Human Resources: Insourcing vs. Outsourcing

One of the core responsibilities of a steward is to ensure the interests of the owner are protected. In my case, I’m a steward of a business that God has given to me. And in this business – as with any business – one of the core risks that must be managed is exposure to liability in the employer/employee relationship. Given the nature of our litigious society and it’s increasing violence, risk management would indicate that giving an inordinate amount of resources toward managing risk in the human resources arena is prudent. This is the stance that I have taken, which is why I’ve steadfastly held to the notion that having a full-time HR person is essential to mitigating risk for my business.

However, it occurred to me just yesterday that the one reason a business owner might outsource HR work and compliance efforts is to not just lower risk, but to share risk with another firm that is willing to shoulder the legal exposure to litigation and judgments, should something like this ever occur. The chances are high – very high, IMHO – that your business and mine will be caught up in a litigation matter at some point in its’ life. The one thing a full-time employee cannot do is spread around the risk to another firm.

If you own a company, the one reason you might consider outsourcing HR is from a risk management perspective.

Bill English, CEO


This is the question that nearly everyone in the United States is asking in the wake of the Newtown Massacre. But it’s not just Newtown, its’ other shootings like those at Virginia Tech, Aurora or Columbine. It seems that these shootings are increasing in frequency and brutality. In fact, in the last 30 years, we’ve experienced 61 mass shootings. Among the myths is that school shootings are on the rise, but depending on who you read or listen to, this is either a myth or fact. This problem has been studied by the Secret Service and the FBI. The latter study reminds us that this problem is multi-faceted and complex:

School shootings and other forms of school violence are not just a school’s problem or a law enforcement problem. They involve schools, families, and the communities. An adolescent comes to school with a collective life experience, both positive and negative, shaped by the environments of family, school, peers, community, and culture. Out of that collective experience come values, prejudices, biases, emotions, and the student’s responses to training, stress, and authority. His or her behavior at school is affected by the entire range of experiences and influences. No one factor is decisive. By the same token, however, no one factor is completely without effect, which means that when a student has shown signs of potential violent behavior, schools and other community institutions do have the capacity — and the responsibility — to keep that potential from turning real.

The Center for Disease Control reminds us that less than 1% of all homicides among school age children ages 5-18 happen on school grounds. Other major findings include:

  • Violent deaths at schools accounted for less than one percent of the homicides and suicides among children ages 5-18.
  • During the past seven years, 116 students were killed in 109 separate incidents-an average of 16.5 student homicides each year.
  • Rates of school-associated student homicides decreased between 1992 and 2006. However, they have remained relatively stable in recent years. Rates were significantly higher for males, students in secondary schools, and students in central cities.
  • From 1999 to 2006, most school-associated homicides included gunshot wounds (65 percent), stabbing or cutting (27 percent), and beatings (12 percent).
  • Among the students who committed a school-associated homicide, 20 percent were known to have been victims of bullying and 12 percent were known to have expressed suicidal thoughts or to have engaged in suicidal behavior.
  • Most school-associated violent deaths occur during transition times-immediately before and after the school day and during lunch.
  • Violent deaths are more likely to occur at the start of each semester.
  • Nearly 50 percent of homicide perpetrators gave some type of warning signal, such as making a threat or leaving a note, prior to the event.

Our society is far too violent. We play video games that show graphic violence every few seconds. We watch movies that multiple killings. Numerous web sites – both pornographic and otherwise – show women and children being violated. We tolerate a sex trafficking industry with a shrug of our shoulders. We kill the unborn at a rate of over 1,000,000/year. Every form of deviant behavior is available in the United States if you search hard enough and are willing to pay the price.

In the 1950’s the most difficult problems we had in school were students talking out of turn and chewing gum. Today, we’re looking at putting armed guards into our schools in an effort to maintain a minimum level of safety. Uffdah.

I’ve heard several times that evil has visited Newtown. And surely this is a correct assessment. But the admission that evil exists presupposes that good exists and that there is a standard between them. That giver of the standard is God – the same God whom we have thrown out of our schools, evicted from our public squares and routinely, we curse. We don’t want Him to tell us what to do and we ignore Him. In our humor, we make fun of Him, we sometimes shake our fists at Him and sometimes treat our dogs better than Him. Yet, when tragedy strikes, we turn to Him and ask for His comfort. We ask Him to help us make sense of the senseless, not realizing that His love for us is greater than our sin or disdain for Him.

I don’t know why this happened. But I can say that if we turn to God, he will comfort us and to give us strength to keep going. As you contemplate this tragedy, I ask that you turn your heart to God. God can (and I believe will) take this tragedy and turn it into something good. He is One who restores, who takes misery and turns it into Joy, who fills us with a peace that really does pass all comprehension. In this world, we will have trouble. But Christ has overcome the world.

