COMPANY SPONSORED PRE-RETIREMENT COUNSELING. IS IT A GOOD IDEA?

76 million US employees are at or near retirement age. The benefits of proper pre-retirement planning for your employees are many and obvious. Yet most of the millions of baby boomers who have imminent plans to retire are ill prepared. They face five main hurdles:

(1) Raising Health Care Costs. Health care costs will conservatively raise anywhere from 12% to 18% per year. As the technology of keeping us alive longer only continues to improve, there will be no relief to the cost of doing so.

(2) Disappearing Pensions. More and more companies are eliminating their company sponsored defined retirement plans. And they are doing so while not significantly increasing their defined contribution offerings.

(3) Inadequate Personal Savings. Not withstanding the recent turmoil in the stock market, Americans simply do not save enough money period, let alone for their retirement years. Study after study indicates that we save less per individual of any major industrialized nation.

(4) Forced To Retire Far Sooner Than They Had Hoped. In a recent study of retirees and pre-retirees, 50% planned to work past age 65. Only 13% have done so. Most of been forced to retire because of unexpected health problems or loss of their job. More than 30% of retirees planned to work part-time after their formal retirement, but only 10% have been able to accomplish this goal. The same reasons have prevented the other 90% from working part-time: poor health and no job opportunities.

Of course this presents a double whammy for retirees who are forced to quit working early and/or cannot get part-time work. They have significantly less time to contribute to their retirement savings and they have to use what savings they have accumulated for more years than they anticipated.

(5) Unrealistic Expectations About Reducing Costs. Only 10% of retirees state that they have significantly reduced their expenses from their pre-retirement levels. Most say that with inflation and higher taxes, it is just impossible to lower your expenses from what you were paying just prior to retirement and keep a similar standard of living.

So your employees need pre-retirement help, but why should companies pay for it? That’s a good question. Why should a company invest any more money in an employee that will retire and no longer be of benefit to the company? This question is especially relevant in light of today’s tough economic times.

We believe that the answer is both no and yes! Companies should not get involved with offering financial advice, either in-house, sponsoring outside providers or by subsidies. Despite disclaimers, the risk of lawsuits stemming from financial downturns or unexpected catastrophic situations are just too great. Even without the potential legal consequences, a company would risk the tarnishing of its image and, therefore, its employee branding. If employees lost a portion of their retirement nest egg by following recommendations made by an organization or individual somehow linked to the company, they would invariably blame the company to some extent.

Fewer companies provide this benefit for these very reasons. Other companies only offer it to their top executives, who presumably have more financial sophistication. With the preponderance of financial companies out in the market today, all levels of employees can find needed assistance on their own for reasonable cost. Investment advice is no longer confined to the wealthy.

However, there are at least four benefits to a company that provides some modest pre-retirement counseling to its employees:

A. Improve Employee Branding. Goodwill will be generated with current employees. This type of effort demonstrates that the company does care about its employees and is willing to invest in their well-being.

B. Create A Pool Of Experienced Part-Time Workers. If structured the right way, retirement counseling can provide options to the retiring employee to return to the company in a limited role. This might be especially beneficial to a company if the retired employee fills lower level vacancies to which they would not normally do so. This allows the company to staff positions with extremely qualified (perhaps over qualified) personnel who know the company and are happy to assume vacancies that have less pressure.

C. More Voluntary Lay-Offs When Needed. If employees feel better prepared for retirement, they are more likely to accept requests for voluntary lay-off packages when the company offers it. This is especially true if the employee has reasonable prospects for part-time work with the company. The company would have less need for in-voluntary reductions in staff and the problems inherent with them.

D. Better Succession Planning. With better planning for retirement, comes a more orderly flow towards people leaving their jobs. Companies have more advance notice to plan for openings and fill vacancies.

Some modest pre-retirement counseling does benefit the company. A good program can be constructed that generates these positives while being cost effective. If you'd like to explore this concept further, please feel free to get in touch with me.

For More Information:
http://www.gatewayinternationalgroup.com/
http://www.larrymaglin.com/
http://www.lawrencemaglin.com/
http://www.joekran.com/
http://www.josephkran.com/

Staff Review by: Joseph (Joe) Kran, Lawrence (Larry) Maglin, and Rick Spann

Leadership Best Practices for Human Resource Professionals

The results of a recent global study of 1770 human resource professionals identify key leadership practices tied to effectiveness.

Effective Practices for Human Resource ProfessionalsAlthough Human Resource professionals play a vital role in organizational development and growth, little actual empirical research on the characteristics of effective HR professionals actually exists.
We, Gateway International Group, Inc., a global leader in assessment-based individual and organizational development, thought it would be helpful for our clients to consider this kind of data. In a recent global study of leadership effectiveness among human resource professionals we found that a number of leadership behaviors reliably distinguish superior leaders (the superstars) from less effective ones.
The Study
1770 HR professionals from over 670 organizations were included in the current study. Each leader completed 360TM leadership assessment and development tool that measures 22 dimensions of leadership practice (what leaders actually do) and 22 dimensions of leadership effectiveness (how effectively they're perceived by their bosses, peers, and direct reports).
A number of key practices were identified that significantly predicted higher leadership effective ratings.
The FindingsIn order of importance (starting with the most important) superior HR leaders:

• Analyze the future impact of their decisions and understand the impact of these decisions throughout the organization.

• Maintain in-depth knowledge and expertise in their area.

• Demonstrate an active concern for others and form supportive relationships.

• Energize others, getting thementhusiastic and involved.

• Clearly express their thoughts and ideas, keeping others informed of their expectations.

• Are comfortable being the one in charge and seek out opportunities to be influential. They know and accept the fact that they will be under constant scrutiny.

• Use effective persuasion to build commitment to their ideas and initiatives.

• Challenge the perceptions and mandates of superiors.

Study Details
Each participant was evaluated during ongoing developmental programs, by their bosses, peers, and direct reports. Participant breakdown by geographic region, management level, and industry are presented below.
A weighted mean procedure was employed to combine the rating of bosses, peers, and direct reports for each participant. An overall measure of leadership effectiveness (based on the summation of 22 effectiveness scales) was regressed on ratings of 22 common leadership practices. As a set, the 22 practices accounted for 59% of the individual variation in overall effectiveness.Relative importance measures were calculated for each predictor and are displayed in the figure below. Bars indicate the percent of the variation accounted for by each predictor. Light bars indicate an inverse relationship (i.e., higher levels of the practice were associated with poorer effectiveness ratings.


For More Information:
http://www.gatewayinternationalgroup.com/
http://www.larrymaglin.com/
http://www.lawrencemaglin.com/
http://www.joekran.com/
http://www.josephkran.com/

Staff Review by: Joseph (Joe) Kran, Lawrence (Larry) Maglin and Rick Spann

“It’s like getting fired twice!”

More Laid-Off Workers Being Left on Their Own

In Weak Job Market After Outplacement Runs Out

When a terminated employee’s outplacement services run out before he or she has successfully landed another job, it’s like getting fired twice.

