eCommerce and

If you’ve spent any time reading though the eCommerce and Entrepreneurship blog, you’ve seen the difficulties the company engages in. These “journal entries” of sorts, are an opportunity for our employees to express what hardships they’ve gone through and what positive and negative outcomes come from their experiences. The blog is a legitimate forum for venting, learning, growing and sharing; aka an HR manager’s best friend. Everyone’s blog entries have enough of their personal stories laced through them that these entries become a useful means for HR to check out what lies just under the surface at the company. Under the surface is where you’ll find people’s motivations, perspectives and a look at how they view themselves in comparison to others. What better way for me is there to find out what is going on at our eCommerce business than to read the online commentaries detailing employee’s experiences?  Of course there are details and extreme circumstances that should not be displayed publicly and should be treated with the upmost confidentiality, but when it comes to the company’s everyday lifestyle, the blog is a great tool to use when figuring out where the Lifestyle Pillar meter should be rated.

Gordian Project’s eCommerce and Entrepreneurship blog of course has its intended strategic business purposes, but it is not there just so we can share with the world what mistakes we’ve made and what successes we’ve mastered.  The blog lets us look at ourselves to see how we’re doing, what frustrates us, how we can make our retail websites a better place for us to be productive and enjoy coming to work. If there is anything we can do to make our employees just “not hate coming work”, but look forward to going to work everyday, it will be better for the employees and better for the company. 

Take for example those who have been involved in our OutdoorPros Adventure Team, activities outside of the office have sparked relationships and growth inside of the office.  I’ll let some of the pictures speak for themselves:

But I know what you’re thinking…. “We’re here to run a business, not a daycare”. Of course I understand the extremes associated with letting employees be “happy”. I am not advising for a lack of structure that ends up with work becoming a video game palace and online shopping café, but rather, I’m promoting growth of employee ownership and self-investment in their everyday work. Making work enjoyable allows employees to build commitment in their intimate relationship with the company. Happy employees equal productive employees and if they’re unhappy, I guarantee it will end up on the company blog.

 

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I’ve been thinking about something lately and I need your help. Can someone please tell me why every article, blog post, news report, or ANY informational piece in our space has had recession tunnel vision?  Entrepreneurs in eCommerce have quickly shifted focus from the latest fads and trends in user interfaces and vendor partnerships to best practices in hiring, strategic cash plans, etc. and all as a result of the recession.

It seems that the recession is the driving factor behind the influx of attention made on best business practices.  This just cracks me up – as if these things should not be a major focus in BOOM times.  We should be doing this (concentrating on efficiencies, market share, employee retention rates, etc.) all the time!!  I have to admit, I am guilty of writing posts like this myself.  Just imagine if all of the business owners, politicians, whoever should be named, crunched these same numbers when the economy wasn’t forcing everyone to pay attention and do so?  What if we were motivated and “entrepreneurial” enough to make these meticulous calculations when things were going well?  If we all acted as if “economic Armageddon” (as we all like to call it around here) was just around the corner, just think about how much leaner and meaner our businesses, industries and economy would be as a result.  Those that are successful, those that survive and move through these difficult times are those that are proactive, those that are prepared and ready for what’s next, they create their own competitive advantage in doing so.  Don’t get me wrong, I understand that different times call for different strategies, but it just seems like strategies such as particular hiring, sensible cash plans and market share maneuvers are important regardless of what the economy is doing.  How about from now on, don’t just ride the market cycles, drive them.

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I recently read Jason Calcanis’ newsletter regarding the current hiring environment entitled, "How to Hire – and Get Hired – in a Recession".  This newsletter spoke mostly of how important it is to be a hard worker and how important it is to hire someone who is willing to work hard. He admitted that it sounded a little obvious, but still had many legitimate and important suggestions regarding the subject. I would like to advise readers of Jason’s newsletter that our economic position can cause a lax attitude when it comes to the subject of hiring and reply with a few things to consider before making any drastic changes.

