Successful Retention Strategies (Part 2 of 4): Recruiting
As the year continues to see upheaval and tremendous instability with rising inflation, tight supply chains, and persistent pandemic fears, the labor market also remains the tightest in recorded history. The Great Resignation has left many businesses scrambling to fill open roles and struggling to figure out how to continue growth or achieve strategic plans with a seemingly revolving door of employees. There is no silver bullet to stop the trend, but there is one critical focus that has received too little attention leading up to and throughout this pandemic and the new challenges that stem from it. This focus has the highest probability of making the most positive and significant impact on stabilizing this challenging labor and employment market. What is it, you might ask? RETENTION STRATEGIES. This is the second of a 4-part series addressing Onboarding, Recruiting, Total Rewards, and Organizational Design strategies that collectively affect and reflect the retention strategies of an organization. The previous article focused on the Onboarding piece. This was important to address because of the egregious errors we saw many companies make in their rush to bring in talent. This article will focus on recruitment’s role in employee retention. While the apparent function of Recruitment is to add headcount to an organization or backfill open positions, little has been shared about Recruitment’s role in employee retention. In fact, employee retention starts with Recruitment. We all know that it is rare, if ever, when we get a second chance to make a first impression. The Recruitment function of an organization is the first impression candidates, and prospective candidates may receive. Thus, it is critical to make it a positive one. Following are several steps that Talent Acquisition partners can and should take to lay the foundation for long-term employee retention, whether internal or external to an organization. Be Real Often, recruiters approach talent acquisition as a transaction, “selling” the company by focusing on all of the exciting and wonderful features, perceived or real, about a company. It comes naturally for many recruiters because they are often selected to be a Talent Acquisition professional based on prior or exhibited sales experience. And while salesmanship is not necessarily a bad trait, it boils down to “how” not “that” you use the skill set. Whether in retail, B2B relationships, or even in the most complex business interactions in the M&A arena, no one wants to be “sold” to today. What people want are solutions to problems. A big challenge is that people don’t want to bluntly disclose the very problems they need to solve. Uncovering these concerns requires a consultative approach. A true consultant will reflect care and compassion, listening to understand first before being understood. A high Emotional Quotient (EQ) combined with an analytical approach will allow the Talent Acquisition professional to best consult with the candidate and help them understand the alignment between them and the role to be filled. This soft approach opens the hearts and minds of candidates to what they can expect when joining a company and often is the first trigger towards high engagement— a key we will address in other articles in this series and a critical link to employee retention. Part of consulting is ensuring prospects and candidates understand the good and the bad about a company. No company is perfect, just like there are no perfect candidates. The exclusive pursuit of only the perfect will always disappoint, leading to disaster and an impossibly long recruitment cycle. Every company has challenges. The right candidate must understand these challenges and be excited to tackle them. They should not be daunted by the challenges but willing to embrace them. Of course, there must certainly be something in it for them, and the advantages should be presented to balance the discussion. In the end, there should be a win-win scenario where the advantages and disadvantages are shared, where both see that the right candidate will enhance the company’s advantages while solving their challenges. The right candidate’s advantages should be the right fit to solve these challenges, while a company’s advantages should be able to support the candidate’s growth and development. Like a jigsaw puzzle piece with curves on various sides with high and low points, the highs of one should fit the lows of others and vice versa. This is being real. Be Engaged Automation permeates so much of our lives, and the intent is to make things easier and faster, to do more with less. Unfortunately, there are times and interactions where technology is just a poor substitute. How many of us receive blind outreaches on LinkedIn, email, or even spam calls about products or services that have no alignment to us, what we do, want, or need? Someone is throwing mud on a wall and hoping something will stick. But how do you feel about such an approach when you receive one? Do you think a candidate will feel something different just because you are the one deploying such an approach? Everyone, to one degree or another, wants to be noticed and be recognized for their accomplishments. They want to be wanted and sometimes pursued. When reaching out to the passive job market, craft personal messages that tell the prospective candidate you read their profile or resume. Connect the dots to show them what made you believe a conversation may be worth their time, and importantly— do your homework. When Talent Acquisition professionals are disengaged, they fail to pay attention to the little details that make the most significant differences. They fail to catch experience, education, and geography. There is a lack of analysis and understanding of career trajectory or directionality. But the most critical miss of the disengaged Talent Acquisition professional is a failure to follow up. They make promises they do not or cannot keep. Candidates and prospective candidates view this as disingenuous. The perception is that the Talent Acquisition professional— to put it lightly— is not very professional. If by some miraculous chance the candidate is