In this softer labor market, job searches are taking longer than in recent years. More than two-thirds of displaced employees who receive traditional three-month outplacement programs — generally, the most common program given to executives and middle managers — are not finding new jobs before their outplacement programs expire. They are being left entirely on their own after the clock runs out.

Companies that provide limited-time outplacement programs to their terminated employees in today’s weak job market are violating the top three reasons why outplacement is offered in the first place. Outplacement is provided to displaced employees to help them: (1) find a better job faster than they could on their own, (2) reduce their anxiety during their unemployment and, thus, their frustration with the company and (3) help maintain the morale of those workers who remain with the organization. Yet, companies that provide outplacement programs to terminated employees for only a limited time in today’s weak job market, risk not achieving these objectives.

Displaced employees are facing stronger competition as they vie for their next jobs. According to research by Gateway International Group, just as many companies are continuing to terminate employees this year as those that are hiring staff. Only 21 % of employers are adding employees, while 20% are continuing to cut staffing levels.

Gateway International Group’s innovative outplacement programs can offer home-based, personal career coaching with no time limits. Gateway guarantees that 100% of its program participants, through personal one-on-one coaching, will achieve their desired objectives before their programs expire — regardless of how long this takes. At best, 40% of the participants in traditional, limited-time outplacement programs reach their objectives before their program expires.

Gateway International Group has eliminated the requirement for outplacement participants to go to an outplacement firm’s office to get the service and support they need. Most people don’t want to leave home for outplacement coaching. There has been a dramatic decline in the number of affected employees who actually take advantage of and use traditional outplacement firm offices. They just don’t come to outplacement offices anymore — no matter how much you encourage them.

Personal computers and the Internet explosion have made searching for employment from the convenience of one’s home the preferred method of job-hunting for millions of Americans. Many displaced employees already engage in online searches for new employment, or found their last job this way, and prefer to continue home-based job searches without the inconvenience of having to travel to an outplacement firm’s office.

According to a recent Gateway International Group survey of 300 white-collar professionals nationwide, 92% of workers surveyed said they preferred to receive employment counseling from their homes, rather than traveling to an outplacement consultant’s office, as long as they have professional assistance available via telephone and the Internet. Only 8% of employees surveyed said they needed to receive outplacement assistance in an office setting. In addition, 87% of respondents said they felt that outplacement assistance could be provided just as effectively over the telephone as in face-to-face meetings with outplacement counselors.

Most importantly, 93% of respondents said they felt outplacement services should be provided until they have successfully achieved their objectives — and not just for a limited amount of time, like traditional outplacement firms provide.

Questions You Should Ask

If you were unemployed right now, in the current tough job market, which would you rather receive: an outplacement program that expires within a given time period or an outplacement program with no time limits that lasts until you have found new employment? Now you have a choice!

If you were unemployed right now, which type of outplacement program would you rather have: one that necessitates you having to drive to the outplacement company’s office to receive service and support, or one that you can access from the convenience of your own home? Now you have a choice!

Have any displaced employees ever complained about their outplacement services expiring before they found new employment? Now you have a choice!

Have you ever had to grant outplacement program extensions to displaced employees whose services ran out before they found new employment? Now you have a choice!

Have any displaced employees ever complained about having to drive long distances to an outplacement provider’s office, especially with the price of gas? Now you have a choice!

Have you ever personally visited the offices of your outplacement provider to see how many of your displaced employees are regularly coming to the outplacement company’s office to fully utilize their outplacement programs? Now you have a choice!

If you were displaced from your job and had a spouse or partner, would it be of value if the company that displaced you also offered you a spouse or partner employment assistance program? Now you have a choice!

Call Richard Spann at 1-800-376-8176, or e-mail him at rick.spann@gigincmail.com so that we can discuss if our “at home” or “virtual” product line is right for your company.

For More Information:
http://www.gatewayinternationalgroup.com/ http://www.larrymaglin.com/
http://www.lawrencemaglin.com/
http://www.joekran.com/
http://www.josephkran.com/

Staff Review by: Joseph (Joe) Kran, Lawrence (Larry) Maglin and Rick Spann

Get yourself connected

by Walter Sonyi, Jr.

There is nothing new about networking - haven't we all heard that it isn't what you know but who you know? The difference is that networking today has taken on a new magnitude of importance. It has been described as an "art", a "way of life", and some people even make claims for its spiritual value. It is something more than a business lunch and less than a political campaign, and it is a subject everyone seems to have an opinion on.

So what, exactly, is networking? Essentially, it is the modern term for making lots of business acquaintances, the understanding being that if you amass enough of these acquaintances, you will derive enormous opportunity for financial and personal gain. Of course, amassing them isn't quite enough: you have to work them correctly. Here is where networking becomes a science, understood by a new breed of professionals with bulging databases who have the credentials to represent the industry of the truly connected. These gurus bring us such compelling concepts as "bootstrap", "pigpen" and "power" networking. Despite the jargon, the prodigious literature on the subject does throw up several recurring themes, which you might do well to remember when prowling for that crucial contact or planning a major change in the course of your career.

Such events are all very well, but what if joining a networking group sounds like worse torture than a Britney Spears novel (yes, it does exist)? Can't you survive perfectly happily going about your job with diligence and skill and leave networking to the extroverts and the name-droppers? Well yes, up to a point. But if you want your career to thrive, you really have no option but to continually extend your range of contacts, whether you like talking to strangers or not. The good news is that you don't have to get to know anyone very well. You don't have to reveal deep truths, or even to possess any. You have to know people, lots of people. You will be known by who you know.

Malcolm Gladwell, in a brilliant New Yorker article entitled Six Degrees of Lois Weinberg, describes the "power in relationships that are not close". He recalls the 1974 classic Getting a Job by sociologist Mark Granovetter who reported that some 56% of professional and technical workers he interviewed in a Boston suburb had found their jobs through a personal connection. These opportunities mainly came about through what Granovetter calls "weak ties".

"Granovetter argues that when it comes to finding out about new jobs - or for that matter, gaining new information, or looking for new ideas - weak ties tend to be more important than strong ties" writes Gladwell. Think about that. We generally reckon that the most important and influential people in our lives and careers are those we are closest to. But these people tend to have similar interests and move in similar circles to ourselves. The real power of networking lies in an ever-widening circle of acquaintances, improving the likelihood that, following the logic of the six degrees of separation, you too can associate yourself with anyone in the world. Granovetter calls this "the strength of weak ties".

If, like me, you're convinced that networking is a necessary, if somewhat painful, activity, which may just reap unknown benefits in the future, then it, helps to be familiar with some of the techniques employed by the experts.

John Naisbitt, author of Megatrends, offers some sound advice: "In the networking environment, rewards come by empowering others, not by climbing over them." Herein lies the first rule of networking: the "givers gain philosophy" or as William Blake's puts it, more elegantly: "Always give without remembering, always receive without forgetting." If you set out to share what and who you know with other people, the chances are they will reciprocate, or at least remember your generosity when the time comes for you to call in a favor.