I invite you to know the only One who can really solve our problems. The only person who can really fix all this is Jesus Christ. Neither party, alone or together, can fix man’s heart. You can take away all the guns and pass all the preventative laws you wish and people will still commit senseless murder. Only Christ can change my heart and your heart. Turn your heart to God and while you and I may not have all our questions answered, we’ll know the One who can answer them.

Bill English, CEO

Pray without Ceasing – Hmmmm……….

I’m a firm believer in prayer – or am I? In 1 Thessalonians, Paul instructs us to “Pray without ceasing”. How often do I stop and do a formal prayer to God about my decisions or circumstances? Frankly, not often. Some days, I make numerous decisions. Other days, I make very few. In most of those decisions, I rely on the Holy Spirit to simply put a “check” (for lack of a better word) in my Spirit. Listening to that check is more important than what I say to God, IMHO. If I am to be a Christ-follower, then I’m the one who stops talking to God and I listen to what His direction is – then I follow it.

For example, I’ve been interviewing for an important position in my company. I have met with several individuals about coming on board to fill this position. After talking with one highly-qualified candidate who I’d really like to hire, I found myself getting that “check” in my spirit. That’s God telling me – don’t hire this individual. When I go to more formal prayer in the AM or at night, those checks are usually confirmed with more focused attention on listening to God.

Listening to God – it’s not hallucinations. It’s not delusional. But it is spiritual. Paul tells us that the man who isn’t regenerated in his spirit by God will find things like this foolish. OK. But if you’ve been regenerated through the Holy Spirit, this post will make sense, because you and I are now participating in the Divine nature – literally – our nature has been super-naturally transformed. In this context, prayer is more about my relationship with God than it is about what I say to make Him happy. Prayer is listening to God (Isaiah – “…and you will hear a voice behind you saying ‘ walk in this way’…”.

Can I listen without ceasing? You bet. Can I talk to God all day long – nope. I’ve got things to do. But I can listen. I can depend on the Holy Spirit to guide me as I go through my day and make decisions.

For those who read this blog and claim to be followers of Jesus Christ – I’ll implore you – listen to God throughout your day. You’ll be glad you did.

Bill English, CEO

Try Standing in Your Office

I’ve recently put in my office a hydraulic desk that moves up and down. It’s small, but functional. What I like is being able to stand for part of the day and sit parts of the day. Since most of my meetings are spent sitting, I tend to stand between meetings and walk around the office using my headset when I’m on the phone. I’ve heard through the grapevine that this will help reduce my chances for heart disease – not being so sedentary. I don’t know if it’s true, but I’d like to believe it is.

Try it for a while. Figure out a way to get standing into your day – I think you’ll be glad you did.

Bill English, CEO

Why I Like the “Opt-Out” Method of Interviewing Candidates

As I write this post, I have a group of candidates taking an assessment for an open sales position in my company. This assessment is part of a larger process that I call the “opt-out” interview process. I didn’t come up with this idea. A colleague of mine explained it to me and I’m sold on this method. It’s not the right method for every position in every company, but for certain positions at certain times, it works pretty well.

The thrust of the method is that you give candidates applying for a job 2 different opportunities to “opt-out” – essentially, to say “no” to you, the employer, before you ever interview them. Why? First, it’s a huge time saver. Secondly, it honors them by giving them a chance to have a say in the process early on. Thirdly, you interview only those who have demonstrated that they are serious about working in your company.

The process works like this – at least this is how I do it:

  1. Post a job opening – usually on LinkedIn
  2. Gather resumes – don’t read them. I don’t care at this point.
  3. Invite them to an informational meeting about the job and the company. You’ll find that at most, 20% will come to the informational meeting. If you receive 50 resumes, that 40 resumes you don’t need to read. They have already eliminated themselves by not showing up for a meeting in which they can learn all about your company and the opportunity.
  4. So a presentation on your company. I recommend:
    1. Company history
    2. Company values
    3. Your leadership philosophy
    4. Company purpose and vision
    5. Details about the position and the opportunity for professional growth
  5. Take a break – let them know they can slip away if this isn’t for them. That’s the 2nd chance to “opt-out”. Plan on some leaving, for reasons unknown to you.
  6. Give them a written assessment. Make sure there are situational questions about ethics and some about the job functions. No more than 10 questions. From this, you can learn:
    1. Their level of writing skills
    2. If they are willing to invest time in the interview process
  7. Be sure to greet each person directly afterwards and invite post-evening questions. Some will stay and talk with you, some will try to sell you, some will slip you their resume (you already have it from LinkedIn) and some will make astoundingly honest comments, like one person who took the Controller assessment: “It’s been a long time since I’ve done this kind of work. I didn’t realize how much I had forgotten”. Obviously, we didn’t hire that individual.
  8. Read through the assessments and resumes. Select from zero to four to interview.
  9. In our process, we hire a third-party consulting firm to do the technical interviews. For example, we hired a sales consulting firm to interview our sales candidates.
  10. Then send them to a corporate psychologist for an evaluation. You’ll be glad you did. They are worth their weight in gold.
  11. Assuming good recommendations from the consulting firm and the psychologist, bring them in for staff interviews.
  12. Make a decision.

