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

GETTING CONTROL OF YOUR COACHING PROGRAM

GETTING CONTROL OF YOUR COACHING PROGRAM

Some time ago we had a meeting with the VP of Human Resources and Chief Learning Officer of a consumer products company to assess our recent coaching efforts with some of their senior level executives. They were pleased with the measurable, practical results that we achieved and how well we kept the major stakeholders informed.

They did express dissatisfaction with the overall management of their entire coaching program. It seems that the company frequently uses a number of other coaching providers who also do a competent job and keep key individuals up-to-date. As the number of and types of coaching cases grow within their organization, they felt like they were losing control and did not have a firm grasp of the status and success of any particular initiative or their overall efforts. Problems were slow in coming to their attention and feedback from the coachee and supervisor was fragmented. And they did not have a systematic way of measuring the success of their total coaching efforts.

The Chief Learning Officer asked us if we had a solution. We did not. But took his situation to heart and investigated other options. We looked at web-based platforms that existed in the marketplace. The results were disappointing. The systems only dealt with portions of the solution. They were not fully integrated such that they could provide convenient summary information. And they had no way of measuring the effectiveness of any specific coaching engagement or the development efforts as a whole.

So over a period of a few months, we developed a web-based coaching platform that met the needs of the CLO, and then some. Gateway International Group/OI Partners has developed a revolutionary technology solution for coaching. Specifically, our web-based platform:

• Offers a complete tracking system for key stakeholders involved in the coaching process. It can tell HR and other designated personnel what stages of the coaching assignment have been completed and where in the process it is currently. It indicates which assessment and other tools are being used. The system can easily provide a composite summary status of all coaching assignments, domestically and internationally.

• Allows for immediate feedback from the coachee, coach and supervisor as to how well the engagement is going. This information can be provided for each major milestone and is accessible by all the key stakeholders.

• Enables the coachee to use this web-based portal to take any personality or 360° assessment, review core corporate or job competency information, create development plans, read important literature on leadership in our leadership resource library and maintain an active “coaching blog” with their coach.

• Creates a standardized coaching process for an entire organization. Across all engagements all over the world and either with an organization’s internal coaches or with outside ones, the same coaching processes, tools and language are used; and the manner in which results are analyzed is the same. In essence, our system creates a standardized coaching culture and structure within organizations.

• Can easily build a return on investment case for business coaching that has been difficult to do before. The ROI is seen in leadership competency adjustments, the way in which individuals improve and reduced turnover.

• Is capable of being accessed at anytime, from anywhere. It can be easily used as a stand alone platform or as part of an exiting one without any development costs. It is completely password protected.

• Fits easily in your budget. There are no development, customization or platform linkage costs. Only a yearly license and per user fees are charged.

Our system does offer an extremely user friendly platform for the overall management of all individual coaching engagements across an organization. It creates consistent processes, tools, lexicon and analysis of results. There is nothing else like it in the marketplace! Call Joseph Kran at 800-376-8176, ext. 102 or email him at joe.kran@gigincmail.com so that he can tell you how this platform can address many of your needs.

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

IT’S OK IF YOUR MANAGERS DON’T ALWAYS FUNCTION AS A TEAM!

“If they could just function as a team” often seems to be the perceived solution to many business challenges. Who among us has not wished that our direct reports or peers or superiors work better as a team so that strategies become easier to execute or problems more readily solved? But if you were to speak with most employees, the common perception they would have is that the managers in their department, division or, for that matter, in the company do not function well as a team. They often see individual goals, petty differences, and conflicting objectives as getting in the way of their managers acting as one mind, with one objective without regard to personal gain. Moreover, they would shake their heads incredulously at the notion that their managers could ever develop into a cohesive team on a consistent basis!

THEY HAPPEN TO BE RIGHT. The entire workforce of any large and complex organization can never function as a team, but think about how often executives refer to their company as such. And even more important, it is not necessary or even desirable to a group of managers to always function as a team. Now I know this idea goes against the mind set of most Human Resources professionals and enlightened line management. But this is certainly not a new concept; others have effectively argued this very notion. To better illustrate this concept, we need to first consider how a manager’s job, whether it is an executive or first-line one, is generally structured.

