Staff recruitment and retention is always a challenge for business owners and managers, particularly if you don’t enlist help from the professionals. Kevin Kevany talked to the experts to pass on some useful advice.
It’s probably a case of “steady as she goes – no change”, if you’re an employee in the current market – and “what in goodness name can I do to find and keep the critical people we need, now?”, if you are the frustrated small or medium enterprise (SME) employer.
And it’s going to get worse as the skills shortage bites, fuelled by the departure of the ‘baby boomers’ and new employees needing more than just money to keep them.
“The skills shortage crisis is never over – it just alters,” says Jane Welch, co-founder of About Potential. “When confidence is low people are less likely to leave their role, making it harder to attract staff. When confidence increases people are more likely to consider moving, making it harder to retain staff.”
Of course, there are other issues, such as our inability to mix-and-match the undoubted skills of those taxi-drivers and real estate agents into our medical and other professional shortages, because of a suspicion about their qualifications or their CVs – the elephant in the room, when it comes to recruiting necessary people from overseas (see box). Or there’s our geographical remoteness; or the proverbial “the grass is always greener across the ditch”.
So what does this mean for you as a business owner/manager? How do you get the best out of, and into, your people? How do you retain your ‘rock stars’ without upsetting your ‘reliables’? Who can help you in the ever-complicating employment arena with regular law changes? And who can you trust?
First up, some facts and figures:
• The average cost to replace an employee is between 30 to 200 percent of their salary for a year.
• The three key reasons why employees leave a job are: issues with people, structure and process.
• 22 percent of companies identified a lack of training and career development as the most common reason for staff leaving.
• Inadequate salary accounted for only eight percent of those departures.
• Some 60 percent of people exaggerate what they have done in their job applications.
• 39 percent of New Zealand employers struggle to fill jobs despite the economic downturn.
• 41 percent of employers worldwide say finding top talent is their biggest challenge.
We are still in the midst of a 30 year critical labour shortage first predicted by McKinsey Consulting back in 1997.Chartered accountants, engineers, IT consultants, telecoms and banking and finance professionals, in particular, remain in short supply.
What then is the state-of-play in the local SME market when it comes to employment relations? We asked Max Whitehead of Whitehead Group.
“Small operators, like mum and dad businesses, are struggling financially and experiencing major difficulties, often close to closure. They have learnt that they need to be ruthless and frugal to survive: they have run out of generosity and no longer tolerate employee failings.
“Debt is everywhere. Even if people can pay, they don’t until the supplier is screaming and threatening them. This results in the erosion of goodwill, trust and respect, and people have become ruthless (‘I’ll pay you because I may need you later.’) This attitude has migrated into the working environment, making it not as pleasant as it used to be.
“When faced with employment issues, rather than taking a strategic approach, SME owners often procrastinate until matters come to a head. This results in the employee either dropping the issue or taking drastic action, like legal proceedings.
“Employers still often fly by the seat-of-their-pants and avoid getting professional advice in the areas of employment relations, recruitment, legal compliance and accountancy, amongst others,” Whitehead says.
Even more concerning are his other observations: “The talk in the workplace is of big money and prosperity in Australia. Everyone knows someone who has made the move across the ditch and enjoys it. Those with potential and motivation are leaving: Kiwi employers just can’t compete.”
And, another drop of reality: “In the last 12 months, I have rarely seen employers going beyond what is necessary to retain good workers.”
Surely an overly bleak picture is being painted here. Whitehead again: “I am, of course, being rather negative because there are signs that indicate that the dark cloud, which hangs over our economy, will eventually lift.
“When this happens, business owners can then afford the luxury of generosity towards their staff. Also, it’s encouraging to see that business people are showing the strength and determination not to give up, meaning employees retain their jobs.”
Retention is cheaper
Industry veteran, Robert Half associate and co-author of 101 Great Ways to Enhance Your Career, Kim Seeling Smith, has some pithy advice – which also provides a good reason why you should retain those precious staff you might just be under-valuing right now, even if you are conscious unemployment rates are still high.
“Not only is retention a cheaper option, a stable staff can add value to your company and help to make it more competitive, by increasing their productivity and job satisfaction, as well as reducing stress in the office.
