Sometimes I'll ask an owner or manager about using pre-employment assessments as part of their employee selection process and they'll say something like, we tried that and it didn't work. To be fair, sometimes assessments don't appear to make a difference. Here are some reasons why assessments may not seem to be helping you hire and retain stars as promised:
You're using the wrong assessment. A good consultant - one who is looking to sell solutions, not assessments - is going to look at the roles you are trying to fill, ask relevant questions, discuss alternative assessments that are available, and make recommendations based on your need, not just on what they offer.
Your assessment is not benchmarked. Some consultants give the assessment to your best two or three employees, then blend the results and call that a benchmark. It's really better to benchmark the job, not your people. I prefer a process where we get a group of stakeholders in a room and discuss the success factors of the job, then run a benchmarking assessment against those success factors. This gives much better results than benchmarking incumbents.
The failures of new hires have nothing to do with assessment results. People typically leave jobs in the first six months for one of three reasons - 1) Bad management. The assessment may be identifying ideal candidates, but those candidates are quitting because their supervisor is a jerk, or the company culture is negative. I haven't found an assessment yet that will predict which candidate will prefer working for a bad supervisor. 2) Poor job design. The job itself is no fun and even though we did our best to put lipstick on that pig during the interview process, once the reality of the job sets in, they choose to do something else. 3) Poor pay. There is usually a link between pay and job design. Do you really expect workers to do your job for the same wages they could do some other job that is more interesting and generally more attractive?
Should you ditch your assessment or the consideration of using an assessment? Unfortunately, the alternative is to base your hiring decisions almost 100% on interviews. Studies show that unstructured interviews are almost a waste of time - you are likely just as well off making job offers based on applications or resumes, sight unseen, than bringing people in for casual, unstructured interviews. Make the interviews more structured by using pre-selected, valid interview questions and the results are slightly better.
Step one is to understand why your workers are leaving and take appropriate action to close the back door. Step two is to add more structure to your interviewing process to increase the validity of your results. Step three is to add one or more benchmarked assessments to your selection process. Invest in these three steps and you'll find that each time you add a new hire to your company, you've upgraded your talent pool.
The Davidson Group can assist with all three of these steps - contact us for more information.
Tuesday, March 6, 2018
A Common Recruiting Mistake
Perhaps you heard about the college baseball coach in Texas that notified a prospect in Colorado that he wasn't welcome. Unfortunately, we are not recruiting players from the state of Colorado. In the past, players have had trouble passing our drug test, he wrote to the high schooler.
This is an example of a very common error related to recruiting - the tendency for hiring managers to draw conclusions about an individual based on past experience with other individuals who share some common link.
In this case, the coach's failed logic is pretty easy to spot - by excluding all prospects from Colorado, he is unnecessarily limiting his prospect pool and he might possibly miss out on a future hall of famer, like Goose Gossage (from Colorado Springs) or a Cy Young Award winner, like Roy Halladay (from Arvada).
Most companies have competitors they respect and competitors they don't think as highly of. As a result, managers often have a strong bias against candidates who previously worked for one of the companies that are not as well respected. In essence, they are saying, since we perceive Company X to be a lousy company, Candidate A is probably a lousy candidate.
This is a lazy shortcut that so many managers and owners make in a variety of ways. Other examples include:
We prefer workers from a certain ethnic group rather than workers from another ethnic group. The reality is that there are hard workers as well as lazy individuals in every ethnic group.
We don't interview anyone with an aol email address. The assumption here is often that workers over 40 aren't "energetic" enough or will expect too much pay. That candidate you passed-up based on indicators they are older might be a marathon runner or yoga instructor who is highly skilled and very affordable.
We don't hire anyone with tattoos or goofy hair colors. 40% of millennials have a tattoo. Are you sure you want to automatically eliminate that much of your prospect pool based on what is likely a faulty assumption - that a large percentage of your customers will be put off by someone with visible tattoos?
Men do this job better than women (or vice versa). Statistically, men dominate certain fields and women others. Does this mean that a dentist should automatically reject a male dental hygienist candidate or a construction contractor ignore a female carpenter applicant?
