Career Pathing Success Story on a Budget that Decreased Turnover: Eric Mraz, Founder, R3 Strategic Search

Hi there. This is Cindy Lu with CHRO partners and HR mastermind groups. And I'm here with Erik Mraz today and we're gonna talk about career path things. So there's been a lot of interest in some of our groups about career path thing, and, um, the importance of putting ah clear vision together for your employees. And so, Eric, you want to introduce your current role as well as your pastoral when we used to work together? Sure. Cindy, Thanks for having me today. My current role is as co founder of our three strategic search were an executive search firm,

and TA strategy and recruitment process optimization firm. We work out of Dallas, Chicago and Milwaukee is our primary markets Um, part of finding the company that was with the Nova group startup based out of Milwaukee? Um, I had a lot of fun there for almost 12 years, and, ah, kind of roasted the ranks doing everything from corporate recruiting operations HR and everything in between. Yeah, So Eric was my art director of HR, and, um, we went through a time frame initially when we really needed thio up a level.

The talent and the caliber of recruiters that we're bringing in. And so, um, you were really instrumental and bringing in the right people with the right kind of culture, attitude and aptitude. And so that was amazing to get all these great people lam. Then all of a sudden, we were having a Jones would turn over, even though people were pretty happy with, you know, their roles with their co workers with the culture. But for some reason, we were having a challenge with turnover like up to 50%.

Remember, we couldn't figure it out because everybody was having so much fun. And we were doing great things for our clients. And I think, um, really driving innovation a time when recruiting had the opportunity to do different things in it. And I remember thinking and talking with you about that, that we we couldn't figure it out. Now, granted, we weren't We weren't doing things like engagement surveys and polls, surveys and whatnot. So but I know where we're gonna get to that a second. Yeah,

s o our organization. Just to give everybody a little bit of context was a professional service is firm, so really consulting firm focused on project based recruiting work. And so we had a little bit different structure. So it wasn't an agency type model where, you know, recruiters worked on the herfi kind of basis, but it was much more like a consulting model. And so there was a lot of collaboration and a lot of work between different recruiters and teens and project leaders, and so we naturally had some of those levels.

But, um, I guess, you know, we put together Ah, here, advisory border advisory board. ... but where there were some chief HR officers that were very helpful to our team. And so we met with this advisory board on a quarterly basis, and they would give us feedback. And so we presented this challenge to them. And so, Eric, do you remember some of their feed back during that time? Well, I think one of the big things was they wanted to know.

You know what we had done to kind of evaluate the cause of this, You know? Where was where was it coming from? You know, where people actually unhappy? Um, I remember not really having a money. The answer, because we felt like Hey, we've got this great thing going, um and and realize that surveying the team first and foremost is going to be gonna be critical and figuring out too, you know, I don't think we're is consistent with connecting exit interviews and things like that to make sure that we did actually understand the reasons that people were we're leaving.

And the reason that people were saying So we put together exit interview for men's gathers and data Theo exit interviews, you know, which which was bits and pieces of data and then worked with one ch our own particular with driving the engagement survey. And they had been using something that had been designed. Ah, little while prior toe conversations, I think a couple of years were worth of it, keeping it really clean and simple. Um, on getting to the core of you know why people stay. I'm in addition to white people go,

um, and then we use that as a as a way to benchmark years moving forward. But that first survey was it was interesting, just kind of understand that the data points and see what you know what the perspectives really were on Billy It gave us some great insights as to, you know, how we could up our game a za firm and keep people more engaged? Yes, If I recall, the feedback was like, you know, we like working here. We like our co workers. We like the work.

Um, we've even feel like we're being compensated, you know, fairly. But we just we don't know what the career path is. And there if I recall, we had, like, one title, it was like and that was it. And everybody was a consultant. And no matter what level of work you were doing, you were basically that one title. And so everybody at the time, I think, reported to one person, which was a little crazy as well. Um, she was pretty high energy,

but, um, even between the two of you, you know, that's that's a lot, a lot of work. So, um, remember the board kind of saying to us, You know, it's clear people want to know what their career path is and I remember pushing back and saying, Well, you know, we're not a very big company. How many levels do we need? How many layers do we need, and I remember them sort of dissecting it going. You know what? You've already told us that these types of people do this work,

and you have sort of your internal management level, you know, titles for these people on. Then you've got people who do this kind of work, and you have people who do this work. And then other people were like project managers. And so they're like, you're kind of already doing it. I mean, doing it, they just don't know you're doing it was getting behind. It is yeah, way had we had the path of there and people were on it, We just didn't have it,