Just opening your mouth at an event full of strangers can require a lot of courage, especially if you are naturally shy, or feel you're the last person anyone will want to talk to. However, BBC radio producer Carol Stone, in her recent book Networking: The Art of Making Friends, points out that "the sternest people melt when they think you could be interested in what they have to say". If you have listening skills, then it shouldn't be hard to show them off when you find yourself in a networking situation. And be prepared to make the first move. "Do you mind if I join you?" is seldom met with the answer "yes, I do". Your own introduction then gives the other person the chance to launch into their story, and you're away.

Most of the networking gurus repeat another golden rule: keep your promises. How often has a person said they'd do something that might make a real difference to you, then completely forgotten about it? We're all guilty of it from time to time, and this is where good organization comes in. I know someone who is constantly interrupting conversation to write names and ideas in a tiny notebook - this gets irritating after a while, but at least he's the kind of person who does what he says he's going to do. Stone maintains a database of over 14,000 names, from which 1,000 get the coveted invitation to her Christmas party. When you operate at this level, there's no option but to manage your network of contacts like a military operation. The rest of us should just be sure to write down who we've met, with any action points, as soon as we can after the event. Waiting until the alcohol has worn off is not a good idea.

Some people approach networking as they would hunting. They beguile their way into their prey's company, stalk them until the perfect moment, and then pounce. I prefer a horticultural analogy: cultivate a wide variety of plants, and the chances are some will bloom or bear fruit when it matters.

So, when you next find yourself with the opportunity to network, don't fall into the habit of speaking only to those you already know. You can open up exciting new worlds for yourself: all it takes is some effort, a positive attitude, good manners and a little organization behind the scenes. All of which are easier to cope with than the school reunion or a round of golf. Unless, of course, you like that sort of thing.

Staff Review by: Joseph (Joe) Kran, Lawrence (Larry) Maglin and Rick Spann

VIRTUAL OUTPLACEMENT

CAN MAKE BETTER SENSE IN TODAY’S WORLD

Traditional outplacement for executives and professionals has evolved quite a bit over the last two decades. In past years, these employees were often provided with significant career transition support. They could often count upon the following:

A. Being assigned to one highly qualified, seasoned advisor. This advisor would often work with the individual for the duration of his/her job search. Most, if not all, work being done was on a one-on-one basis. Training and coaching were highly personalized.

B. Resumes and cover letters were written by experienced writers. The employee’s task was simply to review and approve them.

C. Having an individual office or cubical to make phone calls and conduct business. Often times, the individual’s phone was answered by a receptionist or a personalized message was developed for him/her.

D. Research and office support were done by office support staff. An experienced research administrator was there to generate all available information when requested. Letters were typed and mailings were done for the client.

E. Other professional support staff was available as needed. Retirement specialists, relocation experts and credentialed mental health practitioners were on call.

OBVIOUSLY TIMES HAVE CHANGED. Largely because of cost, assistance has been dramatically curtailed. Client companies no longer can afford these more comprehensive services and are still looking to provide quality services, but at lower prices.

In order to be able to make the adjustment to these lower fees, many career transition companies often have had to limit quality to make a profit, especially those companies who are part of larger conglomerates and, thus, have a higher overhead. Now, with some exception at the highest of levels, executives and professionals generally are provided with the following:

A. An advisor “of the day”. This advisor is not dedicated and is at the provider’s office to offer advice to anyone who seeks it. The employee is only able to speak with whoever is on call on any particular day. Although reasonably qualified, these advisors are not as sophisticated and experienced; they often work on a per diem basis for as little as $275 per day.

B. Employees are given templates so that they can write their own resumes and cover letters. The advisor will provide only basic editing and commentary.

C. No office, cubical or phone usage.

D. Modular training done at the provider’s schedule by another low level advisor. No additional support professionals to provide unique support.

Not surprising, employee satisfaction with the career transition services which are being offered is decreasing. But because of budgetary constraints, companies are hard pressed to do anything about it.

THERE IS AN EXCELLENT ALTERNATIVE. Virtual career transition services can make better sense. The cost of virtual vs. office based outplacement is very favorable. Virtual is no more expensive, often less. By using this delivery method, the employee receives many of the same high level quality components which were provided in earlier times:

A. High quality, dedicated advisor

B. All development/training done one on one

C. Resume and cover letters done by experts

D. Additional support personnel

AND WHEN GIVEN THE CHOICE, YOUR EMPLOYEES OVERWHELMINGLY PREFER VIRTUAL OUTPLACEMENT. In a recent survey, 91% of employees chose virtual over office based programs. This survey was done before the current high priced gas situation! The reasons for their choice were:

A. No travel time.

B. Their own technological sophistication as well as that of the systems used.

C. Work is done on their schedule, not the company’s.

D. Actually more personal. One-on-one vs. group/modular sessions.

E. Is more directed at specific client needs as opposed to those of the classroom.

F. Visual capability is available.

For More Information:
http://www.gatewayinternationalgroup.com/

http://www.larrymaglin.com/
http://www.lawrencemaglin.com/
http://www.joekran.com/
http://www.josephkran.com/

Staff Review by: Joseph (Joe) Kran, Lawrence (Larry) Maglin and Rick Spann

Making Layoffs the Right Way

by Walter Sonyi, Jr.

Ian Kerner saw it coming. The CEO of Arc, a New York-based Internet consultancy, knew by October that his business was slowing down, and that the next round of funding his investors had promised was probably not to going to come anytime soon. Something had to give; some people would have to go. "This wasn't a case of singling people out for performance issues. I knew I had to do something significant," Kerner says.

"Significant" was an understatement. After a "brutally frank" assessment of Arc's project pipeline, Kerner concluded that he had to let 40 employees go - half of Arc's staff, almost all of whom he had hired personally. "You have very few opportunities to get smaller, and if you miss the right moment to shrink, you go out of business," observes Kerner. "But I felt anxiety, guilt, a desire to help them, a desire to forestall the layoffs."

Firing good employees is one of the toughest tasks a business leader can face. And these days, it's a task that's getting harder to avoid. After years of learning how to manage growth, executives are now being reminded that they need to know how to run a shop in lean times, too.

"There's little worse you can do in the work world than take someone's job away when they've done nothing wrong," says Helen Drinan, CEO of the Society for Human Resources Managers.

Unfortunately, nearly half of U.S. companies fail to provide their managers with any layoff training. But there is a right way to go about downsizing. Do it well, and few of the victims will take it personally. Your "surviving" employees will remain committed to the hard work ahead as well. And your conscience will rest easier if you know your smooth handling of the situation helped soften the blow.

"Companies that are in business for the long term recognize that how they lay people off is just as reflective of what kind of company they are as how they reward people," Drinan says.

The best time to prepare your employees for a downturn is when things are going well. Discussing layoff procedures before they are even a threat allows for a calm, clear exchange of information, which will prove valuable in the event of actual bad news. Regular updates on company or division performance are essential. Keep your employees informed, and they'll be upset -- but not surprised -- when layoffs are announced.