1. Understand what the unemployment numbers are really saying:  Yes, the overall unemployment rate might be 10%, but that doesn’t mean the employee you are looking for necessarily comes out of that unemployment pool. High school grads have the highest unemployment rate at (10-15%), while college grads are in the middle (7-9%), and graduate degree earners have little unemployment problems at all (2-3%).  Jason said he received 200 resumes for one $10/hr job posting. That would make sense considering that the $10/hr job would most likely (not always) be picking from the high school graduate pool with the highest unemployment rate.  So the next time you’re thinking, “I know the pickins are good and I can just replace that person”, think of what group that person comes from and how hard it might really be to replace someone. This leads to my next warning…


2. Don’t let your attitude turn into “my employees are dispensable”.  Remember that your employees are the people that you have entrusted to run the day to day functions of your business and these responsibilities shouldn’t be taken lightly. They can mean the difference between profits and losses. If you treat your employees as if they are dispensable, they will treat your business as if it was dispensable. This leads to my next point…


3. Pay the Price: Jason talks a lot about hiring someone who is obsessed with work and who is willing to work late, extra hours etc.  Remember that type of employee comes with a price and you better be willing to pay that price for that type of commitment.  This doesn’t mean that you have to pay more money necessarily. Really, paying the price can be as simple as recognizing that your employees are working hard.  I’m not sure any staff member would appreciate being told that they are replaceable let alone the “work-a-holic”.  Rarely being recognized for the hard work that they do can be a larger detriment than monetary compensation to some.  Individuals that are that dedicated to their work, who spend their personal hours to improve your business, look for recognition.  A little encouragement goes a long way.

Jason is right; I agree that hiring the hard worker will be the best for your business.  Please remember however, not to take advantage of these people or let the unemployment rate change your appreciation of your employees.  Your employees are the ones running your business. Treat them with respect and they will keep making your company a profitable one.

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One of the most difficult areas of Human Resources to manage is salaries and wages.  As an eCommerce business, and I am sure traditional businesses face this too, it is one of our highest expenditures.  Not only that but salaries, wages and benefits are one of the most difficult areas to tweak.  I highly recommend charting out your barriers and expectations before you start the hiring process.  Setting up guidelines should not prevent you from being flexible, but rather should just set up fundamentally necessary boundaries that may help to prevent future regret.

A lot of small business do not know how much to pay a new employee.  Instead, they wait to see what their resumes are asking for and make decisions based on the asking price of the new hire.  These decisions are not made on what they can afford, and maybe more importantly, what fits in their lifestyle.

I think of it in terms of making any large purchase.  If you know how much your bandwidth as a company can handle, in terms of salaries and wages, don’t get bright eyed and excited when you see the flashier, more qualified, more expensive person.  More importantly, don’t fall into the, “I’m sure we could make more money if we just hire her.  She’ll pay for herself!”  Just know your limitations and know your goals.

In the end, find a balance between flexibility, goals, and living beyond your means.

It’s all about the silver lining…

If you’ve looked at the prices of homes lately, there are some great deals out there; a huge supply and little demand.  The same can be true in the employment market. When other companies are cutting jobs, many qualified people are out there hunting for employment.  Not to make light of a very sensitive subject, but the current employment rate’s 16 year low, can actually be a great opportunity for the growing small business. A huge supply and little demand of workers is a great chance to snag up a quality employee.  Not only will you get your pick, but you will be less likely to get caught in a bidding war, which most small businesses can’t afford to win.  You will have a better opportunity in this market to hire qualified employees, then when the competition for such employees is fiercer.

Shop on.

 

The professional world of eCommerce can often be more relaxed than other businesses.  With fun and work being commonly intermingled, it’s sometimes like a mullet: Business in the front, party in the back.  Among the various in-house amenities like basketball and foosball, outside parties are also useful for maintaining a “fun” work environment.  

This is where it gets messy.  How do we apply in-house policies to outside parties while still utilizing the “hangout outside of work” feel?  Where can we draw the line between camaraderie and debauchery?  Company party misfits can not only ruin the occasion, but can expose the company to costly liabilities.

I have come up with four standards that can be used when laying down the law at work parties that still allow for parties to be productive:

• Be Prepared:  Where my boy scouts at?  Anything can happen, so limiting unwanted variables can contribute to the success of the event.  A well organized party with specific activities, such as well defined games and interactions, will lessen the chances of having inappropriate behavior.  Our most recent example of this was at our company anniversary party.  While the party was casual with excitement at the pool and food at one’s convenience, we had a set schedule of our own Backyard Olympic Games.  Teams participated up through the championships while others watched and cheered.  Given that party goers had the opportunity to focus on fun and friendly competition not much room was left for unwanted actions or behavior.
  











