Recently, we had the pleasure of chatting with veteran HR and recruiting executive Derrick Harris, Regional Human Resources Business Partner at Marsh & McLennan, the global insurance powerhouse. With around 45,000 colleagues worldwide operating in 130 countries, Marsh has been the leader in risk management for companies and individuals since its founding in Chicago in 1871. Derrick, a Columbia University grad and Emory MBA, joined Marsh after an impressive career that included stints at JPMorgan and Deloitte, as well as the founding of his own global staffing company.
What follows is an abridged version of our very lively conversation about the big headwinds facing us today in recruiting and HR.
Tell us about your journey into HR and Recruiting.
Since I got my MBA at Emory, I thought HR was an interesting function within businesses because it is sort of between the profit motive and employee welfare. I thought that in that function, I could do something to improve the general welfare of workers. In my early experience, I did not feel that working life for most people was all that enjoyable, or at least as good as it could have been, so I got into HR.
I worked in a lot of different corporate roles at Unisys and JPMorgan. Then I got into the consulting world, which allowed me to work with a lot of different companies. I worked for Hewitt Associates and Deloitte and some other firms basically trying to improve the delivery of HR and raising the profile of the human resource function. Eventually I got to the point where I said, hey, I want to try to do something on my own.
So I started a small consultancy here in Atlanta where I was trying to bring some of that big firm, HR consulting down to smaller organizations that couldn't necessarily hire a Hewitt or Deloitte or anybody else for that matter. That's where I really learned a lot about the recruiting function. We actually made the INC 5000 three times in a row, but we fell victim to the cardinal rule: don't concentrate all your business with just a small number of clients, because you never know when the rules might change.
Long story short, that brings me up to today, where I joined Marsh as a regional HR business partner, which is a fancy way of saying I deal with employee issues or problems and performance issues. I try to help our employees get back on track, and if they can't get back on track, I help them move on from the organization in a fair and equitable way. Over the past year, I’ve also been handling the recruiting function as well.
Interesting year to get back into recruiting, especially recently with headlines of economic turmoil and layoffs. How do you expect these headwinds to affect hiring and recruiting?
Well, over my whole career, I've seen the normal boom and bust cycle, and I think that, just like in the past, you'll see a lot of companies, as soon as they even see a hint of downturn, slash heads and get people off the board, especially public companies concerned about share price. Then when the times get good again, they're going to try to bring them back. I think this is self-destructive because as soon as things improve, you're going to wish you held onto those great people.
I've seen that my entire career. I don't see that changing. It's just how it is. But there are some companies that will be a little bit more enlightened and say, hey, whatever excess profits we have during the boom times, let's use that as insurance to maintain our core staff so that we don't have to go through the whole process of finding this talent all over again.
Do companies use these headlines and layoffs as cover to make changes they’ve wanted to make anyway, such as removing underperformers?
They definitely use that although more recently, people are just leaving on their own. Before COVID, if someone was underperforming, I was walking them through the progressive counseling process because they didn’t want to leave. Now they're leaving on their own faster than we can do that because they're getting calls from recruiters like me all day, every day, from areas that they normally wouldn’t have been considered for, because these are remote opportunities.
So COVID has changed that as well.
Yeah, this has been a really interesting time because I think the whole dynamic of employment opportunities has changed. What I've seen, first of all, is that COVID opened up the floodgates to show people that they could work from home effectively. And companies also realize they can make as much money or more allowing employees to work from home.
So now you've got two camps, basically. You’ve got one camp over here of companies that think, hey, this is not bad. We did pretty well during COVID. Like my company, we actually had better financial results during COVID than before. And then there's the other camp, this old school that is trying to force people back into their box, working five days a week in the office with all the restrictions that go with that.
I frankly believe that the first camp is going to win, ultimately, because for the past year, the first question out of almost every candidate's mouth is: is this 100% remote? Insurance is a staid industry, you can’t get more staid than that, but people got a taste of this, and it worked for them. And the reason why I think the first camp is going to win is it's hard to fill a job when you're restricted to a geographic area within commuting distance of an office. Think about how much more limiting that is in terms of the talent pool.
We’ve seen a lot of that. I think the second camp would argue that coming into the office helps to preserve culture, which leads to a bigger question, what are people really looking for? What does work mean to them?
What are people really looking for? Well, I hate to say it, but I think there is a generational divide. Folks who have been working for a long time, they like the idea of coming into the office. They like seeing their friends, going to lunch and chit chatting while working. That doesn’t happen as often working from home. It’s hard to say, hey, let’s get on Zoom and chit chat about our weekends, that’s not going to go as well.
