eight questions. So we know a lot about those eight questions measuring engagement, and we know those eight questions vary by what team you’re on.

So we kind of know, what your experience of your manager and your team is through those eight questions. We know what your experience of HR is through the 15. So we can then do a statistical analysis to see how much of the variance of your experience of HR is caused by your manager. And how much of your experience of your manager is caused by HR.

So we can sort of see what the overlap is and the overlap is 51%. So 51% of the variance of your HR experience is explained by how you feel about your team and your team leader, which is kind of intuitive and interesting. But it leaves 49% of your experience of the HR function, discrete and distinct and separate from. I mean, you might say you’ve got a terrible manager, but you might actually be able to say you’ve got really good experience of their HR function and vice versa.

You might say, I’ve got a really great manager. But have sort of a terrible taste in your mouth from the HR function. If you have a terrible taste in your mouth from the HR function, independent of your manager, you are much less likely to go out and advocate the company as a place to work. Okay. That’s huge for HR because what it means is every CHRO can walk down to that ExCom table and sit down and go listen.

I know you wouldn’t say it quite as bluntly as this, but my function drives the most important criteria we have in terms of our current and future performance. Our talent brand, our ability to attract the best talent in super tight labor markets. HR distinct from Real Estate or Finance or IT, or marketing, distinct from any other function.

The HR function has the power to get people to think really differently and talk really differently about the company. That’s a huge elevator. Elevator, not lift elevator. But it’s a huge lift, I guess, for the HR function to go, Wow, if we do this right, if we did this whole HR thing right, from the employee sentiment standpoint, if we do it right we can be a huge value creator for our overall company’s talent brand.

Tim ReitsmaYeah. It’s such an amazing opportunity organizations after they read this study and actually take it to heart and think, Okay, well let’s actually measure the engagement of our HR team and measure that employee engagement. There’s lots of opportunity in front of companies.

Where does, where does somebody start? Where does a company start? You know, I worked in an organization. We were acquired by a large company, went from 300 people to over 5,000 people and HR was decentralized. If you needed to get your name changed, you had to send an email to who knows who. If you had a personal problem, you send an email to who knows who. It was just such a decentralized function.

And so knowing that people are more than two times, two times likely to stay if there’s even a single point of contact, where do, where should a company start? Aside from let’s implement this metric and then go from there.

Marcus BuckinghamTo begin with for HR, it’s, and this is where we made it. We sort of made it to give it away to help the overall function and go, Hey, if you want to see your function through the lens of the people you’re serving, here’s a really good way to do that so that you can begin to see whether what you’re doing is working. By working we mean whether or not it’s creating people who think that HR is value promoting.

Once you’ve done that, once you’re doing that, and I think to my mind, if I was a CHRO of companies I would, I would be doing it quarterly. I would want to see whether what we’re doing is making a difference. Then you have to start going well, what, what can we do to, to make a better set of experiences? And to your point, well one of the first places to start is to look at those five different experiences.

Do I feel that you give me what I need? Do I feel safe? Do I feel like you know me, and understand me, and value me? Do you feel like you are getting growth opportunities and encouragement for growth from HR? And then overall, do I deeply, deeply trust you? Anything that HR is doing should be targeted to one or all of those experiences.

We should be incredibly focused in going, This thing over here, we’re going to try to make people feel safe. Well, this thing over here is entirely focused on helping you feel like you can grow and develop here, or there, so everything we do should have a lens on it that says, how will this affect positively one or more of those five experiences?

The second thing that was a huge, well it goes completely against the grain of the way that the HR function is going. The macro trend of HR is that deep down HR thinks that it is a source of friction and a source of cost. And so an awful lot of what happens in the world of HR is let’s remove the friction and let’s try to reduce the cost. Often, true as you said, silos where we create, a very siloed function of, if you want to ask a question about insurance you go off to over here to this call center and you know, you got a million people sitting answering the phones and you don’t know who they are.

They don’t know you. Boom. If you have a question about a family leave issue or that’s a different number, you go over here and we’ve done that because we want to reduce costs. And then of course tech, we put a lot of tech in to try to disintermediate HR. I mean, in fact there were commercials all the way through this year with various companies making light of how stupid HR, HR is in the way.

Now your employees can use our tech and just do it for themselves, why? Well, because HR is a cost center and a friction center. What this research shows is something really different that not that we shouldn’t try to reduce friction, we should. But what this research shows is that HR has each point of contact with HR is a source of value, a potential source of value.

And if you see it through that lens, the first thing you would do is you would say, we need to have, somehow we need to have a single point of contact. We asked the question, Do you have a single point of contact with HR? Do you have multiple points of contact with HR? Do you have no point to contact with HR?

It’s all tackled. We asked all sorts of questions and it’s not inevitable that the most powerful predictor of your company’s talent brand is that you would have a single point of contact with HR. That was not inevitable at all. And yet in study, after study of society that we did, sample up to sample, that relationship held true.