Don't go it alone. Given the number of financial, legal and emotional pitfalls layoffs can bring, human resources professionals lead the effort in most companies. Whenever possible, consult with an employment attorney as early as possible, if only to avoid possible legal ramifications; employee lawsuits are up more than 2000 percent in the past two decades, according to Jackson, Lewis, Schnitzler & Krupman, an employment and labor-law firm.

Having been mandated to cut positions, how do you decide who stays and who goes? It's an easier assignment if you're excising an entire department or division. When Kerner assessed his company's prospects, he chose to close the firm's satellite offices wholesale, and trimmed certain types of jobs he didn't see a market for. "I decided the age of business plan writing was over, so the people I had to write plans weren't going to be as useful going forward," he says.

If, however, you need to cut with a smaller knife, the problem is unfortunately not as simple as keeping the best and jettisoning the rest. Employees with specialized skills (such as knowledge of a certain programming language or a crucial account) may be indispensable despite lackluster performance.

This still leaves you a fair amount of leeway. Redundant positions, relatively poor individual performance, or budget imperatives that suggest cutting higher salaries - all are potentially valid reasons to let someone go. Just be sure to document your reasons for electing each employee, so that in the unlikely event of a discrimination suit, you will have a paper trail to support your reasoning. In larger layoffs, you should make sure that no single ethnic, racial or other demographic group is overly represented on the cut list.

Look out for age discrimination in particular, cautions Lisa Moran, a New York employment attorney. Since age often legitimately correlates to slowing performance or higher salaries, you may find cause to concentrate your cuts on more senior employees. Just make sure you're acting on quantifiable data on performance or cost and not just a general sense that, for example, your 55-year-old salesman "isn't a good fit."

Moran also cautions clients about the WARN Act (Workers Adjustment and Retraining Notification). This federal statute requires companies that have at least 100 full time employees and that are laying off more than 50 of them to give two months' warning before making the cuts. "Most people don't know about this and they get into lots of trouble with it," says Moran. Companies that don't provide the necessary 60-day advance warning not only have to pay laid-off workers for the balance of the 60 days, but also may have to fork out punitive damages.

The next step is to develop a clear message explaining the layoffs. The message must be delivered uniformly to everyone concerned: affected workers, remaining staff, and even investors.

This is also the right time to give your lieutenants the help they'll need to do the job properly. The training should go through the layoff selection process, timing and other logistics, the message managers should communicate, and how to deal with the survivors. Training meetings also give managers a chance to write a script for the dreaded meeting. As unnatural as it may seem during an emotionally intense meeting, having comments prepared can help to keep the interaction from becoming personal.

Keep in mind that while human resources managers may be orchestrating the show, they're the conductors, not the performers. Whenever possible, employees should receive the word individually from their immediate supervisor. "It's awful when you've hired somebody, you've nurtured their career, and now you're going to do something that damages their personal and their professional lives," Kerner admits. "That's why a lot of managers want to delegate the job." He found that in most cases, people handled the news very well. "Most people understood and felt that it made sense."

Once you're ready, don't delay. Break the news early in the week, early in the day. Be concise. "After the initial shock, says SHRM's Drinan, "people can't even hear most of what you're saying anyhow."
A few crucial points to hit: Make sure the employees understand how their layoff fits into the bigger picture. "They have to leave with a story they can tell themselves, their colleagues, their family. If the person's going to be one of 25, they need to know they're one of 25," Drinan says.

Make it clear that this is a final decision from which employees will have to move forward. Avoid explaining how hard this is for you, too. This meeting isn't about you -- after all, you're still employed. Instead, concentrate on what the person is going to do immediately after your meeting. Have something on paper detailing the severance arrangement, COBRA (health insurance) rights, and what must be done with company equipment and facilities like phones and computers.

Once the pink-slip meeting is over, now what? Lawyers and human resources executives often disagree about how to handle the rest of layoff day.

I don't think people should have to leave right away. there needs to be a reaction process and space
Moran takes a harder line. "People say it's inhumane to lock down computers and escort people out, but that's what I would recommend as your lawyer. They're your files and your property," she says.

Closing laid-off workers' email accounts and access to your corporate network probably does make sense. If you're allowing them to use their desks for a few days, consider having your IT department provide a generic log-in so they can have access to the web and email.

Security guards, on the other hand, may be an excessive touch, sending a message that you either fear or mistrust your employees. "Their presence is very, very negative in a layoff situation," Drinan says. "I've been in companies laying off thousands of people. I've never had an experience where anybody has done something where you'd say someone call a guard."

Don't expect much real business to take place on the day the music dies. As people absorb the news and begin adapting, "you cannot over-communicate". You have to woo remaining employees to stay all over again." In your role as a leader, don't downplay or soft-pedal business conditions with the surviving crew. Give it to 'em straight, and don't be ashamed of what you've done. Show that you still believe in the company's future, and that what just happened, while surely unpleasant, was the right thing to do.

"Remember, it's about survival," counsels a Los Angeles media executive who recently laid off staff for the first time in his career. "If you don't do it, 100 more people are going to lose their jobs."

Staff Review by: Joseph (Joe) Kran, Lawrence (Larry) Maglin and Rick Spann

Leadership as a Relationship

In a recent article that appeared in Human Resources for the 21st Century, management guru and author Margaret Wheatley identified 7 practices to follow in dealing with the overwhelming change that's taking place in today's business environment.

One of those practices has particular importance to the style of leadership we encourage in our work as executive coaches.

It's the concept of "Leadership as a Relationship." People often think of leadership as a role — or a position — to which someone has been promoted. Instead, we believe leadership is a relationship among individuals.

The better the relationship, the more profound the effect leaders will have on others. In any relationship, the more trusting, caring and honest it is, the more successful it will be in overcoming challenges and facing the onslaught of change we are faced with on a daily basis. Successful relationships are the heart and soul of any successful business.

Successful relationships can overcome the "us" versus "them" mentality that so often manifests itself among employees and management.

Far too often, people in positions of leadership will insist that people follow them. They will demand blind loyalty and punish anyone who doesn't tow the line. These so-called leaders are leaders in title only. When someone is forced to follow, his or her performance is measured by what is expected — instead of driven by what is possible. The status quo may be maintained, but the status quo is rarely enough to survive and prosper in a business environment subjected to the outside forces and technology that change the global landscape daily.

To cultivate successful relationships, leaders must possess the emotional intelligence to not only understand their own motivations and desires as they interact with others, but also the ability to sense what others are thinking and feeling as well.

In today's environment, blind loyalty is a thing of the past. Instead, leaders must insist on individual integrity. They have to encourage people to give their best thinking. They have to ask for diverse opinions and be prepared to find value in opinions that may challenge their own perceptions. Instead of being "followed" into a false sense of security, leaders need to see through insincere platitudes. They need to shun bravado and the limelight and instead, champion the fruits of their relationships.

