I recently facilitated a workshop with several CEOs where we worked on the dramatic business growth model components. One of the questions that I had asked them beforehand was, "What is Your Profit/X?" The results showed that there this concept is not clear to many....
Reflecting on the current employment environment as we emerge from COVID makes me think of “Being Caught Inside When a Big Set Comes Through.” Why?
For those who don’t understand the analogy, it is something that surfers experience when paddling out when a large set of waves appears. The first wave appears in front of you, and it is a monster. So you put your head down and paddle like crazy to get over it before it crashes on you. You paddle up the face of the beast, hoping to get over the top before it breaks and drags back down “over the falls.” You make it, and you look up to see the next monster, larger than the last, bearing down on you. Tired, you have to paddle harder to make it over that one before you end up in the “impact zone.”
2020 was the first wave that appeared. We all put our collective heads down and paddled hard. We made it over. However, talking to many in early 2021, I don’t think we realized how much effort that had taken. Everyone was tired, many a little depressed. But as we looked up, the next wave was there blocking the entire horizon. That wave is the increase in business activity.
Some of my clients are experiencing more business in Q1 than they did in H1 last year. So we need to paddle hard to make it over this one. However, with everyone tired and depressed from the last one, it is getting harder. Everyone is looking for employees right now, but you are asking more of your employees when they are already working flat out and dealing with the stress until you hire.
The Current Situation
As a result, many are thinking about moving. A new survey reported by Fast Company found that 52% of U.S. workers are considering a job change this year, and 44% have plans in place to move. What is interesting when breaking down the data is that:
- 59% of those whose annual household income is between $50,000 and $75,000 (the middle-income bracket) were thinking about moving.
- 76% of those under 30 either looking or open to new opportunities.
- 48% of six-figure salaried workers were planning their change, and 66% of them are feeling more confident about their decision to change jobs than they did six months ago.
- 21% of those surveyed felt there were “better opportunities available to [them] at other companies.”
What I have also seen recently is not only that people are considering leaving, but who. The “Who” here are those centers of influence within the organization. To understand that, look at your “shadow org chart,” which shows employees who have disproportionate levels of impact relative to their hierarchical position. To develop one, ask your employees these three questions:
- Who energizes you at work? (list four or more people)
- Who do you go to for help and advice? (list four or more people)
- Who do you go to when a decision needs to be made? (list four or more people)
If key influencer leaves, then many others may decide that the time to move on has come. One executive told me this week that his concern was that if two of their top influencers left, that would be the beginning of the end.
A recent HBR article suggested asking both the departing employee and the rest of your team questions, listening attentively, and acknowledging their concerns. Focus on goals and reassure your team that they’re still important and achievable, and provide them with educational opportunities to show that you care about their long-term effectiveness.
Regardless, those looking or considering a change are looking for:
- A stable organization and where they are sure they’re growing and changing within that organization.
- More pay. Pay is the main factor that entices employees to look for a new role.
- Work-life balance is also an essential requirement. 68% of employed workers and 43% of women said that remote work and work-from-home options are “very important,” versus 33% of men. 18% want to have more flexible hours in a new job.
- Finally, the overall work environment is an essential factor.
However, employees say that the most critical factor that keeps them with their employer is engaging work.
Furthermore, a recent study from Ceridian reports that the cost of onboarding a new employee can range from $2,000 to $4,000, and talent expects a rise of 29% to change roles. I have mentioned before that everyone I know is looking for people. So if a 30% increase is required to change, and 50%+ are looking to move, expect salary and wage costs to increase.
So given the above, the critical challenges for organizations today that want to get over that second wave are:
- Growth path.
- Stand out above the crowd. How do you attract the best talent and not just one of the many looking for a new opportunity? To achieve this, you need to produce job ads that create interest in your organization and the opportunity to attract everyone, not only those considering moving.
- Using your employees, customers, and suppliers to help find new talent. These people all know you. They know your culture and values. So they are the best people to refer people to you if you are looking. However, first, you have to tell them what you need. If you have a great job ad, share it with them. Encourage your employees to refer people.
- Employee testimonials on your website. Again I have mentioned this before, but it still amazes me how few companies have employee testimonials on their website. The first thing a prospect will do is go to your website to find out about your organization. Having no employee testimonials is not a good way to entice them. Worse is only having stock photos of employees other than the leadership team.
- Ensure your reputation is good. Check Glassdoor and other sites to see what has been said about you. While you cannot always change the negative posts, understand them and be willing to address them in an interview.
