Saturday, January 30, 2010

The "War" for Talent

I read something on LinkedIn the other day that I thought offered an interesting and in my opinion incorrect perception- that the "war" for the best talent is over for the short term because of the current recessionary and unemployment conditions.

It rather reminded me of a conversation that I had twenty years ago with the CEO and VP of HR at a high technology firm where I was employed. I was frankly pretty disturbed by some of our human resources practices and policies that were just this side of exploitative in my opinion. It wasn't that our wages needed to be that low or practices that Draconian, it was that we were essentially the "only game in town". When I questioned our approach the CEO quipped "they aren't leaving are they ?".

He was right in many cases they weren't leaving, but our absenteeism, utilization of mental health care and regular health care benefits, absenteeism and other factors were much higher than both the industry and regional norms. Employee satisfaction was also low.

Then something interesting happened, some additional high technology employers came to town and "they" started leaving, in droves.

Flash forward to 2010. You see comments from CEOs, CFOs and others that because employees are anchored to their jobs because of the economy companies can occupy themselves with "important" matters like costs, efficiencies, etc. Employees aren't going anywhere.

Here are some contrary reasons to why I think that strategy is dumb:
  • Employee dissatisfaction is at an all time high
  • Studies show that something less than 30% of employees are "engaged" or exhibiting discretionary effort in their jobs.
  • The demand for "experienced" workers is expected to increase by 15% while supply diminishes by 25% over the next 10 years.
  • "Presenteeism" costs the U.S economy $200 billion annually.
  • The costs of replacing an employee ranges between 2 and 5 times annual salary in "hard costs" alone.
  • Engaged employees outperform their disengaged colleagues in every category and organizations with high engagement similarly outperform their competitors in every key metric.

Organizations that have high engagement didn't arrive at it by accident. They have a deliberate strategy. Do you really believe that organizations like Apple, Google, Southwest Airlines, and others are ignoring their people strategy? Do you really believe that best employees are going to stay with employers who exploited circumstances when the economy picks up?

So I have some recommendations JFHF3HCJD6FE for you during this "lull" in the war for talent:

  • Look at your talent and acquisition strategy. As many as 30% of outside executives and 40% of new management hires fail within their first 18 months because of poor hiring processes.
  • Studies have shown three essential pillars are key to long term business performance and success: trust, communication, and leadership.
  • It is much more efficient to build an "employment brand" and hire people whom it resonates with than try to retrofit your culture and staff.
  • The team with the best players playing in an aligned fashion always wins.

Systemic approaches like "lean", six sigma, ISO, and others aren't going to fix engagement and trust issues. Waiting until the "war" restarts and the cease fire is over seems like a dumb strategy to me. What do you think?

Monday, January 25, 2010

What's Your Plan?

Over the last year I have talked with many friends, colleagues and acquaintances regarding their happiness with their current jobs. Not one has told me they are excited to go to work each day but rather that they are being asked to do so much more with a lot less (that’s not anything new to all of us), they are not appreciated for the extra time and work they are putting in and that the general atmosphere of their workplace is tense and stressful. Some have even quit their jobs hoping to find that “golden opportunity” with a different great company. Are the days of employee satisfaction and engagement gone forever or is this just a temporary state of being? Are the days of employee loyalty and trust gone as well?
Where we are today
• According to WJM Management Advisor, they conducted a survey to which 47% of respondents claimed to be “miserable or “sometimes miserable” with their job. This compares to the survey of two years ago that indicated only 18% felt this way to the same survey question.
• A survey by the Center for Work-Life Policy reports that between June 2007 and December 2008, the proportion of employees who claim loyalty to their companies dropped from 95% to 39%; the number saying they "trust" their organizations from 79% to 22%.
• With unemployment in the U.S. at 10%, executive happiness and retention understandably become less of a priority for organizations that are preoccupied with bolstering productivity and protecting profits during difficult economic times.
So Why Do You Care?
• According to Monster.com, 79% of jobholders said they have stepped up their search for a new place to work since the recession began.
• Considering demographic trends it will soon get harder and harder for corporations to fill the vacant seats: low birth rates, baby boom retirements and caps on immigration could reduce the number of working people by 20-40% (The Economist, 10/10/09).
• A recent study by the Chandler McLeod Group revealed that 95% of the 930 executives surveyed were seeking alternative employment with 73% of the group pursuing other opportunities on an active basis!