Leaders need to thrive on the rigorous thinking of others that forces them to act and react and fine-tune their own critical thinking.

Staff Review by: Joseph (Joe) Kran, Lawrence (Larry) Maglin and Rick Spann

The Honeymoon's Over

If starting a new job makes you nervous, don't relax-it should. How you manage your first weeks in a new executive position can carve a path toward success or mark the beginning of your inevitable demise.
"There is no honeymoon. Once you're on board, you're on display," said Dory Hollander, founding partner of Wise Workplaces, an Arlington, Virginia-based executive coaching firm.
Just as you need a strategy for getting a new job, you should have a good strategy for starting one or your early missteps may come back to haunt you. Here are pointers from executive consultants and coaches for ensuring a smooth and successful transition into a new position:
Check your assumptions at the door.
Before you begin, remind yourself that you are entering a new corporate culture, which might be radically different from the one you left. For instance, you may have worked in an office that thrived on confrontation, but that kind of aggressive style may not be acceptable in your new job. Or perhaps the earnest, self-effacing approach that was effective in your past might be mistaken for a lack of resolve at your new company.
"You need to understand the nuances of the new culture and let go of the nuances of the culture you came from," said Hollander. It's more difficult than it sounds, as it could mean adapting ingrained work habits, especially if you spent several years in your previous position.
Get with the program.
You probably have a good sense of your job responsibilities. But do you understand how your job fits in with the overall mission and strategy of the company? If you don't, sit down with your boss and find out how your results affect the bottom line.
A surprising number of executives work without that knowledge, which makes it difficult, if not impossible, to prioritize effectively, said Caela Farren, president of Mastery Works, an Annandale, Virginia talent management firm. "I always ask them how they make decisions without knowing. How do they choose what to focus on?" Farren said. "Especially these days, when we're trying to up performance and do more with less, it's more and more important that people are really hooked in to what's important to the organization."
And don't assume that those reporting to you understand how their jobs tie into the company's mission. If you make sure they know, you will not only help them focus, but you will empower them. "Knowing the mission and strategies gives people a great sense of pride, meaning and commitment," Farren said.
Identify your network of support.
Your first days on the job should be spent getting to know the people upon whom you will rely, as well as those who will rely upon you. In the first few months on the job, you should meet face-to-face with these people. If you manage people in different locations, start traveling. Find out how they work, what stumbling blocks they face, what they need to succeed. What do they expect of you? Build an organizational chart if there isn't one, and create a plan for communicating regularly with the members of your team.
Devote extra time to establishing good relations with the administrative assistants of anyone whose ear you hope to have, including your own boss. Administrative assistants, who often have more power than assumed, are sometimes the confidantes not only of a top executive but a whole group of executives. If you are sarcastic or dismissive with them, they may give you a negative review when a higher-up asks them, "What do you think of the new guy?"
"Never think going into an organization that you are too big or too powerful or too important to pay attention to this very critical group of people," said Hollander. "They may be the watchdogs of the culture."
Listen and learn.
One of the best ways to start a new job is to be open about what you don't know and to use your newness to ask questions. For many executives, displaying ignorance is difficult to do, but it's essential. After all, you may know your field, but as a newcomer to a specific company, there's no reason you should know everything about the way it operates.
Confront the legacies of your hire.
One of the stickiest challenges of starting a new job is dealing with the internal candidates who were passed over for the position you got. Ask your boss for the background, and then approach those people directly.
"Incite the dialogue rather than try to ignore it," said Michael Shahnasarian, president and founder of Career Consultants of America, Inc. in Tampa, Florida. "You can't go in there like a bull in a china shop. You have to be very knowledgeable of all these little dynamics that could undercut your effectiveness."
Soon after starting in a new management position at a brokerage firm, one of Shahnasarian's clients ran into difficulties with a subordinate who had been passed over for his job. The subordinate not only was angry; he had the sympathies of his co-workers. Shahnasarian counseled his client to befriend the man and look at ways to help him advance his career goals elsewhere in the organization. The client did, and ultimately, the subordinate was transferred to a different department, where he got the promotion he had wanted.
If you were hired at a particularly high salary for your company, you should be careful not to mention a fancy vacation, a new car or anything that will suggest you're flaunting your hefty compensation.
Approach change carefully.
A common mistake of new executives is to make a change that is less rooted in strategy than in a desire to flex one's muscles. Those changes often backfire, as they don't take into consideration what is actually needed or how the employees will react to the message.
"Changing the wrong thing, or changing things too soon, is worse than not changing anything at all," McKay said. "You need to know what the impact of the change is going to be. You have to know enough about the organization to know what change is going to be effective in bringing about the desired results."
Limit your promises.
New executives often make too many promises about the things they are going to change. This tendency is often motivated by enthusiasm for the job or a desire to win over new colleagues, career counselors say. But you'll do better to hold your tongue until you know not only what needs changing, but also the most effective way to achieve those changes.
Develop an exit plan.
It seems counterintuitive, but developing an exit plan before starting a new job-or even before accepting a new position-may be the best thing for your career, according to Hollander of Wise Workplaces.
Hollander counsels her clients to develop an exit plan that includes how long they will stay in the job, when they will leave and, most important, what they want to leave with. What skills do you want to acquire? What kind of contacts do you want to have? What kind of new knowledge?
"That's a developmental plan that has teeth in it," Hollander said. "If you just say, 'I've got some goals', those goals will be blown away the first month you're there. They'll evaporate because there will be so much on your plate. Your exit plan won't evaporate because it has got dates and timelines of what you need to learn by what time. It compresses your developmental approach."
Said Hollander, "You will be a better executive, a better entrepreneur, if you start with the exit in mind."
After all, your overall goal is not simply to start a great job, but to build a stellar career.

For More Information:
http://www.gatewayinternationalgroup.com/ http://www.larrymaglin.com/
http://www.lawrencemaglin.com/
http://www.joekran.com/
http://www.josephkran.com/

Staff Review by: Joseph (Joe) Kran, Lawrence (Larry) Maglin, Walter Sonyi, Jr. and Rick Spann

HR’s CRITICAL ROLE IN IMPROVING 2008 SALES

Most of the current focus of your sales management team is understandably on bringing in as much sales as possible for the remainder of the calendar year. Q4 results can often mean the difference between celebration and frustration. Nearly all of the management activities which will take place during the next three months are tactical in nature. How to finally close this important account, getting the last bit of sales out of an existing customer or increasing the number of client sales visits are paramount in the minds of your sales management team.

Yet the last three months of this year are critical to the success your company will have for 2008. The strategic/structural improvements you do or do not make know will have a tremendous effect on the company’s sales success for 2008. Obviously, you need to start making these changes now because structural improvements take longer to implement than tactical ones. If you wait until January to begin thinking about what changes need to be made, than your Q1 results will be over before you have made any meaningful changes.

