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Winning the war for talent

How to attract and retain the people you need to get you from
"Where you are now" to "Where you want to be"

By Brian Birley, TEC Chair & Speaker, May 2007

Topic: Recruitment & Retention

In the Q1 2007 TEC Index, two-thirds of TEC members said the skill shortage is getting worse. We are living in a time when it is difficult to find the candidates that we need to take our organisation to where we strategically would like it to be. Compound this further with our ageing population and the generational differences between Generations X, Y and the Baby Boomers, and CEOs and managers feel like they are in the middle of a war for talented employees.

For your business to perform, let alone grow, you need the right people: those with the ability and willingness to perform in the position to be filled along with the attitude and values to fit your organisation. But it doesn’t end once they join your company. The ultimate objective of an effective Human Capital Management program is to find, train and KEEP the right employees for your organisation.

I would like to share with you the six key steps that will put you ahead in the war for talent along with templates and checklists to help you complete the process.

Recruitment

Recruiting effectively is the first step to retention. The employment rate has been under 5% for some time and often this is the figure that is referred to as 'full employment', putting the emphasis on people seeking work rather than those who seek to employ.

There are two major sources of skills that are at this time somewhat overlooked. These are women returning to the workforce after having their families – often highly skilled, under valued and overlooked. Secondly, the 50+ year olds who may well have been made redundant from an organisation or who have been cast aside for younger candidates. These are people who are looking for a way to regain self esteem – giving them an effective role in the organisation can often achieve this. However, they also may not be part of our search pattern when we look for candidates.

The internet is providing an unprecedented source of information and can be used effectively for recruitment in order to find the right people. It also provides an excellent training ground for candidates to receive exceptional interview technique training. Basically, it means that many of the candidates that we interview are better trained as interviewees than employers are as interviewers.

The single most important step in recruiting is the first one – to define the role and the type of person you need to fill it. Often this is done 'on the fly' because the person is needed quickly, but investment here will save time and money for as long as the new person stays with you.

Gut feel, commonly used in recruiting, generally indicates that you have a liking for the person – probably because that person exhibits some similar qualities as you. As important as this may be, it leaves a lot of room for error, and it has a much lower success rate than when used in conjunction with other (more objective) indicators.

Before candidates walk through our door, we need to have complete clarity about what the outcomes of their role should be. The traditional Job Description does not manage this process well. Instead, try a Job Outcome Definition (JOD™) which has 6 primary purposes.

>> Download the JOD template

The JOD™ sets out the following:

The reason for the job
The key outcomes expected to be achieved by the person who is doing the job
Key performance indicators
Targets against each outcome
List of competencies (i.e. attitude, skills and experience)
Time period to achieve outcomes

Besides helping you define the role so that you find the right employee, the JOD will show the candidate exactly what will be expected of them so there are no surprises once they join your organisation.

Other uses for the JOD include performance management (quantitative), communication (sharing each other's outcomes in the team), training (by comparing the required competencies to those of the individual) and team building.

Induction

The first day of any new employee's time with your organisation is vitally important. It is essential to make them feel welcome by organising a senior employee to introduce them to their work team.

We hear the horror stories of people being brought into an organisation, taken to a room, pointed to a desk - "there's your desk" "there's your computer" "the coffee and the toilets are over there" – and left to their own devices. It still happens today, but thankfully not as often as previously.

Following the downloadable Induction Checklist for engagement will help you create a strong first impression on your new employees.

>> Download the Induction Checklist

Some of the key issues here are to ensure that the employee knows exactly what is contained in their JOD™, so they understand the expectations of the company. In return, by making them feel very welcome, they should be able to assimilate into your culture and be productive much faster.

One of the greatest measures of success of an employee's induction is the length of time it takes for a new employee to become fully productive – obviously this varies with the complexity of the role and the type of organisation. It is, however, reasonable to expect that you would get some productivity out of the employee within the first two weeks.

Training

Many people still believe there is a 'perfect employee'. Regrettably, this is a myth. The ability to train people in a focused and effective way is one of the success factors of truly successful companies.

Again, use the JOD™ to assess your employee against the total competencies – gauge which areas your new employee has to receive further training in - and get an agreement and focus on that training. Remember, play to their strengths – do not try to eradicate their weaknesses – you should have resolved all that through an interview process.

The Induction Checklist for training and probation will provide some guidelines.

Assessment

How do you know whether your employee’s performance meets expectations? Regular conversations with your people, assessing them against the agreed key performance indicators contained in the JOD™ will give you a quantitative performance management system.

Assessment is not only about quantitative performance though. While you measure the quantitative through the JOD™, you need to find a way of measuring the qualitative side.

There are very complex ways of doing this and often the 360 degree process is put forward as a good way of seeing whether the employee is actually performing within the parameters that you expect in your organisation. This process requires a certain culture of trust and openness to be effective.

A simple solution is to take the Values of your organisation, and confirm that the employee is operating within these parameters. If they are achieving the outcomes in the JOD™ and meeting the Values that you have established, then they are doing their jobs.

Incentives

This in itself is a huge discussion – not everybody likes the same incentives. The thing that I believe you should do is to make sure that you know the 'What's in it for me'? (WIIFM) element for each of your employees. This WIIFM is a very powerful tool if you use it correctly. How do you find out? You ask them.

An example of not doing this correctly is to have a great incentive program which is only about cash rewards. Incentives can include tickets to the theatre when you see someone do something well, tickets to the football, a night at the opera, a great meal for the employee and his/her partner. Just a word of caution – not everybody likes going to the footy or to the opera so, again, you should have some flexibility in your incentive program.

Statistics and surveys undertaken by well-known organisations, such as Hewitt and Associates and SEEK International, show that money is number 5 on the average person's list of what they want from their employer.

The list starts with:

The people you work with
An excellent working environment
Fair policies and procedures
Training and education

What's the biggest reason for people leaving an organisation? The people they work with.

Retention

The ultimate objective of an effective Human Capital Management program is to find, train and KEEP the right employees for your organisation.

Often the most difficult part is retention of employees, particularly with Generation Y who seem to move from job to job at very short intervals. Statistics from the United States show that the average tenure of all employees is about 4.6 years. In Australia this tends to be less and is probably be around 2.8 – 3.0 years. Generation Y reduces this period, with an average of 18 months to 24 months.

When you think about this, what you have then is somebody who has taken an enormous amount of time to find, to induct, to train and then you lose them, and you start all over again.

Some people feel that a reasonable employee churn rate is healthy and in a number of professional service firms a target of 15-20% would mean that you are bringing in the latest talent with the latest thinking. However, a rate of more than 10% can be quite unhealthy and destabilising. It also means that you are wiping a great deal of money off your bottom line. There is also the issue of planned and unplanned exits.

It can be shown that every employee who leaves you will cost you between 1.5 and 4.0 times their total annual package to replace. There is an extensive process that can prove this, but at the very least, losing employees is very expensive. Not only will you lose their expertise, and the energy and effort and training you invested in them, but you may even lose some of your customers.

Remember, people do business with people – businesses don't do business with businesses!

I hope you found the foregoing helpful and I would be delighted to engage in a conversation or respond to any query you might have.

I would also ask you to look at my website www.pacecorp.net and to consider the book that I have written on this topic called 'Human Capital Management – People are our greatest asset – Practical tools to lead and motivate them'.

This book is a follow on from my other two books:

'The One Page Business Plan – 1PBP®' and
'Implementing Strategy Using the One Page Business Plan'.

They are all available on www.1pbp.com.au.

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Winning the war for talent