Humans have a natural tendency to assign people to groups and to attribute skills and abilities based on group stereotypes. Since hiring managers are busy and want to be efficient in their interviewing and selection processes, it is tempting for them to screen people out based on these types of broad-stroke criteria.
Hiring managers will get much better results if they evaluate each candidate as an individual rather than a member of some arbitrary group first. The kid from Colorado may be a stoner, but he might also have never smoked marijuana in his life and go on to be a star player at another university. If that turns out to be true, the college in Texas missed him because they used faulty criteria to evaluate his potential.
This is an example of a very common error related to recruiting - the tendency for hiring managers to draw conclusions about an individual based on past experience with other individuals who share some common link.
In this case, the coach's failed logic is pretty easy to spot - by excluding all prospects from Colorado, he is unnecessarily limiting his prospect pool and he might possibly miss out on a future hall of famer, like Goose Gossage (from Colorado Springs) or a Cy Young Award winner, like Roy Halladay (from Arvada).
Most companies have competitors they respect and competitors they don't think as highly of. As a result, managers often have a strong bias against candidates who previously worked for one of the companies that are not as well respected. In essence, they are saying, since we perceive Company X to be a lousy company, Candidate A is probably a lousy candidate.
This is a lazy shortcut that so many managers and owners make in a variety of ways. Other examples include:
We prefer workers from a certain ethnic group rather than workers from another ethnic group. The reality is that there are hard workers as well as lazy individuals in every ethnic group.
We don't interview anyone with an aol email address. The assumption here is often that workers over 40 aren't "energetic" enough or will expect too much pay. That candidate you passed-up based on indicators they are older might be a marathon runner or yoga instructor who is highly skilled and very affordable.
We don't hire anyone with tattoos or goofy hair colors. 40% of millennials have a tattoo. Are you sure you want to automatically eliminate that much of your prospect pool based on what is likely a faulty assumption - that a large percentage of your customers will be put off by someone with visible tattoos?
Men do this job better than women (or vice versa). Statistically, men dominate certain fields and women others. Does this mean that a dentist should automatically reject a male dental hygienist candidate or a construction contractor ignore a female carpenter applicant?
Humans have a natural tendency to assign people to groups and to attribute skills and abilities based on group stereotypes. Since hiring managers are busy and want to be efficient in their interviewing and selection processes, it is tempting for them to screen people out based on these types of broad-stroke criteria.
Hiring managers will get much better results if they evaluate each candidate as an individual rather than a member of some arbitrary group first. The kid from Colorado may be a stoner, but he might also have never smoked marijuana in his life and go on to be a star player at another university. If that turns out to be true, the college in Texas missed him because they used faulty criteria to evaluate his potential.
Tuesday, February 13, 2018
Does Your Comp Strategy Align?
How is your company going to win in a competitive environment? The answer to that question is really your business strategy. You might try to win by offering the lowest price or by delivering the highest quality or by offering the best value (of price and quality) or by finding some unique niche. You must clearly understand how you are going to win.
Compensation strategy must follow and align with business strategy. Based on your strategy, certain roles in the organization may generate a higher return on investment than others. Some roles may be easier to train and develop, while others are more difficult to develop and may be scarce in the marketplace.
Here are some tips for controlling labor costs and increasing your return on your labor investment:
1. Make sure you are a good place to work to begin with. Companies that have a negative culture with bosses that are simply hard to work for typically must pay a premium to attract and keep employees. I sometimes refer to this phenomenon as the "a$$hole premium." If you regularly schedule two hour meetings on Friday afternoons at 4:00 or jump down people's throats every time they make a mistake, you are probably paying it. You can avoid this premium by simply becoming a better employer.
2. Understand market rates. Some roles in your company should be paid at or above market rates (based on your business strategy). Other roles may achieve a satisfactory result at or below market rate (if the cost of turnover is relatively low and the time to proficiency is relatively short). It's important to know which roles matter more and what the general market rate for those skills is.