So you are faced with the proverbial problem of how to overhaul the engine when the car is going full throttle in the race! Yet this is precisely what you must do. There are a number of positive, constructive improvements you can begin to make that will have a tremendous impact on next year’s sales performance. Knowing which to implement can be the uncertain and confusing part. It is certain that you can not do everything, given the restraints of time, energy and money.

The most effective way of knowing which direction to pursue is to identify the behaviors of those people who are already successfully doing them and then promote their actions. This is true for just about anything. If you what to learn how to improve your golf game, then you are likely to buy videos of golf pro’s and then try to duplicate their behavior.

The same thing applies to making structural changes to your sales force, only better. It is better because you have an opportunity of assessing what the top, say 20%, sales reps are doing to be successful in your world, in your environment, with your products and against your competition. Instead of comparing yourself to some generic criteria which may or may not apply, you can get a more accurate understanding of what is effective in the environment that pertains to you.

There are four major behavioral areas that you want to assess your top sales reps in, then base any changes on:

1. SALES PREPARATION. Thinking about and planning a sales approach requires some degree of strategy and analysis. Sales professionals have a finite amount of time and energy to expend; therefore, they must structure and organize their efforts effectively. Channeling energy into generating leads and finding prospects is a critical factor for achieving success for many sales professionals. Prospecting may also require some ingenuity and risk taking in order to find new ways to go after markets and potential customers.
2. CONTACTING. Once prepared with product, market and customer knowledge, it is then necessary to make contact and begin the process of producing results. All competitive sales efforts rely on building excitement about the value of the product or service and its potential for meeting the needs of the customer. This implies having good business instincts, providing sufficient information and presenting a solution in a convincing manner. How much emotion, persuasion and information are used may vary depending on the sales situation, but the success of the sale is greatly influenced by the quality of the sales person’s behaviors at the point of customer contact.
3. IMPLEMENTATION. Implementing a sales solution may require a quick transaction or a more lengthy engagement. In most cases, sales achievements and customer solutions occur as a result of both individual and shared efforts. Whether short term or long term, relationships develop between salespeople and customers as well as between salespeople and other members of the sales team. This team may be internal or external to the salesperson’s organization. This type of effort requires great empathy to understand the needs, preferences and priorities of both customers and those groups whose help is needed to land the sale.
4. DRIVERS. Salespeople who set high standards and are willing to push themselves to meet these expectations often find that sheer hard work will take them a long way toward achieving success. But the rewards for this hard effort must be there or this important behavior will not be sustained. These rewards come in many forms, from pride in being a sales professional, to delight in making lots of money, to great satisfaction from closing a particularly difficult account. What each sales rep considers as a commensurate reward is shaped by the pattern of his or her underlying motivations. The strongest motivations are likely to be especially significant and meaningful to each sales rep, and may well act as a strong driving force to sustain the required work effort needed to be a long term success.

With the proper tools, assessing these four critical behavioral groups can be done easily, electronically and inexpensively. You then can compare the results of your top sales performers with those of others sales rep groupings; i.e. bottom 20%, geographic areas, divisions, females, minorities, etc. Now armed with this powerful data, you can identify and implement long lasting programs that will truly be effective in improving sales for 2008 and beyond.

These results and subsequent individual assessments can also effectively be used in new hire, potential transfers and promotional decisions.

Please contact Joseph Kran at (800)376-8176 so we can discuss in greater detail how this assessment process and our sales development capabilities can help you implement the needed structural solutions to achieve your 2008 sales goals!

Staff Review by: Joseph (Joe) Kran, Lawrence (Larry) Maglin, Walter Sonyi, Jr. and Rick Spann

ENGAGEMENT

As outplacement has become more commonplace, many of our client organizations have become more selective about the on-site presence of an outplacement provider at the time of termination and that has resulted in the need to address the issue of engagement in a new light.

No longer does engagement with the individual take place on-site, immediately after the event, rather it must now take place outside the workplace, after the fact. How can you support the likelihood of engagement in the new scenario? Our experience has shown that there are several key steps that encourage and expedite smooth and timely engagement.

• First, is the availability and provision of clear, concise information regarding the services that are being provided.
• Second, the material should be separate from other transition documentation which should stand out and be attention getting.
• Third, the individual should be verbally encouraged to contact the provider to ask questions and schedule the start of their services. They should also be informed the provider will be contacting them to introduce themselves, answer questions and set up a mutually convenient initial appointment.

The importance of staging the engagement process cannot be overstated. In our experience, when we have the opportunity to talk with someone about our services, engagement is 90% or better. When we do not have the ability to make that initial contact, engagement drops dramatically, sometimes down to 50%.

The critical ingredient in this process is for the outplacement provider to have access to a home or cell phone number and this can be a sensitive arena. On occasion, companies with whom we work have taken the position that they would prefer to just give the individual the requisite information, encourage them to call, but not share their contact information with us. The stated reasons for this are:

• They want the individual to show genuine interest and initiative.
• They feel this is personal information and don't want to violate a person's right to privacy.
• They feel a call from the provider would be considered invasive during an emotional time.

While legitimate concerns, we feel that the positives of proactive contact and introduction outweigh these concerns. We find that many individuals simply do not understand what outplacement is, what services will be provided, and how the services can assist them in navigating the uncertainties they are facing. Emotionally they may not be ready or able to initiate contact with someone they don't know, and hence may miss out on meaningful support and assistance when they need it most.

It is in the interest of the organization to make sure the individual understands what is being provided so they can, in fact, make an informed decision. This is not sharing personal information in an inappropriate way with an outside party; rather, it is providing necessary information to a service provider who is acting on behalf of the company and representing a service they want the individual to have.

The bottom line is that when you structure the engagement process following a termination, you have the opportunity to demonstrate the goodwill of the organization and genuine interest in seeing that everyone equal opportunity to access the support services being provided. That extension of goodwill will go a long way to help achieve the best outcome possible in a difficult situation.

Staff Review by: Joseph (Joe) Kran, Lawrence (Larry) Maglin, Walter Sonyi, Jr. and Rick Spann

