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Understand Your Employee Retention and Hiring Advantages...and Seize Them -- Now

 

Post from the Strategic Service Group's Strategy Insights Blog »

 

In their article, “Winning Back a Wary Workforce,” BusinessWeek, July 13–20, 2009, Jack and Suzy Welch put into strong words what so many of us in business today know to our core: “This recession has really shocked people. Never before has the bottom fallen out so fast or affected so many people so deeply.”

The Welches see a very disturbing trend that could impact businesses, and the work force in general, for years to come: “Many people have come to the conclusion that they don’t want to work for ‘the man’ anymore. They want to work for themselves or someone they know and trust.”

“The impact of this growing attitude could be profound. When the economy recovers, most companies might, for the first time, have to deal with a candidate pool that’s not particularly excited to work for them.”

Of course the Welches don’t just present the problem—they see a solution and opportunity.

 “Fortunately, companies can prepare now for the changed hiring dynamic ahead. All they have to do is, well, stop acting like big companies—bureaucratic and impersonal—and start creating a fast-moving and vibrant atmosphere.” The Welches spell out attributes of the “reinvented” company, including offering the upside of small companies—smaller teams, flatter organizations, and more candor, informality and innovation. People will need to feel that what they say matters, regardless of rank and title. Perhaps most important, companies will need to understand that when the recovery arrives, stars will no longer wait around to be given the authority to make decisions or to be promoted. The alternative—running their own show—has too much appeal.”

Wow!

Haven’t we been told for many years that the center of the business universe lies with large companies? After all, they have the managerial talent and seemingly infinite capital to effect change and reap large rewards for themselves and their shareholders while the next tier or tiers of businesses are merely trying to play catch-up or follow along. But now, in so many ways, we’re seeing how this recession is turning traditional thinking upside down.

Here, in Jack and Suzy Welch, we have two of the best-known business leaders and sages, advising business leaders to take a page from the book of smaller companies “by acting in ways that appeal to entrepreneurial types of employees,” concluding that in the “ ‘revised economy’ of the future, speed, flexibility and innovation will be more crucial than ever.”

Perhaps those of us managing or working with smaller companies can be forgiven a brief moment for gloating or “I told you so” thinking.

But, not for long. What the Welches point to as a small business advantage can be quickly lost in this challenging environment by any of these companies that don’t both recognize the opportunities and seize the benefits that their leaner and flatter organizational structures afford.

Retaining key employees isn’t a given. This is especially the case for the truly talented who will have other opportunities as the business climate improves. Likewise, engaging new talent might prove to be more difficult when such individuals might have lost their jobs during the downturn and now are leery of trusting anyone.

It’s critically important that business owners carefully think through what it will take to create a long-term sustainable environment of open communication, innovation, job satisfaction and, yes, excitement.

What might this mean for you? Some action steps to consider:

• Communicate. Communicate. Develop a formal (it need not be onerous) two-way employee-employer communication plan as well as an informal culture of openness and candor in good times and bad. Playing it “close to the vest” will not engage your employees. Nor will a culture that doesn’t invite and act on employee suggestions and contributions. Employees simply are going to demand, and need, more from their employers when it comes to sharing information—financial and otherwise.
• Set individual job goals and targets that can be measured, review progress regularly and celebrate success. Certainly engage your employees as a team but also in their individual capacities. Don’t shy away from challenging them with clearly articulated goals and responsibilities. Good employees will embrace such targets as long as they understand how and why they contribute to overall departmental and corporate goals. It’s also critical to consistently provide feedback on employees’ progress.
• Set understandable, transparent compensation structures. Employees need to understand how their compensation is determined, and just as importantly, how their efforts and accomplishments can lead to increased compensation. Whenever possible, employees should be paid for what they do as well as how well they do it.
• Provide psychic compensation. A critical element of the changing business world is that large companies are likely to start offering non-monetary perks to their key employees. This used to be the competitive recruitment/retention strategy of smaller to midsize businesses. Not anymore. Make a list of these non-monetary incentives and outline how employees can earn them.
• Empower employees. Lead, but don’t do. Set your corporate strategies, make sure that your leadership understands and buys into them and then get out of their way. Trust and guide them when necessary, but let them assume responsibility for the results.
• Reward success. Beyond compensation, develop and articulate paths for advancement within your organization, and promote education and skills training for those who show potential.
• Develop leadership skills. Leadership starts at the top, and it’s never too late to work on leadership skills and techniques at that level. But don’t stop there. Enroll your next level of managers in leadership training seminars to help them better appreciate their roles and challenges today and what skills they might need to develop for success in the future.
• Invest in your employees’ professional growth and job satisfaction. Encourage them to take targeted classes that will enhance their individual professional growth. One idea is to develop an exchange program with another company where new skills can be honed through observation of another business environment. Another idea is to employ a career coach to work with key employees to further their careers, achievements and job satisfaction.

The bottom line: You and your business have a retention and recruitment advantage going into what assuredly will be a changed business environment. The big companies are likely going to develop similar strategies. Seize your advantages—now.

BlackmanKallickStrategyInsights.com

Sincerely,

Barry S. Cain, JD, CMC, Managing Director, Strategic Services
Blackman Kallick • 10 South Riverside Plaza, 9th Floor • Chicago, IL 60606
Direct 312-980-2976 • Fax 312-756-3976 • Mobile 312-315-9495

David Spitulnik, Director, Strategic Services
Blackman Kallick • 10 South Riverside Plaza, 9th Floor • Chicago, IL 60606
Direct 312-980-3339 • Fax 312-928-5339 • Mobile 312-593-3181

Suzanne Lane, JD, Senior Manager, Strategic Services
Blackman Kallick • 10 South Riverside Plaza, 9th Floor • Chicago, IL 60606
Direct 312-980-3301• Fax 312-207-1066

This publication is part of Blackman Kallick’s marketing of professional services, and is not written tax advice directed at the specific facts and circumstances of any person and/or entity. Contents of this publication are of a general nature, and you should not act on this information without obtaining professional advice from your business advisor that is appropriately tailored to your individual needs and circumstances. This written advice is not intended or written to be used, and cannot be used by any taxpayer, for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code.