3. Align your rewards with the behaviors you want. Commissions, individual performance bonuses, team performance bonuses, etc. should align with the behaviors that you want repeated. Want collaboration? Look at team rewards. Think competition is the best motivator? Look at individual rewards (and hire competitive people). It's easy for a company to inadvertently reward behavior A when they really want behavior B. One example might be paying commission on gross sales when your business goal is to improve profitability. Your commission structure may be encouraging sales reps to offer discounts at the very time you don't want that behavior.
It's really easy during times when unemployment is low and competition for talent is high to start throwing money at your labor force. But taking some time to analyze where your cost of labor should be, structuring it to get the best bang for your buck, and looking for appropriate ways to make a portion of total compensation variable so that you can reward the behaviors and the performance that is important to you in a way that is self-financing, is an important strategic initiative. Now might be a good time to revisit those questions in your organization.
Compensation strategy must follow and align with business strategy. Based on your strategy, certain roles in the organization may generate a higher return on investment than others. Some roles may be easier to train and develop, while others are more difficult to develop and may be scarce in the marketplace.
Here are some tips for controlling labor costs and increasing your return on your labor investment:
1. Make sure you are a good place to work to begin with. Companies that have a negative culture with bosses that are simply hard to work for typically must pay a premium to attract and keep employees. I sometimes refer to this phenomenon as the "a$$hole premium." If you regularly schedule two hour meetings on Friday afternoons at 4:00 or jump down people's throats every time they make a mistake, you are probably paying it. You can avoid this premium by simply becoming a better employer.
2. Understand market rates. Some roles in your company should be paid at or above market rates (based on your business strategy). Other roles may achieve a satisfactory result at or below market rate (if the cost of turnover is relatively low and the time to proficiency is relatively short). It's important to know which roles matter more and what the general market rate for those skills is.
3. Align your rewards with the behaviors you want. Commissions, individual performance bonuses, team performance bonuses, etc. should align with the behaviors that you want repeated. Want collaboration? Look at team rewards. Think competition is the best motivator? Look at individual rewards (and hire competitive people). It's easy for a company to inadvertently reward behavior A when they really want behavior B. One example might be paying commission on gross sales when your business goal is to improve profitability. Your commission structure may be encouraging sales reps to offer discounts at the very time you don't want that behavior.
It's really easy during times when unemployment is low and competition for talent is high to start throwing money at your labor force. But taking some time to analyze where your cost of labor should be, structuring it to get the best bang for your buck, and looking for appropriate ways to make a portion of total compensation variable so that you can reward the behaviors and the performance that is important to you in a way that is self-financing, is an important strategic initiative. Now might be a good time to revisit those questions in your organization.
Why Don't My Employees Take Initiative?
Bob is a service technician. He drives a company truck. He drove it for several days after he noticed the check engine light blinking. Finally, the engine seized up. A repair bill that might have been a few hundred dollars became several thousand dollars due to Bob's lack of initiative. Bob had no good answer for why he didn't report the blinking light when he first noticed it.
These are the kinds of things that drive small business owners batty. My employees can see the piece of paper on the floor just like I can, why don't they pick it up?
Initiative or proactivity is an interesting topic. Turns out there are two possible explanations for why Bob let the truck blow up.
First, proactivity is a personality or behavioral trait similar to extraversion or conscientiousness. Some people score high in proactivity and others low. In Bob's case, if he scored low on an assessment that measures proactivity, he might be as likely to let his personal vehicle blow up as he did his company vehicle. If this is the case, no amount of yelling or disciplinary action is going to make Bob more proactive. He might notify someone the next time the check engine light is blinking, but he's just as likely to miss a new opportunity to proactively contribute as he was the last.
Second, organizations might be inadvertently managing initiative right out of individuals. How can this happen?
Jane is on the phone with an angry client. There is no specific policy to address this particular client's complaint. Jane proactively offers the client a solution that is "outside-the-box." The customer is happy with the outcome but Jane's manager is furious. Jane gets reprimanded.
Joe is in the field and encounters a situation he's never run into before. Rather than call his supervisor, he attempts to solve the problem himself. Turns out his effort to solve the problem actually made it a little worse and cost the company a modest amount to correct. Joe gets an earful from his supervisor for not getting permission before attempting the non-traditional fix.