In practice, the overall goals of a corporation are segmented into compartments for maximum efficiency. A company organizes managers to take full advantage of their experience and skills. Manufacturing executives generally only focus on production issues, R&D executives generally focus on research and development efforts, etc. Of course there has to be activity and coordination between departments (R&D has to develop products that can be manufactured on a volume scale), but the reward systems are structured more to stimulate individual, rather than group performance. As manager become more efficient and productive, they become more valuable. They are then given better raises and responsibility for more people and company assets.

This structure is desirable because abstract goals such as “maximize the company’s or “implement the company’s strategy” are too broad to provide the appropriate focus or mutual accountability that is necessary for a real team effort. Without this type of structure, companies, their divisions and their departments would get very little accomplished. Deciding on strategy, getting things done in a timely fashion, taking maximum advantage of specific expertise and skills would all suffer. The company over time will cease to exist or will be gobbled up by another because of poor execution and efficiencies.

On the other hand teams are usually defined as a small number of people with complementary skills who are committed to a common purpose, set of performance goals, a group approach for which they are held mutually accountable and where rewards are given out on a group basis. The structure of a team is often diametrically different to the traditional Corporate construction.

Several ingredients must be present for a group to be truly labeled as a team:

• A specific, tangible goal or purpose that the team itself obtains
• Shared leadership roles
• Mutual accountability
• Group incentives and rewards
• Collective work products

Yet no one is understating the importance of team efforts. In fact, as companies are confronted with the need to manage change across their organizations to successfully compete on a global level, the need for more teamwork will be necessary. Teams will become the driving force for success because they can cut though the established bureaucracy, resistance to dynamic change, and limited diversity in skills and knowledge of a homogeneous group.

But this does not mean that teams will or should crowd out individual opportunity, performance or formal hierarchy and process. Rather, teams will enhance existing structures, effort and leadership, rather than replace them. A team opportunity exists anywhere traditional structure, hierarchy or organizational boundaries inhibit optimum results.

Thus, for example, product innovation requires preserving functional excellence while eliminating functional limitations through cross functional team efforts. And first line productivity requires preserving directional and guidance through hierarchy while drawing on the benefits of teamwork. Specific goals, such as getting a new product to market in less than half the traditional time, resolving customer complaints within 24 hours, or reducing error rates by 1/3, trimming costs by 15% are all appropriate for team efforts.

On the other hand, when teams lack that specific, singular purpose, they rarely are effective. This waste of time, energy and talent can be seen in instances such as “quality circles” that could never identify specific quality improvement goals.

The challenge for all executive and human resources leaders is to preserve the traditional hieratical corporate structure where the benefits of individualism, specialization and command control are realized while taking advantage of the vital and discrete work products and results that can only come about through the joint contributions of their teams members. For a company to be successful in this ever increasingly competitive environment, it must do both well!

Company officials must ensure that both hierarchical and team groups are structured and function in a manner to allow its individuals to truly feel engaged and motivated to maximize their contributions. And they need to create an environment where individuals can seamlessly migrate from one group type to another.

We welcome the opportunity to discuss how this can be accomplished at your company. For more information, please contact Joseph Kran at 800-376-8176 or via email at joe.kran@gigincmail.com.

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

Getting the Most out of your Employees!

GETTING THE MOST OUT OF YOUR CORE EMPLOYEES

It has been made absolutely clear to all of us that a successful talent management program is the number one demand faced by senior management. This is not only true today, but good talent management will be more difficult in tomorrow’s workplace. The competitive pressures of globalization, outsourcing, the aging workforce, demographic shifts, generational differences and work/life balance issues will only become greater.

We are spending more of our time and energy addressing this issue. We develop succession planning systems for our high-potential employees to better identify and plan for their growth and development. We are quicker to terminate or shuffle those employees who are not performing well to make room for our up-and-comers. Indeed, our high-potential and poor employees take up most of our effort in managing personnel.

