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
Starting A Great Retention
Strategies for Keeping and Attracting the Best and Brightest Talent Vast numbers of employees reporting burnout and wishing to leave, record-level quit rates, and millions of unfilled positions have led to concerning new terms, such as “The Great Resignation” or “The Great Reshuffle” and for Baby Boomer employees who’ve had enough – “The Great Retirement.” However, for most business leaders, it is becoming a “Great Headache.” We live in a time of “greats,” and they are generally not too good. In addition, we see firsthand high levels of career unhappiness across multiple generations. So, as employees continue to leave in record numbers and leaders worry about keeping their best and brightest while bringing others on board to fill gaps and continue their growth, how do we begin to get a handle on this and start a “Great Retention”? Of course, the pandemic is often seen as the root cause. After all, entire industries and labor pools have been affected (i.e., travel and hospitality), and some are seemingly changed forever due to the last 18 months. However, many of these challenges were already underway well before the pandemic – skills shortages, “war for talent,” record low unemployment, demographic shifts, generational attitudes concerning work, technology, and more. The pandemic has simply accelerated many of these changes. As business leaders, how do we move our own companies from a “Great Resignation” to a “Great Retention”? How do we change from the reactive mindset of the last 18 months to a more proactive approach designed to not only attract great candidates but to keep your best and brightest employees from seeking greener pastures elsewhere? In our discussions with clients and candidates, there are three “Cs” to pay attention to in the ever-changing employment landscape: culture, communication, and capital (the human form). Spoiler alert – although important, “Compensation” is not one of them. Your Culture When talking with candidates, we typically ask what is prompting them to seek a new opportunity? Far and away, the number one answer is culture. They report no empathy, understanding, work/life balance, and how their company handled the challenges of the pandemic has them looking to leave. In fact, according to a recent PI People Management Report, nearly 50% of employees are considering striking out for something new. Moreover, this trend is primarily driven by those earlier in their careers – 49% of millennials and 56% of Gen Zers are looking to leave their current positions. As we dig further into cultural challenges, we find a significant disconnect between company leaders and their employees in perceptions versus reality. For example, research from Human Resource Executive finds that 84% of CEOs believe empathetic organizations get stronger business results. On the flip side: 83% of employees would consider leaving their job to join a more empathetic employer. A case in point, we spoke to a candidate recently who was deeply insulted by his company leadership. He stated that the company went to a hybrid work schedule, usually a positive. “However, when they presented the plan, it was office days on Mondays-Wednesdays-Fridays because the boss said he didn’t want anyone taking 4-day weekends. They don’t get it – we have been working harder than ever, the company’s growth has been exploding, and he flat out accused us of being lazy. I’m burning out, working more overtime and weekends than ever, and more than a few of my team said, ‘I’m outta here.’ It is never enough.” Sadly – a true disconnect and a wasted motivational opportunity. Since the pandemic started, people who work from home across all generations are logging an average of two more hours of work per day. According to a recent Finery Report survey, 83% report working overtime was the norm, and 70% regularly work on the weekends. Pandemic burnout, resetting priorities, and a need for work-life balance are real. However, it also creates opportunities for companies with cultures that better address it through more flexible work schedules and letting employees have choices, setting clear work-life boundaries (fostering the need for a life outside of work), and increasing support. According to the Adobe survey, 78% of millennials and 74% of Gen Zers would switch jobs for a better work-life balance, even if offered the same compensation. Communication: Talk or They’ll Walk Working from home and hybrid work arrangements, while showing increased productivity, also make the employee feel less seen, heard, and valued. Our strategic partner, 15Five, a leader in employee engagement and management software, has just released their 2020 Workplace Report, and while there is no quick fix, a solution is emerging – frequent one-on-one meetings. When managers regularly communicate through ongoing one-on-one meetings, especially in WFH and hybrid environments, they increase their effectiveness as managers and their teams and company overall. The results are staggering: 82% of employees with weekly one-on-ones say they’re getting the support they need during the pandemic from their managers. 78% of employees state that weekly one-on-ones provide the necessary feedback they need to improve performance. 71% express more trust in their leaders, 72% feel more comfortable bringing up issues, and 73% are more motivated to go above and beyond in their role. Importantly, 1.4x are more likely to say they are currently looking for a new job with monthly or less frequent one-on-ones instead of weekly. Regular communication helps bridge the gap. Consider the outside pressures your employees have been under the last (18) months. It is no wonder that “burnout” is often cited as the reason for leaving a company or manager – they are losing the feeling of connectedness to their manager, team, and company. Staying up to date with an employee through weekly meetings helps managers understand how their people handle their work and where they need more support and guidance. The message– Talk, or they will walk. Communicate with your people frequently and one-on-one. Human Capital Investment Another casualty of the last 18 months has been learning and development (L&D) programs – only 29% of organizations have clear development plans for their employees. In
