The next participant in The Field Guide‘s interview series – “Nine Questions” – with HR thought leaders is Rory C. Trotter, Jr. – one of my personal favorite HR bloggers (and all around connected HR pro) who is currently providing his services to Archer Daniels Midland. Below, Rory gives us his thoughts on everything from why HR is awesome, breaking down the future of HR with facts and data, talent management paradigms, using compensation where-with-all to look at ideas and notions big and small, leadership (following and becoming), and much more…
Tell me why what you do is rewarding, challenging, and I suspect in your opinion (and mine) quite awesome?
This is a fantastic question, but it’s one that’s difficult for me to answer because my day to day has changed so often over the past 18 months. I’m in an HR Leadership Development Program at Archer Daniels Midland. It’s been a fantastic opportunity that has seen me spend time as a Labor and Employee Relations Representative, Talent Acquisition Specialist, Compensation Analyst, and (presently) an HR Representative directly supporting a client group of 250+ employees. I’ve been a key player in multiple labor contract negotiations, managed the wage review process for an entire country, done analyses of executive compensation packages reviewed at both the CEO and board levels, and have had the opportunity to recruit for a variety of positions ranging from unskilled laborers to upper management. What I’ve loved most about my work has been its complexity and scope. The functional space I work within has changed every 6-8 months, and this has created a constant need for me to continuously educate myself, be flexible, and most importantly work hard. Everything I do is HR. When I’m not working on HR I’m reading or writing about the space (I also intend to get to some conferences when I finally find the time). The last two years or so have been the most professionally rewarding of my life.
Do you believe in the notion of professional regret? Why or why not? If so, what’s been your biggest professional regret?
I would say that I believe in the notion of professional regret (to lament over what could have been is to a certain extent to be human), but I have an even greater belief in moving forward. The thing about regret is that it by definition focuses on missed opportunities… but once a moment is in the past it’s in the past. You have to move on. With that said, one piece of advice that I would give to any young person is to get serious about your career early. I didn’t really start to focus on what I wanted to do with my life until my early 20s. By then you’re at a huge disadvantage compared against those who were engaged from the start. You have to work extremely hard to catch up to your peers in these cases. Time is finite, and opportunities dwindle as you get older for a variety of reasons I won’t get into now (though it’s a great topic for another day). Just know that this moment – right now – is when you should get serious about your future. Be restless, and have a sense of urgency. Always be thinking about what’s next. The earlier you start doing these things the more likely you are to maximize lifetime earnings (and end up doing something you love).
What do you think has been the most significant game changer in your specialty area of human resources over the last 5 years? Over the course of your career?
I don’t have one specialty area at present (as I said above I’ve spent time in lots of different functional spaces), but I’m a compensation guy at heart. With that said, I would say that the biggest game changer in compensation over the last 5 years or so has been the Dodd–Frank Wall Street Reform and Consumer Protection Act. It has changed the way we compensate executives. It mandated (non-binding) shareholder say on pay votes every 1-3 years (which has empowered proxy advisory firms like the ISS and Glass Lewis), driven mandatory executive compensation no-fault clawbacks, and dramatically influenced best practice as it concerns disclosure of executive pay (and its alignment with performance). This has really created a shift to the center concerning executive pay (companies are terrified to fail say on pay votes), with the practical effect being that compensation committees are more concerned with aligning pay with TSR than designing a pay program that truly aligns pay with long term performance (TSR and performance are strongly correlated but not directly so). To be fair, some of the changes proposed by the Dodd-Frank act were probably truly needed (Dodd-Frank’s no-fault clawback policy creates additional incentives for CEO/CFO oversight of direct reports who might otherwise misstate financials), but by and large the act has negatively impacted the ability of boards to do effective plan designs.
Where do you see your area of specialty heading in the next 5 years? Do you think that’s a good or bad thing?
Sticking to the topic of compensation here (the specialty area I’m most passionate about), I think that on the executive comp front we’re headed for even more uniform plan design across companies. For non-executives I think we’re going to see merit increases start to trend upward as the economy continues to improve. The average worker isn’t seeing an increase in wages that’s aligned with increases in overall productivity. CEO’s received median raises of 11% last year in an economic climate in which the median for most people is 3%. Part of this can be attributed to the fact that CEOs are higher performers than the average worker, but not all of it. More importantly, setting aside questions of farness, the way that executives are compensated has created considerable social unrest. Average workers need to start seeing a greater share of the wealth they help create – if for no other reason than because social pressures will push companies in that direction sooner or later. By willingly giving the common employee a larger percentage of earnings (in the form of wages and equity) companies have the ability to direct the process (as opposed to allowing the government to do it for them via legislation).
