R² = EOC (Recruitment and Retention = Employer of Choice)

by Rick Johnson

Published on this site: August 31st, 2005 - See more articles from this month

Problems with staffing and retention may not be due to bad hires or a low unemployment rate. In fact, they may be related to poor management insight by not recognizing your employees as a core competency in your business strategy. Although employees may not fit the strictest definition of a core competency, it is a fact that your employees are the ones responsible for creating many of your core competencies. It is an undisputable fact that failure to recognize the importance of employee contributions will lead to failure regardless of your business strategy.

Recruitment and Retention

Creating a strategic plan and definitive initiatives is the easy part of the formula for success. The difficult part is finding, recruiting and retaining the appropriate talent combination in today's market to carry out that plan. Recruitment and retention are major issues in most industries today. These issues are especially critical to the wholesale distribution industry for two reasons:

• First, wholesale distribution is one of our aged-basic industries that doesn't necessarily project the excitement of the high-tech industries and the dot coms of the new millennium (even though many have crashed and burned).
  
  
• Second, the number of employees between the ages of 25 and 44, traditionally the bulk of the workforce, will continue to decline in the United States for at least the next five years. The baby-boomers are aging quickly toward retirement.

Under these circumstances, how in the world does a company not only recruit new talent, but protect the talent they have? Questions about compensation, training, incentives, benefits and work environment always come to the forefront. The answer is committing to becoming an employer of choice (EOC) with as much tenacity as you commit to being a supplier of choice, always wanting the first call and last look.

Pay Attention

Many company executives pay far too little attention to this part of their businesses. Often the mindset is that this is the "touchy-feely" stuff that's a non-revenue producing necessary evil. Maybe that thought process didn't hurt the company in the 80's or early 90's when unemployment in some areas reached 10%, but that's not the case today where the labor unemployment rate in many markets is less than 4%. When unemployment is that low, most people who are unemployed just don't want to work. As a result, there is a lot of corporate raiding going on. Even with the recent massive layoff announcements by the automotive industry and some high-tech industries, unemployment remains at a level that just is not conducive to recruitment and retention.

So what's the answer?

Going on midnight raids? Offering BMWs as signing bonuses? Paying way above market wages? NO, the answer is building a human resource strategy into your business plan. Get over the old paradigm that human resource departments are too costly and of little value. In fact, those companies that adopt that philosophy actually spend more money by having highly compensated managers, particularly sales managers, running ads, receiving resumes and doing preliminary interviews when they should be selling. The costs associated with that process as well as the revenue lost due to extended position vacancies inevitably far exceeds the annual costs of dedicated human resource professionals. Secondly, a huge percentage of new hires will jump ship within 18 months if they sense the company is not committed to its employees. They will jump if the company does not accept them into the fold properly by offering initial orientation, subsequent training and a culture that treats the employee as the company's most precious assets.

The question is not, "Can you afford to invest in this soft touchy-feely stuff?" The question becomes, "Can you afford to not invest in your most important asset, your employees?"

The old paradigm creates a bias against paying attention to the human element of the workforce. Many company executives that do strategic business plans initiate from the top down instead of the bottom up often ignoring the real value of a strategic plan. The real value is the involvement and education of your employees in completing the plan, not in the document itself.

Are you at the mercy of your workforce?

This bias that exists in many companies is almost as though admitting that employees are the most precious of corporate assets will lead to an anarchy on which owners and managers will fall at the mercy of the workforce. Well, shake your head in disbelief if you want to, but the reality of the situation is that you are at the mercy of your workforce. The rules have to continue to change. If you aren't willing to admit that and get your head in the game then you won't survive in the new millennium.

"People are not profits but without people there are no profits."

Some companies recognized their dilemma years ago. Many of the top performers in your industry are at the top because they strive to be employers of choice. These are forward thinking companies that have found solutions to their recruitment and retention challenges. Following in their footsteps requires an initial "gut check." Honestly ask yourself how your employees would answer questions like:

• Do you receive counseling on a career plan?
  
  
• Is there a current wage and salary plan in place?
  
  
• Do performance incentives exist?
  
  
• Do you receive regular training and instruction?
  
  
• Do you receive performance updates and recognition beyond a once a year chat with your boss?
  
  
• Does customer feedback play a role in performance evaluations?
  
  
• Are suggestions reviewed and awarded?
  
  
• Is there both a formal and informal communication channel?

These questions relate to the basic core competencies of human resources: staffing, training, rewarding, recognizing and organizing. The business strategic plan cannot succeed without paying attention to this part of the business. You must facilitate your employees' involvement and feedback into this process. This basic premise in implementation across steel service centers varies according to size. The same plan for a $20 million privately held company would not work for a $500 million private or public company EOC

To solve your recruitment and retention problems you must strive to become an Employer of Choice. To accomplish that objective you must have a Human Resources strategy that is integrated into your corporate strategic plan that acknowledges and recognizes the employees as the company's most precious asset. R2 = EOC

Dr. Eric "Rick" Johnson ([email protected]) is the founder of CEO Strategist LLC. an experienced based firm specializing in Distribution. CEO Strategist LLC. works in an advisory capacity with distributor executives in board representation, executive coaching, team coaching and education and training to make the changes necessary to create or maintain competitive advantage. You can contact them by calling 352-750-0868, or visit http://www.ceostrategist.com for more information