by: Michelle Seger
Everyone likes it when unemployment is low. More jobs, more opportunities for advancement, more pay. What’s not to like? If you’re a CFO or a chief risk officer, you may feel good about your own job security and the economy overall, but you’re likely worried about the other side of the coin: how to attract and retain top talent in a highly competitive job market.
According to the Wall Street Journal, a recent survey conducted by staffing firm Robert Half International Inc. found that 54% of U.S. employees and managers attempted to negotiate higher pay when they got their last job offer – a significant rise from 39% reported in 2018. The Journal article also reported on a December survey by the Association of International Certified Professional Accountants that found “the availability of skilled personnel was the biggest challenge facing companies in the fourth quarter of 2019, marking the 10th straight quarter executives reported that as their top concern.” In earnings calls in recent weeks, companies have cited rising wages and benefits as the reasons why profits are eroding even as revenues hit an all-time high.
The bottom line for the bottom-line oriented: Be prepared to pay more if you’re serious about hiring your top picks.
But hiring is just part of the challenge. The real trick is retaining great employees at a time when unemployment is at a historic low. The following are four best practices that we know will help you identify, hire and retain the best people for your organization.
To be clear, there are four points and I’m purposely putting culture first. It’s hard to define exactly what makes a great corporate culture. While there is no cookie-cutter approach to building one, we all recognize great culture when we see it and work in it. Companies that are known for their culture – from Apple to Zappos – often have cultures that are markedly different from one another. While there is no step-by-step methodology for creating the desired culture, you can identify great culture by looking at attrition when your highest performing people have the option of leaving for greener pastures but choose to stay. The only caution here is that while it might not be a good culture for the company, it just happens to be a good culture for the employee. For example, I recently spoke with one of the sales leaders of a Fortune 500 company who stated that the corporate culture was one where everyone was “nice” to each other. In other words, no constructive feedback going on and virtually no involuntary turnover on the sales team. And the company was wondering why less than 50% of the sales organization was not hitting its goals without consequence. Yikes! What are some common cultural themes that regardless of overall cultural differences create adhesion for your team and retention of the best?
Leadership has created an environment where people believe in what the company is doing, and the people trust and care for one another. That’s hard to pull off, and often misunderstood. In the example above where everyone was nice to each other, with the results being no accountability for low performance or bad behaviors, think about what that does to a team’s morale. Caring for one another doesn’t mean just “being nice.” It means taking time to understand what the level of employee satisfaction is and what you can do to improve it. If you don’t know where to start, read on!
Employees buy into the company’s mission and take pride in making a product that resonates with the American work ethic. They like telling people they work for Levi Strauss, and they like that they are respected and listened to. How does the company achieve this? By making employee engagement a chief concern through performance management and weekly check-ins with staff.
The keys to retaining top employees differ across countries, companies, and demographics. In Russia, surveys show that workers measure their employers’ commitment by how much money employers are willing to pay. In Latin America, employees want opportunities for development. Employers that offer such opportunities are perceived as loyal. The U.S., however, is less formulaic. Who are your people? What are they looking for? What will ensure their loyalty and commitment? For starters, ask them. You may be surprised by what they tell you. For some millennials, a flexible schedule or an opportunity to telecommute may be more important than a raise. Some CFOs assume that a 25-year-old will be motivated to stay with the organization because of terrific retirement benefits, for example. But not so fast. That 25-year-old may have witnessed her parents getting laid off during the great recession – and she can’t imagine working at the company long enough for those retirement benefits to mean anything. So, if you are worried about how to retain her, why not ask what’s important to her? Employee surveys will take the guesswork out of the value equation and give you solid insight into what’s important to your employees.
According to an article from the news service Quartz at Work, mass layoffs can have a profound effect not only on laid-off employees’ bank accounts but on survivors’ commitment to the company as well. Organizations that announce layoffs early, communicate the reasons for the decision and provide retraining and job-search help to those who are leaving get higher marks from those who stay on. After all, if you watch your company treat those who are laid off are human beings as opposed to excess baggage, you will know that if and when your time comes, you too will be treated with dignity – and you may be inclined to stay with the organization. This builds loyalty and drives retention. Layoffs used to be rare and were seen as failures of the corporation, not the workers. By the early ‘80s when layoffs were rampant, some companies actually took pride in trimming the fat and keeping the workforce lean. But that attitude led to a decrease in employee loyalty and commitment. Let’s face it: Powerlessness and loyalty don’t play well together. If you want loyal, committed employees, empower and engage them.
Finally, you can’t retain top talent unless you hire top talent. But how can you do that in a seller’s market where opportunities abound for the best of the best?
Start by using an assessment that’s been validated against your 90th percentile performers. The assessment should address two things:
Recently, a CEO told me that she believes the best salesperson you can hire is one with a continuously learning mindset who won’t get stuck in old thinking patterns. This isn’t about age, it’s about a lifelong mindset. Look for people who describe themselves as continuous learners. Continuous learners adapt and engage. They may even be more likely to survive a layoff because they’re quick studies and can be retrained, learn to use new technologies, and even become evangelists for new systems, methods, and platforms.
Aside from the desire to learn continuously, how else would you describe your ideal long-term employee? Open this discussion up to managers at all levels. When you know what your ideal employee looks like, be sure you have a recruitment, interviewing, and selection process that can identify him or her.
But this is where it can get a bit dicey. Do you want to bring in a high performer who isn’t a cultural fit? Employees like that can be toxic to the rest of the organization, resulting in unwanted turnover from other employees you hope to retain. Remember, it’s a lot easier to develop a solid performer into an outstanding one than it is to “retrofit” a poor cultural fit into the organization. In my experience, that’s the way to go. If you can determine that a candidate who is a good cultural fit has the potential to be a top performer, make the hire and get the development started.