This is the third HR article released this year by me at BL&MT and this blog has been initiated through discussions with senior advisers, HR experts and HR partners in Stockholm, Chicago, Dublin, London and Saigon (my own network). Secondary data has been derived from professional databases such as ProQuest, Science Direct, the Journal of Management, and the Society for Human Resource Management.
Why am I writing this? How often do you hear about high attrition rates (churn rate)? And the average cost of replacing an employee equals 20% of an employees' annual salary according to cbsnews. It is also vital to consider the brand and bad buzz online that may be reality if an employee leaves the business extremely disappointed. I'v seen hundreds of young talents leaving a well-established American blue-chip within 12 months costing millions in USD in loss of opportunity as calculated together with vice presidents at that firm. The financial impacts of losing employees have also been described by Huffingtonpost, see this > Link
Sharing the views by experienced HR practitioners: Through my many talks with HR directors, hiring managers, HR partners and senior recruiters I often get a general answer on the question of how to attract and keep employees engaged. I also constantly hear concerns from senior management about how to find and keep people engaged for maximised output, so I decided to write this article combining fresh primary and secondary human resource data on top of my own management and HR experiences.
To think about: Before reading this post, consider what you could do to maintain low attrition rates, how to find talents and how to keep them engaged. Welcome to comment and share this article as well. You can also contact me today for consultation or any kind of cooperation covering people development, talent management, training, education, effective leadership or HR management. You may also want to download my eBook about project management success available here > Link to Amazon
Topic of importance: Employee Benefits News, March 2013 mentions that "those companies with highly engaged employees are reaping meaningful rewards in terms of personnel profit". Same source states that "engaged employees are three times as likely to suggest improvements to a firm". "They are also twice as likely to stay late at work to get something done to help a co-worker without being asked". That is why this topic is of an importance in addition to the costs of having people leaving the firm as mentioned earlier in this release.
Amity Global Business Review, 2012 mentions that "the engaged employee is a productive employee and he develops a passion to deliver beyond expectations, a bond with the organisation and a sense of belonging". Amity Global Business Review, 2012, also states that meaningless work is associated with apathy and detachment and is further linked to employee turnover, customer satisfaction, loyalty, safety, productivity and profitability. Gallup Management Journal Employee Engagement Index highlights that 29% of employees are actively engaged, 54% not engaged, and 17 % disengaged hence supporting the importance of this topic.
Effective HRM improves the bottom line: Initially, let's briefly show what leads to enhanced operating margins and an improved bottom line in the context of human capital. Satisfaction and motivation ensure higher productivity which can be seen in improved margins, which is often the result of doing that little extra thing (out-of-office-hours) that can close a critical deal, or, deliver a vital project on-time. A driven worker may also execute job related activities on his/her spare-time related to team building, in order to secure a unified group with shared values and goals that leads to higher productivity.
How do you identify employee engagement?
- A hiring manger must set realistic and motivating goals and be clear with what he/she wants to achieve, and when, and why these goals are important for the business. It is not all about the employer, there has to be mutual satisfaction and agreement between the hiring manager and the employee. Many firms fail to consider this critical two-way approach, thus, having the attitude of "we pay you - you work for us - just do what we say". While that is partly true, it is also about the time spent by the employee, and his/her potential loss of opportunity elsewhere that needs to be considered.
- Act on the targets. An action plan must be developed and this should be implemented with continuous support from management, and peers as required. The hiring manager shall appoint one or more "job buddies" who also need to be accountable and rewarded for their time spent to help a new employee.
- Analyze employee data every fortnight: is the candidate delivering on-time and as expected? If not, why? How can management further assist?
Metrics that can be used to measure employee engagement include employee retention, company performance, innovation, customer satisfaction, profitability and can be measured through surveys, attrition rates, number of referrals, and organisation growth.
What are the drivers for employee engagement?
- Career advancement opportunities. These have to be clearly defined and a career plan should be established for the employee upon starting his/her new job. I'v seen too many companies failing by just making lousy statements such as" if you do well you can climb": No dates involved. No clarifications of how this can take place. Nothing about potential support provided.