The Missing Employees
Are you missing employees? Where did they go? I just got off the phone with a restaurant owner who temporarily closed one of his locations so that he could redistribute the staff to the other three. I’ve also heard or seen in the last week: A Starbucks closing at 4:00 PM for lack of staff. A director in a large accounting firm reporting that two pay raises in 9 months (for remote employees) are being characterized by the 30-something accountants as “non-competitive.” Apple employees publishing an internal letter saying the company’s plan to require 3 days a week attendance is “unacceptable.” A wire service story noting that only 12% of office workers in Manhattan have returned to their offices. The manager of a new restaurant scheduling 27 interviews, then sitting through 26 no-shows. Wait times for services businesses that are are unworkable for customers. Our tree trimmer offered me a date 4 months out. The pool contractor’s backlog is seven months. Both claimed insufficient crews to handle the business. I talk to at least a dozen employers a week, and all are complaining about the lack of qualified applicants. Several have raised their starting wage rates multiple times, with no discernable change in the flow of applicants. What the hell is going on? To start, I don’t believe that it’s all the fault of supplementary unemployment benefits. It is true that the states which discontinued the supplements have somewhat lower unemployment rates, and that $300 a week is enough to entice a $10/hour employee, but the missing employees are across the wage range. Factors Driving the Shortage and Wageflation One fact is that the economic rebound since 2009 has not previously had much impact on wages. They were bound to catch up at some point. The Federal Minimum Wage of $7.25 an hour is now insufficient to pay for basic apartment rent anywhere in the USA. Supplementary benefits or not, no one wants to put in 40 hours a week and not be able to live on what they earn. Another is the absorption of women into the workforce. For much of the ’80s and ’90s, women working for the first time represented a net addition to the number of available workers. This had a depressing effect on wages, as there were more bodies chasing limited jobs. The employment market has adjusted to this new normal. Remote working has frayed the cultural relationship between employers and employees. Where workers often stayed in a job because they had friends there, or were comfortable with their responsibilities, now salary is rapidly becoming the only factor they consider. The inflationary pressures of deficit spending are shrinking the buying power of static paychecks. The lessening of COVID-19 is releasing a backlog of employees who “wanted to move anyway,” but were hanging on to what security they had through the pandemic. Most importantly, over 50% of the Baby Boomers are now over 65 years old. Generation X is much smaller, so these retirements impact mid-level employees and managers the most. The available pool of experienced people is literally shrinking. Missing Employees and Exit Planning If you are one of the Baby Boomers who are now 21% of the population but still own 51% of the private companies in the U.S., missing employees will impact you in more ways than just on your daily workload. Increased labor costs will have a direct impact on profitability, and therefore valuations. The challenge of retaining employees long enough to develop true proficiency is growing. Higher turnover means you’ll need more people for the same tasks. The long-term commitment of a relationship where someone is in training to assume control of the business becomes in many cases, unimaginable to an employee. Lack of experience in a management team also detracts from enterprise value. In businesses that depend on repeat customers, relationships may need to be reestablished regularly. I saw a cartoon a few weeks ago. An owner is talking to his employees. He says “When we said you were essential workers, we didn’t mean you should be paid like essential workers.” Perhaps they can be forgiven for misunderstanding. In our mission statements, we often say that employees are our most important asset. It looks like we may have to put our money where our mouth is. John F. Dini, CExP, CEPA is an exit planning coach and the President of MPN Incorporated in San Antonio, Texas. He is the publisher of Awake at 2 o’clock and has authored three books on business ownership. The single largest transaction and transition of your life deserves special attention. Are you planning to exit and sell your business? Business Exit planning is quickly becoming a buzzword in the legal and financial communities. Your professional advisors position themselves to provide tax, risk management, wealth management, and contract preparation services. BEST Exit Plan Advisor has been trained to manage your team of tax, legal, business, and financial planners to navigate your exit strategy. Click here for more details and a video on how to get started. If you want to see how prepared you are for transition, take the 15-minute Assessment at no charge: There is one indisputable fact – 100% of owners will eventually exit their business. The Assessment is a multiple-choice questionnaire that does not ask for confidential or financial information. Nevertheless, it is a critical first step in starting the discussion and planning process. Click here for more information concerning our free, no-obligation exit planning assessment.