I'll say, labeled on. But there was no no direction, so to speak, as far as how you got from here to there to there, Um and so being ableto understand that and have them say to us exactly what you just had. You have it in place. You have people that are doing this role. You have people that are, you know, focused on project management. You have people that are focused on, you know, different pieces of the, uh, human capital puzzle. And we just need toe figure out how to communicate that well,

have dissected completely. And then how to lay it out, How to assess people against it. Test those theories and make sure that we are actually doing what we We think we should be doing what we have in place. Yeah. I mean, end result is pretty spectacular. The perils of working from home, huh? Uh, and we'll get to that in a minute. But I remember just thinking, like how sad it wasthe when people would leave because we had a group that really liked working together.

So aside from the fact that there were financial consequences, So I remember we were struggling with our margins at the time. I think your targets were something like 40% and we were just struggling with, like, 36 37% on a good month would hit 38%. But what would happen is every time somebody would leave and all that institutional knowledge would go with them, the client relationships would kind of, you know, simmer down. And it was just, uh And then on top of that, it was just sad.

Yeah, likely. Well. And people people were don't say sad, necessarily leaving. But it wasn't. Ah, I'm out of here. Like, give me away from this firm. It was kind of like, you know, I I love everything about it. I just feel like I need to take the next step in my career. I just feel like, you know, there's there's something bigger and better for me. Um, and the reality of it was we we had that there. We just you know,

I think we're in the space where we weren't able to kind of clearly lay it out for everyone. So I remember the board nudging me gently to put something in place.

And, um, I remember it was actually interesting for you back there like, Well, you should do this,

but you actually probably shouldn't do it. You should let, um, Eric and your boss at the time jen handle handle the execution of it.

They're like, really, you're ah, your forte. But you should sponsor and make sure the board you know that the governance board buys in into the process.

And so I suspected the governance board might actually have some Some of the same feelings I did about Just like like how many levels do we need?

And, um, you know, the kind of reaction. And so I guess, um, I'm gonna just kind of highlight some of the amazing results,

and then let's jump back and dissect it more and unpack it a little bit more. A ce faras.

Like exactly what were the steps you took so fast? Ford. You know, it's a little foggy right now,

but I would say nine months after that, we probably dropped our, um, turnover from 50% down to,

like, 10%. And then I want to say over the next six years what? It killed dropping.

I remember at one point, our turnover was barely 2% like 2.6 or something were so hoping and be under 2.5,

But yeah, it was crazy. And it just it it had virtually stop people from leaving. And the ones that did leave,

you know, it was sacked. Yeah, well, in the boomerang situation, which we remember, that nickname we gave people.

We had probably 30% of people leave. Come back, we had a lot of boomerangs just because they knew that they had something really amazing here.

Yeah, Yeah. So, um and then the part that really convinced the board to sort of let us do.

Our thing was that the margins crept up over time and literally there were months we we'd hit 46. 47% was probably,

on average, more like 43%. But seriously, just the retention level and the morale boost right that came with that was pretty pretty amazing.

So, um, I remember at the time I had a friend who had worked at AA e y,

the consulting firm, and that he had this spreadsheet he had shared with me about their career path and all the different levels for other consultants.

And, um, that's the only part I really remember sharing with you guys and you guys did all the rest,

right? So I can't take any credit for the actual work except for, uh, fending off the board of making sure that it was something that we could move forward with because I think once it hit the compensation plans,

then we had to take it to the government's board. Right Advisory board was like, You need to do this.

And we knew we needed to do it, But, um, tell me a little bit about, like,

the process and, you know, from beginning to end, How did you guys go about determining the levels are solidifying.

First, I took an Excel class. Um, um, no, I did The first and probably most critical piece was just connecting with the team.

So we had We have this engagement survey then that we had rolled out and we had, you know,

data points there, and we filled in the gaps by basically interviewing our most tenured and senior people. At that point,

we had people that have been, you know, in the organization 678 plus years. Um, so we knew we had buy in from them.

