Employee Engagement: “Did I Stutter?”
Poor Stanley. The lovable curmudgeon on the still popular TV Show “The Office” wants to be left alone so he can do his crossword puzzle in the middle of a company brainstorming meeting in peace. His boss, bumbling Michael Scott, tells him to put his game down and join the group. Stanley replies with a firm, “No.” Michael then says, “Stanley, we’re havin’ a little brainstorm session.” Stanley then proceeds to cut him off and says loudly and firmly enough so the whole room can hear it, “Did I stutter?” Michael becomes so embarrassed and flustered that he calls a quick end to the meeting so he can grab a glass of water. The episode continues with Michael and Stanley trying to come to an understanding and better define the boss and employee relationship. Do you think Stanley is engaged in his work? Do you think he is committed and connected to his organization? Do you think Michael may have something to do with that? According to SHRM, executives from around the world say that enhancing employee engagement is one of their top five global business goals. As a critical business driver in today’s highly competitive environment, employee engagement can have a significant impact on your company’s bottom line. According to The ISR Employee Engagement Report, “Companies with high levels of employee engagement improved 19.2% in operating income while companies with low levels of employee engagement declined 32.7% over the study period.” Is it any wonder that increasing employee engagement is a top-five global business goal? A highly engaged workforce is the key to retaining top talent within your organization, driving high levels of customer satisfaction and loyalty for sustained growth. However, how do you know if your workforce is engaged or not? Then once you identify low engagement as an issue, how can you address the problem before your bottom line starts to suffer? Is My Workforce Engaged? That is a good question because we often confuse job satisfaction and happiness with employee engagement. Therefore, the thought goes that if my people are happy, then they’re engaged. However, it is possible to have a happy and satisfied employee who is not actively involved in their work or committed to the company. According to Kevin Kruse, the author of Engagement 2.0, “Someone can be happy at work, but not ‘engaged.’ They might be happy because they are lazy and it’s a job with not much to do. They might be happy talking to all their work friends and enjoying the free cafeteria food. They might be happy to have a free company car. They might just be a happy person. But! Just because they’re happy doesn’t mean they are working hard on behalf of the company. They can be happy and unproductive.” Thus, happiness and job satisfaction are not useful indicators of employee engagement. It could be they have found a comfortable place to “hide” in your organization without the level of commitment and caring that could help propel your company to the next level. Gallup regularly conducts surveys on the topic of employee engagement, and they have found that nearly 70% of the workforce today is disengaged, causing employees and businesses to suffer dramatically due to increased turnover, low commitment, and reduced productivity. How to Address Low Engagement? Measure employee engagement each quarter to provide closer-to-real-time data about how your staff views the organization, their managers (who have a significant impact on their overall engagement), and their roles within the company. The powerful “heat map” it creates shows leaders exactly where problem areas exist as they slice and dice the data into targeted workforce segments (by the department, location, generation, tenure, and more). Scientifically based employee feedback surveys allow you to take a deeper dive into the company culture and pinpoint the root causes of disengagement. By collecting anonymous feedback regularly, it gives teams and leaders real-time insights from scientific data that can then be used to impact change quickly. If you’re looking to bring more meaning to your employees’ work experience and increase employee engagement and productivity, then start acting on a proven and predictive data format. We can help you build an action plan to drive high engagement and performance, which will impact your bottom line and your ability to compete better and win. In August 2019, close to 200 business executives met and issued a statement on “The Purpose of a Corporation,” radically stating that companies should no longer advance only the interests of shareholders but also invest in their employees. It could be a reaction to a changing economic environment and record low unemployment. It could also be that business leaders finally understand the importance of employee engagement. That’s right—Did I stutter? SOURCES: “Did I Stutter?” The Office, written by Brent Forrester & Justin Spitzer, directed by Randall Einhorn, 2008; Gallup Employee Engagement Poll, August 26, 2018; The ISR Employee Engagement Report by Towers Perrin; Engagement 2.0 by Kevin Kruse, Createspace Independent Pub, 2012.