Successful Retention Strategies (Part 1 of 4): Onboarding
The current labor and employment market is the most volatile in recorded history. Never have employee candidates had more choices and power in the market than they do today. Add to this the pandemic, continued low wage growth for most people below the executive level, technological improvements, and failure of many businesses to appropriately demonstrate caring and support of their people. The result is the current crisis known as The Great Resignation. While the Great Resignation does not impact all businesses, industries, sectors, and career levels equally, all of these segments are nonetheless affected. Even at the executive level (Vice President through C-Suite), where people are arguably treated better than many front-line, entry-level people, and who are recipients of already higher pay and higher pay growth over the last 20 years and more, are cashing in on this wave driving up base salaries, signing bonuses, and restructuring of bonus packages more favorable to them. There is no silver bullet to stop the trend, but one critical focus has received too little attention leading up to and throughout this pandemic. This focus has the highest probability of making the most positive and significant impact on stabilizing this challenging labor and employment market. What is it, you might ask? EMPLOYEE RETENTION STRATEGIES. This is the first of a 4-part series that will address Onboarding, Recruiting, Total Rewards, and Organizational Design strategies that collectively affect and reflect the retention strategies of an organization. Employee Relations and Communication strategies overlap and lend support to these (4) categories, making them more successful at retaining key talent. Interesting to note that each of these areas (outside of Onboarding and Communication) is a dedicated Human Resources discipline. Each discipline is far too deep a topic to cover fully and impacts significantly more than just employee retention. Therefore, each area will be discussed from the standpoint of their impact on employee retention and not the totality of the discipline. A Typical New Employee Onboarding Scenario Let’s take a look at a typical start to a new hire’s onboarding journey. It’s your first day on the job. The day is filled with hope and promise. The interviews were exhausting, lasting several days stretched over several months. Many were conducted virtually due to the pandemic and precautionary guidelines (thankfully, they didn’t see your comfy fuzzy bunny slippers). The final interview included an in-person onsite series of interviews and a facility tour. You are nervous even though you are confident you made the right decision. As you walk into the office building for your first day, you notify the receptionist that you are here. He looks at you quizzically, not knowing who you are nor whom you are supposed to see. The receptionist asks you to have a seat, and he will track down who should greet you. “This is odd,” you think to yourself. “The interview process seemed relaxed, organized, and well-executed. Perhaps it’s nothing, and I’m just being critical. Relax – think happy thoughts. Today is going to be a great day!” Twenty minutes go by, and no one has come to greet you yet and begin your onboarding. You approach the receptionist and ask, “Sir, am I supposed to be meeting with HR first or my direct supervisor?” “I’m not sure,” he replies. “I contacted HR, but they did not answer. I left a message with the HR Generalist, who typically handles new hire paperwork. I am sure they will be here any moment.” And so, you go back to the seat in the receiving area where you had been sitting and continue to wait. Anxiety starts to build into frustration. “I did get the right start date, didn’t I?” you think to yourself. You pull out your cell phone, access your personal emails, and search for the welcome email with your start date information. “Yep, I got the right day and time.” After another 20 minutes, an employee comes in through the front doors. On their way past the front desk, the Receptionist stops them saying, “Akeem! So glad you are here. I left a voice mail for you a bit ago about this person starting today. Are you supposed to do their onboarding, or is the hiring manager?” Looking a little embarrassed, Akeem says. “I’ll handle it,” and he turns to greet you, arms full of coat, coffee, umbrella, and thick, overstuffed computer bag. Fumbling with everything to free up a hand, Akeem offers you a proper handshake and greets you. “Hi, I’m Akeem, HR Generalist. I hope you have not been waiting long.” Mentally you are quite miffed and barely contain the thought, “waiting long? I have been waiting for nearly an hour now,” from coming out your mouth. “Not too long,” you reply instead. “Very eager to get started for my first day.” This scenario often plays out in too many companies, from small independently owned businesses with under 20 employees to large publicly traded multi-national companies with over 60,000 employees globally. It does not matter if there is no HR presence, an HR department of one, or a large 100+ person HR department with defined HR discipline coverage and degreed/certified professionals, this first-day scenario and the corresponding train-wreck of an onboarding experience that follows it can happen anywhere. An experience such as this starts the time clock ticking towards resignation day. Not what any business wants when they spend so much money, time, effort, and energy to recruit the right person for the position. An effective new employee onboarding program is a critical step in retaining employees. The only constant in business is change, and change is the greatest source of stress, worry, and concern for most people regardless of career level. The onboarding process should be designed to reduce the new employee’s stress, anxiety, and concern by transparently and effectively communicating with them. Effective communication is critical. Each company is uniquely different, so each employee onboarding program should be customized to your company. Through the onboarding program, necessary compliance forms (such
What’s Going On with HR?