• Executives and Upper Management Set the Tone and Demeanor:  If your boss brings a flask to the 4th of July picnic that gives everyone else the OK to do the same thing even though this type of behavior is not ordinarily acceptable at the office. 
• Encourage Family Participation:  A good way to keep it G rated is to invite the kids along.  Not only does this help set the tone for a G rated event, but it promotes family.  Family promotion can be especially important for the husband/wife dynamic; this creates an environment devoid of the stress of the feared ‘Company Party Sexual Harassment”.  Not only does this add sensibility to the occasion, but employees will generally have a better appreciation of the festivities if their families are not only invited but encouraged to attend company functions.  It’s a win-win. 
• No Exceptions - Be Consistent:  Give your Employees a chance to succeed.  All of us in HR can sympathize with the difficulty that comes from ever changing rules and regulations. . Keep that in mind when legislating your own company rules.  Just as enforcing the rules consistently among employees is obviously important, keeping the expectations the same from party to party is just as vital. 

The human resources rep doesn’t have to be the stick in the mud at the party and with the proper planning and expectations no one will have to take on that role either.  Summer’s coming to an end so keep these tips in mind as we move toward the up and coming holiday parties.

 

Don't Jump the Gun

In this negative economy, I get a lot of HR emails about layoffs and downsizing.  It is surprising how quickly companies turn to downsizing to solve their problems that relate to their bottom line.  This is the time to find efficiencies and areas of opportunity; not run for the hills and give up.  Understandably, there are times when layoffs are necessary and downsizing is a last resort, but it should not be the first thing that pops into my inbox as economic stresses increase.  Not only do they make us HR folk grow gray hair and get heartburn, they are expensive, reduce performance and diminish one of the company’s most central investments. 

I’m Going To Need You To Get Outside The Box 

In combination with other strategies throughout the company, try some efficiency tactics through the HR department.  First, reevaluate job descriptions and roles in all areas of the company.  People do their best when they are doing something they love; happiness at work is the ultimate productivity booster.  Changing a couple of employees around or even simply adjusting their scope of responsibilities to involve areas of interest can impact employee enthusiasm and create a more efficient and excited workforce.  This philosophy will not only raise the level of efficiency per employee, but will also give a much needed “fresh” look at the overall picture.  Maybe that employee in customer service has some great ideas about supply chain, but has never been given the forum to express these new and exciting thoughts.  At a time when competition is fierce and the opportunity to get ahead narrows, this tactic could produce the “out of the box” thinking a company really needs to get back on their feet and diminish the impact of the depressing economy. 

 

Small, fast growing companies thrive off of nimble, entrepreneurial, growth infested staff at all levels.  The thought is that eventually, you will be able to fill from underneath, as the company grows-up and develops a strong upper management team.  But finding the turning point between hiring for ideas and hiring for tasks is challenging; and there is a point. 

The small business e-commerce entrepreneur must understand that even when hiring for entry level positions, it is better to hire the analytical ace then the taskmaster.   For example, just because someone might say they want to start their own company someday when interviewing for an entry level position, doesn’t mean they won’t be an excellent employee for the two years they do spend with your company, and by no means should it be an immediate turn off.  Yes they might leave in a year or two, but it is better to hire employees that can grow the company with their ideas and complete the tasks, then worker bees that complete the tasks but require additional management. 

The truth is that both the “taskmaster” and the “analytical ace” suffer turn over and it has just as much to do with the nature of the position as it does the nature of the employee.  Finding the tipping point when your company is huge enough, and I mean huge enough, to support worker bees is a fine science.  However, judging this pinnacle could make or break your growth and efficiency.  Especially in this down economy, when investments should be even more calculated and on target, it is better to invest in someone who can grow you, rather than save a few dollars on someone that can sustain you. 

 

Regardless of political affiliation, in times of economic uncertainty, governments traditionally become more involved; i.e. more legislation, rulemaking, enforcement, and influence.  The situation today is without exception.  At the same time Federal Reserve Chairman Ben Bernanke finally orated “recession”, various departments at various levels of government increased their involvement in the economy.  Multi level policy making not only means that various levels of government will act, but their actions will affect multiple levels of society.  Realizing Bernanke is known best for his research on inflation and the Great Depression, leaves little surprise that the Federal Reserve bailed out Bear Stearns.  Similarly, with the ferocious presidential contest of only Senators that has engaged even the traditionally uninvolved lower socio-economical and vulnerable members of society, it seems timely that Congress is now working with the mortgage lenders on loan forgiveness instead of foreclosure as a cost savings strategy.  These policies coordinate to create an economic stimulus by reducing the individual burden of market participants. 

