October 2007 Newsletter

In this issue:

Not so impressed by your company's financial performance?

Some things about your business stay with you long after you leave the office.

Take a slumping financial performance. If you're like most corporate leaders, a drop in operating income or fall in income growth rate keeps you awake at night.

Lying there, you mull over the question "why?" and turn to the measurements you have -those you've derived from monitoring your processes and systems. You might use revenue growth or cost of goods sold as yardsticks, for example.

Many corporate leaders do, and then they invest in hot new developments in business process improvement and use software to automate processes. Unfortunately, after putting a great portion of their revenue in technology, however, their companies see only little change in financial performance.

Where did they go wrong? What could they do differently?

There's no doubt software and technology are great, but truly successful business leaders will tell you that improving financial performance requires more than changes in the process area. It requires that leaders take a broad view of the company and look at everything combined - process, systems and people - and envision them all clicking together.

When financial numbers weaken, it's easiest to turn to the business process and systems. After all, we can automate and measure process, and monitor systems. It's not as easy to measure the effectiveness of people.

And many business managers don't understand that they cannot remove the employee from the process…that people play a critical role in processes, especially when something outside the norm happens.

They forget, for example, that if a heated customer calls with a billing discrepancy, only people can solve the problem by finding a win-win solution for company and customer. Or that if receivables are down, the company may not have a money problem. The real weakness could stem from a customer service problem that creates unhappy customers who pay slowly.

People must perform superbly to solve problems, and that means engaged employees who understand the problems and care enough to find solutions.

If you doubt that workforce effectiveness impacts the bottom line, look at these numbers from ISR, a global employee research and consulting firm. Comparing the financial performance of companies over a 12-month period, ISR showed that:

  1. Operating incomes of companies with high levels of employee engagement improved on average by 19 percent. Incomes declined by 33 percent in companies with low levels of engagement.
  2. Companies with highly engaged employees saw a 14 percent improvement in their net income growth rate. Those with less-engaged employees saw a four percent decline.
  3. Earnings per share rose by 28 percent in companies with highly engaged employees, falling by 11 percent in companies with low levels of employee engagement.
(You can find the ISR briefing at http://www.insight.com.)
Now look at these sad facts:

An unengaged workforce is a tough problem. Otherwise it would not stick to us so stubbornly.

Even so, you can make headway in addressing it by:

Clearly, just as you do with any persistent problem, you must attack workforce engagement on many fronts. Only then will you begin to see employee engagement numbers creep up – maybe to 35 percent, 50 percent or even higher.

And only then will your company's other significant numbers also begin to rise.

Take This Test:
Here are the five main reasons people change jobs according to a recent Profiles International survey. In what order would you address these reasons if you wanted to improve your company's reputation as employer?

  1. Boredom
  2. Inadequate salary and benefits
  3. Limited opportunities for advancement
  4. No recognition
  5. Unhappy with management and the way they are managed

Now compare your ranking to the survey results. Just go to the information at the end of the newsletter titled "How Did You Do?"

But don't forget to come back to this point and continue reading my tips for attracting and retaining quality employees. They will help you key in on changes you can make to improve your employee retention.

Tip of the Month: Six Steps You Can Take to Become An Employee of Choice

Are you losing people before you've even recovered the cost of hiring them?

It happens. You sweat blood to find the right people and suddenly they're gone.

While many employers have difficulty attracting and retaining quality people, others - those we call "employers of choice" - seem never to have this problem. What's their secret?

Here are six steps that will help you also become a "choice" employer:

1. Evaluate Your Managers

People leave people, not jobs. Look at the Profiles International survey results: 30 percent of people didn't leave their jobs; they left their managers. Poor managers can negate everything you do to attract and retain the right people. So what do you do?

First, measure your staff turnover by manager. Doing this may frighten you, but until you know which managers are losing their people you can't do anything about it. After identifying which managers need help, help them.

Next, review all your managers in terms of leadership and management skills to determine what they are doing to drive people away. Then provide training, coaching and support.

2. Create a Recognition Culture

Twenty-five percent of all people leave their jobs because of insufficient recognition. You can fix this by asking managers to identify ways their people perform above expectations and then seek out opportunities for positive recognition. Create and publicly give awards for exemplary performance. Be aware, however, that you cannot create a recognition culture from nothing. You must have a healthy working environment for it to thrive.

3. Create a Healthy Work Environment

You can achieve a healthy work environment through:

Open Communications. Let all your people know where the organization is going, how it plans to get there, how their jobs play a part and why they are key to its success. Give your people an "I'm-on-the-inside!" feeling. It's hard to leave something when you're an insider.

Develop an Attitude of Cooperation. Consider flexible hours, compassionate leave, sabbaticals, telework, child care facilities—anything you can afford to do that makes it easier and more practical to work for you than for anyone else.

Develop an Atmosphere of Trust. If you want people to trust you, you must trust them. Create an atmosphere where management automatically expects the best. No one is more flattered than when they are trusted implicitly.

4. Create an Atmosphere of Continual Self-Improvement

Twenty percent of people leaving jobs do so because they feel they aren't getting sufficient advancement. This isn't surprising given the preponderance of flat-structured organizations today.

So what can you do if you don't have an old-fashioned, multi-layer hierarchical organization? Offer a clear advancement path through training and development. Create an atmosphere of continual self-development by giving all your employees access to training that will enhance their skills, value and self-esteem.

5. Put Your Best Foot Forward

What about the 15 percent who leave for more money? In many cases, more recognition, better management and opportunities for continual self-development will retain them. But you still must pay the market rate or better to stay in the game.

Know what each job is worth and what you can afford to pay, and then pay it—from day one. We all respond to fair treatment. Therefore, let your people know that this is what you're doing and that you need them to engage with you in making the organization successful so you can continue to do this in the long term.

6. Match People to Jobs

A recent Harvard Business Review study demonstrated that where cultural demands of a position matched personality, staff turnover decreased and productivity increased dramatically.

When it comes to job matching, don't go by gut feel. Use psychometric tools to determine the requirements of each of your positions and then use this information to match your jobs to people who will excel in them.

Sadly, you can't win the war for quality people easily. Apply these six sensible steps, however, and you can eliminate more than 95 percent of the reasons people defect and put yourself squarely on track as "employer of choice."

Technical Corner: Checkpoint 360™…Healthy Feedback for Managers

As mentioned earlier, 30 percent of people leave their jobs because of their managers. Now you can take positive steps to stem that flow.

Using Profile International's Checkpoint 360™ your managers can get healthy feedback on their performance from the people they work with—bosses, peers and direct reports. This tool examines managers in areas of communication, leadership, adaptability, task management and development of others. It can fortify employees' perceptions about their strengths if they are accurate and offer insight into where they may need to improve.

If you are interested in learning more about Checkpoint 360™ or any of Profiles' assessment tools, give me a call or send me an e-mail. Profiles International offers proven methods of helping organizations unite the right employee with the right job and keeping that employment on track. And, if you need counseling, call me at 952-322-3330.

How Did You Do?

Here's what the Profiles International study found. Of the job-leavers surveyed:

Now return to the Tips section of this newsletter to learn how to use this information to attract and retain people essential to your success.

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