In both of these cases, Jane and Joe were proactive and showed initiative. In both cases, their initiative was met with punishment. If this happens often enough, both Jane and Joe will eventually decide that it's not worth taking initiative.
So, the very managers who are asking me why their employees aren't proactive might be the very managers who tend to question every decision their employees make and create a culture where it's safer for employees to do nothing than to do something before they've been told to. In other words, they become passive because they've been trained to be passive.
If hiring proactive individuals is truly an important predictor of success for certain roles in your organization, then you should measure for this during the interview and selection process. If proactivity or initiative is not a significant success factor for your organization, and what you really want are people who are compliant and do only what they're told, then you'll need to accept some mistakes of omission because you're not likely to get many mistakes of commission.
These are the kinds of things that drive small business owners batty. My employees can see the piece of paper on the floor just like I can, why don't they pick it up?
Initiative or proactivity is an interesting topic. Turns out there are two possible explanations for why Bob let the truck blow up.
First, proactivity is a personality or behavioral trait similar to extraversion or conscientiousness. Some people score high in proactivity and others low. In Bob's case, if he scored low on an assessment that measures proactivity, he might be as likely to let his personal vehicle blow up as he did his company vehicle. If this is the case, no amount of yelling or disciplinary action is going to make Bob more proactive. He might notify someone the next time the check engine light is blinking, but he's just as likely to miss a new opportunity to proactively contribute as he was the last.
Second, organizations might be inadvertently managing initiative right out of individuals. How can this happen?
Jane is on the phone with an angry client. There is no specific policy to address this particular client's complaint. Jane proactively offers the client a solution that is "outside-the-box." The customer is happy with the outcome but Jane's manager is furious. Jane gets reprimanded.
Joe is in the field and encounters a situation he's never run into before. Rather than call his supervisor, he attempts to solve the problem himself. Turns out his effort to solve the problem actually made it a little worse and cost the company a modest amount to correct. Joe gets an earful from his supervisor for not getting permission before attempting the non-traditional fix.
In both of these cases, Jane and Joe were proactive and showed initiative. In both cases, their initiative was met with punishment. If this happens often enough, both Jane and Joe will eventually decide that it's not worth taking initiative.
So, the very managers who are asking me why their employees aren't proactive might be the very managers who tend to question every decision their employees make and create a culture where it's safer for employees to do nothing than to do something before they've been told to. In other words, they become passive because they've been trained to be passive.
If hiring proactive individuals is truly an important predictor of success for certain roles in your organization, then you should measure for this during the interview and selection process. If proactivity or initiative is not a significant success factor for your organization, and what you really want are people who are compliant and do only what they're told, then you'll need to accept some mistakes of omission because you're not likely to get many mistakes of commission.
Tuesday, January 9, 2018
Time for a New Employee Handbook?
Wise employers understand that employee handbooks have several purposes:
First, they are marketing documents. Your organization likely has marketing fliers used to promote your products and services. Those fliers were designed to influence potential buyers to have a positive image of your brand and build potential buyers' confidence in your organization's ability to solve a problem or somehow make their life better. Your employee handbook should do the same for new hires - inspire confidence in your organization as a fair and good place to work.
I run across some organizations who have invested thousands on slick marketing material but their employee handbook looks like a Frankenstein document. Sometimes they are not branded, they have multiple fonts and font sizes, each section reads like it was written by a different author (because they were cut and paste from different sources), and it's chock full of legal-sounding terms and phrases designed to intimidate the new hire. Nothing says, "welcome to the company" more than a document in which every other sentence ends in, "..may result in termination."
Second, they are guidebooks. A good handbook shows employees where the boundaries are. It defines the behavior that is expected and rewarded and behaviors that might get you in trouble. It's not a substitute for managing, and supervisors and managers shouldn't expect to have a written policy to back up their every decision. For example, I see some handbooks where the dress and appearance section is over a page long as the company has codified every violation that's ever occurred. For most organizations, just saying "dress appropriately for your position" and "management reserves the right to send you home..." is probably enough. If specialty shoes or apparel are required, it's appropriate to mention those in the handbook, but defining the difference between unapproved flip flops and approved sandals in a handbook for 50 employees seems silly - and will be perceived as silly by new hires.