In other words, an economic recovery may herald a seller's market for talent like we've never seen before. And of course, the ones most likely to hit the exits are the ones with the most talent and potential - i.e. the executives most sought after by your competitors!
So What Can You Do?
• Diversified and varied responsibilities vs. just more work. Studies show that giving more responsibility is one of your best strategies. It takes more than money to make people passionate. Dr. Tracy Duberman, WJM's SVP, Organizational Effectiveness states, "It's really about giving people increased opportunity, bigger roles, empowering them more, and watching them closely to see if they step up to, and are able to handle, each increased level of responsibility."


• Leadership communications. Your leaders’ communication skills are key to building a high-retention culture and high-engagement. This includes the C-Suite articulating compelling, strategic business goals and promoting the growth and improvement of the company's talent to support these objectives. This not only means leaders being clear about the business plan, but also transparent about talent selection and promotion, as well as coming clean with employees and sharing the “dreaded” bad news.


• Assess the skills needed to grow your workforce now and beyond recovery

• Identify what skills you have in your workforce and where the talent gaps are and what talent you will need to attract – talent skills mapping is critical at this time.

• Develop a talent attraction strategy, including revisiting the organization’s culture to ensure it aligns not only with the revised business strategy but also the type of talent you are retaining and attracting.



• Talk to employees about their career development plans and what motivates them. Remember it is easier and cheaper to retain than recruit!

• Be transparent and open about staffing projections, career development opportunities, and the “real” situation. Building and retaining trust is critical.



It is clear that until companies reach the realization that their “A” players are going to jump ship as soon as a better opportunity presents itself executive employee dissatisfaction will continue until it explodes. Employee engagement and employer trust are going to be the staples for an organization to survive the coming year.
What is your company doing to make sure that your valued executives are engaged, and committed? It is their futures you hold in your hands. Why should they trust you with something so important?

Sunday, January 24, 2010

Building Your "Brand"

A colleague shared a great article written by Brett Minchington, an Australian consultant and expert on employer branding.

He mentions that he has been studying this issue for years and thought the start of a new decade would be a great time to explore it further.

It is interesting the reaction that you get when you say "branding" to the average business person. I usually get a reaction similar to what I get when I talk about engagement, both "functions" are thought of as belonging to marketing and externally focused. I find this interesting as studies have shown now for some time that the relationships that drive great organizations have their foundations internally rather than externally and are based on things like values alignment, clarity of organizational mission, clear expectations, and competent supervision.

When I talk about your employment brand I don't mean your recruitment brochures or candidate sourcing software. I mean taking the time to see your organization as a "product" that you want to get in front of your desired "customer" base and retain them.

Minchington mentions and I agree that building this "brand" doesn't belong to HR, Marketing, or Communications; it belongs to all three.

You might ask why I think it is important now; unemployment is high and employees are sticking tight to their jobs. The answer is why are they staying? Information about employee dissatisfaction and low levels of engagement would suggest they aren't staying because they are committed. Add that to the idea that the demand for "experienced" talent is going to increase while the supply decreases would suggest that relying on the recession to keep people captive is bad strategy.

I would also suggest that building your employer brand takes time and energy. It is intriguing to me how many employers still use a very reactive process to the acquisition and management of their human capital. They don't think through the totality of what they are looking for in an employee or candidate until an opening occurs if then. The urgency there usually translates into "find me a body".

There are of course exceptions. Top performing companies have created their employment brand. Businesses like Google, Starbucks, Apple, Southwest Airlines and others have a clear brand not only for "customers" , but for prospective employees. Even GE and EDS under Ross Perot were famous for what you "got" in their employment environment, not much ambiguity.