Each employee feels that they are a whole human. A full whole human. They’re not separated out into insurance bits and, you know, personal status bits, and compensation bits, and learning bits. We’re a whole human. So what we want is someone in HR that we go to who knows us. Now immediately after I was talking to that person, that they send us off to different centers of excellence as we call them, right? Fine.

But I want someone who’s a quarterback. It’s like in healthcare. I want, I guess in hospitals these days there’s a, there’s a, there’s a doctor that you’re given called the hospitalist, which is a recent invention, which is kind of like a quarterback. This guy here’s the surgeon. This guy here is the, the person focused on infectious diseases.

This person or here is your physiotherapist, and they’ve all got their specialties and that’s fine. But I want as a patient, I want some doctor who knows my whole body because it is actually, I’m not the gallbladder in room 206. I’m Marcus. Same is true of HR. I come to work. I’m a full human. I want HR to recognize I’m a full human.

That means when I’ve got a problem, could be any problem, and remember everything that HR deals with, even the good stuff is fraught. Everything that we have to deal within HR we’re worried. We think we’re going to get it wrong. We’re going to get our withholdings wrong. We’re going to get our status put it in wrong.

We’re going to do the 401k thing wrong. We, I don’t know would just get it that we’re worried. Everything is worrying, emotionally taxing. And I don’t think, by the way, HR has already dealt with that. But the simplest way to start is to go, Look, we need to recognize that it’s emotionally taxed. And then when you feel anxious like that on anything, you want somebody to hold you.

I don’t mean physically hold you. I mean, you want somebody to call who knows your name, who knows what your family situation is, who knows what your work situation is, because then you’ve got shared anxiety. You’ve shared your anxiety with a human resources person who knows you, who can then intelligently guide you to whatever your next step is.

We shouldn’t try to disintermediate that. Now, should we go back to 30 years where everyone’s got HR generalist? No, I’m not saying that. I’m saying a single point of contact person who knows you is a super interesting way for you to add the value to your employees, at least according to the employees.

So if you’re an HR professional and you don’t have, if, if you look at your processes and every one of your processes takes a person off down a different path, and there’s no unifying integrating person for you to call, that hurts your ability to build your company’s talent brand. I mean, we should say it as clearly as that, if you look at your functions and your processes, and every one of them is siloed, it hurts your ability to find and keep good people.

Your CEO, and indeed your CFO would look at that and go, wait, wait, wait, wait. What? What we’re doing is preventing us from being able to efficiently find and attract really good talent? Yes. Okay. Then we need to change what we’re doing so that we’re deliberately trying to create in our people a feeling like we gotcha. We’ve got you. Not in a bad way, like we’re holding you. We know you.

Tim ReitsmaYeah, it’s that sense of bringing the whole self to work and having that point of contact of, if I’m having a bad day, I’m not getting along with my manager, who do I talk to? I’m not going to call a general number and talk to who knows who, and then the next day if it’s still got ongoing and then who knows who I’m going to get.

I love that idea of that single point of contact that, that business partner, so to speak or that function that just is there to connect. Doesn’t have to be that generalist to know absolutely everything about, about every aspect of HR, the technical, the non-technical. It’s just, but that, I like what you said, that quarterback and I like that how it’s really tied back to that employee engagement.

And there is a significant cost to disengagement and there’s a significant cost to people leaving their jobs and then having to hire to fill that position. So if you’re a CEO, you gotta be listening to this.

Marcus BuckinghamYeah. No, I mean, it’s, there is a way for HR differently from any other function to dramatically increase the value of the company.

We don’t really think about HR in those terms, but there is a way for HR. If they’re, if we’re intelligent, psychologically intelligent. This quarterback is one example. If we got, if we figure out a cost-effective way to make sure every employee feels like there is someone who I can call first, who knows me. And it’s really as simple as that, can you have someone?

The first call I make is someone in HR who knows me. As to your point, Tim. They don’t need to be expert in every single other area. The next call could be, Hey, I’m going to send you to the people who are experts in family leave, or whatever your issue is. But I feel lonely at work. I feel unseen at work. I feel disconnected at work and HR can be a place that so pulls all that together for me.

And when you do that, you actually do have a company where people are charging around going, You know what? Yeah, yeah, absolutely. You should come work here. Absolutely. Should come up. Can you imagine how valuable that is? And that’s not just engagement, Tim. That’s, that’s advocacy of the company’s talent brand leveraged entirely through my experience of HR.

Okay. Particularly in the next five years where talent markets are going to be so incredibly tight. I mean, here in the US you know, 10 million job openings, 8 million unemployed. Okay. That is just bizarre, just bizarre. And so for every single HR executive to know that they can walk into their CEO and go, I think I can help you with this huge problem we have.

And the experience of HR is one big lever for helping you solve the talent brand problem. Okay, that’s, I think it’s a whole new day for us in the world of HR.

Tim ReitsmaI agree. I think we’re just hitting on one aspect of the study and we could probably go on for a couple hours and just talk about just the benefits of focusing on that employee experience through the lens of HR. And, you know, often I’ve heard an organization says, Oh, well, we have one HR person for, for a hundred or 150 people. It’s that age old metric of, I think we have enough HR people and we’re a 300 person organization and we’ve got two people.