Executive OnBoarding: A Secret Weapon in the War for Talent

You have won the War for Talent—at least for now. After an extensive (and costly) search, your company is delighted to welcome a new executive—a talented, visionary leader. You are confident that you have chosen well, and that this heavy-hitter will help the organization attain critically important goals.
You have brought this new leader on board expressly to bring about organization change. He has an extensive record of success in his career, including a stint at a top competitor known for its innovation and marketplace agility. Your company also has a long history of success, but you see the need to upgrade your products, services, and processes. This new executive is a sure bet to get that accomplished, right?
Maybe. And that is a qualified maybe.
It is extremely difficult for new leaders, especially those brought in as change agents, to develop the complex knowledge base required for success. It is imperative that they understand the organization (and the people in it) well enough to implement and sustain real, lasting change. New leaders must also pace their entrance into the organization in a way that will emphasize this learning process while simultaneously allowing them to start making important decisions. In doing so, they must temper the understandable desire to quickly prove themselves with the awareness that this sense of urgency may ultimately cause their undoing.
There is a lot at risk. The War for Talent has only begun with this strategic hire. It is not enough to bring an incredible new leader on board—your organization must learn how to hang onto him and optimize his impact.
What if you had a way to dramatically increase the odds of this new leader’s short- and long-term success? A thoughtful and intentional approach to the assimilation of this new leader? Increasingly, organizations are developing structured, organization-wide Executive OnBoarding processes to ensure leadership effectiveness and longevity. A formalized OnBoarding process can cement a new leader’s success. The lack of one can lead to his failure. Abject failure.
Extremely costly failure. One large financial services organization calculated that the cost of hiring a new officer-level leader is at least $380,000. For a top leader in a large corporation, that cost can approach (or exceed) seven figures. Not even considered in these calculations is the cost of intangibles such as the skepticism that develops when a leader and his/her initiatives fail. The cost and difficulty associated with starting up a new change project to replace the failed one. The financial impact that missed opportunities could have on your organization, both short- and long-term.
Recent research in a 100,000+ employee retail organization also demonstrated several other tangible benefits of their Executive OnBoarding process above and beyond their considerable financial savings. They found that their OnBoarding process predicted executive effectiveness on a variety of fronts:
Thorough understanding of business culture and objectives
Increased collaboration and exchange of information among senior leadership team
Effective integration of executive into a leadership role in the functional team
Focused identification and implementation of critical organization initiatives
Increased job satisfaction; and
Decreased likelihood of job turnover.
Without more information, you might be inclined to think that OnBoarding is just an orientation process. In some ways, it is. Effective OnBoarding does help new leaders learn the rules—but in this case, it’s the unwritten rules that they learn about. How to get things done. Who can help (and can’t, or won’t). What to do, and, more importantly, what not to do. However, OnBoarding is about much more than the rules.
A well-structured OnBoarding process helps new leaders develop a deep understanding of, and respect for, the organization as they enter it. It is not a training class. OnBoarding is a six month (or better), systematic approach to developing a strong foundation for future success. In a perfect world, we would let new leaders spend six months just learning about the organization. Unfortunately, we rarely have that luxury. We must ask new leaders to learn about the organization as they do their jobs.
Typically, an ideal OnBoarding process is non-linear and non-sequential. And it is not easy. Effective OnBoarding requires a significant commitment of time and energy. It must be supported organization-wide, and championed by the boss as well as the new leader. As a new leader is assimilated into the organization, OnBoarding simultaneously supports an effective transition at a number of levels: Organizational, Business Unit, Functional, and Personal.
Organizational OnBoarding is an opportunity for new leaders to meet with top executives to learn about organization history and culture, brand identity, strategic direction and initiatives to support current priorities. One organization created such a powerful OnBoarding process that they decided to “retrofit” all 200+ VP-level and above leaders—the bosses released that their new direct reports knew things about the organization of which they were unaware.
Business Unit OnBoarding provides a balance between strategic thinking (as it pertains to the business unit) and the mechanics of organizational functioning. This part of the process creates understanding of the cycle of business meetings and their purpose, provides awareness of business workflow and handoffs, identifies organizational resources and decision-making processes, and facilitates formation of important collegial relationships among top business leaders.
Functional OnBoarding is where new leaders roll up their sleeves and really begin to lead their teams. They assess the function’s capabilities and effectiveness, meet and size up their team, learn from key stakeholders, participate in a structured team assimilation process, and begin creating and implementing initiatives.
Finally, Personal OnBoarding addresses the non-work side of the leader’s life. Many, if not most, high-level hires require relocation of the leader and his/her family. To increase their long-term commitment to your organization, you need to help them put down deep roots in your community. To feel like they belong there. They need help identifying resources. Feeling welcomed by the organization on a personal level.
By addressing the needs of new leaders on these four levels, your company has gained an important business advantage—fully-integrated leadership. If you save one at-risk executive, your process has already paid for itself. And you’ve managed to sidestep the organizational wreckage that can accompany that derailed or failed leader.
Importantly, in addition to the other clear benefits of On-Boarding, it can also become a valuable recruiting tool for your organization. A way to let key candidates know how important they are to you in a way that your competitors can’t. It can become your organization’s secret weapon in the War for Talent.
If you would be interested in how we have helped other organizations assimilate their new management talent,
Please contact;
Walter Sonyi, Jr
1-800-376-8176
walter.sonyi@gigincmail.com

www.gatewayinternationalgroup.com
www.larrymaglin.com
www.lawrencemaglin.com
www.joekran.com
www.josephkran.com

Get Your Leaders Moving On Your Strategy

Strategic Leadership Development (SLD) Creates the leaders you need to take your organization where it needs to go. SLD is a highly effective change process that addresses all the issues:

• SLD begins with your business objectives and enables you to identify the specific leadership practices needed to achieve them.
• SLD builds accountability into the development process in a uniquely powerful and comprehensive way.
• SLD is grounded in a technically superior, research-based model of effective leadership practices.
• SLD makes your leadership expectations clear and credible - and that is critical to creating the leadership culture you need to reach your business goals.
  

DEFINE LEADERSHIP REQUIREMENTS

In order to focus and align leadership development with the needs of the organization and its strategy, the first step is to define requirements.

"In the future, our leaders must..."

Using Strategic Directions, your designated team identifies the behaviors needed in the future to create a leadership culture aligned with your strategy. Because there is no "one right way" to lead for all organizations, Strategic Directions enables you to select the template of leadership practices that is right for your organization.

By establishing Strategic Directions, your entire organization gains clarity and consensus about leadership expectations. Moreover, Strategic Directions helps you assess learning and development initiatives to determine where to invest time and money.

Strategic Directions is the best starting point. It produces rapid, impressive results. It provides a road map for change and builds the commitment needed for long-term success.

Strategic Directions answers the question: To create a leadership culture aligned with our business strategy and direction, what leadership behaviors will be required?

Staff Review by: Joseph (Joe) Kran, Lawrence (Larry) Maglin, Walter Sonyi, Jr. and Rick Spann

Critical Talent

Following their recent nationwide survey of US based HR professionals; Deloitte Consulting concludes gloomily that as soon as 2008 US companies may well find themselves in the middle of a "perfect storm" that could threaten the global business economy. The crisis will, they predict, be provoked by a combination of factors ranging from the impending retirement of the baby boomer generation to a widening skills gap resulting from a decline in educational standards and a failure to manage and keep talent.

First off is the aging factor. In three years time, the first wave of "baby boomers" will reach the age of 62, the average retirement age across North America, Europe and Asia. According to the survey, one-third of US companies expect to lose 11% or more of their workforce to retirement by 2008. The effect is expected to be especially acute in the healthcare, manufacturing, energy and public sectors. Over the next fifteen years, 80% of US workforce growth is expected to come from people aged fifty years or over. Nor is the crisis confined to the US: by 2050, it is predicted that 40% of Europe's total population and 60% of its working age population will be people aged over sixty.