Third, they are for compliance. There are some policies that simply need to be in a handbook. For example, if Paula Deen's restaurant group had an employee handbook with a well-written harassment policy that communicated what employees should do if harassed back in 2012, she would be millions of dollars wealthier today. Government agencies and the courts expect a company to have certain policies in place covering discrimination, harassment, at-will employment and several other staples of labor law compliance. Some once-popular policies have been found to be out of compliance in recent years, so it's important to purge those from your handbook.
If you handbook is more than three years' old, if it was borrowed and repurposed from another organization, if it doesn't reflect your brand and present a positive first impression of your company, if it has more pages than your company has employees, or if sounds like a real estate contract, it might be time for a handbook refresh.
First, they are marketing documents. Your organization likely has marketing fliers used to promote your products and services. Those fliers were designed to influence potential buyers to have a positive image of your brand and build potential buyers' confidence in your organization's ability to solve a problem or somehow make their life better. Your employee handbook should do the same for new hires - inspire confidence in your organization as a fair and good place to work.
I run across some organizations who have invested thousands on slick marketing material but their employee handbook looks like a Frankenstein document. Sometimes they are not branded, they have multiple fonts and font sizes, each section reads like it was written by a different author (because they were cut and paste from different sources), and it's chock full of legal-sounding terms and phrases designed to intimidate the new hire. Nothing says, "welcome to the company" more than a document in which every other sentence ends in, "..may result in termination."
Second, they are guidebooks. A good handbook shows employees where the boundaries are. It defines the behavior that is expected and rewarded and behaviors that might get you in trouble. It's not a substitute for managing, and supervisors and managers shouldn't expect to have a written policy to back up their every decision. For example, I see some handbooks where the dress and appearance section is over a page long as the company has codified every violation that's ever occurred. For most organizations, just saying "dress appropriately for your position" and "management reserves the right to send you home..." is probably enough. If specialty shoes or apparel are required, it's appropriate to mention those in the handbook, but defining the difference between unapproved flip flops and approved sandals in a handbook for 50 employees seems silly - and will be perceived as silly by new hires.
Third, they are for compliance. There are some policies that simply need to be in a handbook. For example, if Paula Deen's restaurant group had an employee handbook with a well-written harassment policy that communicated what employees should do if harassed back in 2012, she would be millions of dollars wealthier today. Government agencies and the courts expect a company to have certain policies in place covering discrimination, harassment, at-will employment and several other staples of labor law compliance. Some once-popular policies have been found to be out of compliance in recent years, so it's important to purge those from your handbook.
If you handbook is more than three years' old, if it was borrowed and repurposed from another organization, if it doesn't reflect your brand and present a positive first impression of your company, if it has more pages than your company has employees, or if sounds like a real estate contract, it might be time for a handbook refresh.
HR Priorities for 2018
Each January I publish a list of HR priorities for small and mid-sized companies for the coming year. Here is this year's list:
1. Harassment Policy and Training - sexual harassment has been a dominant feature on newscasts over the past several months. Like me, you've probably been shocked by some of the allegations against prominent celebrities and politicians. The take-away for small and mid-sized businesses is that they should have two things in order: First, they should make sure they have a good policy. Read yours and confirm that it covers what it should and is very clear about what employees should do if they believe they are being harassed. Second, they should make sure all of their foremen, leads, supervisors and managers have received documented training on what harassment is (and isn't) and what to do if they encounter it.
2. Classification of Exempt/Non-exempt - if you are located in North Carolina, 2018 signals the beginning of a new enforcement division which represents a consolidation of resources at the state level specifically to combat misclassification of employees. Summarizing what one labor attorney told me: "in the old days, if one agency determined you were out of compliance, they didn't necessarily communicate that with other agencies, but with this new enforcement group, you're more likely to get hit with fines from multiple agencies for a single infraction." That might mean fines from the wage and hour division for failure to pay overtime plus fines from the taxing authorities for failure to withhold the proper taxes, all from a single investigation. Even if you're not in NC, lack of compliance with exempt/non-exempt can be an expensive mistake.
