November,
1998
Fickleness:
Thy Name Is "Employee"
WHAT ARE
YOUR EMPLOYEES doing between noon and two p.m.? If you think
they are munching sandwiches behind closed doors, think again.
Chances
are, more than a few are logged onto the Internet, surfing
for jobs. According to CareerMosaic, the largest job-posting
service outside the U.S. Government, its site is visited almost
four million times a month – with the heaviest frequency
on Mondays and Tuesdays between noon and two. (Absence from
work over the weekend does not, apparently, make the employee
heart grow fonder.)
Four
million visits does not equal four million visitors, since
hard-core job-seekers may return to the site several times
each week, but it still represents a lot of traffic. And CareerMosaic
is but one of many such job sites constituting the electronic
classifieds of the ‘nineties.
Your
employees may be heeding the advice of a current newspaper
ad from the search firm Korn/Ferry International, whose headline
reads:
BEING
IN LOVE WITH YOUR JOB
DOESN’T
MEAN YOU CAN’T FLIRT
WITH
A FEW OPPORTUNITIES.
And when
an old-line search firm begins advertising for candidates,
skilled employees know they are in heavy demand. Those who
feel disloyal or insecure, however, about responding to jobs
on the World Wide Web – or who may even be in love with
their current job – do not have to worry about missing
the Big Opportunity. It will find them, thanks to the "old-fashioned"
breed of executive recruiters who know how to locate people
whose resumes are not in play.
Some
mega-corporations not only expect attrition, they actually
encourage it – trying to weed out those whose careers
have peaked. Several, in fact, have created a job bank that
allows the expendable employee from Company A to investigate
job possibilities at Company B.
In most
organizations, though, attrition – especially of the
unplanned variety – is more disruptive than productive.
You may be furiously sending signals to the bottom ten percent
that you’d dearly love to see them leave, but there
is no guarantee (short of firing) that they will be the ones
to do so. The increasing propensity of many companies to heap
lavish counter-offers on those who have tendered their resignation
reflects the difficulties today of finding qualified replacements,
not to mention the costs of hiring and training them.
How
to Build a More Stable Workforce
Marketers
use a term called "switching costs," which simply
means the direct or indirect cost, if any, of switching from
one brand or provider to another. If, for example, you purchase
your car from that rare dealer with evening and weekend service
hours, there may be a cost to you in terms of convenience
if you buy your next car from a dealer with traditional service
hours.
This
principle can be used to great effect in building employee
retention. Another employer can always come along and offer
one of your employees a fatter salary – but what will
the employee give up in order to accept it? In the celebrated
case of the Atlanta consulting firm that recently bought every
employee a BMW, the switching cost is obvious. Less dramatic
and less costly ways, however, may work as well.
Companies,
for example, try to offer competitive benefits packages –
meaning that they are little better or worse than what similar
companies appear to offer. While that approach may neutralize
the appeal of a competitor’s benefits, it also means
your employees may leave precious little behind by jumping
ship. An alternative approach might be to select one key benefit
and enhance it, such as the co-pay provisions or deductible
on a group health-insurance plan, the company match on the
401(K) plan or the treatment of unused vacation. Another approach
is to survey employees to determine the one missing piece
of your benefits package that they would most value receiving
– dental coverage, vision care, a medical savings plan,
etc. The widespread use today of cafeteria plans allows many
employers to increase the range of benefit options without
significantly increasing costs.
"Soft"
benefits, such as a day-care center, also can be used to demonstrate
an employee-friendly environment – even to those who
may not have need of the service. Working Mother magazine
recently honored a select list of large corporations that
have established formal programs to track the career progress
of working moms. On a smaller scale, one innovative company
has established a "personal shopper" service that
frees employees from the tyranny of grocery shopping (and
probably results in their working longer hours).
At the
individual employee level, most business organizations do
a more diligent job of criticizing employee weaknesses than
they do of saying thanks for a job well done. Managers in
even the smallest of units or remotest of facilities can assume
responsibility for correcting the imbalance by instituting
employee-recognition programs. These may be no more elaborate
than a thank-you letter (with copy for the personnel file),
a company-paid dinner for two or an extra vacation day at
the end of an important project.
Targeting
the Key Employee
As the
pig said in George Orwell’s Animal Farm, "All animals
are equal, but some are more equal than others." Certain
of your employees are more equal than others by virtue of
position or performance – and they are exactly the people
in your organization whom recruiters are trying to target.
You should
keep them in your sights as well. The mission with the key
employee is threefold: to remove any hidden irritations, to
create a visible career path and to encourage tenure through
creative long-term compensation plans.
As we
have said in these pages before, executive search consultants
know one great truth: employees who change jobs have some
kind of dissatisfaction with their current work situation
that their employer has failed to address. It may be money,
but more likely it is elsewhere in the hierarchy of needs
– a lack of recognition, a lack of perceived upward
mobility, an overbearing or indecisive boss, a lack of "perks"
(from larger office to company car), or – worse yet
– a nagging concern about the company’s future
or sense of direction. Any performance review worth its salt
should provide ample opportunity for the employee to express
his or her concerns and desires.
As an
ample number of court cases have demonstrated, the employee
who is promised a job for life will certainly have one. So
never promise what you can’t deliver – or later
may not want to deliver. Instead, demonstrate your interest
in a key employee through faster than average promotion (or
lateral "broadening"), bigger than average salary
increases, expanded responsibilities and high-visibility assignments.
Your thoroughbreds don’t want to be stuck in the stables,
unable to show their stuff.
Finally,
there are a wide range of deferred compensation options that
can build long-term commitment to the organization while making
it costly for the key executive to change jobs: for example,
stock options, restricted stock grants, multi-year incentive
plans, forgivable loans, split-dollar life insurance policies,
etc. Companies that fail to take advantage of them do so at
their peril. (For a fuller discussion, see our July 1997 issue,
"How Attractive Is Your Compensation Plan?")
Why
Are We Bringing You This Message?
Executive
search consultants succeed or fail on their ability, day in
and day out, to extract top performers from organizations
just like yours. But top-drawer firms like Sanford Rose Associates
build long-lasting practices by developing long-lasting partnerships
with important clients whose needs we serve over many years.
If one
of your people flirts with another job and takes it, we certainly
stand ready to help you fill the void. More important, however,
we want to see the people we put into your organization stay
and contribute to its growth. As long as our clients grow,
we’ll never run out of search assignments (or other
companies to recruit from) – and that’s motivation
enough to share these thoughts.
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