“What’s going on with HR?” you ask. Well, frankly, a LOT. Human Resources is a diverse collection of disciplines. We all love a succinct answer. In short, Human Resources includes anything that impacts the people working in and around the business and may even impact the vendors, clients, customers, and consultants to the company. But even that does not quite capture all that Human Resources is and does. So, to ask, “What’s going on with HR?” you can quickly see how expansive of a question that is. Rather than share all that is going on with HR, let us look at some current events occupying a lot of time, effort, and energy within Human Resources. While the industry, unique operations, organizational headcount, and revenue volume all impact the priorities of the HR function within each business, some commonalities have a high probability of being experienced by the largest number of HR functions across all industries, operations, headcounts, and revenue volumes. Talent Acquisition This is currently the most pressing issue facing businesses today. The sourcing, screening, interviewing, hiring, and onboarding of top talent to either grow the business, stabilize the business, or backfill positions vacated through voluntary or involuntary terminations is taking up an unbalanced and overwhelming amount of HR’s work today. The pandemic is a primary driver of the issue and not just because of the dangers to the health and even lives of the employee population. Many employees are resigning their positions not to go on unemployment or even to move to a competitor but instead because of their perception of how they were treated in the early stages of the pandemic when layoffs and closures happened; because of their perception of how they are being treated today with the controversies around masking, testing, and vaccinations; and because they have discovered during the layoffs in the early stages just what is important to them or the need and benefits of a better work/life balance; and so are leaving to go into different industries, open their own businesses, or into jobs they perceive will provide better opportunity to support themselves and their loved ones. Because of this, finding top talent and convincing them to join your organization is more challenging than ever before. We are further seeing massive exits from the workforce. There have been significant drops in the labor participation rate. Many attributed this to the pandemic alone, and that is not the case. We have known since the early 2000’s that the baby boomer generation would eventually retire. Up until February 2020, it appeared they would continue working far longer than any other generation in the workforce, but the pandemic did have an effect in accelerating the exit of Baby Boomers from the workforce. They began to ask themselves, “Is this really what I want to deal with in the twilight of my life? Isn’t family more important? Shouldn’t I enjoy all that I have built, gained, and acquired throughout my life rather than add more stress or risk my life and those I love by working through this pandemic?” So while the pandemic has affected the decline of labor participation, it is primarily the exit of a generation already known to be leaving the workforce that is having the significant impact we are seeing today. And with those exits, who is left to fill the void? If the labor participation rate decreases, Talent Acquisition has a big problem on its hands. They cannot recruit people who do not exist.” Total Rewards This is the second most time-consuming issue for many HR professionals today. Closely tied to Talent Acquisition and Talent Retention necessary to stave off or stem the tide of this Great Resignation, astute HR professionals are examining pay equity and pay parity. They are researching the benefits that are offered, and not just medical/dental/vision benefits but also all wellness initiatives, continued professional education coverage, and perks which make their employees’ lives easier. Many businesses are discovering they do not have the right combination in their total rewards program to obtain and retain top talent. There are adjustments that must be made, and some of these are costly. What is the alternative? Doing the same thing the same way and expecting a different result – well – we all know what that is. The only constant in business today is Change. HR professionals should be reexamining their total reward programs to improve the mix and meet or exceed organizational and employee needs. Talent Retention This is tied closely with Talent Acquisition and Total Rewards. It is what many businesses hope is an outcome of the efforts in Talent Acquisition and Total Rewards, and that is a mistake. Retention should be an initiative all its own. While the right Talent Acquisition and Total Rewards initiatives and strategies will have a significant and beneficial impact on Talent Retention, there is so much more to it. To retain talent, businesses must understand that people do not join a company exclusively for the role into which they are hired, they enter a company for that role and the potential for personal as well as professional growth. They look for increased responsibility, contribution to organizational success, giving back to the community, and income growth to achieve their own financial goals. While companies profess to provide this growth to employees, too many have been quick to replace employees before and even during this pandemic, and it has left a sour taste in the mouths of many employees. Businesses that are successful at reducing or eliminating the impact of the Great Resignation are genuinely focused on defining how they treated and currently treat their employee population differently and better than their competition; they provide a strong and positive culture that exemplifies caring and support for their people; they develop an active social cause employees welcome giving back to, and they clearly articulate a career path and the learning and development programs that will help their employees meet personal and professional objectives. While this
To Be Strategic or Transactional? That is the Question
