Attracting and Retaining the Best Employees
President and CEO, CSSP, Inc.
We all know unemployment is low. People are not motivated to take jobs that they would have in leaner times. Many employees are eager to jump ship for a job that they think will be better. This situation causes tremendous strategic difficulties for some companies, but it can create opportunities for others. If your company can create a real strength in attracting and retaining the best workers in your industry, you will have a competitive advantage that few can match. This is most easily seen in service industries, where the force is often, in a sense, the product. Manufacturing companies, however, should not overlook this source of competitive advantage, as it can be quite powerful. One of our clients notes that, in their manufacturing business, there is a direct correlation between measured employee satisfaction and measured customer satisfaction - that is, happy employees make for happy customers.
As the growth rate in the U.S. economy exceeds the growth of the literate work-force population, we can expect to see this problem get worse rather than better. In some industries it is already acute. In addition, there are facets of the current situation that exacerbate the problem, such as a booming stock market and the rise of wealth in the Internet sector. Morale in many businesses can be affected by employees vague feelings that other people are a lot better off than they are. This has always been a great source of dissatisfaction, but the perceived tidal wave of Internet millionaires created in the past three years has greatly increased this problem.
Of course, high employee turnover and understaffing can be handled, if they are anticipated. McDonalds, for example, is a very successful company because they have, over the years, developed systems that enable their operations to deliver consistent quality with inexperienced employees. But even a company like McDonalds, whose systems are designed to handle high turnover, can suffer when turnover gets too high. And such operations still require managers with at least a modicum of experience.
Clearly, companies need an arsenal of goodies to attract top people. While its always a good idea to give employees a piece of the action, you must remember that there is a wide array of rewards to offer employees. If you resort to the simplest of these - money - you may soon see your bottom line turning red. What your company needs is a series of attractions that will turn it into a Disneyland for your workforce. These attractions, however, must be affordable and aligned with your strategy.
People want to feel that they are special and that their jobs are special. This is the single most important point any company should consider when deciding how to attract, develop and retain employees. For an employee to feel that a job is special there must be something about the job that is perceived as noteworthy and admirable. Ideally, this perception should extend not just to the employee, but to the employees friends and family as well. There are several things that might make people think a job is special:
The reputation a company has can be tremendously valuable, even to small firms. In the late 1980s, Ben and Jerrys was a fairly small ice cream manufacturer, with about $30 million in sales. Because they got a lot of press about their unique management style, employees flocked to the company - at one point, they had a 3 year waiting list of people hoping to get jobs in any position at their Burlington, Vermont plant.
Many companies we see are concerned when a big, well-known company sets up shop nearby, and this is a valid concern. Such companies have a great intangible advantage in hiring - potential employees feel more secure that they know what they are getting into when they join high profile firms. For smaller companies, this is a problem, because its often difficult to create awareness of your company and its strengths as an employer.
Industries can be considered attractive for several reasons. Many people want to work in entertainment businesses because they think it will be fun. Others seek academic careers because they desire intellectual stimulation. And, of course, many many people want to work in Internet businesses today because they think they can become very wealthy there. Most of us cant do much about our industries, but we can portray our industries in the best possible light.
The nature of the work itself
Many jobs carry inherent rewards. Its easier for a teacher to feel good about doing a good job than it is for a meter maid. In addition, different types of people enjoy different types of work. Shy people dont usually enjoy sales, and people with weak quantitative skills dont often find accounting fun.
Titles dont always mean that much, but they certainly have an impact where people outside of an organization are concerned. Employees are likely to be more proud of their jobs if their titles sound good to friends and family. In addition, employees will tend to feel better about themselves with better titles, because they will feel more positively about identifying with their jobs. More important than title, in many cases, is the feeling of empowerment you give employees. Even a lofty title wont improve the morale of an employee who feels powerless and crushed by micromanagement. Beyond this, it is critical that employees feel that they are part of the exciting future that you are creating for your company. Broad involvement in the creation of strategic planning homework (especially action plans) is tremendously useful for empowering employees at all levels of your organization.
Pay is a simple lure that is overused because it is the easiest to understand. Nevertheless, employees who feel well paid will be more motivated, especially if they are required to earn that pay. Conversely, employees who feel they are poorly compensated tend to harbor ill feelings about their employers. Dont overlook the fact that the best employees will be turned on by rewards for performance, as well.