High potential employees or “A” players demand and receive constant attention. Their concerns about career growth and promotion, performance feedback, and their seemingly constant demand to be noticed is a time-consuming experience for bosses and HR. Many bosses initially find mentoring A players to be satisfying, because most of them are top players themselves. Bosses see a lot of those attributes which made themselves successful in this group of employees. Given the pressure on their time, they often decide to focus their mentoring on the employees who will benefit them and the company the most.

Because of legal ramifications, management and HR also have to devote a lot of effort and care to handling poor performing or “C” employees. Behind the scenes performance discussions, making sure that solid documentation exists, conducting appropriate counseling sessions and the actual termination are draining. Moreover, filling any vacancy and the ramp up time that goes with it also take a considerable amount of energy and time.

Some studies estimate that bosses and HR can spend up to 75% of their time that is not devoted to administrative duties dealing with A and C employees. Yet these two groups of employees usually make up only about 30% of the workforce with A’s consisting of about 20% and C’s 10%. Employee problems seem to gravitate among these categories of employees. In fact, how often have we seen new bosses get “rid of the bad managers/employees and replace them with the excellent ones” and consider their reorganization efforts all but done?

No wonder executives and HR personnel can’t give the third unit of employees the time and attention that is needed. Yet these “B” employees usually constitute about 70% of all company personnel. Their development and mentoring often go wanting. An occasional structured training or formalized course usually makes up their formal training. There is not enough transitional or cross training assignments to give B employees since companies have to run leaner because of global competition. The few ones that do exist go to the A players. And bosses and HR do not have the time, energy or inclination to devote to mentoring these middle level employees.

Yet we often forget that this middle group of employees brings several important advantages with them. B employees are generally not as outwardly demanding of time and attention as are other personnel. These solid citizens differ from the A group in that they tend to pursue organizational goals over personal ones because they value stability both for themselves and for the company. Because they are not promoted as quickly, they build up a greater degree of institutional knowledge which makes them more valuable in times of organizational transitions. And because of this greater degree of stability, they are able to take a longer-term perspective to situations and problems.

IT IS NOT AN OVERSTATEMENT TO SAY THAT B PLAYERS ARE THE HEART AND SOUL OF ANY ORGANIZATION. IF THEY ARE MEDIOCRE, THE COMPANY WILL BE MEDIOCRE. IF THEY ARE HIGH PERFORMERS, THE FIRM WILL BE ONE AS WELL. THE A GROUP WILL NEVER MAKE UP FOR THE MARGINAL PERFORMANCE OF A GROUP THAT CONSTITUTES 70% OF THE WORKFORCE.

Yet this core group often exhibits a greater patience with career advancement and development such that managers often overlook them. Given the constant demands of the other two groups, administrative tasks and planning/strategic requirements, bosses and HR will always be hard pressed to provide the B group with the resources that are needed. There often does not seem to be enough time, money, energy and opportunity to ensure their careful and systematic development into excellent performers. This core group of employees will not be provided with the same level of job rotation, individualized coaching and customized structural training that high-potential employees receive.

Yet, turnover among this core group of employees is rising. Companies are struggling to retain enough B level professionals to service existing clients, let alone acquire new ones. B professionals, like those in the A group see themselves as free agents, and stay only until a better offer comes along. One of the biggest reasons why the core employees leave is dissatisfaction with their development. They do not believe that their company really cares enough about them to make appropriate investments, especially when they see what the high potential employees receive.

Constructive steps can be taken to minimize this problem. A critical component is to offer core employees some meaningful level of one-on-one mentoring/coaching and customized training to meet their individualized developmental needs. It is important that these efforts are seen as being relevant to the employees’ current challenges and probable future work assignments. The coaching and structured training has to be tailored to the uniqueness of the role that the B employee must play in the success of the company: one that is critical even though none will likely be promoted to executive management. Mid-level skills and competencies must be stressed in a manner that does not come across as canned or off-the-shelf.