- Management shall ensure enthusiasm for the job and be willing to support upon request. Management should be patient and act as adviser and mentor for the newly hired employee. Unfortunately, too many managers are stressed, and busy with other duties (often ineffective admin duties) and this element easily falls behind the chairs.
- Establish clear decision making routes, accountability, and authority in the organisation. Large matrix organisations often suffer from the syndrome of "passing the ball to someone else", hence, it is easy to become unproductive and confused about who to ask for decisions.
- The work shall be realistic, challenging and build on previous experiences and knowledge. It is not just about what needs to be done today, an employee must feel that his/her past history is of value in the new position or the candidate may become disappointed.
- There should be a competitive base pay. While salary is not everything, and we all get motivated by different incentives, an underpaid job versus competition will find it hard to keep talents in the business.
- The employee needs to feel he/she can impact the quality of the work, product or service. One of the worse things that can happen for the bottom line is when an employee are told to work with processes and procedures that just kill time rather than adding value for the operational chain. Especially when long term employees are complaining and suggesting improvements but very little happens, hence, this may lead to demotivation and unproductivity.
How do you engage employees?
You may think the answer is straight forward, but why are there so many well established firms with strong brands battling with high attrition rates and a growing bad employee buzz online? According to my primary and secondary research below steps are basics yet critical in creating employee engagement - which is important for employee satisfaction and motivation leading to higher productivity and lowered attrition rates.
- Inform - employees need to understand an organisation's vision, brand values, and how customers feel about the company.
- Inspire - it remains vital to connect employees to an organisations' vision & values and make them believe those matter and to take pride in their job and firm. Leaders with an MBA or advanced executive strategic training are preferred as they are more likely to be able to make this strategic top-bottom translation.
- Instruct - support employees with training, coaching and feedback which is needed to deliver a brand's promises to its clients
- Involve - take actions with employees when designing their jobs as well as improve work processes and solve problems which have been identified through surveys and feedback from customers and employees.
- Incentivize - use appraisal systems to measure, reward and reinforce desired employee behaviors and motivate employees to give their best.
Employee engagement starts at the selection stage
- Chose the right person for the right job. An organisation needs to find out what tests are most effective and efficient for a particular job role as there are plenty of tests available online. This is comparable to what I wrote in my ebook project management success and critical leadership factors: PMI and PMBook mention several tools and techniques that are advised to use for anyone seeking project success but they do not mention for what particular projects (size, industry, complexity) these tools and techniques are valid.
- There has to be a strong induction and orientation program for the newly hired employee
- Motivate employees through recognition letters, profit sharing schemes, and long performance awards
- Take feedback and implement suggestions of improvements by employees
- Communicate within the organisation and use communication forums, internal magazines and conferences with data gained through surveys, interviews and informal talks.
- Maintain a healthy work life balance. Overly stretched employees are seldom the most productive in the long run.
- Organize so called "get together" activities to improve the team spirit and a stronger sense of belonging to a winning concept.
- Be open and transparent with policy and culture and focus on empowerment.
Employee engagement is also a two-way process were individuals are accountable for their engagement and were managers shall coach team members on an ongoing basis. Executives need to set the tone for high morale and motivation and reinforce the responsibility of individuals and managers through reward performance measures (ex: 360, 540 degree evaluation). In order to engage the employee, the employer must understand his/her needs in the organisation and carefully consider Maslow's hierarchy. In addition, low employee engagement is often caused by wrong positioning of a candidate, management treatment, as well as not holding employees accountable and demotivation quickly leads to frustration. And when frustration occurs, employees start to spend valuable office time to air their disappointment for busy peers or in worse case scenario, contacting top decision makers which could lead to a sinking boat for all parties involved. The employee may also start to make calls at the office to future employers, and search for new jobs which distracts the focus on important day-to-day activities.
How do we hire the right candidates and how do we on-board them?