We knew that we kind of build champions out of them. And they gave us some really interesting insights as far as feedback they were getting from,

you know, the more junior level consultants that they were informally mentoring. Um, you know, the whispers and things that they would hear on the in the break room.

Um, and that really kind of helped guide us in highlighting both hard and soft skills for you know,

what we would we would deem the competencies for these roles. I remember things, friend sheet. At first we had so many different things that people were throwing into the mix as faras.

What was important, what they felt it was, was critical and non critical on in addition to just kind of the the competencies in the skill sets,

we looked at some of the experience as well. You know, we wanted people, especially at the more senior level,

to understand, you know, kind of the nuance of managing clients and managing projects and leading people on and then kind of as the think we broke down the fourth kind of chunk of this this assessment methodology as we reading citizenship were kind of that culture piece.

Um, you know, the softest of soft skills. But it helped us also, you know, ensure that we were also recognizing people that contributed to the organization.

I'm not just from, ah, a working perspective or a billable is perspective, but how are they?

Are they making it a great place toe? Be part of the people that own that more so That was kind of the It's said that the biggest speaks and from there then we were able to kind of grid out.

Um, essentially, I think it was five levels. Director, Senior consultant, uh, consultant, associate consultant.

I think there was one other in the next. Yeah, um, so we kind of we went back and forth quite a bit on that on that,

content to really refine it on. Then we took that with the competencies. And it's a work backwards and kind of assess.

The team members to kind of see? Okay. Are we pressure testing this the right way? Does this actually makes sense?

If we think that this person is an associate, we think this person is a senior. Are those those competencies going to line up with what we believe this person?

Yeah. Yeah. Um And then we went toe, I think, before we went to the board,

um, even just looked at at bill rates. Um, the sales team. We talked with your controller.

I think you were more involved in this part of as far as You know, what are we billingg at these levels to,

um this is gonna work in the market. Let's back up a minute. Just a trap. So you had four different competencies a hard skills,

which, if people don't use that term, it's the more measurable skills, like, you know, can you specifically do something related to that job?

Not a soft skill, which is more of a, um, how to describe it. What would this off scale versus a heart skill like hard skill would be,

You know how to is gonna make things very sounding basic, but like, you know how to use Ah,

job board, associate level person in the space. And a soft skill would be You understand how to,

um, you know, effectively communicate with your clients. Mmm. Right. So maybe give clients feedback.

So first was hard skill. Second was off skill. Third was like the managing and leading the management piece of it and forth with citizenship,

Which I Yeah. So and I think that was really important because culture was such an important part of,

um, why all of us were there. And then you line that up with the different levels, calibrated back with actual people,

and then you're about to tell us how Then we looked at what bill rates were out in the marketplace because obviously have to be able to tie this back.

The financial picture to say this is Stu, Right? So we're gonna give this person's bump because their skills were really here.

Um, you know, can they command that in the real world with clients? Yeah, Yeah, I think I think that was was critical.

And it was something that I think, really, The fourth out thereto. Think about. Okay. What's this gonna look like in six months?

12 months? 18 months. When we start promoting people on dhe, can we still make margins or can we achieve the market margins were looking to achieve?

Well, I remember. I don't remember. This is when we put bonuses together for the delivery staff or not.

But remember, some of the board members were dead set against any kind of bonus structure for a delivery staff.

And, um, you know, luckily, we're neighbors able to negotiate like, hey, we had our margins and were able thio,

you know, if we were able to meet or exceed our our margins. Then does it matter to you how we distribute the bonus structure?

So I think some of it was also making sure that some of the more senior folks had ability to really burn more or taking on formally more responsibility.

Um, so let me let me just don't do a script. Quick screen share on. Take a look at the document that you produced.

Just give everybody who's visual little bit more feel. And then, um, we will have show notes that you can download and take a look.

So, Eric, can you see my screen? Uh, I think so, Yeah, I guess,

Um, in any case, So here are some of the competencies down the left side. So the hard skills were the recruiting skills,

as Eric had mentioned. And then A, B and C were the different levels, right? Yes.

Yes. So you know, the idea here was that and this document to just to clarify this was so we had kind of an internal document as far as how we kind of scored people,

so to speak, um and and put more objectivity to it. This was a way to but this was part of the rollout.