“The first step is to stop and have a think about who the critical people in your company are – the quiet over-achievers, and the ‘rock stars’. This is where you should be putting 80 percent of your energy.
“Most employees will be far more engaged by simply being given the opportunity to do meaningful work at a company they love, with a team they enjoy.”
And when it comes to recruiting: “Base it on a candidate’s ‘cultural fit’ in your company. You can train a skill-set, but you can’t train cultural-fit,” says Seeling Smith.
Angeline Long, MD of EK Executive Solutions agrees times are tough both on the recruiting and retaining front. She believes a lot of HR service providers have, themselves, not responded to the changes.
“They continue to charge huge fees, up front, and once the three-month guarantee is up, they walk away. We don’t. We have responded to market changes by being flexible in the way we operate and charge, and we never walk away from anything that is our responsibility,” says Long.
She believes in absorbing the culture of the organisation so she can assist employees to adjust. Typically EK Executive Solutions would organise 360 degree reviews and, based on that, better define roles, reallocate tasks and tighten-up procedures, “so work would flow more smoothly and people would be happier and more effective”.
“You often find staff complain they are overworked and more people are needed to be brought on board. But adding more staff can simply add more problems. It is usually better to give employees more control over their roles and their individual responsibilities, ensuring they are more clearly defined and understood.”
Frequently that results in the firm not requiring the extra people. Productivity soars, and it allows people to be outstanding, Long adds.
Turning on the benefits
According to Kelly Services managing director Debbie Grenfell, a recent company survey indicated that businesses are considering a wider range of benefits in order to attract and retain employees. A number of these are focused on providing greater work/life balance, and benefits which reflect the lifestyle demands of employees.
“The most popular benefits employers use to support a better work/life balance for their staff are flexible work scheduling, additional maternity and adoption leave, and employee counselling. Other common benefits include car-parking, redundancy packages and additional leave benefits, such as long-service or milestone occasions,” says Grenfell.
She notes that throughout the survey, local employers also emphasised the importance of utilising the experience and expertise of specialised recruitment agencies.
Jane Welch of About Potential believes when it comes to attracting staff, SMEs have a lot to offer an employee.
“They can often provide broader roles with more responsibility and autonomy and influence. The employee can talk directly with the owner manager about ideas, suggestions and concerns.
“About Potential works alongside SME owner-managers to improve their company performance. We do this by finding out what specifically is happening in their business; their goals and challenges, the different dynamics at play, and where the organisation is trying to get to.
“We then help to develop a plan that will enable the business to align the focus and capability of its people to achieve these goals.
“An external perspective can provide a new focus to create a more productive and enjoyable environment. Our aim is to help organisations understand how to engage their employees at a rational level and also at an emotional level (their heads and their hearts).”
Welch strongly believes that everyone is different and a manager needs to get to know each employee.
“The extent to which someone wants to remain in their role is highly situational and depends on the individual’s own career goals and needs; as well as the dynamics within the business.” For example:
• What is their relationship like with their immediate boss?
• Are they developing the skills they want to develop?
• Is there a good fit between the organisation/role and the person?
• Are they using the skills they enjoy using?
• What does an individual want/need from their job/career – for example, growth, type of remuneration, security, challenge, work-life balance, being part of a team, leading, achieving good results, and so on.
“People want different things and their needs change over time,” says Welch. “Roles also change over time. If the environment has changed due to the global financial crisis, is there still a fit?
“If there has been a lot of restructuring and an employee wants job security, this can be a problem. But not all employees will feel this way, for example, a young single person compared to someone with a family to support.”
The head of Randstad, a specialist recruitment and HR service company, can give you the global perspective at the click of a mouse.
“As we put the global financial crisis behind us, hopefully, New Zealand is now moving swiftly into a ‘global talent crisis’,” says Paul Robinson, general manager New Zealand at Randstad. “The winners in this environment will be those organisations with the right people in the right jobs, motivated and ready to grow the business.
“Business leaders will need to reconnect with their employees through open and honest communication to ensure they are happy, motivated and engaged – and ready for the challenges that lie ahead.
“The past two years need to be openly-acknowledged as one of the most challenging times in the last two decades, and employees will be looking for acknowledgement and recognition of their hard work and loyalty.”
Kevin Kevany is an Auckland-based freelance writer. Email email@example.com