By Vistage Editor
Want to reduce turnover?
Forget about gimmicks and flavor-of-the-month management techniques, Vistage speaker Nancy Ahlrichs advises. Instead, focus on becoming an employer of choice.
According to Ahlrichs, becoming an employer of choice starts with knowing what employees want most in the workplace. Based on numerous studies, today’s employees value five things over all else:
- Competitive compensation. Compensation equals money, benefits, rewards and recognition. Becoming an employer of choice requires offering the whole package, even if you pay well in terms of salary.
- Training and learning. Before people will work for you, they need to know that you offer training, learning and career development opportunities. In particular, younger employees need to feel they won’t fall behind the marketplace by working for your company.
- Community reputation. Most corporate relations aim at potential customers. To become an employer of choice, aim at potential employees as well. Identify the different communities you hire from and work to build your image in each.
- Management style and corporate culture. Management style determines corporate culture. Being an employer of choice doesn’t necessarily mean having a certain culture. The key is being honest about who you are and how you do things.
- Profitability. People want to work for successful firms. Making money always makes it easier to hire people.
Primary Retention Factors
The above factors attract people to companies, but what makes them stay?
- Fairness at work. People want fair and equitable policies and procedures. More importantly, they expect them to be applied in a fair and judicious manner.
- Demonstrated care and concern about their careers. Are you training your employees and making sure they stay current?
- Job satisfaction. People don’t expect perfection, but their jobs must provide a certain amount of personal satisfaction. Have your managers explain to every employee how their job fits into the big picture and how the company adds value to the community.
- Feeling of accomplishment. People need to feel that their work adds value and that they are making a difference.
- Appreciation of ideas. Employees want to contribute their ideas. They don’t expect you to adopt all of them, but they do expect to be listened to.
According to Ahlrichs, companies that earn EOC distinction do so by implementing six foundational strategies:
1. Make recruiting and retention part of your strategic plan. Set a strategic goal to improve recruiting and retention. Set measurable goals for all supervisors and managers and hold them accountable. In particular, make improving retention of younger employees a goal, since they tend to switch jobs more frequently.
2. Build and communicate an “Employer of Choice” reputation. Start to think of yourself as an employer of choice. Talk about it on a consistent basis as a major company goal. “You can’t name yourself an EOC,” notes Ahlrichs, “but you can put the question on employee survey forms and ask your employees to name you. Better still, pursue awards and have an outsider identify you as an EOC.”
To build your reputation:
- Give hiring managers plenty of training. The applicants who interview but don’t get hired will carry the message about your organization throughout the community.
- Have comprehensive orientation programs that integrate new employees and make them feel welcome from day one.
- Conduct performance reviews on time.
- Give plenty of rewards, recognition and opportunity for promotion, learning and skill development.
3. Hire well or not at all. Make hiring a personal and organizational competency. Train your managers so they can hire right and with confidence. Speed up the hiring process. Most people who interview with you are sneaking away from their current jobs. Respect their time by having an efficient, well-organized interview process.
“Stop hiring average performers and start hiring star performers,” advises Ahlrichs. “Define the behaviors that make star performers and then purposefully go after those people.”
4. Treat all employees as if they were customers. Often, it’s harder to replace an excellent employee than an excellent customer. The cost ranges from 50 percent of annual wages for hourly staff to more than twice annual compensation for salaried staff. Replacing a top sales rep or senior officer can cost as much as four to five times their annual salary.
5. Retrain and develop all employees for tomorrow’s needs. Too often, companies train but once a year (if they do that much). Becoming an EOC requires ongoing training and continuous learning for all employees.
In addition to formal classroom training:
- Use articles, books, discussion groups, etc., so that employees have the tools to compete in a changing marketplace.
- Offer tuition reimbursement. Whether employees use it or not, they perceive tuition reimbursement as a real differentiator between employers. People will not leave your company while they are using it.
- Offer paid memberships to professional organizations. When people attend professional meetings, require them to share what they learned at a “lunch-and-learn” with other employees.
- Set up a “bring a book and take one” library for employees. Reimburse employees who buy books that help with their training.
“Shine a positive spotlight on the people who are willing to learn,” suggests Ahlrichs. “You can’t afford to have employees who think they know everything. Look for people who are willing to make incremental changes as well as the big ones.”
6. Build support processes to ensure the ongoing success of the first five strategies. Make sure you have ample support processes in place to support your goal of becoming an EOC.
Ask questions such as:
- Do we provide sufficient training for our hiring managers?
- Do we have an effective orientation process?
- What process do we have in place to ensure that we treat employees as well as our customers?
- What processes do we have in place to ensure ongoing learning and development?
- How do we measure the competitiveness of our compensation packages?
- How do we recognize people and make them feel valued?
“Simply throwing money at the issue does not make you an EOC,” concludes Ahlrichs. “Employees want the whole package, from money to opportunity to the right culture and management processes. That requires making it part of your strategic plan, setting goals and following through on a consistent basis.
“Keep in mind that top talent gets to decide where they work. Help them decide to work for you by becoming an employer of choice.”
Originally published: Sep 8, 2011