Thio, um, show our consultants. This is how we're actually measuring these things. So it was a fairly large document to kind of go through,

and you can see you know each one of these levels, right? Okay, then. Business document.

Looks like it was one of them. Yep. On including the club business acumen was another one of the major kind of competency pieces there.

Time management, accountability, re talent, your pressure, and then the project management leadership piece. And then at the end here.

Yeah. So, yeah. So this was a lot of work to put together. I can see even simplifying this more if you're,

you know, just getting started. If you're just a one person department Thio, maybe just start with the hard skills,

right? Just hard skills, and then eventually work your way through the rest of it. But, um,

yeah, so So that just gives everybody kind of Ah, quick visual. All right. So we looked at the folks who were put into each level,

looked at their bill rates, you know, at the time and said, Does this make sense on dhe?

Crunched the numbers with our controller to see if, um, at the end of the day, it would make sense.

I don't think any of us really predicted how much it would actually affect margin And how no Apple that would be,

um luckily, we didn't really have to like we didn't have to really prove that piece. The board was pretty hands off from respects until it came to the compensation piece.

But I don't remember if there was a ton of pushback from the board. I think the bonus pieces probably the bigger the bigger challenge.

And I think when we were able to present to the content and say, Okay, we've We've been really deliberate in kind of lining up these four different arenas that we're assessing,

you know, our our talent on on. And then we also ended up using it, obviously, as a recruiting tool as well for people coming in tow the organization.

But, um, it was pretty pretty simple to kind of say, like, this is this is a very clean way toe change,

the way that we're structuring career path or treating career path and and ultimately I mean, our big goalswere let's reduce turnover and and,

you know, kind of turn up the volume on engagement on dhe. You know, we knew that it was gonna impact margin to some extent.

It just again. To your point, I don't think we had any idea it was gonna ratchet it up that quickly?

Yeah. I mean, I think that would have been a good thing, too, to push, but I don't think we were forget about We're just like we're tired of people leaving and,

uh and I think the board probably intuitively knew that I remember having that discussion and with the board and just saying,

you know, really, if you're if you believe that our business is in a meritocracy from a culture of perspective and they were nodding their heads,

then we have to line our compensation programs with that, right? We can't say we're in a meritocracy and then pay everybody exactly the same,

no matter what. And so it actually gave the organization the opportunity to put more risk and reward in place for delivery staff,

which they totally bought into for the sales team. But for some reason, you have a harder time seeing that with the delivery staff.

And so the argument was really Hey, we can manage to the margins that you sit out there for us.

Then do you really care how we structure the rest on? The answer is no as long as you get your margins,

we don't care. So so that was That was great. So, you know, fast forward. I think we're to give everybody some of the results.

But how? How did it feel? I think you know, to some of the the staff that were there,

How how did they respond to it initially? Good, bad. I think. I think the response over always was your excitement.

People were kind of, you know, I think a little taken aback that okay, were completely rearranging what everybody is known to be the same structure of titling it noble,

which was one title. Um, and so, you know, I think that and the combination of,

you know, we did a lot of deliberate, you know, communications to, um, you know,

are more senior people the ones that have been involved in beginning to kind of help shepherd this new concept in,

um and we were very clear about you know, what this is going to mean for people, the opportunities it was going to provide the exposure would provide them.

Um and so, you know, I think I think the biggest challenge we had was, you know,

rolling it out in a deliberate fashion and took some time. Thio kind of complete this this transition with communication and then formally assessing everyone rearranging the titling structure for for the individuals within the organization,

um, and making sure that people are comfortable with where they had been, um, say reassigned as faras The title was concerned,

but I think once people saw what was possible, it was pure excitement. And I remember, um,

it took some time, but after we rolled things out, um, people that had left prior re engaged with us like I don't see you.

You've changed things. This could be a great opportunity for me, you know, now that I've got this stuff,

this is great. Um, so I think that just solidified our place in the market. and as Well,

just near the organization. Our people, uh, we were listening, and we wanted to do the right thing and help them learn,

grow and then evolved. That's cool. You know, change is never easy for people. Um, but I think in this case,

they were asking for it, and I think you guys did such an amazing job. Um, engaging and collaborating with the senior team that ultimately,

Yes, We're, um, promoted right to directors. They were sort of doing the job anyways. And,

um, and getting their feedback and getting the feedback that they had heard from the field. So that was keys,

just, you know, listening. And I always say, you know, HR is like marketing. Really?