The Case for Human Resources in Strategic Planning Ask most business leaders and professionals, and they will describe human resources in transactional terms. “They are the department that hires people, fires people, manages our benefit plans, and tells us how much we can pay people.” A lot to unpack there for sure, but that perception misses the mark entirely. While it is true that human resources has a lot of transactional components, it is no different from any other department or function within a business. For example, consider your Accounting Department. Arguably it is one of the most critical roles within the business as it has the power of the purse. Its transactional tasks include logging debits and credits into the general ledger, the monthly close process, development of quarterly and annual statements, or logging receipts and outflows through the AR/AP departments. Human Resources also has its share of transactional components. Someone has to enter payroll weekly or biweekly, manage open enrollment, conduct onboarding, or even manage recruitment requisitions. If that is the extent of the value leadership perceives human resources brings to the table, there is a lot they are missing. We would argue that perception is precisely what is holding a business back from achieving its fullest potential. At its core, a business is its people. Try starting a business without any people at all? You can’t do it. You know why? You are a person. If you start a business, even a company of one, say a single shingle consulting business, then a human is part of that business. Humans are the brainchild of every initiative and action internally and externally to the company. Even with all the automation being implemented today, from software to robots, people must maintain, repair, and monitor them to ensure they continue to perform as intended. There is a strategic component that is often overlooked, and it begins with strategic workforce planning. When your business develops its strategic plan, you look at a 3-to-5-year horizon. With the fast pace of change in business today, it is almost always the case that many of the roles, skills, and competencies needed to fulfill that strategic vision do not currently exist. Absent strategic workforce planning, that vision is doomed to fail from the start. Strategic HR professionals can work closely with executive management to flesh out a human capital plan according to organizational goals. Such a plan may include developing career pathing to move key talent from current roles that will be going away and into the new positions that will be created. It may also have a compensation analysis and benchmarking strategy to determine what to pay roles that don’t yet exist in your business (or even, possibly, anywhere). Plus, learning development programs to teach existing employees the very knowledge and skills they need to succeed in roles they don’t even know are coming, employee relations strategies that will drive engagement and retain key talent, and manage the impact on your people as the organization marches towards that strategic vision. None of this is transactional. All of it requires a very strategic and planned approach aligned with the organization’s strategic plan, outcomes, and goals. As with many areas of your business, there are laws and regulations involved. The EPA places restrictions on the output of carcinogens that can be expelled by smokestacks of factories or waste that can be dumped into rivers and streams. The SEC restricts actions they consider insider trading. Even your sales teams have restrictions to protect consumers from “bait-and-switch” tactics. Human resources is no different— well, maybe a little different. Employment law is a fickle beast, constantly weaving and bobbing, changing all the time. A great example is a recent court case in Minnesota (Hill v. City of Plainview) that appears to have upended decades of legal precedent about the use of disclaimer statements that prevent an Employee Handbook from being interpreted as an employment contract. To the untrained and uninitiated in the ways of human resources, it can seem that the application of employment law bends with the proverbial wind. Though it is rare when significant landmark laws are passed (i.e., Affordable Care Act, Health Insurance Portability and Accountability Act, or even the Civil Rights Act), the way many of the laws are interpreted by the courts is what drives the most significant adjustments by businesses to comply with employment law. With the right strategic HR leadership in place, appropriate plans for implementing changes to employment law can be made that will protect the organization from costly fees, fines, and government-imposed remedies. Strategic human resources leadership can also guide your business by executing transactional HR tasks and even positively impacting the bottom line. For example, there is a time in the business lifecycle when outsourcing transactional HR tasks are more cost-effective. That does not mean every aspect of human resources should get outsourced. That would be a huge mistake. It means that a strategic HR leader should guide or even lead the research, selection, and implementation of an appropriate Administrative Service Organization (ASO) or Preferred Employer Organization (PEO) to handle these transactions. That strategic HR leader should lead the selection and implementation of appropriate Learning and Development (L&D) programs, develop and direct a total rewards strategy, and even the selection and relationship management of the suitable recruiting partners to align human capital needs with the strategic workforce plan. As an economy of scale is reached internally due to headcount and revenue size, it becomes more economically feasible to bring back the human resource tasks formerly outsourced to an ASO or PEO. The organization will further benefit from greater command and control over transactional HR tasks and align better with corporate strategy. There is no magic universal breakpoint to determine when to do this. You will have to look at your business’s demands, nature of employment, industry, and geographic reach as each impacts a company differently. However, the right strategic HR leader will make the correct business case, leading to the most beneficial outcomes. It’s a new year. We have
Strategic HR