Debunking the Compensation Myth Surrounding Retention
A driving need for obtaining talent is retention. It is a huge issue when you take into account that, according to a September 2018 article from CNBC, “workers are quitting at the highest rate since 2001.” When retention rates are low due to high undesirable attrition, many business leaders look to recruitment to fill that gap and solve the problem. However, the reasons that candidates wield so much power in today’s market is because of a growing skills gap and talent shortage. The need is high and the supply is low, so it is unreasonable to believe that workforce headcount issues can be solved by recruiting alone. Most business leaders understand the laws of supply and demand as it relates to the products and services that they produce and sell. When demand is high and supply is low, prices rise. Conversely, when supply is high and demand is low, prices fall. The challenge is finding the equilibrium where the right price stimulates movement of the product or service rather than warehousing or letting it sit idle and unproductive. People, however, are not the same as a product and that is a hard pill for many business owners to accept. In other words, retention is not exclusively about price. Recently, Forbes published an article entitled, Why American Workers Quit Their Jobs, and provided an infographic to summarize and showcase the results. Unfortunately, the article and corresponding infographic can be misleading. The results are based on a survey conducted by PayScale; whose core business revolves around compensation metrics. Thus, is it any wonder that “I want higher pay” is identified as the highest percentage motivator for quitting? While informative, the article did not provide the complete picture leading most business leaders whose time is short and consume data and information in quick, easy bites to come to a quick conclusion. “Well, according to Forbes, a very well respected and trusted source of news and business information, retention IS about paying my people more.” WRONG! With all due respect to Forbes and the article’s author, it’s just not that simple and everyone who deals with recruitment and retention as a core function of their role and responsibilities knows it. Even PayScale knows it. The very same report cited in the Forbes article reflects that compensation is not the key to retention. A deeper look into the numbers reveals the following: Top Reasons for Quitting: I want higher pay (25%) I am unhappy at my current organization (16%) I want to work at an organization more aligned with my values (14%) Top Attraction to a New Organization: The opportunity to do more meaningful work (27%) Increased responsibilities in this role (17%) Increased pay for this position (16%). If compensation were the single most important retention tool, it would be at the top of the reasons for quitting and the attraction to the new organization. What this study reflects is that what exiting employees tell us, and what their real motivations are, are two different things. Additionally, one has to look even deeper to understand that retention differs across different levels of the organization. What motivates retention for front-line workers is different than what motivates top executives, which is even different from what motivates managers or directors. As in any sales interaction, price is the most common objection encountered. “That product/service is just too expensive.” Every salesperson worth their weight is prepared and knows that such objections are often just chicken poop, and this is when the real sales work begins. What the client/customer does not see is the VALUE for the price but rather they see the PRICE for the value. When it comes to employee retention, it’s the same thing. Exiting employees use the price objection all the time as an avoidance, but if the business is to really solve its problems then they have to perform true root cause analysis, dig deeper and understand the actual underlying reasons for employee attrition. Let’s not fool ourselves either. Compensation IS a legitimate factor that DOES impact and factor into why people leave. For example, when an employee perceives discrimination in the workplace or mistreatment, being skipped over for a promotion when deserving of it, not receiving the training and development they need, a lack of recognition or reward for a job well done, or even something as severe as harassment or workplace bullying. The overriding perception in these scenarios often becomes, “I don’t get paid enough to put up with this.” Therein lies the reason pay is provided as the chief motivator for leaving. The last thing they want to do, especially once they have made up their minds and they are ready to leave, is to burn bridges, make waves, or fight their way out the door. Mentally, it is best to make a smooth and conflict-free exit. As such, they often hide their real objection to remaining for fear of offending someone, getting into an argument, or painting themselves into a corner where they cannot leave an environment they no longer want and are unable to go to where they believe they will be happy and prosper. Incidentally, compensation is also the easiest excuse for a company or manager to accept. So, what are business leaders to do about this? How are they going to retain top talent? First and foremost, don’t immediately jump to the conclusion that compensation is the silver bullet or the magic wand that will solve all problems. That’s a surefire way to price yourself right out of business. Rather, work collaboratively with your HR department and managers. Engage in the same root cause analysis with your team’s motivations that you do when solving production or operational problems. LISTEN to the employees and what truly motivates them. Conduct engagement surveys to confirm it. But most importantly, when you listen, be prepared to ACT on what you hear. Demonstrate to your people that they are valued, and you are willing to invest in them through training and development.
