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?