It's empathy and be listening. You know what? You're your clients. And in this case, your employees were saying to you,

and then I think, you know, the, um, this the effort that you guys put into being very specific about outlining all the different competencies is clear that you,

you know, obviously knew the job well, and so that's certainly helped. Do you have any advice for people who you know?

Because we all did recruiting. So we knew the competencies. Well, but imagine now doing that for engineering consulting firm or financial services consulting firm.

How would you recommend somebody who's implementing this and they haven't actually lived that job? Do you know what I mean?

Yeah, absolutely. E you know that I've done this with with clients before too. And I think I think first and foremost,

even in space is that I've been in where I haven't been ultra familiar with, um, you know,

either the industry or the specialization of my client. You know, the listening piece. And I think getting people on on on various angles to say Okay,

are we doing something vey an engagement survey? Are we just interviewing people in general to understand what their actual job is?

You know what's what's a challenge to them? What is a success to them? Um, what do they need?

What do they not need in their role? Um, how have they gotten to where they are, what they need to get to the next level?

Do they think, um, you know, asked every every question you can, Um and to me,

that's That's the base line for all of it. Mean to your point, Jen and I knew the roles.

We knew what people were doing. Um, and we probably could have built out the model without having a having the engagement survey out or,

you know, discussing everything with with our tenured people. But having those conversations and diving deep, combined with the data points that we have,

I think was the critical foundation point for us. Um, And then and then pressure testing it. Gonna make sure that when you do you think you know the answer.

Ask again. Um, what does it measure twice. Cut once. Coming. Same thing, right?

Yeah. Yeah, well, and sometimes I say, you know, designed the system without thinking about the people.

In this case, I think it made sense to go back and align the people and say, if if we put this person at this level and paid them this level,

can they command those bill rights Don't. So I think that, um, the career path, um in that studying just made it so amazing.

If you were a recruiter in town, you wanted to work there because it was an opportunity to say,

Hey, I can manage a pretty large team by being in the talent acquisition profession. Sometimes those teams aren't very big,

right, or there's not really a career path, sometimes from talent acquisition into any other kind of management role.

So it gave those folks some opportunities to lead teens. And although it's fairly matrix, like many consulting firms where you know,

you might report to Bonnie but then work on a project for the next six months to Jesse, right?

So there's ah, a lot of crossover. But because we had a common language, it made it easier for people to be in the Matrix,

you know, type of environment. One from a talent management perspective to, um, for our newer leaders and well,

as well as for the people that had been leaders in previous roles. It really helped them be able to guy conversations with the people that reported it.

Okay, where do we need to focus your energy on developing yourself? And it mean people that were we're at,

you know, less senior roles. Yeah, it was It was easy for them to say. Okay,

I need more exposure to X, y and Z in order to take the next step in my career.

So made all those conversations easier. It wasn't like that. I like you are Don't I like you?

It's like a spinning black and white whether or not you're doing this or not really objective. Yeah. Yeah.

And, um, in any case, well, it was really an amazing experience for me on for somebody who quite honestly,

I didn't really buy in initially um, a true believer that career path thing and talent management is Ah,

huge differentiator. Not just from an attraction and retention perspective, but also, I think, to be able to say to your clients,

Right. Um, we have an amazing career path, and therefore our turnovers, like 22.6%. Um,

I think we won so many great places to work awards like, over and over again. And some of these awards,

every single company are person in the company. Had to respond, so it was pretty impressive. So great job again.

Um, thanks. Feels like your performance review. Uh, it's just that we're not sitting at, uh uh,

Rick Bayliss is placed in Chicago. Okay. Yeah. Yeah. Well, Eric, um, thank you so much if people want to find you and want to learn more about your service is and,

uh maybe have you do this for them? How would they get ahold of you? They can reach me via our website are three s to dot com.

Otherwise you find me on LinkedIn, Eric Mraz. Iike mraz like a singer, right? Yeah,

it's not related. All right. Before we go tell everybody what you what you do for fun, outside of work,

work, work, cook and eat and cook and eat. That's prettyit,

All right, Eric, thank you so much for sharing your lessons. Well, have show notes that people can download And,

um, really appreciate your time today. Thanks for having me. Cindy can stop recording, all right?