Thursday, August 17, 2017

What Can You Do to Turn the Attrition and Engagement Problem Around at Your Company?


Previous articles in this series:


Unfortunately, it’s rather common on Social Media channels such as LinkedIn to see articles and posts that articulate problems – without a hint of how to go about setting a tactical action plan for solving them.  I recently posted two articles that discussed the problem (see the links above) of high employee attrition and the influence of corporate culture on influencing employee decisions to seek other employment.

In the next several articles in this series, I’ll make an attempt to provide a solution framework. While this is certainly not intended to be an all-encompassing treatise on the topic, I’m hoping that it will provide some ideas and sound advice to C-Suite executives, human resources professionals, and recruiters that can be used to develop a comprehensive action plan / program for addressing the corporate cultural aspects that frequently lead to higher than normal attrition and employee engagement issues.

While there are certainly other aspects to consider, the attrition, retention, and engagement problem normally requires a multi-disciplinary solution approach. I’ve chosen to categorize these areas as C-Suite Commitment, Culture and Communications, Policy and Technology.

I’ll cover the first two topics in this article and then follow up on the last two in a subsequent article.

C-SUITE COMMITMENT

If you don’t have it, you can stop reading right here. It’s unfortunate, but the number one reason that employee retention and engagement programs fail to work is the lack of a full and continuous “both feet in the water” commitment from the CEO and other C-Suite executives. They need to set the tone for everything that happens in the company and they have an obligation to ensure that the tone that is set registers with each successive layer of management below them (including accountability and participation at those levels). That communication, direction, and motivation must carry all the way down to the lowest level employee within the company. Without this, even the most complete program will, at best, wallow, and at worst, fail miserably. If you don’t have firm senior management commitment in place and you’re unhappy or recognize faults with the corporate culture, it might be time to look for employment elsewhere. If you’re a hiring manager and this commitment is not in place, fasten your seat belt because you’re going to be spending a lot of time hiring new people – and spending a lot of money -- to replace, train and on-board replacements for the well-qualified people you’re losing. Moreover, the efficiency with which your company will carry out its mission will, likely, be severely compromised.

CULTURE AND COMMUNICATIONS

A few years ago, John Coleman wrote a short but interesting piece in the Harvard Business Review that discussed corporate culture. He quoted James L. Heskett, who postulated that culture “can account for 20-30% of the differential in corporate performance when compared with ‘culturally unremarkable’ competitors.” Mr. Coleman went on to suggest that at least six common components could be observed in great cultures. Isolating those elements can be the first step to building a differentiated culture and a lasting organization. Those six elements were Vision, Values, Practices, People, Narrative, and Place. While I’m not going to specifically go into all of these elements, you’ll recognize tangible linkages to them in the discussion points I’ve provided below. If you want to review his article, you can follow the link, above.

I’d like to concentrate on specific, tactical measures that can be deployed by companies who are trying to improve their culture, develop an extraordinary environment that engenders engagement, and influence employees to remain with the company and provide continuous value and improvement.

I’ve worked in a senior management role within the automotive services space for decades and learned a great deal about what works and what doesn’t when it comes to human capital. The following items, while crucial, only begin to scratch the surface of what can and should be done to increase employee retention and improve the corporate culture. If you’re interested in a more in-depth conversation or would like to discuss another matter with me, please feel free to reach out to me on LinkedIn.

1.     Create a corporate culture task force with a direct line to the C-Suite that is weighted age-demographically according to your employee roster

Depending on the size and geographic disparity of your company, this might involve multiple task forces at the local and/or regional level to ensure all silos / offices / regions / etc. are adequately represented. Generally speaking, the closer the members of the task force are to the prevailing local culture, the better the efficacy of their efforts.  It’s important that such a task force represent the makeup of the work force and not be overly weighted in the direction of senior management or any singular functional activity within the company. Equally important, task force reporting should be direct to a high-enough level in the management structure that their work product cannot be modified or redirected by mid-level managers who may have ulterior motivations.

2.     Frequent communications from senior management to all employees on the company's status (revenues, profitability, business development strategy and challenges, etc.). Use technology for this, so employees can participate from their workplace and/or homes.