And so there is a significant investment organizations have an opportunity to take the study, implement, the metrics and look at that correlation between that employee experience, a talent brand.

And, and if you’re heading up an HR team, a CRHO or VP of people and culture, like this is, this is ammo that you can bring to that exact table and say, Look, we can really improve that employee experience, create advocates to bring people on, because like you said, the talent mark it is tough.

Here up in Vancouver, British Columbia, anybody that I know in HR is, it was really taxed right now. Struggling to find talent and, it’s not going to be solved overnight, so…

Marcus BuckinghamNo, but I think to your point it’s this research is ammo. In a sense, it’s ammunition to go in and say, Look, we’re not going to solve the talent bound problem overnight, but we ought to be taking deliberate action to ensure that everybody that comes to work becomes an ambassador for our company.

Because it’s one leg up. Now, maybe we’ll pay people a little bit more, or maybe we will revamp our recruiting process or there’s other things to do. But if we’ve got a whole bunch of people out in our community, not advocating our company to friends and family, then it doesn’t really matter how good our fishing poles are.

If we are actively sort of chasing away all the fish, then it’s a really under maximized opportunity for us to put it bluntly. So my hope for this, what was to be able to say, now that we’ve seen the data, which again, I didn’t know what the data would show, frankly. But now that we can see the data and we can tease out, really tease out what is the distinct and discrete role of HR.

And we can see it like, Oh my word. And by the way, we can see that the more frequently you interact with HR, the more likely you are to advocate the company to friends and family, which flies completely in the face of some of the megatrends in HR.

Let’s remove HR from the equation. Employees is, they’re not saying that. Employees actually want frequency of interaction. We thought maybe one of the interactions will be more powerful than others. And we were trying to figure out which particular HR functional role is more powerful than creating advocacy.

It actually turns out that, just as many as possible, everyone. In fact, the more, the better. If you have seven interactions with a judge, better than if you have five, which is better than if you have three. Which is super interesting cause it, it means that HR, every single interaction point is a little opportunity to increase my willingness to advocate the company to friends and family.

Every point of interaction isn’t necessarily a source of friction, isn’t necessarily a source of cost. Although there are probably some costs involved. If we look at it right, every single interaction is a, is a source of potential value. Now, if we think about it that way, a whole tech strategy would be different.

We’d get tech, HR tech, to do things that only tech can do. And we would get people to do those things that only people can do. And we would be super intelligent in not trying to remove the people from the equation. Because if we get the people right, the HR people right, they will create little moments of sources of value for all of our, for all of our people.

Tech can help in terms of removing some of the friction. Tech can help in terms of accuracy and speed of response. And maybe sometimes with some artificial intelligence stuffs, tech can help with, you know, bots giving you the right answer to the right quiz. I mean, all of that’s fine, but let’s please not imagine that’s going to be the creator of your value brand.

I mean, if you’re, you know, your talent brand, rather. It, it’s not. Humans need to feel seen, heard and understood by the humans. Sorry, but that’s why it’s called human resources.

Tim ReitsmaYeah.

Marcus BuckinghamIt’s like, we’ve got to deal with humans and it should cause an awful lot of HR people to have much more power, frankly, much more assertiveness in terms of what we should go do.

And in the end, which is good, much more accountability. It is what we’re doing. That’s the point of this at the moment are right, is what we’re doing actually raising people’s sense of our talent brand as a company. Is HR having a positive impact on that? That’s kind of what this, the moment is supposed to do to arm the HR function with a way to go.

Yes, what we’re doing is working and here’s how we can prove it.

Tim ReitsmaYes. No, it’s great. And I think it’s such a timely study, to be honest, as somebody who’s been in, in the world of, of people and culture and, and being stuck in that. How do we measure the effectiveness and seeing, you know, there’s lots of talk of the great resignation, which is maybe we should reframe that as a great opportunity to retain talent. And, and so it’s a timely study Marcus.

And so as we wrap up, I just want to encourage anybody. If you’re a leader in an organization, it doesn’t have to be an HR leader. You’re the CEO, the founder, CFO, take a look at this study. We’re going to put a link in our show notes as well as we’ll have it up on the People Managing People website.

And I just want to say thank you, Marcus, for taking time out of your day to talk about this study and the importance of it. And…

Marcus BuckinghamMy pleasure.

Tim ReitsmaAnd yeah, I’m really excited to see how this will influence the change and transition of HR just to be a cost center to be something that is value-adding.

So, thanks for coming on.

Marcus BuckinghamIt’s my pleasure, Tim. Thanks for having me.

Tim Reitsma
I don’t know about you, but I am really excited that ADP Research has embarked on this study. The “HR Experience Score: How to Measure the Performance and Impact of HR Through the Lens of the Employee Experience”. It’s such a relevant study and in a timely study and I would encourage you to head to ADP Research website and download the report.

We’ll also include it in our show notes and as always, we’d love to hear your feedback. So please head to our website, peoplemanagingpeople.com and let us know what you think.

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So with that, I hope you have a great day!