Expand Your Candidate Pool: Best Behaviors Lead to the Best Candidates
I don’t know about you, but it’s starting to get old hearing the “it’s a candidate’s market” comments from nearly everyone in social media, news articles and in far too many blogs to count (The BEST Blog included). It’s one thing to call it out, but it’s entirely different to address and solve the problem. While there are currently no silver bullets, there are some innovative and different ways of looking at the workforce that can give you the edge over your competition. In January 2019, I came across an article that highlighted a professional’s path to business leadership. It walked us through how she got started in the industry, her background and expertise, recounted the obstacles she faced and how she changed with the times. These last two, obstacles and changing with the times, are often missed by so many when hiring. The Obstacle With un- and even under-employment at historic lows and such a significant skill mismatch, it’s becoming harder to backfill roles when the talent pool seems to be shrinking at an alarming rate. In fact, in Bloomberg (April 4, 2019 – U.S. Jobless Claims Fall to 49-Year Low, Below All Forecasts) it was reported that employers are “holding onto workers and loath to let them go.” This makes pulling talent from competitors even more challenging than ever before! Much of the issue is based on how one defines the talent pool. Hiring managers tend to select candidates only if they have the exact pedigree, experience and knowledge required for the position. Usually, this means they want a sales candidate’s “book of business” to come with them. For technical roles, they want candidates to make a parallel shift into the same role they are leaving. However, this is not the 1980’s. Candidates today are more career savvy and they have choices both in and outside their current industries. To add another layer of complexity, many business leaders are stuck in two camps: clone the current aging employee population or hire the younger generation. In cloning the current aging employee population, hiring managers want someone who has done it before in their industry and, if possible, for their clients or clients’ competitors. This first camp leads to low or no innovation, a decreasing talent pool, and the challenge of pulling from a competitor, which is the only place to find those who have done the exact same role you are trying to fill. Hiring the younger generation appears to be a terrific alternative! Get them in early in their career and they will stay forever, just like the Baby Boomer generation or Gen Xers, right? WRONG! Specifically targeting younger candidates over older candidates equally able, capable, and willing to perform the same job at the same rate of pay is a violation of the Age Discrimination in Employment Act (ADEA). Additionally, there are challenges that must be overcome such as client perceptions that they lack the knowledge, skills, and abilities to help them. There are also the challenges of keeping these early career professionals engaged in the business when they are hungry to grow their careers. So, how do we get around these issues? Changing with the Times: It is About Behaviors The solution does not have to be an either/or situation. In fact, age never has to be a factor at all, and legally it’s safer if it isn’t. Every role has certain behavior traits and competencies that lead to success no matter who is in the role. These traits provide us insight into each candidate around what motivates them, how they act or interact, and the thought processes they engage in. Competencies that candidates bring are developed over time and can be seen through their innate and learned behaviors. Competencies might be core to the role or company, demonstrated leadership or individual contributions, and may even be very unique based on the positions they have held. In the context of a job, people must possess a particular set of competencies to be a good “fit” and achieve success. The three critical dimensions of job-related competencies are: Behavior Traits that are required to accomplish the job Experience or job-related education and training that contribute to greater productivity Chemistry or the personality that is compatible with the company and work group. We need to change our hiring thinking by realizing the importance and specific identification of the behavior traits required in a role. This will open a wider, more qualified talent pool. Experience, or hiring the exact same position from your competitor, is too often viewed as the most important dimension. However, it’s actually the LEAST critical to success. Outside of highly technical roles, we can hire a lower level of specific experience because technical, product and industry knowledge can be trained. If a professional has the right behaviors and experience but the chemistry is lacking, a person may still be successful if the company and person recognize, and choose to work through, their differences. The same is true for professionals with the right behaviors but little experience and poor chemistry. The common hiring success denominator is behaviors – not experience or chemistry. We are all looking to hire the ideal candidate with adequate levels of behaviors, experience and chemistry. Unfortunately, this is akin to looking for a purple squirrel – good luck finding that in today’s dynamic hiring market. How Do We Identify these Behaviors? There are 25 specific professional behaviors that make up behavior trait families. We define these 4 families as: MOTIVATIONS – The fundamental drive of an individual characterized by more than the simple desire to earn money. What provides the individual the personal fulfillment in their work? MODES OF ACTING – Functional behavioral traits that address the individual’s approach and skills for accomplishing work functions. These include organizational and time management skills, planning and prioritization, initiative, work focus and physical and mental stamina. MODES OF INTERACTING – Addresses an individual’s interpersonal skills in how they influence, interact and get along with others.