I think the younger generations think of work for what it is. It's a paycheck. If this job can give me the opportunity for an even bigger paycheck, that's my goal too.
They don't see work as their home or where they gain their identity from. It's just not as much of a social, emotional connection thing for the younger generations. You pay me well, treat me well, give me opportunities for growth, that’s all I really need from you. I don’t need to be there and have the team lunches - hey it’s my birthday, let’s have a cake. They don’t really want that, they don’t really care about that.
How does an employer in this second camp compete for the talent that is less focused on the in-office culture?
Well, organizations can compete on their brand, the big names, the Googles, the Amazons. The companies that offer that sort of name brand recognition, they're going to do well. But even they are starting to push back to the old school mentality of, hey, got to get everybody in the office, and they're getting killed by that. You could retire all this excess real estate and the cost to go with it and give your employees more money and more perks by going remote instead of this ambiguous kind of, in the office culture.
Companies are concerned about losing the ability to collaborate, but the technology available now allows people to collaborate. People can form relationships using electronics if they’re comfortable with the technology. It's a generational thing. I think that's the key. I can't break it down by generational group, but with the older workers coming out of the workforce, if you're still catering to them and their cultural needs, where is the growth coming from?
And we’ve seen firms have a hard time filling these jobs, or having to settle for people who are probably not the best workers simply because the job has been open for three months, and they’ve got to fill it because the ones that are still there are getting burned out from doing two jobs. Whereas if they opened it up to fully remote, they could tap into this gigantic talent pool and people would come flocking.
I think a lot of companies thought this was a temporary thing, just because of the pandemic, but once you open Pandora's box, you can’t close Pandora's box.
So if they want to compete for the younger talent and maintain the in-the-office culture, they have to really up their game. One, they're going to have to do one thing that we've all done, and that is raise their pay rates. I've seen them creep up pretty drastically over the last year because of the people leaving and what people are demanding. They have to make sure they're competitive. I used to be a compensation consultant. Look at those surveys, make those adjustments. Figure out where you want to be. What percentage of the market do you want to be at? Do you want to be at the medium 50%, or you want to be in the 70th or 80th or 90th percentile?
That's your first lever, money. Like I said, this generation is more focused on money because look at how expensive everything is. Thing is, they have to be focused on self-preservation so they can't say, oh, I'm here just for the team - now my mortgage or rent went up 50%. I need more money. So I think companies really have to focus on that first and foremost. If they don't have that right, the rest of it is just window dressing. All this gung-ho, ra-ra team stuff is just going to fall on deaf ears.
Same thing with time off. Be more generous with that too. That's something that's completely in your control. You don't have to wait for the market to force you. So if you're going to be more restrictive and force people back in the office five days, you have to up all your perks like crazy, because you're at a disadvantage. You've got to look at all the other elements of the employment equation - pay, perks, opportunity for advancement. You have to be on your game big time just to compete with the average company that's offering 100% work from home.
And not everybody is going to want to be fully remote. Some people want to be in the office, and you can make that available, sort of a hybrid, three days in the office. I use it. I’m working from home today. Friday’s, I work from home as well, and the three other days, I’m in the office. It’s a middle ground for those who like to work from home, although I’ve said it’s like being half-pregnant.
The challenge is to find the right formula.
Yes, there's a lot of opportunity for companies that can figure out the right formula for themselves and for the conditions. They will thrive. I've been right in the middle of it unexpectedly, and I've seen how this is playing out, and I think it's an exciting time. It's an opportunity for companies to really hit the mark, if they can truly tap into this broader talent market, get the right people, lower their overall cost in terms of employment, give more of that to their employees, and thereby attract even better people. I think a company that is maybe just middle of the road can really excel if they can figure out how to take advantage of these new norms and actually elevate themselves to a higher position in the market.
I'm not sure what the formula is, but I do believe it's the ones that, if they can make it more flexible for their workers and take advantage of the talent wherever they may lie, I think those are going to be the ones.
For example, you're in Chicago. Your company is in San Francisco. Would you be working for them if they force you to be in office? And they would miss out on this great Harvard/Columbia guy, so you’re a case in point right there, proof of concept.
So I think these folks are going to win, or certainly do well. They may not win because certain names will always attract talent. But if you look at the reality of it, a great brand only means something because that name can get you a better job somewhere. But if these people are already offering you that great job with flexibility, then you’re already there.
Thank you Derrick for an enjoyable and enlightening conversation, your passion for HR really shined through!
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