Transparency is a huge issue in most companies. C-Suite executives often feel they are keeping the work force adequately informed about the direction of the company and the challenges it is facing. Providing clear, concise and transparent information goes a long way toward making everyone in the company feel like a valued team member. This mode of communication has a strong benefit in getting “all hands on deck” to solve company-wide problems. While most C-Suite execs believe that is their role, the truth is that you never know who might be holding the key to a breakthrough, especially in diverse and talented firms. What is most important here is that the communication to employees not be candy-coated. They are adults and professionals. They can deal with adversity. What they can’t deal with is being lied to or treated in such a way that it becomes clear to them that the company doesn’t believe they will react the right way if they knew the truth about “what is going on around here.”  One way to lay the ground work for this is to ensure that there is strong and frequent communication from the C-Suite to upper and middle management, informing them that the company places a high priority on employee retention while inviting their input on how to achieve this. As an example, you might consider using Skype or a similar platform to hold a virtual town-hall meeting to communicate with employees.

3.     Encourage employees to make workplace environment suggestions and make sure these suggestions are legitimately screened. Regardless of the thumbs-up or thumbs-down evaluation, employee suggestions should be rewarded with a direct and personalized response stating how it was evaluated and the reasons for the final determination.

I’m sure that you are thinking that is could be unmanageable that it might represent a slippery slope. Without doubt, there will be some employees who would use such a communications platform to issue an unending stream of vitriol and provide suggestions that might be rather unpopular. You certainly don’t want to give equal weight to such unpopular suggestions -- that could make the screening process quite difficult. But there are ways around this such as, perhaps, periodic crowd sourcing of workplace environment suggestions accompanied by some kind of employee voting system. In such a model, any suggestion that exceeds a certain vote threshold would receive full administrative consideration and result in a formal (and ideally public) response from corporate leadership. This kind of approach sends an immediate and sensible message to all of the company’s employees that their opinions are important, that the corporate executives are committed to improving the culture, and that the company is engaging in appropriate change management.

4.     Make sure that managers are encouraged to recognize life-change events such as a marriage, birth of a child, passing of a loved one, etc.)

In the context of this article, you might think that this is a minor point. But in my many years of management experience, I can assure you that some of the most effective, positive “water-cooler” moments happened when an employee informed his colleagues that, for example, the company sent a bouquet of flowers when a his/her child was born. The gesture doesn’t need to be something extravagant or expensive; even small measures of empathy will likely have a significant ROI for the company – and, usually, far in excess of the cost of the original gesture. 

5.     Publicly recognize employee milestones (intranet, house newsletter, etc.) Such as 5- 10- 15- 20- year anniversaries.  These might even include a small gift.

This seems almost trivial, and many HR departments would worry about managing this effort. But even a periodic spotlight on teams or employees that shows up on the company’s intranet or in-house newsletter could greatly benefit team/employee morale and help siloed employees learn more about how the rest of the business functions (both good things). In addition, the company’s senior management is sending a very clear message in the process: We value employees who remain with the company and continually provide value to our mission / business goals. 

6.     Encourage employees to apply for career-enhancing promotions and lateral transfers inside the company.

I can’t tell you how many people I have met over the years who made a statement to the effect of “I really didn’t want to leave the company, but I felt locked down and it didn’t seem like there was any room to grow in the position I was in.” Great companies engender great employees by developing practices that continuously ensure professional development. Employees who get a clear message from the company that it’s willing to invest in them and positively consider their career growth objectives have a heads-up on the competition – primarily, because the valuable and, now, multi-functional employees aren’t out shopping their services to your competitors and/or customers.

7.     Make sure that all hiring managers are aware of the hard- and soft-costs associated with recruiting, training and on-boarding of a new employee. This is critical, because most managers do not recognize all of the opportunity costs associated with this step.

I almost didn’t include this point. But I’ve seen so many mid-managers who simply didn’t understand the opportunity cost associated with recruiting, hiring, training and on-boarding a new employee to replace one who departed the company. Studies on this topic (such as SHRM) have suggested that every time a business replaces a salaried employee, there is an opportunity cost to the company on the order of 6 to 9 months’ salary on average. So next time a long-term employee who has been performing well requests a salary increase, or a stand-up desk, or better working accommodations, or an opportunity to apply for another position in the company that might not be related to his/her current responsibilities, ask yourself the question: would this cost the company more or less than finding someone to replace this person?

In the end, management should be accountable for such decisions. One possible approach might also include exploring the creation of incentives and/or disincentives for good or poor employee retention, respectively. Minimally, this metric should be included as an element in management evaluations.

So there you have it. It’s certainly not complete – but it’s a good starting point. I’m sure that if you implement some of these features, you will have gone a long way to improving your corporate culture. Now before you sign off, go back to the top and re-read the paragraph under C-Suite Commitment.

The next post in this series will cover policy and technology features that can benefit your corporate culture and help reduce attrition and improve employee engagement.

As usual, I invite you to contact me if you’re looking for help on setting up such a program.  I can offer a wealth of knowledge and experience and add value to your company that will improve your culture and, in the process, your bottom line.

Until next time.