Benefits and perks
Benefits and perks can include a lot that you might not otherwise consider. The best of these are those that are perceived as somehow unique. This is one reason why airlines give air travel perks to their employees, for example. But such perks can extend into odd things like company shirts, provision of athletic facilities and day-care, annual trips and all kinds of entertainment. Not every employee will like everything a company does in this area, but giving out a bit extra in this area shows an attitude that nearly all employees perceive and appreciate.
Working conditions and location
A workplace that fits the employees temperament and work style is important. One that is somehow enjoyable can make the employee look forward to coming to work. And location can deliver subtle benefits and costs to employees, so they should be taken into account. You will have an easier time, for example, hiring engineers who like outdoor sports in a place like Denver than in New York City.
Work hours and vacation time
Some people enjoy jobs with long hours and little vacation, but many do not. You may be able to substitute some flexibility in these areas for other benefits the employee may derive from working for you. Financially, this may mean you will need more employees, but you will get better work out of better employees if you offer them flexibility and opportunities that they dont feel they can find elsewhere.
This is often overlooked. Employees spend a third or more of their time at work at least five days a week. This means that at least part of a workers social life is made up of people that are in your company. If employees find these people an attractive addition to their lives, the job will again be viewed as creating a benefit for the employee.
Finally, beyond all the items above, there is a far less tangible aspect of the company that we call corporate culture. Corporate culture is the part of shared ideas, values and behaviors that affect the experience of working in a company. For best results, you should definitely seek a culture of empowerment which empowers employees to help customers, each other, themselves, you, your suppliers. People are most attracted to companies with open, trusting, authentic and empowering corporate cultures. In practice, your company can have any of these attributes, or none of them, but attracting and retaining the best people will be easiest if you have a culture of empowerment. Maintaining an empowering culture is easiest when there is openness and trust, and these require authentic, or trustable behavior. Weve seen plenty of companies fail in attempts to create empowered cultures because they didnt start by building the foundation of openness and trust, built on authentically trustable behavior.
So, now we see that there are lots of ways to attract people besides pay. How do we use this to our advantage?
First, recognize that you have a lot of options. You dont just have to use money, although it helps.
Second, be creative. The more unusual the benefits of working for your company, the more employees will see a similarity between how they are treated and how they feel they should be treated. Remember, everyone wants to feel they are special, and different is almost always special.
Third, try to create consistency with your strategies. If your business model is built upon great customer service, make sure that employees are most highly rewarded for providing or enabling customer service. In addition, you may want to try to design career paths that steer your best people into more and more contact with customers. Rewards - whether monetary or not - for performance that is consistent with your strategies are extremely powerful tools for creating alignment between your employees motivations and the strategic direction of the company. In addition, failing to reward performance can be a serious demotivator for the best employees, and can contribute to a feeling of dissatisfaction.
Fourth, have a type of employee in mind when you design a job. Think about what will attract them, and recognize that you cannot create a job that will appeal to everyone. If you want a Nobel-prize-winning chemist, you probably need to offer the things that person would find attractive, such as fine research facilities, access to other bright people in the field, and the time and resources to pursue technical problems that generate passion. If you want young, gregarious employees, consider locating them in a community they might find attractive, such as a larger city or a college town.
Fifth, you must remember that attracting and retaining employees involve processes, and your company can be as efficient (or inefficient!) with these processes as with any others. This means that you need to think about leveraging your capabilities and competencies when designing jobs to be more attractive, but it also means that you need to think about using job design to enhance your competencies. Coincidentally, generic things that arent that unique, such as salary, health insurance, and an annual Christmas party, are among the least efficient lures that you can use for attracting and retaining good people. Thats because anyone with a deeper pocketbook can beat you out by throwing more money on the table.
Lets look at an example: Say you are setting up a sales force for an equipment manufacturer called RabbitTech, in Grand Junction, Colorado - and you have never had salespeople on your payroll before. Your company is creative, flexible, and customers love you for your speedy delivery, but your prices are a bit high. Your strategic competency is that you know how to deliver a specific range of quality products to customers in less than a week, while your competitors have trouble meeting commitments with a four-week lead-time. How should you be attracting people to join your newly created salesforce?