In your opinion what’s the most important part of the talent management puzzle: attracting talent, acquiring talent, developing talent, or retaining talent – or something else entirely? Why?
This is a tough question. I lean towards two of these components being more important than the others – those two being acquiring talent and developing talent. I’ll (cautiously) say that developing talent is probably the more important of the two because if an organization develops talent well it’s the most cost effective way to build a deep bench/do effective succession planning. Fundamentally, in situations where organizations can’t afford to lose certain people it’s because they haven’t optimized the knowledge transfer process. A company that effectively develops its people and has strong succession planning should be able to seamlessly account for workforce turnover issues. With all that said… if an organization can’t find a way to bring the right people in (i.e. people with the interest and capacity to learn, mobility, cultural fit etc.) then it won’t have the assets required to build a talent rich bench… So I’d say that talent development and acquisition are the most important components of the talent management puzzle, with talent retention and attraction (the latter of which I view as a company branding issue mostly outside the scope of HR) taking a backseat.
What do you think is the biggest failure of most organizations when it comes to their talent management strategy? Is there an easy fix, a difficult one, or can it be fixed?
I’m not familiar enough with the talent management strategies of other (large cap?) companies to really answer this question. It’s a space I want to learn a lot more about, but I haven’t really deep dived into it quite yet. Anecdotally, I can say from talking with people over the years that a lot of companies don’t do a good job of being transparent as it concerns how their people can get development opportunities. As far as I can tell, most individuals leave their organizations because their direct managers don’t give them the chance to really grow in their careers (beyond existing job duties and responsibilities). Whether this is an employee perception problem or manager problem is unclear (probably a bit of both), but companies have got to do a better job of communicating (to their general employee populations) how to move up the corporate ladder. I don’t think this is easily done – if you meet someone at a large cap company who has succeeded in doing this on an organization wide level please tell me how it was done.
In your own words, define what it means to be a leader? Do you think anyone can become a leader? Why or why not?
I think most people can be leaders, but learning how to be an effective leader requires an open mind and self-awareness. Additionally, the earlier in one’s career one is given leadership responsibilities (and coaching around leadership) the better. I think that some people’s “cultural legacies” (i.e. their upbringing/experiences and the way those things shape attitudes/behaviors) make it very difficult for them to learn to be leaders. Deciding how much time and resources to invest into coaching said talent(s) is a decision every organization must make on a person by person basis.
In your opinion, what’s the biggest challenge facing human resources related professions and professionals today?
I would say that the biggest challenge facing the profession is attracting talent with the capability to reach senior management levels. Several years ago Fast Company wrote a great article touching on this issue. My take is that (in general) HR is marginalized in most organizations. As a support function it isn’t always valued by the business, and as such both the pay and status are relatively low (compared against revenue generators, creators and select support functions). Ergo, the people that have the potential be to world class HR executives typically go into other functional spaces instead. What HR needs is a Steve Jobs type figure – someone who does something transformative for the function and redefines the value proposition HR provides to organizations. When someone like that comes along we’re going to see a huge talent infusion into the profession.
What words of advice would you give to a college student considering a career in your field? To someone looking to transition careers? To someone in your field that is feeling burned out or turned off?
This is really three questions, so I’ll (quickly) answer each one as we’re over 1,700 words already. If you’re a college student looking to enter the space I would say to 1. Get as many HR internships as you can between now and graduation and 2. Don’t run away from math/numbers/financial statements. Both of these points are a huge source of comparative advantage (which equals more job offers/money when you graduate).
For someone looking to transition careers, I would say start internally. First be a high performer in your current role, and then look for opportunities to work on special projects that demonstrate your capability to perform at a high level within the function (this may sound tough, but career switching externally is typically even tougher). My advice on how to do this is going to vary considerably based on career stage, so I’ll just say that if you have any questions e-mail me (contact information is at the end of this post) and I’ll do my best to answer (or refer you to someone who can).
Finally, if you’re feeling burned out I would say do something else. Life is much too short to spend it doing something you hate (and if you’re reading this I’m going to make the assumption that you have the resources and education to make decisions around your career that aren’t strictly governed by the ability to pay the bills over the short term).
Rory Trotter is an HR leader with Fortune 50 experience in compensation, talent management and labor/employee relations. You can connect with him via Twitter (@RoryCTrotterJr) and read more of his thoughts on human resources at rorytrotter.com.