This is much less expensive than using a recruiting firm and it’s more thorough too. Receiving the various opinions of other professionals adds perspective that you can’t get from a recruiter or your own staff. Total cost is roughly $3K – $4K/candidate.

Post back if you have questions.

Bill English, CEO

Friday Five, December 7

I’ve learned more this week about what not to do. I think Mindsharp has had one of our most difficult weeks, mainly due to forces outside our control. Yet, we are in control of how we react and the decisions we make in response to the unplanned event. I learned this week that having a process in place for the seldom occurring event and ensure that we have trained the staff for these eventualities. Events that don’t often happen do happen. We had a major miss this week by not having a plan in place for how to handle such an event.

Secondly, this article on what Americans should know about economics got me to thinking about what I wish Americans knew about economics and limited government. If I had written this article, I would have focused on the same two points RC focused on, including the fact that God owns everything and governments can’t create wealth. But I would also add the following:

  • You can’t spend more than what you take in and remain solvent.
  • If you soak the rich too much, they will eventually just leave.
  • Given our current debt, the only real choice we have as a country is to lose some government services now or lose them all later. Our level of services that we have voted for is unsustainable.
  • Without a strong, vibrant economy, you’ll lose your freedom, your country and your civilization.

Thirdly, I learned recently that just because someone understands and acknowledges their responsibility to perform at a certain level, that doesn’t mean that they have “bought into” the expectations given to them. I recently was discussing the poor performance of a member of my sales team with that member. When I pointed out that this individual was at roughly 50% of goal, their response about the goal numbers was this: “that’s just a number pulled out of thin air”. This, of course, wasn’t true. Every sales member is shown how to achieve their numbers and the product mix that will get them to their goal numbers. I was really surprised at this individual’s brazen disregard for standards while honestly believing that hitting 50% of goal was doing a “good job”. Our ability to rationalize ourselves into another realm is truly profound.

Fourthly, I was talking with a colleague this week who is in the SharePoint space and is in the ownership group of a solid, growing company. Two comments he made have stuck with me:

  1. Take the emotion out of business
  2. Hire first for culture, then process, then competence.

Lastly, as a firearm instructor and enthusiast, it’s good to stay in touch with the number of background checks being conducted on a monthly basis. As can be easily seen, the number of background checks has doubled in the last 10 years on both a monthly and annual basis. While each check doesn’t indicate a gun purchase, it is indicative of how many more guns are being purchased.

One more thing – as a favor to me – if you’re interested in firearms and live in Minnesota or Western Wisconsin, please take a moment to visit Maple Grove Firearms and register to receive $20 off your first purchase with us. I’d like to grow this side-business and avocation. Thanks.

Bill English, CEO

Fiscal Cliff – More Thoughts

I’m already tired of hearing about the fiscal cliff.

In a nutshell, no one is offering the solution we really need. We need to close a $1.4T gap now – today – not over the next 10 years. We need to cut government services significantly. How would I do it?

Since we’re over spending by 42 cents on every dollar, I’d raise taxes on *everyone* by the same percentage equal to 14 cents of the 42 cents. Then we cut every program – social, defense, government health care – every program by the same percentage equal to 28 cents of the 42 cents. Everyone feels the pain. Everyone shares in the pain.

Look – we have all voted for this. The Boomers – by far the most self-absorbed, selfish, affluent and whiny generation this world has ever seen – has voted for all these programs. They want all these services but they don’t want to pay for it. Now it’s time for *us* (I’m a late Boomer) to experience the pain of our choices.

We can raise taxes on the top 2% and it won’t do anything to change the trajectory and velocity at which we’re heading into bankruptcy. We can cut $4T out of the rate of growth over the next 10 years and it won’t do anything to change the trajectory and velocity at which we’re heading into bankruptcy. We have to solve this problem today – now – not over 10 years. It’s time for leadership and it’s time for us as a nation to realize we can’t afford what we want. We need to deny ourselves. We need to realize that there is no free lunch. We need to admit we have met the enemy and the enemy is us. We need to be honest with ourselves and our children and admit it’s time for us to fix the problem we have created.

Neither party is offering the solution we need. Neither party wants to do the tough work of making unpopular decisions. At this rate, I give us 5-7 years as a country.

Bill English, CEO

Can you build a welfare state on the rich?

President Obama and the Democrats love to talk about the rich paying “their fair share” and that if they just raise taxes and increase revenues, the budget problems will go away. I’ve talked about this before on this blog, with examples from California and Maryland. Now, we have another example from the UK. The reality of trying to soak the rich too much is that it leads to diminished revenues for the government. We now have three real-world scenarios that demonstrate the rich, by themselves, can’t support the welfare state and that after a certain amount has been extracted from them, continued taxation results in lower revenue than had the tax rates been left alone.

Bill English, CEO