- Interviewing. With many people looking to move and the cost of replacing large, make sure that you are getting the right person. A term I prefer is “auditioning.” As many have said, the key is culture and values. Concerning ability, ensure they can do the job. Given how busy everyone is, it might be harder to defend hiring someone capable but requires training. However, getting the wrong person just because they have the skills is a more expensive proposition in the long run.
Onboarding is more critical than ever, and it is more challenging than ever with COVID. However, now you have to ensure that your new members can absorb your culture and values and know your strategy and expectations.
I have discussed onboarding with many CEOs and find that all are struggling to do it effectively. A few thoughts are:
- Ensure they know your culture and values, and strategy first. With this knowledge, they can make better decisions that benefit the organization.
- Ensure they understand what is expected of them and have regular check-ins for the first year to ensure that both of you are on the same track.
- Understand their objectives and needs. These are both professional and personal, but you can build a plan together to help realize them if you know them. That is not to say the company has to give them more but enabling them to see that they have a path to what they seek will show interest on the organization’s part. Right now, several companies are offering an extra day off a month or large bonuses. Figure out what you can offer to make your employees feel appreciated and not cause trouble in your organization.
- Make sure they feel welcome. Remember, a majority of people regret the move after the first day! Make sure your new employees don’t.
Keeping all employees engaged is key to keeping them, those that you have and those that you are hiring. That means they need to know:
- The current situation. Your employees need to know where you are today. Now is time for the truth because they do know, just not necessarily from the leadership team. Telling them everything is okay when they see chaos around them means that the leadership team is out of touch with reality, and now is the time to move on.
- Where is the company going? Make sure they know the company’s BHAG and 3HAG. Knowing where you are going provides more energy for the task, and right now, we need everyone to paddle.
- What is their role? Make sure they know their role in the organization. First, make sure they can answer the following:
- What do we do, and where am I in the process?
- How do we make money, and what do I do that helps that?
- How will we succeed?
- What is most important right now that my team has to do?
- Who must do what? Accountability and reporting roles and
- How can they help? Seek input from them regularly on how to improve processes and actions to perform better. It is incredible how often employees know a better way, but no one ever asks. However, please don’t ignore their feedback because they will never give it again. If you don’t want to use it, explain why.
As part of the onboarding, understand what they want in their life. If they wish to grow to a new role in the next X years, help them develop a plan. If they are contented at their current position but want to move flexibility, work on that. Understanding their wants and needs shows interest by the company, and that builds attraction. If they feel you care about them, they will care about you.
Given all that is happening, this is not the time for the Mushroom Theory of Management!
Finally, given that many people are thinking of leaving, if you can afford it, maybe this is the time to prune some of that deadwood.
Good luck paddling out, and I hope you make it through the set.
Copyright (c) 2021 Marc A. Borrelli
There is a war for talent. How do you attract talent to your company and have them apply for jobs there? You have to show why they should consider you, who you want, what you offer, and how your current employees feel.
Productivity remained during WFH with COVID. However, further analysis found that hourly productivity fell and was compensated for by employees working more hours. What was the culprit – Meetings. Want to increase productivity, have fewer meetings.
For those of you who are not aware of EOS, it is the Entrepreneurial Operating System. It seeks to improve businesses by getting six components aligned to enhance business operations. The six are: the vision the people the issues traction - meetings and goals...
COVID has affected everyone. However, companies need to examine if they have lived their core values during COVID, how they are reinforcing them in a WFH environment, and especially with the onboarding of new hires.
Knowing how much cash you generate is essential for planning for growth. Too many companies don’t know and when they grow they find they are continually running out of cash. Understand your cash flow generation and how to improve it through improvements in your Cash Conversion Cycle and using the Power of One.
The key to achieving long term goals is to define short term goals that lead you there. Focusing those short term goals around a key metric is essential. However, ensure that the metric will not lead other areas astray by having an appropriate counter critical metric act as a counter balance.
Defining an organization’s culture as a “Family” culture reflects tolerance to subpar performance. Rather focus on those characteristics of a “family” culture that you want.
Knowing the profit of your core customers is key to building a growth model. Many companies have identified core customers that are generating a sub-optimal profit and so they cannot realize the profits they seek. Identifying the correct core customer allows you to generate profits and often operate in “Blue Ocean.”
The European Super League collapsed within days of launch due to hubris and the founder forgetting the key parts of their business model, value creation, sales, and value delivery. The collapse might bring a high price.