- Recruitment: Most reliable sources according to Hire right, journal JPM mentions referrals but I slightly agree in this case. While referrals can be a good source, it may also lead you into the the trap of hiring friends and relatives, instead of getting best possible candidates. It is of course also vital for the candidate to be responsible, and, to accomplish tasks with a hard working and committed attitude. This is seldom a problem if the hiring firm keeps it promises, and, if the hiring firm ensures mutually aligned values, goals and interests with the candidate at the very beginning. Social media and networking events are good sources when finding strong candidates. Why not using a "we hire" badge or a t-shirt when appearing in public? Jobvite mentions that employers who used social media experienced 49% improvements in their hiring quality compared with when a candidate was found through traditional channels. And don't apply a one-size-fit-all approach; a sales professional and a maintenance technician requires different strategies of evaluation and measurements both in terms of questions asked, but also in terms of tests applied.
- Selection field: Most hiring managers fail in this stage costing millions in USD in high employee turnover. Don't blindly scrutinize resumes looking for errors, gaps or mismatches, but see the big picture and a candidate's true potential. Create specific questions based on a job role, industry and corporate culture. I would like to highlight that those hiring managers or recruiters who have been working in a similar position that they are now trying to fill, are often better in selecting the best candidates. Use the "tell me more phrase" often, and follow-up, probe the answers. Watch the red flags: is the candidate late to the interview? Has the candidate done enough research beforehand? What questions is the candidate asking during the interview? A panel interview together with tests such as IPAT, LDQ tests, or on-site assignments in test centers can also ensure best possible candidates.
- On-boarding: Employees may not be able to jump right in, and training alone is not sufficient. Offer a mentor and give the person remuneration and time to do his/her job. Provide a who-is-who directory with responsibility and authority and introduce the hired candidate to the team. As a hiring manager, communicate to the team what is expected from the candidate, why he was hired, and how the team must help to make this work. The hiring manager must plan for progress meetings with the candidate 30,60,90 days and give support as required.
Other strategies for successful hiring and retention include:
- Pre-job assignments: These could include to prepare a short marketing survey, website review, or, to prepare a 30 day action plan. This gives the recruiter / hiring manager a chance to assess communication and presentation skills, as well as, analytical and reasoning ability. It also gives the recruiter a chance to gauge adherence to deadlines, quality of work, structure and business etiquette.
- References: I have become skeptical to references today. How many references are not "made-up" that fail to provide an objective and transparent picture of a candidate? Although references on paper is vital, I would not spend very much time on talking with X-bosses or X-employees - they would probably just say good things about the candidate as they were selected to be references right? But this is my own view and I am not saying it is wrong to check references. But I would spend most of my time on other vital recruitment tasks mentioned above.
- For this particular question watch the body language carefully (face, arms, shoulders, hands, eyes): If I called your boss and asked him to describe you what would that be?
- In terms of tests, the recruiter needs to understand what tests to apply depending on the job, industry functional and personal requirements. Valuable tests to keep in mind include emotional intelligence, leadership tests, psychometric tests, personal and aptitude tests. 80% of Fortune 500 firms use tests, but only 27% of hiring managers use such evaluations according to Hire right, Journal JPM. Emotional intelligence tests can help the hiring manager to uncover the capability to work in teams, deal with stress, and the ability to interact effectively with coworkers.
Top 10 retention strategies
Last but not least, what are the top 10 retention strategies in your experience? According to Employee Benefits News, 2013, these include but not limited to below points:
- Increasing salaries
- Improve employee benefits
- Provide flexible schedules
- Increase employee recognition
- Ask employees what they want and put feedback into action
- Increase training and learning opportunities
- Hire additional workers to ease workloads
- Provide academic reimbursement
- Carve out specific career paths and promote more
- Encourage a more casual dress code
I hope I gave you some very valuable tips and competitive information about how to engage employees, why it is important and how to hire for corporate success. Welcome to contact me today should you need help with soft skills training, sales training, management training, HR evaluation, employee motivation, or just to get help with on-boarding the right candidates to your business: email@example.com
Copyright (C) 2018. Anthony Marc. BL&MT www.businesslynch.com. All rights reserved.