As I am passionate about helping great people, and great companies, do great things, I hope to inspire you today to think about the changes your company has gone through in the last few years, think about your employees, and consider whether you are at risk of losing your talented workforce. As we all know, companies will soon be facing a war on talent. As we revamp and enhance positions, eventually, the number of qualified candidates will start to fall short of your new minimum job requirements. Add to the mix, the stressors of the economy, the tightening of expenses, winning the war on talent might look grim.
Let me just highlight some facts and figures about our talent.
Via Deloitte 2010 Ethics & Workplace Survey, a third of our employees plan to look for work when the economy turns around. Turnover cost is as low as 93% of the exiting employee's salary, but could run as high as 200%, according a 2000 Costing Human Resources study by Wayne F. Cascio. To put this into perspective, a small company that has 20 to 99 employees, with an average salary of $53,000 could be spend up to$300K to $1.6M on turnover cost alone. Not only is this draining on your resources, but, your pockets too.
The Society of Human Resource Management (SHRM) indicates via June's 2011 LINE Report recruitment difficulty is up 8.6% and 13.1% from a year ago for the manufacturing and service sectors, perspective. Contributing factors for the recruitment difficulties are linked to "new or enhanced skill requirements", according to SHRM. In addition, the report also highlights an increase in new hire compensation.
The psyche of the workforce has changed tremendously. Before even arriving to our doorsteps for work, employees are dealing with foreclosures, the fear of being unemployed, the rising cost of health care, dealing with and making arrangement for their ailing parent, and lastly, some are struggling to feed their families. Walking through our doorsteps, the internal psyche of the workforce has changed. The workforce is being asked to do more with less. Pay cuts, demotions, elimination of merit increase and RIFs are taking a toll.
Employees, while being asked to go that extra mile, are resentful as companies have taken precaution to protect the bottom line. While being unemployed is certainly the worse outcome, employees are feeling the pressures to exceed production standards in hope the company does not need to take further actions. Finally, these are definitely new times for all of us. As a result of our tough times, training budgets have been slashed and with it companies are finding their supervisory /management staffs are untrained to deal with the stressed, overworked, and resentful workforce.
Let's recap: a third of our staff will look for new work when the economy turns around; turnover costs are 93% to 200% of the exiting employee's salary; recruitment is becoming difficult because of "new and enhanced skill requirement"; the workforce psyche has changed and finally our management teams are untrained to deal with this new type of staff. The makings of a fierce war are upon us and the fight to attract and retain talent is around the corner. So, where do we go from here? I say, don't get into the battle but rather beat it before it gets to you. Give your employees reason to stay with you. Focus your attention on wellness, engagement and retention strategies.
Wellness statistics are all over the internet. Forbes.com, April 2006, reported for every $1 invested in a wellness program, saves $3 in health care costs. Wellness programs are not all that hard to start and implement. Employees can even organize and runs these programs w/minimal oversight. Consider how easy it is to start a walking group. Sponsor the group to walk for a cause. Or, make healthy eating a priority for the whole company by initiating a monthly 'Healthy Eating Potluck Competition'. The competition is based on nutritional value/calories and taste. Weight loss can be a subcategory of healthy eating. Other initiatives could include an anti-smoking campaign, stress reduction and going green. The upside of a wellness program is the reduction in health care cost, both for you, as the employer, and for your employee. Also, letting your employees organize and run it, you engage and commit your staff to each other. An employee, who "fits" within a company, will stay with their company.
Engagement strategies align employees to the vision of the company. Let me go deeper. An engagement strategy shifts the success, the ownership of success, to employees. For example, Intel has shifted the responsibility of their social media and blogs to employees. Based on employee performance, employees are trained, via a five level certification program, on how to respond to questions while continuously branding the company (Galagan, Pat., "Ready or Not?" T+D, May 2010, p. 29-31). KPMG, well known for their recruitment efforts, have included employees to share with the world why KPMG is such a great place to work at (Galagan, P).
To increase employee engagement, create an environment that inspires employees to unleash their talents and lead. Job satisfaction increases as employees are learning and enhancing their career experiences. Create new and exciting positions; target your middle management (as they are the least engaged), provide challenging work, and create a culture of daily learning. There is a basic need at play here which is often over looked; we as, individuals, are thirsty to learn.
Lastly, knowing recruitment costs are high, recruitment of new talent is harder today than it was a year ago, and recognizing it's going to get worse, a retention strategy will be key. Tomorrow's workforce, via core competencies, will be very different. Unlike the past, we are now asking, more like requiring, our workforce to be more analytical, intuitive, decision-oriented, and educated. As part of your retention strategy, work with your executive team to identify your future's core competencies. Then help educate your staff and prepare them for the company's future. Develop career paths or advancement opportunities (i.e. succession planning). Re-evaluate your tuition reimbursement and make it more accessible to employees. And finally, recognized beyond compensation, such as, for your true high performers provide them with the benefits of working from home, allocate extra time to work on a special project (a project that the employee wants to do), and/or let them run a wellness project.
To ask if your company is at risk for a turnover crisis, ask yourself these questions: Have you eliminated merit increases and/or change your compensation plan? Did you cut pay? Did you demote or reduce your workforce? If your answers are yes, to any of these questions, then the answer is yes, you are indeed at risk. If your answers were no, you are still probably at risk. Consider this, job requirements are being enhanced and minimum requirements are increasing. Employees today are falling short of the new minimum requirements, not to mention, colleges will soon fall short of awarding degrees than the US future demand. Key strategic positions will be harder to fill which will ever so fuel the war on talent. If that is not enough to inspire action, via your HR Team, coordinate a company-wide survey. Ask the hard hitting questions, discover your own truth and may you win the battle.
Having staff attrition challenges? Talk to our talent management & HR advisory consultancy in Singapore. Click here.
No comments:
Post a Comment