Then there is the skills gap. The US Department of Education recently suggested that 60% of new jobs created in the 21st century will require skills possessed by only 20% of the current workforce. More than 80% of US manufacturers already face a shortage of qualified machinists, craft workers and technicians. And according to NASA, North American colleges will graduate only just under 200,000 science and engineering students to replace the two million baby boomers scheduled to retire between 1998 and 2008. Whilst some 42% of undergraduates in China come out of university with degrees in science and engineering, only 5% of US students do so. Again, the problem is not restricted to North America: the number of German engineering graduates, for example, has declined by almost a third since 1995.

Many US children never even get as far as university. Only 32% of US high school students now leave with sufficient qualifications to attend university and only 70% of high school students who do go on to take degree courses actually graduate. Deloitte's research is also critical of educational standards at US universities, concluding "in other areas of specialized education, such as information technology and nursing, schools simply can't meet demand. Faculty shortages in computer science departments, for example, have reached crisis proportions." A fact echoed by the Bureau of Labor Statistics, who predict that more than 300,000 of the 1.3 million new jobs in information technology in the US due to be created between 1996 and next year will remain unfilled.

So what exactly does Deloitte's suggest employers should do to shelter from this predicted "perfect storm"? First and foremost they must manage critical talent, defined as those individuals and groups who drive a disproportionate share of the company's business performance. This is not always "the A players or senior executives", explains Mike Fucci, principal and US leader of Deloitte's Human Capital practice. It is instead those who "possess highly developed skills and deep knowledge of not just the work itself, but of how to make things happen within a company". Who might, for example, be the couriers in a delivery company or the researchers in a pharmaceutical firm.

Having identified critical talent, above all they must then make sure they keep it. Only half of the organizations surveyed by Deloitte Consulting had even identified a list of critical skills needed for future growth, let alone put talent management processes in place. Suggested strategies include finding out what matters most to the company's critical talent - personal growth and development, for example, or the need to be deployed in positions that engage their interests and curiosities. But above all Deloitte urges organizations to become more "talent-savvy" if they don't want to take a bath in that storm on the horizon.

IF YOU ARE INTERESTED IN LEARNING HOW WE HELPED DELOITTE SAVE OVER $60M IN TWO YEARS THROUGH TALENT MANAGEMENT, PLEASE CONTACT:

Walter Sonyi, Jr.
(800)-376-8176
walter.sonyi@gigincmail.com

Staff Review by: Joseph (Joe) Kran, Lawrence (Larry) Maglin, Walter Sonyi, Jr. and Rick Spann

Key Employee Retention in the 21st Century

70 million baby-boomers will retire in 10 years and the next generation workforce will only supply 45 million new workers. The competitive battle among companies for skilled employees will only become fiercer. Employment managers will be in for the fight of their careers in attempting to find and attract needed talent. Of course, this problem is even further exacerbated by today's strong economic climate. With unemployment hovering around 4.8%, competent employees know that they can fairly easily find comparable, if not better, employment with reasonable effort.

Every time a key employee quits, it costs that company 18 months of salary. And when the hidden costs such as lost sales, customer defections, lower productivity and morale are factored into the equation, the loss of a key employee is extremely expensive.

Effectively retaining needed employees will become the most competitive long-term advantage that a company has over its competitors. If a company cannot accomplish this, it will eventually cease to exist. Lowering the turnover rate among key employees will (if it is not already) become the most important priority of the Human Resources function for this century. Pressure will invariably increase from the Board of Directors, the CEO, and the business unit heads to retain valuable personnel. This burden rightly will fall squarely upon the shoulders of Human Resources!

Although salary usually ranks lower than other important reasons as to why key employees leave in any exit survey, a company can always throw more money in the form of increased salaries, bonuses or benefits at this problem. A company can try to make it too expensive for its key employees to leave. Of course, this strategy is untenable because these key individuals only remain because they cannot afford to go to a more satisfying work environment; their productivity and enthusiasm levels will certainly not be commensurate with their costs. Moreover, here is a more practical reason as to why this practice is doomed to failure. The company simply cannot afford to pay these higher wages and still make a profit.

Human Resources is often great at coming up with the latest tactics to combat this problem. A company picnic, employee appreciation day, flexible benefits, a well-defined mission statement, day care centers, etc. are all positive steps that have been implemented to try and stem the tide of key employee turnover. Yet, in current surveys, 6 out of 10 employees state that they are or will be looking for a better position within the next 24 months.

Clearly these well-intentioned programs are not achieving the desired results. These efforts are often fragmented, no more than shots in the dark. They lack a fundamental strategy.

This is not surprising since the long-established implied contract with employees that produced strong company loyalty is no longer in force. Lasting job security and a good pension afterwards are not benefits that corporations can promise its employees anymore to maintain their commitment to stay. And throwing nice-sounding perks at them are not as effective as hoped because they lack cohesiveness.

A fundamental change in how executive management and Human Resources views its employees is needed to generate cost-effective measures to lower its key employee turnover in this current area where employee loyalty cannot be based upon the old retention/ loyalty model.

Employers must now see their employees in the same way as they do their customers. Customers have choice and so do employees, especially those with valuable skills. Customers are not bound to buy and employees are not bound anymore through job security and pensions to stay.

Any good marketing department knows that many factors come into play regarding customer retention. Price, product features, quality, service and promotion are key ingredients. The more that marketing understands the needs and wants of a client, the better the firm can develop and promote products that addresses them. And, therefore, the company has a greater chance of keeping the client. But a good marketing department does not attempt to do this in a piece meal fashion, but rather as part of a systematic process that entails research, product development and promotion.

Key employee retention in this modern era requires no less of a systematic marketing effort! Human Resources must attack this problem as a complex product marketing endeavor. The company is the product and its employees are its customers.

Historically, Human Resources has confined its marketing efforts generally to the employee newspaper and attitude surveys. Those feel-good employee articles and pictures and meaningless messages from the President are about as sophisticated a marketing promotions effort as Human Resources have ever done. Employee surveys generally lacked the comprehensiveness to ascertain really useful information. And when pertinent data was collected, there existed little structure to ensure appropriate follow-up and corrective action.

This must change now. Human Resources must transform and greatly expand its basic employee communications effort into a full-blown "Employee Marketing Department." The primary functions of this unit would be no different than those of any good marketing department: systematic employee (customer) research, long-term strategy development, tactical employee program initiatives and comprehensive company promotion.

No additional funds would be needed to make this re-orientation successful. Companies are spending the money anyway. The only major difference is that company funds for employee programs and benefits would be spent as part of a well thought out, systematic process. And the promotion of these products would be with all the sophistication and intent of ensuring that employees, especially those groups designated as key, know the true value of what the company provides.

If you would like further information about key employee retention, please contact Walter Sonyi at 1-800-376-8176 or walter.sonyi@gigincmail.com.

Staff Review by: Joseph (Joe) Kran, Lawrence (Larry) Maglin, Walter Sonyi, Jr. and Rick Spann