Rethinking Hiring in Horticulture
Effective Strategies for Hiring in the Horticulture Industry By Harrison Downing, PRC and Senior Human Capital Advisor at BEST Human Capital & Advisory Group Are you excited at the prospect of increased demand in the Horticulture Industry over the next few years? But, on the other hand, are you concerned that you will struggle to supply material to meet consumer demand? You are not alone in these thought processes. Most companies are identifying areas to invest increased revenue in satisfying new requirements. Whether through R&D, new market channels, LEAN manufacturing approaches, supply chain amelioration, or bringing on talent for these and additional departments. When hiring in today’s changing climate, it is important to understand options, strategize a plan, and develop expectations, as the industry’s talent pool is critically thin compared to talent needs. The Process Scheduling interviews can be complicated, especially acknowledging that not only are your team members busy with their responsibilities, but the prospective candidate is likely busy in their current role. The chances of finding a quality applicant who is currently unemployed are slim. Thus, it is imperative to be realistic when setting a start date for a new hire. The traditional “2 weeks’ notice” is often satisfactory. However, occasionally, more time is required for the individual to leave their previous employer, potentially your same customers, and put them in a position for success. None of us want to burn any bridges. It is now a commonly accepted, if not begrudged, belief that quality professionals are not frequenting job boards and applying to postings. In discussions with many companies, posting a job is often more about marketing than actually identifying candidates. Utilizing current relationships to network opportunities, involving HR teams and other departments to brainstorm candidate flow, and inquiring with customers or suppliers on star players they interact with are among the options to identify talent in our close-knit industry. The graphic at right represents a recent mid-level position hire. The hiring project timeline included posting job descriptions on job boards, networking with industry leaders, and actively sourcing candidates through executive search. At a minimum, it typically takes (3) weeks to identify qualified individuals, (3) weeks to interview and offer, and (3) weeks for the individual to transition and start in their new role. For senior-level positions, plan to add a minimum of (2) weeks for each of the three steps. Because of this dynamic and the budgeting process, many companies start their hiring process a year in advance to identify what roles are needed in their organization. Hiring from within is a practical approach as it is quick, cost-effective, fluid with the company culture, and can motivate loyal employees who aspire to grow professionally. These items add up to expose less risk than hiring externally. However, internal promotion is not always the best option. Animosity between internal applicants can arise, leading team members not chosen to question loyalty. Another critical element to hiring from within is succession planning. As one hole is filled, another is created in the previous position. Active cross-training prepares team members for succession, strengthens the organizational chart, and motivates the team. Finally, from a legal and efficacy standpoint, a hybrid approach of external search and looking within ensures all available talent is vetted as there is a lack of candidates in our industry. Positions in Operations, R&D, Supply Chain, eCommerce, Analytics, and Sales are being created as companies match changing markets with innovation. Yet, retirement rates are increasing, reducing what is already a thin talent pool for horticulture. Add to this that CEA, Cannabis, and Hemp are hiring from the same talent pool as Ornamental, Nursery, Landscaping, Turf, and Greenhouse – there is indeed a growing talent gap. Casting a broad and flexible net when sourcing talent is crucial. One strategy includes considering all candidates, regardless of age. Another is compromising the amount of required product knowledge, customer relationships, or years of experience and instead focusing on a professional’s behaviors. This option requires increased front-end work through strategic planning and assessments. However, it will ultimately unlock a lucrative talent pool, allow for culture alignment, and increase productivity based on the candidate’s behaviors. We should not ignore experience and product knowledge. Painting a “purple squirrel” (what we call a perfect candidate) is an important thought project when conceptualizing a position, but how many purple squirrels have you seen? If there are (5) “boxes” that you believe must be checked for a role, it may be worth reducing it to a top (3). If a candidate shows strong behaviors, perhaps they can achieve the (2) boxes they cannot check with proper training and management. Conversely, it is nearly impossible to train or manage behaviors as they are set early in life. Behavior-based hiring dramatically opens the talent pool outside of the industry for the right fit. There will be repetitive conversations in interviews, but developing separate focus areas for each interviewer is integral to moving quickly. This approach also gives the prospect an understanding of potential interactions with the interviewer. Continuing to utilize virtual meeting resources early in the interview process allows for flexibility. One-on-one interviews with senior leaders are expected, but interview teams of 2-3 display company culture for the candidate and expedite the process. Once in interviews, an element to consider is how the candidate will be led based on their personality and responsibilities. The initial conversation with a candidate may be the most important. Spend it listening and learning. Listen 80% of the time and speak 20% of the time. Engage them about experiences, listen to what motivates them professionally, and focus on behaviors illustrated when describing achievements. Do not oversell the position or company as there is no perfect job or company. Accentuate the positives but be transparent about challenges and difficulties in the role. Truly understanding your prospect’s personality traits and professional behaviors will create a stronger relationship leading to higher buy-in, more productivity, and continued transparency. Congratulations, you have hired a strong professional! However, the process of engaging them is