How Small to Medium-Sized Businesses Can Get the Most Out of the HR Function “For the world is changing: I feel it in the water, I feel it in the earth, and I smell it in the air.” These words were spoken in the movie and written in the book “Lord of the Rings,” and very accurately sums up what is happening in our world today. The fast pace of change for businesses due to recent social unrest, economic recession, and a global pandemic shined a light on just how unprepared so many companies, regardless of size, industry, or sector, were when it came to crisis management. If there is one lesson small to mid-sized business leaders have learned, it likely is the value, importance, and absolute need for strategic human resource professionals. Years ago, when I joined an underground utility company as the HR Manager, I knew nothing about the business. If I were going to add value to the organization, I had to understand the business— what they did, how they did it, their competition, and how the company could compete. Only then could I collaborate with superintendents on staffing planning, project managers around their pipeline of projects that would feed the revenue wheel, and the employees to understand how to keep them engaged and reduce turnover. In small to medium-sized businesses, many business leaders struggle with understanding the strategic partnership that HR can have within the organization. This is too often because HR does not properly understand the business and because many business leaders only understand the transactional support HR provides. Many business leaders determine a need for dedicated HR personnel only when the transactions become more burdensome than they are willing or able to handle. For HR to demonstrate the strength of the strategic partnership, they must be intimately familiar with all aspects of your business, understand when to outsource transactional tasks, and when to bring those back in-house. To get the most out of your HR department or function, business leaders should differentiate the transactional tasks of HR from their strategic partnership with the business. Transactions can be outsourced and automated. Many solutions are available, some of which were shared in a previous article, Resistance is Futile, that addresses many affordable HR compliance solutions (the primary transactional tasks of HR) for small to medium-sized businesses. The low to no-cost solutions available are numerous, and when employed, these services free up the HR team member(s) to become true strategic partners. There is a time in the business life cycle where outsourcing transactional tasks is the right strategic move, and when bringing such tasks in-house is best. A May 8, 2019, Gartner article, Gartner Survey Reveals That CEO Priorities Are Slowly Shifting to Meet Rising Growth Challenges, indicates that in the annual Gartner 2019 CEO and Senior Business Executive Survey, “a growing number of CEOs… deem financial priorities important, especially profitability improvement.” The survey also states that “at the same time, mentions of financial priorities, cost, and risk management also increased.” The appropriate treatment of transactional HR tasks can be a huge help in addressing such concerns in your organization. Outsourcing can stabilize cash flow, especially in a seasonal business, make it more predictable and easier on the budget. It can introduce automation, such as self-service portals, reporting, and file maintenance. Outsourcing transactional HR tasks can even shift the risks of non-compliance to a vendor, potentially saving your business hundreds of thousands of dollars in fines, fees, and government-imposed remedies. Typically, much later in the business life cycle, insourcing these transactional tasks is the right strategic move. It will provide more control of data, improve the quality of service transactions, develop deeper metrics and tracking, and improve innovation and creativity around HR initiatives. Due to economies of scale, it may even be more cost-effective to insource than outsource. Knowing the right time to do each is somewhat challenging, but HR becomes a more strategic partner to your business when done right. To help HR be more strategic, now that the transactional tasks have been appropriately addressed, we need to immerse them in the business fully. Take HR under your wing and teach them the business from the ground up. Company history is part of that, but only a small part. For example, in horticulture, your HR function needs to understand what growers do and what various crops and systems challenge them. They need to know the role and responsibility of those leading operations, whether they are working with plants in a field or a greenhouse, and the relationship between customer service, sales, product development, marketing, and operations. HR should visit and have a chance to shadow every department or function within your business, meet the key leaders, and have a chance to talk with entry-level employees. Invite HR to meet with key customers to understand this relationship and the customer’s challenges your company is trying to help them solve. Expose them to the entire industry through the various trade show events and conferences such as Cultivate, MANTS, Far West, or the Plug & Cutting Conference so they can learn about all the companies that make up the horticulture industry as well as interact with other HR leaders to share best practices. Expecting HR to stay in their silo, their office, or behind their cubicle separates them from the business. It hinders their innovation and creativity when tasked with solving real business problems. Strategic elements that HR brings include assisting with developing the organization’s strategic and tactical plan, organizational development and design, strategic workforce planning, succession planning, and learning and development. Even the development of compensation and benefits programs, collectively the total rewards program, is strategic. In a March 14, 2019 article by The Predictive Index, Top CEO Priorities Are Business Strategy and Talent Strategy, the top two priority concerns are… well, as the title states… business strategy and talent strategy, two core areas addressed with an HR function that performs a strategic role. Add to that the January 17,