When I was an executive with a financial services organization we embraced a similar strategy. We rebuilt our "brand". Not only as a financial institution, but as an employer. We were clear about who we were and what we were seeking not only in customer/members, but employees.

In a little over three years we became an employer of choice. Our Recruiting Manager was selected as the recruiter of the year by our local national university beating out organizations like Nike, Intel, and Columbia Sportswear. We also enjoyed tremendous business success in the acquisition of desired demographic customers and increased "wallet share".

A colleague summed up our strategy quite nicely when she said " I understand now why you guys are kicking our ass. It isn't just the products and the services. Your people are better than ours at every level". She went on to say "Something tells me that isn't an accident". She was right. We didn't pay the highest wages or have an exotic employee fitness center, we built a brand.

Minchington says that over the next 10 years relationships will replace reputation in making business decisions. I agree in fact I would go further and quote Margaret Wheatley

"In organizations, real power and energy is generated
through relationships. The patterns of relationships and
the capacity to form them are more important than tasks,
functions, roles, and positions."


We have had six sigma and "lean manufacturing", ISO and other initiatives for years now and turnover is still costing the U.S economy alone an estimated $5 trillion per year with another $200 billion attributed to presenteeism, employees who show up, but don't engage. Isn't it time to explore some other solutions...?

I guess there is always plan B, if you have one.......

Thursday, January 21, 2010

Life's Highs and Lows

Who was it that said, life is about highs and lows? Well, let's see from an employee perspective the highs from this past year would be:

- highest % of presenteeism (show up and then go home)

- highest % of job dissatisfaction

- highest % unemployment rate for most of the population



Not so "high" if you ask me.



Oh, and then there's the lows:

- low annual increases, and with some, mandatory unpaid time off and no bonuses

- low job efficiency (it's estimated at 30% in the US)

- low employee engagement


Yeah, life has its highs and lows. This past year has had them reeling.



So what do companies do about it? LISTEN, STRATEGIZE, and ACT.



I just watched the new Domino's pizza advertisement. It showed consumers calling its pizza crust "cardboard" and the sauce "tasteless". WOW. Then Dominos told us what they were doing about it. Oh, at the end the CEO says that they're changing. Did the employees find it motivating?



Well, let's think about it. Did they see their CEO implement and invest in a strategy about complaints I am sure the front line have been listening to for a long time? That would be motivating for me.


Complex? No. Honest. Yes. Did it work? Time will tell, but initial sales are growing.

Sunday, January 17, 2010

Great Interview Questions

In actuality the interview process has been defined as potentially the weakest link in hiring and selection, but I came across these questions every interview should include and I wanted to share them with you and why you should use them:
  • How about them Yankees? The point of this type of question is an icebreaker. It establishes a rapport and a context. Interviewing is stressful, if you can begin to build a rapport you will get better more honest answers.
  • Tell me about a time you had to overcome a major obstacle? The point here is how do they respond to change and obstacles. Do they get creative? Do they shut down? Don't be afraid to probe for details. Also if your candidate is the "super hero" or victim this is a dangerous sign.
  • What interests you about this job? I am all about fit and commitment. If they can't describe why they want the job or they are interested in our organization it makes for some heavy lifting to get them engaged. It can also tell you if you have "fit". If they are looking for something you don't offer or you see a mismatch with the hiring manager better to find out now.
  • Is there intelligent life on Mars? The point of this question is that it is bizarre. It actually makes the candidate think on their feet rather than give you a pre-packaged response that they learned in a how to interview course. How they answer in terms of attitude, thoughtfulness, etc. is more important than what they answer per se.
  • So we just hired you, tell me about your "first day" to do list? What you are probing here is decision making and judgement skills. It is intended to be situational and probe for skills or aptitudes you are seeking.
  • How did you get into this field or career path? Again here you are seeking fit. Do their values correlate with yours. Are they "committed" or compliant?
  • Tell me what you know about us? In this day of the internet, social media, etc. this speaks to preparation and investment. If they don't know anything about your organization they are going through the motions. Is this a person you want in your "life boat"?