3. Classification of Employee/Contractor - many small companies find it tempting to bring on workers as 1099 contractors rather than employees. It's less hassle for the company and the workers like it because their weekly check is bigger. But it's a risky strategy. The government discourages the use of 1099 because it doesn't get its tax money on payday, and may not get it at all. The fines and penalties associated with misclassification of employees as contractors are among the stiffest an employer can face. The threat of prison is even on the table for extreme cases.
4. Social Media policy - the National Labor Relations Board under the Obama administration took a very rigid stance against social media policies that they felt had the potential to silence speech protected by the NLRA. That Board, now lead by a Trump appointee, recently announced a softening of that position. But it still makes sense for organizations to ensure that they have a social media policy that protects the companies interests while also remaining in compliance with even a narrow interpretation of the NLRA.
It can be a costly mistake for business owners to assume that since a more business-friendly administration has replaced a more labor-friendly administration, that investigators and auditors from state and federal agencies are going to turn a blind eye to violations such as these. The rules are still the rules and business owners are better served being compliant.
If you need assistance with these or any HR initiatives in 2018, The Davidson Group is here to help.
1. Harassment Policy and Training - sexual harassment has been a dominant feature on newscasts over the past several months. Like me, you've probably been shocked by some of the allegations against prominent celebrities and politicians. The take-away for small and mid-sized businesses is that they should have two things in order: First, they should make sure they have a good policy. Read yours and confirm that it covers what it should and is very clear about what employees should do if they believe they are being harassed. Second, they should make sure all of their foremen, leads, supervisors and managers have received documented training on what harassment is (and isn't) and what to do if they encounter it.
2. Classification of Exempt/Non-exempt - if you are located in North Carolina, 2018 signals the beginning of a new enforcement division which represents a consolidation of resources at the state level specifically to combat misclassification of employees. Summarizing what one labor attorney told me: "in the old days, if one agency determined you were out of compliance, they didn't necessarily communicate that with other agencies, but with this new enforcement group, you're more likely to get hit with fines from multiple agencies for a single infraction." That might mean fines from the wage and hour division for failure to pay overtime plus fines from the taxing authorities for failure to withhold the proper taxes, all from a single investigation. Even if you're not in NC, lack of compliance with exempt/non-exempt can be an expensive mistake.
3. Classification of Employee/Contractor - many small companies find it tempting to bring on workers as 1099 contractors rather than employees. It's less hassle for the company and the workers like it because their weekly check is bigger. But it's a risky strategy. The government discourages the use of 1099 because it doesn't get its tax money on payday, and may not get it at all. The fines and penalties associated with misclassification of employees as contractors are among the stiffest an employer can face. The threat of prison is even on the table for extreme cases.
4. Social Media policy - the National Labor Relations Board under the Obama administration took a very rigid stance against social media policies that they felt had the potential to silence speech protected by the NLRA. That Board, now lead by a Trump appointee, recently announced a softening of that position. But it still makes sense for organizations to ensure that they have a social media policy that protects the companies interests while also remaining in compliance with even a narrow interpretation of the NLRA.
It can be a costly mistake for business owners to assume that since a more business-friendly administration has replaced a more labor-friendly administration, that investigators and auditors from state and federal agencies are going to turn a blind eye to violations such as these. The rules are still the rules and business owners are better served being compliant.
If you need assistance with these or any HR initiatives in 2018, The Davidson Group is here to help.
Wednesday, December 13, 2017
Can't Find Good People?
Every service company I speak with is concerned about their ability to find good, quality workers. In an environment where the competition for talent is fierce, which companies are going to be most successful? What's the recipe for winning?
Let's start with the basic myth. When I'm training foremen and supervisors, I'll often ask them if today's young people have a poorer work ethic than their generation had. Almost unanimously they say "yes!"