Clearly, you want salespeople who can sell your speed. This means that you may be able to toss all those resumes you got from SnailTech and Glacial Motion (and any other slow moving company) into the trash can, but - before you do - check them out first. Try to figure out if anyone is leaving SnailTech because they hate selling with an eight-week lead-time. A salesperson like that may view your company as heaven on earth, and - best of all - such a salesperson will really perform well at your company. This may be true even if said salesperson is a mediocre performer at SnailTech. Clearly, you should use your competency as both a lure and a filter. In other words, some salespeople will find your delivery an irresistible lure, and those who do not are less likely to succeed at RabbitTech.
What else might you do to get great sales-people to flock to RabbitTech? One thing you DONT want to do is oversell the company. This just leads to turnover, later, and turnover can be more difficult than leaving the job unfilled in the first place. But you do want to sell your real strengths. If your company is in a town with a great school system, for example, you want prospects to know about it - especially those with families. If you are in a rural community, you want to sell the advantages of rural life over urban life. You may engineer your perks to really play this up. Its one thing to say Grand Junction, Colorado is a wonderful place to live and raise a family. Its far more useful to say If you like rodeo, youll love working here - you could even join the company-sponsored rodeo team. The company subsidizes lessons if you want to learn how. We compete every Wednesday night - those are our trophies in the reception area! Why would this be more useful? Well, EVERY employer is likely to tout the advantages of its local community. But creating specific - and unusual - perks that bring employees together in ways that might be hard to replicate in, say, Gary, Indiana, creates an irresistible lure for people who want to see their work life as something more than a job. One warning about this: you will repel some prospects, as well. There is no universal lure that attracts everyone (well, OK, money is pretty good at this, but money has other weaknesses as a lure). But if you take care to create alignment behind the perks and your strategy and competencies, you can benefit from this repulsion. The rodeo team, for example, is really useful for your company if you know that there is something about people who like rodeo that is useful in selling RabbitTech products. In that case, people who are repelled by the idea of working at a company with a rodeo team are probably less likely to succeed at RabbitTech anyway.
|1.||Recognize the importance of non-monetary factors|
|2.||Unusual benefits make people feel special|
|3.||Make your hiring criteria consistent with your strategies|
|4.||Have a type of employee in mind when you design a job|
|5.||Implement processes to make your hiring activities more efficient|
The interesting thing about this example is that it gives us ideas about how to attract and retain our salesforce efficiently. We would want to seek out people who are frustrated by slow turnaround if hiring experienced people from within the industry. We might use the first interview to secretly sound this out: anyone who doesnt say I want to work at RabbitTech because I hate the long lead times we have at SnailTech may not get a second interview. We may also look outside the prospects career activities for clues that Grand Junction would fit with their lifestyle. Someone who enjoys hiking or equine sports would love Grand Junction, but an obsessive opera lover might quickly become disappointed and leave.
A word about retention. Many of the things discussed here are useful for attracting new hires. With existing employees, you have some additional advantages and also, maybe, some disadvantages. Your greatest advantage lies in the fact that you can learn what really punches someones buttons when that person is working for you. This requires constant communication, sometimes about things that have nothing to do with job tasks, but it is well worth any time you can spend on it. In our experience, this is the best way to find out what kinds of special differences employees would really like to have in their jobs. The biggest disadvantage many of us have in retention is that the grass always looks greener at the other company. Often, this is because employees focus on one attractive facet of a job at another company - pay is a common one -without seriously considering the negatives. Its a pretty important part of a companys culture to play up the companys differences and the benefits they create. I like to hear employees saying things like You wouldnt get to do this at Brown and Those poor saps at XYZ are probably having a fit right now, and here we are having fun. One of my favorites was heard after a night on the town with a management team, when the CEO burst into song while waiting for a bus. One of the managers elbowed me and said You think our competitors CEOs can sing like that?. I loved hearing this: the manager was clearly demonstrating to me that he felt his company was unique, and that he appreciated that uniqueness. Thats what you should strive for - because without that kind of uniqueness, you will end up using generic things to attract and retain employees, and the more generic the lure, the more expensive it will be.
Robert Bradford is President and CEO at the Center for Simplified Strategic Planning. He can be reached at