Be an Investor When Recruiting and Hiring
Who you hire is one of the most important decisions and investments you can make in your business. However, recruiting and hiring today is more important than finding a person with the right skills and qualifications. Do the candidates fit our culture and strategic vision? Do they share our values and have the right behaviors to make them successful and provide your company a long-term return? Will they still be around in 5 years? Warren Buffett is considered to be one of the most successful investors of all time and is currently the third wealthiest person in the world. Regardless of one’s opinion of the “Oracle of Omaha,” it is hard to argue with his amazing track record of success. As the Chairman and CEO of Berkshire Hathaway, Buffett has inspired millions, while making billions through a philosophy of investing that can also be applied to successful hiring practices in your business. Aside from utilizing financial ratios and other analytical tools to find undervalued companies he can invest in, there are other key considerations that Buffett and many other successful investors look for before making a decision. Never compromising on business quality, taking the long view, and listening to those you know and trust, to name a few hallmarks of Buffett’s investment strategy. Could thinking as an investor also be applied to hiring? After all, when recruiting and hiring a person to join your company, you are making a major investment. That same hire can often be critical for the future success of the company. Time, training, compensation, benefits and other “rewards” for the people you employ are your investments in growing your business and making a return. In today’s low-unemployment, low-retention “candidate’s market,” approaching recruiting and hiring as an investor may make the difference and lead to better decision-making in this critical area. Never Compromise on Quality “It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.” – Warren Buffett Berkshire Hathaway was originally a textile manufacturer when Buffett first took control in 1962. He later stated that entering the textile business was one of his worst trades ever but kept the name. That experience taught Buffett that “you get what you pay for.” He was no longer interested in buying something at a bargain in the hope of getting a nice short-term return, especially when the long-term prospects for the business look terrible. He chose a path of “value investing,” in which he looks for prices that are low compared to their actual or future worth and often overlooked by other investors. Never compromising on quality can also be applied to hiring. For example, Candidate A is a high-quality candidate that matches all of the skills, qualifications, experience, behaviors and cultural alignment needed for great success in the position. “A” checks off all of the boxes, has been thoroughly screened and you can see a bright long-term future. Candidate B also has many of the same skills and qualifications. “B’s” behaviors and culture fit were not as strong and the references not as glowing, nor was there a projected long-term future with the company. Here’s the kicker— “B” wants 20% less in salary than “A.” How many would automatically gravitate to Candidate B because they felt they were saving the company money or had to stick to a budget? Quality investments yield high returns and increase in value over time, similar to Candidate A in our example. How does this apply to value investing? Candidate B will inevitably cost the company more over time and return less due to low engagement, poor cultural fit and eventual turnover – in other words a lot more than the 20% saved in Candidate A’s compensation. As Buffett has stated, “Price is what you pay. Value is what you get.” Taking the Long View Once asked how long he would hold a high-quality investment he made at what was considered a reasonable price, Buffett answered, “Our favorite holding period is forever.” Embracing a “buy and hold” investment philosophy, many of his investments have been held for decades. Buffett and investors care more about the future price than the value it was on the day it was purchased. As a business leader, you should care more about what a new hire can bring you a few years into the future instead of having them be able to “hit the ground running” and automatically start making returns on day one. Look for those candidates who are quick learners and can innovatively solve problems. They are the ones that have the experience and behaviors that will help them integrate quickly into your company and excel in the future. Smart investors also continue to invest – just as companies need to keep investing in their people. While you may not have the budget to increase their compensation, look for other ways to invest in your new hires and current top talent and leadership. In a recent Udemy “Workplace Boredom Report,” 46% of employees are looking to leave their companies because of a lack of opportunity to learn new skills, and 80% agree that being given more opportunities to learn new skills would make them more interested and engaged in their work. Do you offer continuing education, seminars, training programs and other developmental programs that will keep your employees learning new skills? There is a measurable ROI to upskilling your employees, and often it is in the form of productivity gains, increased engagement, more profitability and reduced turnover. Listen to Those You Know and Trust “Management changes, like marital changes, are painful, time-consuming, and chancy.” – Warren Buffett Warren Buffett has always noted the importance of only investing in competent and trustworthy management teams. He knows that when he selects partners or managers, their actions and decisions will be felt for many years. As a business leader, you too must be cognizant of selecting competent and trustworthy people to join your organization. They could have a
