Welcome to the March 21, 2007 issue of The Total View

Published by Success Performance Solutions, Written by Ira S. Wolfe

Visit our Human Resources Blog and Perfect Labor Storm Blog where we can post daily (and more often) human resource updates, news, and Perfect Labor Storm facts. 

What's Inside:

1.  Is Hiring Top Performers Worth The Trouble?
(Warning: what you are about to read may cause you to say "aha!")

We've all heard about 80-20 rule. You know the one: 80% of your sales comes from 80% of your salespeople, 80% of your profits come from 20% of your customers, and so on.

The official name of this rule (yes it's true, this wasn't made up by the sales manager) is the Pareto principle (also called the law of the vital few and the principle of factor sparsity). In a nutshell, it says 80% of the consequences stem from 20% of the causes. Business management thinker Joseph M. Juran suggested the principle and named it after Italian economist Vilfredo Pareto, who observed that 80% of income in Italy went to 20% of the population.

This past week I had a wonderful conversation with Joseph P. Murphy, a principal and Vice President of Shaker Consulting Group, Inc. For those of you who have participated in any SHRM webinars, his name might be familiar. I interviewed Murphy for an upcoming feature story I'm writing about....."Can Management Trust HR to Get The Job Done?" (If anyone would like to weigh in on this - pro or con, please email me.)

Murphy talked about what he called the Performance Variation:

* 20% of your hires produce 80% of your business profits
* 20% of your jobs consume 80% of your staffing budget
* 20% of your candidates waste 80% of your recruiting/training resources

Those statistics sounded interesting but then Murphy struck a chord when he talked about sales. He shared a sales effectiveness study he recently completed for a large client. His client wanted to increase average territory sales from current base of $1,000,000. Like most VPs and sales managers, they hoped Murphy could identify what made their top sales performers click.

Murphy however threw a kink into their thinking. It's not that he doesn't believe "cloning" the top 20% would be effective. It's just that recruiting only top 20% candidates is difficult and expensive especially in today's competitive and cut-throat job market. Besides, managing a team of super-stars is a challenge even for the most adept manager.

Instead he believes the first step in improving sales performance is reducing the "impact of the bottom 20%." One obvious advantage of this strategy is that it greatly expands the talent pool....without compromising sales!

He got my attention. Remember the $1,000,000 average territory sales I mentioned earlier? Well, Murphy discovered the average of the bottom 20% was only $300,000 per territory. Yes, you read that right - only $300,000.

By removing the bottom 20% of the sales force and averaging only the sales of the top 80%, the average sales per territory increased 50% to $1.5 million!

If you really want to get your blood pressure up, consider all the recruitment, training, mentoring, coaching and eventually severance dollars spent on the bottom 20% on top of that million dollars of lost sales from each of the low performers.

This client was scheduled to hire 50 new salespeople over the next 12 months. Based on their current hiring process, the expected result would be $50 million in sales. But by identifying what differentiated the bottom 20% from the top 80%, the average sales per territory increased to $75 million, a 50% increase in sales just by not hiring the wrong people.  The lost opportunity gap? $25 million!!

Where do you go from here?

The most obvious solution would be to terminate the lower 20% of your sales force BUT we both agreed that is not the first step. The first step is identifying who your top 80 and lower 20 performers are.
Next identify through behavioral, cognitive, values and personality assessments traits, patterns and trends that might help identify differences between top and bottom performers.

Third create a top AND bottom performer profile and compare candidates to both when screening, interviewing and hiring - interview accordingly.

Fourth develop a performance development plan for each low performer, identifying traits and behaviors that might be interfering with their success.

Fifth, when all else fails, it might be time to terminate. Surprisingly, many
of these separations are a relief for the employer AND the employee.

Learn more how to avoid hiring the bottom 20% by replying to this email or calling 800.803.4303 or clicking here.

2.  Perfect Labor Storm Alerts: "Did You Know?"

New to The Perfect Labor Storm website:

"Did You Know?" is a POWERFUL 8-minute presentation about how the world is flattening. I first viewed this at a High School Career Night last November. It's phenomenal. I showed it today before a keynote address and you could have heard a pin drop. Take a few minutes and listen and watch this fabulous presentation, created by Karl Fisch, Director of Technology at Arapahoe High School in Colorado.

The presentation lasts just a little over 6 minutes.   I'd like to call it: The Perfect Labor Storm Boot Camp!

To view "Did You Know?", click here.

Perfect Labor Storm 2.0 is now available. The year 2007 will see an increase in skilled worker shortages and more competition. The result will be higher salaries, more training and career advancement opportunities, and more flexible work cultures. How prepared is your company to find skilled and dependable workers?

To order your advanced copy, click here.

Don't miss day-to-day updates on Perfect Labor Storm.   Save the Perfect Labor Storm blog to your favorites.

Don't be caught in storm without all the facts. "The Perfect Labor Storm Fact Book: Why Worker Shortages Won't Go Away" is a must-read leading edge forecast that predicts workforce trends for decades to come. Order your copy today - Only $7.95.

3.  New! Upcoming Webinars, Workshops and Training Dates Announced

April 12, 2007: Interview for Success (Call for information)
April 17 - 18, 2007 - ASSESS Expert System User Certification

"ASSESS Expert System Certification"

For the first time ever, Bigby Havis and Success Performance Solutions have partnered to sponsor a 2-day ASSESS User Certification in Central PA. (Bigby Havis is one of the top U.S. organizational psychology consulting firms with domestic and international clients.)

Date: April 17-18, 2007
Time: 8:30 - 5:00; 2nd day ends at 12:30PM
Place: Lancaster, PA
Tuition: $1500 per person; $1000 for 2nd person, same company

Assess Expert System is a premier psychometic employee evaluation tool that will take the guesswork out of hiring and promoting key employees.  A state of the art web-based system, ASSESS produces job specific reports linking key personality traits to managerial and executives competencies.  Every selection report comes with a customized behavioral interview guide and every development report includes performance improvements tools and tip customized to the employee, based on his/her responses.

ASSESS Expert System assists management in the selection of outside candidates and in the promotion, placement or development of internal managers, supervisors and professionals. The assessments provided are industry-standard, and each item has been carefully validated and documented.

Participation is limited and over half the seats are already filled.
Don't wait. Call 800-803-4303 for information.

4.  Just Dumb News

NASA last week announced it was cancelling plans to initiate a new program due to lack of budget dollars. The program was supposed to track most of the asteroids and comets that could plow into Earth and wreak havoc on the planet. A NASA researcher said, "It's like walking across Broadway with your eyes closed. We're not seeing and we're not looking."

But you can rest easy: the government did manage to save the following projects: Sparta Teapot Museum, Waterfree Unrinal Conservations Initiative, National Wild Turkey Federation, tattoo-removal program in San Luis Obispo County, CA, and a campaign to combat "goth culture" in Blue Springs, Mo.
Source: The Week, March 23, 2007

5.  Industrial and Adminstrative Skills Testing

SkillClues? evaluates technical and/or administrative skill proficiency levels - from industrial to healthcare to basic and advanced computer skills, including MS Office, Accounting, Design/Graphics and more.

Click here for more about Clues for Skills.

6.  Quotes from Hire Authorities

"Being powerful is like being a lady.
If you have to tell people you are, you aren't."
Margaret Thatcher

Ira S. Wolfe Copyright 2007 - All Rights Reserved. Reprints and other distribution by permission