As I said in the beginning unless you are a very skilled interview the interview itself can be very unreliable. These questions are much more about "fit" and attitude then about competency, but most candidates fail based on fit, not technical skills.

For me it is important to understand someones thought processes and how they respond in different situations. These aren't the only questions I would ask, but I would definitely weave them into my process. They are also intended to be illustrative rather than definitive. You can create your own variations. It is also okay to "wait" for a candidate to respond. While your intent isn't to create stress if the question is worth asking, it is worth waiting for an answer.

So what are some of your favorites and how do you use them?

Building Your "Team"

A Conference Board study released last week reported that worker satisfaction is at an all time low. Many employers are relying upon the recession as a retention strategy- employees have no where to go therefore we can concentrate on "other" aspects of our business. Yes Virginia, that strategy is really as dumb as it sounds!

So I would like to explore a different paradigm; one that says the concept of loyalty isn't dead and that the team with the best people doing the best work wins.

I wanted to take this opportunity to share some ideas from Daniel Pink, author of Drive among several other great books as well as some key other things you can do.
  • One of the suggestions that Pink makes is to create great jobs. We have talked about this previously as building engagement into your process. When you build great jobs and a place for people where their values align with your own you tend to get great people.
  • He follows that up with build great careers - even if they aren't entirely with you! I have long said that we need to redefine loyalty in terms of contribution not tenure. When people are giving you 110% while they are on your payroll they are in fact being loyal. Pink talks about boomerang employees; employees who may leave temporarily to get experiences or a promotion you can't offer them, but come back. In many cases they return with experiences and skills you couldn't provide. Their value has increased not decreased! Even if they don't return former employees who had positive experiences with you are great sources of future employees.
  • Take the pulse of your employees. Great employers "re-recruit" constantly. They ensure that employees understand their role in the organization and how they "fit" constantly. They also focus on them as individuals. People like to know how they fit and contribute on a personal level. It's called meaningful feedback!
  • Be realistic with your expectations and theirs. Some level of turnover is not only to be expected it is necessary. People's values and needs change over time. Making promises that you can't keep undermines trust and makes you seem as if you don't respect their intelligence.
  • Treat them with respect. If I respect you I talk to you about your work in terms of outcomes, not process. I also hold you accountable within reason for achieving your work effectively and independently. I don't encourage co dependence or tolerate mediocrity. I see you as a "partner" not as someone who is beneath me.
  • In addition to Pink's excellent suggestions I would add one of my own- Hire Right! By thinking through what kind of people you need and want to add to your team you will make better hires.

We know that based on lack of engagement, poor fit, and general dissatisfaction U.S. production efficiency is estimated to be at around 30%. Do you really want to rely on the lousy economy to get and keep the people you need to run your organization? Especially when studies also tell us that the supply of "mature" talent (25 to 45) is expected to decrease by 25% while demand increases by 15%. Or worse yet to you want to settle for 30% efficiency?

Are any of these things really that hard to do at the end of the day?

Saturday, January 9, 2010

What's Your Plan?

I just had the opportunity to read a couple of articles that managed to both alarm me and to reinforce a long standing belief I have- we need to invest much more energy in our recruitment and selection processes.

The alarming part of the articles included the following:
  • It is estimated that employee turnover costs the U.S economy $5 trillion annually.
  • Another study states that we lose $200 billion annually to "presenteeism", that is where employees don't leave, but perform marginally because of stress, illness, dissatisfaction and related issues.
  • Employee dissatisfaction with their jobs in the U.S. is estimated to be at its highest point in 50 years.
  • The expected demand for "experienced" talent is projected to increase by 25% while the supply is expected to decrease by 15%.
  • The majority of organizations are doing what they always do in a period of economic insecurity, hunker down and focus on the "numbers". They assume that a combination of economic uncertainty and high unemployment will either keep people in place or make other talent readily available.