They're shocked when I tell them every generation believes this and every generation is wrong. I heard the "young people today don't want to work" thing when I was a helper on construction sites in the 1970s. Engineers building the Taj Mahal in the 1640s were saying it, as were stone masons building the pyramids 4,000 years ago.
What is true is that some individuals have a stronger work ethic than others (in every generation). In periods of relatively low unemployment, we run across more candidates with lower motivation and weaker work-ethic than periods of higher unemployment rates.
What is also true is that work ethic and motivation is not all genetic. Work ethic can be learned and motivation can be tapped. Which leads us back to the question, which companies are going to win in this economy?
The service companies that are going to win are not the companies that invest in finding that secret supply of excellent workers that no one else can find. The companies that win are going to be the ones that find ways to be successful with less than ideal candidates.
The service companies that are going to win aren't simply complaining about the current talent pool, they're building systems that help a candidate who isn't an exact fit to have a reasonable chance at becoming successful. They're building on-boarding, training and feedback systems as well as mentoring programs and career paths to keep people who aren't natural-born stars to build a skill set, become engaged and remain on-track.
The service companies that are going to win aren't going to simply outspend everyone else on talent. If your culture sucks (read: your supervisors and foremen treat people like they're disposable), it doesn't matter how much money you throw at compensation, you'll eventually lose to the company that knows how to build a culture that workers embrace. If you can get $16 of value out of a $13 employee, you're going to handily outperform the company that's having to spend $23 to get that same $16 of value.
The service companies that are going to win will say "thanks" and "well done" a lot. The service companies that are going to struggle are going to generally ignore good performance as something that's expected and spend their energy berating poor performance.
The service companies that are going to win are going to be employers of choice who build their total rewards programs around what their workers really want versus what they'd prefer to give them. (Think: maybe an afternoon off with pay rather than a gift card?).
The service companies that are going to win are going to win with less than ideal candidates. If your organization is determined to find plug-and-play, immediately productive workers that don't need to be trained or managed, you're going to spend a lot of time recruiting.
Let's start with the basic myth. When I'm training foremen and supervisors, I'll often ask them if today's young people have a poorer work ethic than their generation had. Almost unanimously they say "yes!"
They're shocked when I tell them every generation believes this and every generation is wrong. I heard the "young people today don't want to work" thing when I was a helper on construction sites in the 1970s. Engineers building the Taj Mahal in the 1640s were saying it, as were stone masons building the pyramids 4,000 years ago.
What is true is that some individuals have a stronger work ethic than others (in every generation). In periods of relatively low unemployment, we run across more candidates with lower motivation and weaker work-ethic than periods of higher unemployment rates.
What is also true is that work ethic and motivation is not all genetic. Work ethic can be learned and motivation can be tapped. Which leads us back to the question, which companies are going to win in this economy?
The service companies that are going to win are not the companies that invest in finding that secret supply of excellent workers that no one else can find. The companies that win are going to be the ones that find ways to be successful with less than ideal candidates.
The service companies that are going to win aren't simply complaining about the current talent pool, they're building systems that help a candidate who isn't an exact fit to have a reasonable chance at becoming successful. They're building on-boarding, training and feedback systems as well as mentoring programs and career paths to keep people who aren't natural-born stars to build a skill set, become engaged and remain on-track.
The service companies that are going to win aren't going to simply outspend everyone else on talent. If your culture sucks (read: your supervisors and foremen treat people like they're disposable), it doesn't matter how much money you throw at compensation, you'll eventually lose to the company that knows how to build a culture that workers embrace. If you can get $16 of value out of a $13 employee, you're going to handily outperform the company that's having to spend $23 to get that same $16 of value.
The service companies that are going to win will say "thanks" and "well done" a lot. The service companies that are going to struggle are going to generally ignore good performance as something that's expected and spend their energy berating poor performance.
The service companies that are going to win are going to be employers of choice who build their total rewards programs around what their workers really want versus what they'd prefer to give them. (Think: maybe an afternoon off with pay rather than a gift card?).
The service companies that are going to win are going to win with less than ideal candidates. If your organization is determined to find plug-and-play, immediately productive workers that don't need to be trained or managed, you're going to spend a lot of time recruiting.
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