Never Hire Again
Updated: May 10, 2018
One of the most challenging decisions an owner of a growing business has to make, is hiring employees. In a robust economy the process of finding the right person is downright frightening. The prize fighter Jack Dempsey is credited with the quote "The best defense is a good offense". In the war for talent, the quest is to never hire again. How do I make this happen?
The war for talent is a term coined by Steven Hankin of McKinsey & Company in 1997, and a book by Ed Michaels, Helen Handfield-Jones, and Beth Axelrod. The war for talent refers to an increasingly competitive landscape for recruiting and retaining talented employees. The book describes not a set of superior Human Resources processes, but a mindset that emphasizes the importance of talent to the success of organizations.
We are in that increasing competitive landscape right now. It seems that over half of the billboards I see are announcing jobs, and noticing now hiring signs on the utility trailers. Nationally, unemployment is down to 5.5%, in Utah, 3.4%. Full employment is considered to be around 4%. The top talent is currently working so head hunters are not passively running advertisements; they are raiding current employers, stealing people.
The “War for Talent” is on!
Losing people is always expensive. The Society for Human Resource Management estimates the cost of replacing an employee; recruiting, on-boarding, and ramp up productivity can exceed 50% of the employee’s annual compensation. But in the current market, finding replacement talent can multiply this cost significantly.
Surveys show that while employees get more money when they leave a job, they do not leave for more money, they leave due to dissatisfaction with their job, workplace or their boss. Have you done all you can do to establish, protect and promote an attractive, engaging culture that your people do not want to leave?
So here is a R.E.A.L strategy for a positive employee retention culture:
Recognition: Pay for performance, cash is an important part of the equation. But non-cash recognition actually goes further for retention purposes. Public recognition, plaques, trophies, training and good old-fashion hand written thank you notes. My favorite is a date night gift package delivered directly to the spouse with a hand written note of appreciation. Mary Kay Ash has said “There are two things people want more than sex and money... recognition and praise.”
Engagement: Employees desire to “own” their jobs and are committed when they understand the job expectations and their authority to perform. It is vital that you clearly communicate how they contribute to the success of your company. From Ian Hutchenson’s book People Glue: “As far as engagement goes, the fish always rots from the head. People leaders need to be the catalyst to improving productivity and performance, but they can’t if their teams are not first engaged. Engage and motivate your people to get A’s not Zzzzzz’s.”
Affiliation: Your employees want to be a part of something larger than themselves. Anthropologically, humans are tribal and need to belong. The company vision, consistent image and strong orientation are tools to establish this. Service awards, uniforms and logo wear are tangible methods. The company branding efforts should extend to the employees as well. A hundred dollars in clothing gifts with logos can be a better investment than any pay raise.
Leadership: This is the most important piece of the equation. You need to be visionary and positive about the future of your company. You must be decisive and certain and finally you must be clear and consistent about the direction you are asking others to go. You must be genuine and “walk the talk” of your culture? Are you the type of leader you would follow?
By paying attention to these areas it is possible that you will retain your talent and only have to hire when you grow, not to replace the talent you have lost. Companies with strong performance cultures never have to recruit, instead they select. Can you afford to watch your talent go out the door? Remember, when you lose top talent they will recruit their former peers to come with them. Be intentional and Win the War for Talent and never hire again.
Russell Lookadoo is the HR guy for small business. As president and chief strategist for HRchitecture®, he works with business leaders so they accomplish their goals by effectively using their teams. Russell brings over thirty years of experience designing and implementing performance management, motivational and rewards solutions that achieve business strategies in organizations ranging from a small manufacturer to the second largest bank in America. He holds the Senior Professional in Human Resources designation from the Society of Human Resources Management and earned the Certified Compensation Professional designation from World at Work. Russell attended the University of North Carolina on the prestigious Morehead Scholarship and graduated with a Bachelor’s in Industrial Relations. www.theHRguy.biz