"Old" HR — Why It's Detriment To Your Bottom Line

Reading this article will not help you build a winning culture and foster employee retention. Why keep reading, you wonder? The truth is, most of us already know what we’re up against – the tight labor market is making headlines everywhere, and if you’ve spoken with anyone in HR across the country you already know the common theme centers around the tremendous effort it now takes to attract and retain talent. It’s a wonder, then, why most of the HR and management systems used currently have been in practice for decades, despite lackluster results. The fallout of this practice is everywhere as business leaders struggle to retain top talent and overcome underperforming teams. Providing proof for your executives and board that making the investment to a new HR management system is not only worthwhile but profitable is precisely what this article can help with. 

According to the Association for Talent Development, companies that offer comprehensive training programs have 218 percent higher income per employee than companies without formalized training. If you ever needed an incentive to overhaul the way you’re implementing retention strategies, here it is. These companies also enjoy a 24 percent higher profit margin than those that spend less on training. The investment in training and development – versus the cost of replacing high performers – easily outweighs the cost of retaining them, even when there are economic downturns.

The time has come to shake up your HR practices and bring them into this century. The benefits to your company come in the form of increased productivity and efficiencies, employee engagement, talent retention, emerging leaders, cost-saving solutions, process improvements, and client satisfaction, to name a few. Advantages like these would provide a competitive edge for any business and are essential for a business’ growth and survival in today’s marketplace.


 “You’re perfectly aligned to get the results you’re currently getting!” I love this quote from Stephen Covey and I think of it so often in the work we do with our clients. We’ve learned that any time we have a consistent result, good or bad, it’s because we have a great system to get us there. A few questions worth asking yourselves:
1. As a leader, are you getting the employee performance results you want?

2. Is your culture one that is thriving? Are your employees volunteering their best, or do you feel as though constant management is required to get even a mediocre performance from your teams?

3. Do you find yourself doing the “head slap” out of frustration and disappointment that your leaders still aren’t leading at the level you need them to?

4. Do you struggle to attract and retain employees? The good (and bad) news is that if you said yes to any of those questions, you’ve got a great system in place if you want to maintain your current results. However, if you see room for improvement, you will want to evaluate three key areas: talent development, training and coaching, and HR capacity.  

How effective will doing this be … really? In a 2016 national Gallup poll of over 400 employees spanning three generations (baby boomers, Generation X and millennials), 70 percent of the respondents indicated that job-related training and development opportunities influenced their decision to stay at their job. The millennials had the most significant results, with 87 percent of them citing access to professional development or career growth opportunities as being very important to their decision of whether to stay or go.


1. Trash your traditional performance evaluation
In traditional performance management, the supervisor does most of the work – they evaluate employees based on criteria typically designed for an entire company population, and they often compare employees to others in the organization, rather than considering individual talents and capabilities. 

Why does this system fail? Supervisors frequently complain that they spend hours preparing feedback and working to justify ratings, only to walk away from the meeting questioning its effectiveness. Leaders feel trapped by an ineffective system, and employees too often walk away feeling devalued and focusing more on the number or rating they felt they should have earned, instead of the message of feedback the leader worked hard to craft.

Alternatively, effective talent development systems put the employee in the driver’s seat of the conversation, while also providing the necessary space for accountability and performance documentation that leaders seek. It is a move from “grades” to guidance, and it allows employees an open door for a two-way discussion. Ultimately, this changes the review process from evaluation to collaboration, enabling truly great things to happen in the long term.


Replace Annual Ratings with Talent Development Discussions

Rather than once- or twice-per-year evaluations, the new method centers around the continuous development of employees on a quarterly basis, and the discussions are driven by the employees. Additionally, companies are offering over-the-shoulder coaching throughout the review period to encourage and foster personal career growth, satisfaction and leadership skills.

Implement a New Approach to Feedback Systems

It’s critical that employees know where they stand on a more regular basis and whether they are failing to meet expectations or project competencies throughout their jobs. In a tight labor market, it is especially tough to lose trained talent. The more frequent feedback approach allows time to try to remedy the situation – with potential to train or coach the employee during the project, rather than waiting until a performance evaluation to deliver the news about failures.

2. Train and coach with intent – finally get the ROI on your training investment

Assuming you’ve selected the right talent, the greatest predictor of performance complacency comes from a lack of impactful employee development and performance management systems. 

Modern training tactics support ongoing learning for employees and leaders using a blend of on-demand and live learning platforms, but the magic comes when we pair the learning experience with professional coaching. This hybrid development approach moves from training as an event to the foundation for lasting and meaningful skill development. 

Some examples of ways to use a talent development coach include introducing a structured mentorship program to teach employees how to be successful; facilitating employee learning experiences; implementing learning, team building, and development programs across offices; bridging generational gaps; developing natural talents; and cultivating leadership programs. 

3. Increase HR capacity – enlist help from seasoned professionals where your HR department has gaps 

The lack of ability to provide strategic, focused HR guidance leaves companies vulnerable to a breakdown in culture, compliance, talent hiring practices, employee retention, leadership development, and growth practices.

How to alleviate administrative overload:

• Consider outsourcing your HR compliance duties. Outsourcing time-consuming or risk functions like employee benefits can provide the benefit of an entire HR department at a fraction of the cost.

• Seek out the right training solutions for you. Use on-demand learning platforms to provide shorter bursts of learning. Even spending just 10 minutes a day in a stand-up meeting equates to 40 hours of training in a year for a full-time employee, and the training cost is minimal.

 It’s time to break out of the “old” HR. The labor market has raised the bar for employee and culture expectations, and we all know what happens to businesses that don’t adapt and evolve. 

Danielle McCormick
is a principal and functional leader for K·Coe People, the Human Resources consultancy team which provides expertise and HR service solutions for businesses. She and her team of Talent Advisors provide coaching, training and HR support for equipment dealerships and companies throughout the construction industry. Contact her at, or visit for more information.

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