All’s Fair in Love and Retention
Employee retention can seem like war in the current candidate market, but it doesn’t have to be. Often, when top-grade managers leave their organization, it is because of reasons that could be addressed by company leadership and have little to do with salary. In our own internal surveys that we use with candidates, “Company Culture” is the number one motivation for making a career move. As recruiters, we often see candidates willing to take up to a 20-25% cut in base pay for an opportunity that provides more of a challenge, a better company culture, more work/life balance, and a “runway” to their future goals. To get your people to stay, you may be thinking, “Well, I’ll just increase their compensation and that should do it.” Or – when presented with an employee that is leaving, “I will make him a counteroffer he can’t refuse.” Worst case, your budget may not allow for it. Best case, you may get another year or two out of the employee, but the underlying issues for them wanting to leave still remain. The good news is that it is not just about compensation. The bad news is that if you’re not taking steps to address employee retention and understand why your talent is leaving, it is open season on your people. We have identified many clients and companies we work with that have excellent employee retention, and they all share the same four components that we call L-O-V-E (L for Learning and Development programs, O for a great Onboarding experience, V for Values and Culture, and E for Engagement). Thus, when it comes to retention, think about making LOVE, not War. Learning and Development How many of us have said to ourselves at points in our career, ”Did I learn anything new today or was it just another day at the mill?” Learning and development programs are proven ways to boost engagement and loyalty. According to Ellie Bertani, Director of HR Strategy and Innovation at Walmart, “I believe business needs to stop looking at employees as a cost center and realize they are an investment. Training them is an investment that will pay dividends in the future.” There are external factors at work as well. According to Niall McKinney, president of AVADO, “As more jobs become automated, employers need to help employees re-deploy in new or more advanced areas. Around 32% of current workers ages 16-54, regardless of their position, may need to retrain within the next 12 years. Research also shows that workers are leaving your company because they don’t see the career path and opportunity they’re looking for. They may have higher expectations, or they simply need guidance. They also may have been thrown into a position without proper onboarding or training and are learning simply by making mistakes, which can be soul-crushing. In a recent Udemy “Workplace Boredom Report,” 46% of employees are looking to leave their companies because of a lack of opportunity to learn new skills. This is where a more experienced counterpart or mentor can provide the training, skills, career/life guidance, coaching, and patience that can help them learn the position, see their fit within the company and culture, and see a future. Do you offer continuing education, seminars, training program,s and other developmental programs that will keep your employees learning new skills? Do you have a portion of your meetings dedicated to best practices or learning something new, or even a simple sharing of information? There is a measurable ROI to upskilling your employees, often in the form of productivity gains and reduced turnover. Onboarding Onboarding is a great tool for welcoming a new team member and first impressions here are lasting. Think about your own career. How many of us on our first day in a new job had to find a temporary workspace since our workstation wasn’t ready? They may not have had our email setup yet and didn’t even have new business cards printed. “I’m sorry, I didn’t get the email that you were starting today,” was often a common refrain. You can feel the love and sense of belonging in your new company, right? According to ServiceNow, 80% of workers experienced some issues when starting a new job. One-third stated they received no training at all, while 28% were unsure of their responsibilities and goals. 20% felt they were not fully onboarded after three months on the job! In fact, that same 80% would rather go on an awkward first date than attend a new job onboarding session or orientation. What do new hires want out of onboarding? In the ServiceNow survey, 58% want a walk-through of key processes or want a “buddy” or mentor they can turn to for questions. According to a recent Harris Poll, 93% of employers agree that a good onboarding experience is critical to influence the new hire’s decision to stay with the company. In fact, nearly 1 in 10 new hires leave a company due to a poor onboarding experience and the attrition rate can be up to 22% in the first 45 days of a new hire. The solution? Have a comprehensive plan for onboarding new hires. Your onboarding may include: a pre-boarding with your new hire (welcome packet and schedule, including a welcome letter from the CEO, sent prior to their first day); scheduled walk-throughs with key department heads; a longer duration for getting acclimated (most successful onboarding plans take weeks or even months); and the assignment of a coach/mentor to help them learn the new job quickly and immerse them into your company culture. Values & Company Culture Company values and culture are more important than ever when it comes to retention. Are you giving people insight into the company’s mission, values, vision and purpose? A good thing to do is write it down, not just have it on your web site, but have it visible throughout your entire operation. According to Bretton Putter, Founder and CEO of CultureGene, “The success or failure of a