Senator Ed Kennedy has vowed to call a vote on the Healthy Families Act soon that would allow “7 days of sick leave with pay annually for employees working 30 or more hours per week; or a pro rata number of days or hours of sick leave with pay annually for employees working less than--(A) 30 hours per week on a year-round basis; or (B) 1,500 hours throughout the year involved.”.  On the campaign trail, both Democratic frontrunners Hilary Clinton and Barack Obama express support for mandatory sick days.  This is not officially labeled as part of any of the candidate’s economic stimulus plan, if there is one, but it does have characteristics of a stimulus.  This legislation would give sick days to part time employees, and lower level employees which are not currently entitled to paid sick days.  It creates happier, more productive lower level employees, in an economically stressful time requiring increased efficiency.  For a single mother of two working two part-time jobs, paid sick days could be the difference between eviction and a healthy family.  

Some question the rationale behind mandating employers to implement costly benefits in a recessional time of cutbacks, slimming margins, and dwindling profits.  These situations leave this legislation ferociously unpopular in the small business community, but it is worth another look; you might actually see it has some positives.  Employee rights are a tool in the government’s artillery to create economic stability and consumer confidence; a tool that an individual small business owner cannot brandish with the same far reaching impact. In fact, if one small business owner decided to implement paid sick days in a recession, they would be forced to raise prices to cover costs.  However, without the competitor’s participation, the small-business-owner-with-the-paid-sick-days will be dominated by their competition, and might even be pushed out of the market completely.  In all actuality, the negative effects of rising costs related to mandated employee benefits are minimal.  Business owners would be forced to raise prices together and pass on increased costs elsewhere, thereby decreasing the burden to individual businesses.  Meanwhile, the small business owner will benefit from the well-known positive impacts of employee benefits, while not having to shoulder the burden alone.  Governments have the supremacy to equally mandate improvements to the bottom rung employees, and produce far reaching positive economic impacts. 

 

In the week of my annual review, I thought it would be fun to write a blog legitimizing my existence.  As one of the only departments not actively involved in increasing sales, I rely heavily on the efficiency argument when reporting our accomplishments in the weekly meetings.  At that, even the efficiency argument is qualitative, and lacks much quantitative backup. 

As an e-commerce entrepreneur and small business owner, one must decide when the right time is to implement POLICIES.  That’s right I said it; rules, structure and even some formalities.  In an environment where “business casual” only means no ponchos or pajamas, implementing structure into a small business can be daunting.  There are so many fine lines: When is an Indian War Club a weapon, and when is it inventory?  When does hiring your cousins go from, they’re the only ones who will work for me to, I’ve got a company full of related upper management and it is a morale problem for the other employees? And finally, when does a laugh at the office go from a joke between friends, to a million dollar lawsuit?

Here are four tips to consider when implementing a Human Resources Department: 

1. Tag Team – Combine the Human Resources role with another operational role, such as Finance.  The budget lover and policy pundit combination is a rare breed, but finding someone with the ability to understand both, strengthens decision making for the entire business. 


2. “If You Build It, They Will Come” – Similar to a civic planning philosophy, if you prepare for growth by building infrastructure, you will attract the growth. In HR, this is true with employee manuals, benefits, liabilities, hiring, etc.  One of the first benefits offered to PlumberSurplus.com employees was the food program: virtually unlimited breakfast, lunch and snacks.  Starting that program early allowed us to pound out inefficiencies so that expensive mistakes and morale killing issues could be limited.  It is one of our most popular and cherished benefits. 


3. Plug that Hole – Hurry, we need three customer service representatives ASAP!  Having a structured HR department that can fill holes quickly and intelligently makes quick decision making a viable option.  Without the HR structure, hiring three employees in a matter of hours could be the difference between efficiency, and domination; intelligent people placement is a skill most important for a small, growing business when the effect of one person is greater to the entire organization. 


4. Oh Crap – “But Judge, there’s no such thing as an inappropriate joke…that’s why they’re jokes!”  Quoting Michael from the Office is not going to get you off the hook from that $1 Million sexual harassment lawsuit.  Training employees early to detect and prevent costly personnel liabilities can save millions in time and money in the future.  Setting this tone from the beginning is a zero sum game.  Remember, it only takes one phone call… 

The decision to have a Human Resources department is a decision about how fast and efficiently you want to grow your business.   Having the infrastructure in place early will facilitate a strong, scalable and efficient business with an edge.   

There!  Now do I get a raise?