Now for a corollary viewpoint:

  • Engaged employees turnover at a rate 51% lower than their un-engaged colleagues
  • Their absenteeism rate is 27% lower
  • Their per capita productivity is 18% higher
  • Organizations with high engagement are 12% more profitable than their peer group.

So at this point your reaction is probably; Duh! Engagement is better, and you are correct. The bad news is that engagement takes effort and work, it doesn't just happen. There are a couple of basic ways to create an "engaged" workforce:

  1. You can build it in to your organization
  2. You can try to "retrofit" it.

Similar to quality, building it in is a much more effective strategy, but it must be addressed systemically. So I would like to suggest a "plan" to you:

Build an employment brand

Top performing organizations recognize that building a brand is a cultural initiative, not a marketing strategy. The "brand" is part of the fabric of the organization. In the process of identifying, acquiring, and developing their talent their "brand" is intrinsic to the process. The employees experience the brand as much as the customer and the community. The values of the organization are sacrosanct, they are flexible about process, but ruthless about principles. Prospective employees seek them out because of what they represent. This is reinforced throughout the recruitment and selection process. Candidates are kept up to date on their status on progress through the process. Even unsuccessful candidates are recognized at potential future candidates or referral sources or customers.

I am not going to suggest to you there is a "right" brand or culture, but rather that you define it and communicate the brand that is "right" for your organization.

Talent management is proactive rather than reactive.

Top performing organizations maintain a robust internal and external talent "pipeline" at all times. Their processes are not reactive. They identify potential talent and take pains to develop that talent. I discussed in a prior post that truly progressive organizations see executive search firms as talent scouts and partners rather than vendors. They recognize these firms see thousands of candidates annually and partner with them as part of their process.

Recruitment, selection, and development are management competencies.

The best organizations ensure that everyone in management roles recognizes that competency in selecting talent, setting clear expectations, giving feedback, coaching, and taking appropriate corrective actions are everyone's job, not the exclusive province of HR. HR is a partner in the process, but the responsibility resides with the manager.

Talent is a corporate resource.

In the best performing organizations they don't follow best practices, they create them. Managers realize that their role in relation to human capital is that of stewardship, not ownership. They are expected to coach and reinforce values and competency not only in their own staff, but across the organization. The best managers are not "technocrats", but highly skilled at building teams and developing talent.

Engagement is a "built in" not a "bolt on".

My colleague, Joseph Skursky of Market Leader Solutions, refers to it simply as "Hire Hard-Manage Easy". Steven J Zaccoro in his 2008 literature search puts it more academically, but conveys the same concept in his "best practice" model:

  • Define the position requirements. This involves the "technical" skills and competencies the position requires.
  • Define the attributes. This is where we look for "fit". This is a critically important because of the more than 50% failure rate for executive new hires it is "fit" rather than competency that causes the "failure".
  • Recruit appropriate candidates using the profile developed using the first two elements.
  • Assess and evaluate using the pre-established profile. It is critical that the profile be developed up front to prevent bias and adverse selection.
  • Selection involves using both the objective profile and the subjective interview process. Interviewing as a "stand alone" is one of the least reliable methods of selecting.

By defining your "profile" upfront you are bringing aboard candidates who are pre-disposed to support your culture. They are "committing" rather than complying.

You might look at this process and see it as prohibitively time consuming and "expensive" so I will share a few more data points with you:

  • A recent study estimated that because of low engagement the U.S. economy is currently operating at around a 30% efficiency rate, and that was before the 2009 recession.
  • The cost of individual employee turnover is estimated by the Department of Labor as ranging between 30 to 200% of the employee's annual salary, with the higher costs being associated with senior management.
  • What we are "spending" on turnover and presenteeism annually could fund the costs of healthcare reform with money leftover for education, poverty, and other social infrastructure programs.

My experience has taught me that is not necessarily the team with the best players that wins, it is the team with the best players who share a common vision and purpose.

Less than 30% of organizations worldwide currently have a formal engagement initiative. So what is your plan B?