Q #96: How to reduce (if not eliminate) attrition of valued employees?

In this series, Bob Morris poses a key question and then responds to it with material from one or more of the business books he has reviewed for Amazon and Borders.

In Topgrading: How Leading Companies Win by Hiring, Coaching and Keeping the Best People (Revised and Updated Edition), Bradford Smart explains why the average cost of a mis-hire is 24 times the annual salary. (That’s right: 24 times the annual salary.) I am unaware of what the average total cost of losing a highly-valued employee is but it must certainly be substantial.

Experts on employee attrition (notably Leigh Branham, Beverly Kaye, and Mark Murphy) seem to agree on the most common reasons. Here are six:

1. The job and/or workplace of the company are/is not what was expected

2. There is a lack of confidence in the company’s senior management

3. Performance expectations are unclear or inconsistent.

4. The criteria for measuring performance are also unclear or inconsistent.

5. Little (if any) feedback, mentoring, coaching, etc. is provided by supervisor.

6. Prospects for career advancement at the company are poor.

The most highly-regarded employers are those that avoid making these and other mistakes. They have almost no loss of valued employees. Moreover, they always have far more job applicants (including those currently employed by competitors) than positions available.

Check out Branham’s Keeping the People Who Keep You in Business: 24 Ways to Hang on to Your Most Valuable Talent and his more recent The 7 Hidden Reasons Employees Leave: How to Recognize the Subtle Signs and Act Before It’s Too Late (2005) as well as Kaye’s Love ‘Em or Lose ‘Em: Getting Good People to Stay (4th edition) and Murphy’s The Deadly Sins of Employee Retention: Cutting Edge Strategies for Keeping Your Best People.

Comments, questions, requests, or suggestions? Please share them. They will be most welcome and I thank you for them. Best regards, Bob

Q #59: Any advice for those now interviewing job candidates?

In this series, Bob Morris poses a key question and then responds to it with material from one or more of the business books he has reviewed for Amazon and Borders.

There are more unemployed and under-employed people now than there has been in at least 20 years so those now interviewing have no shortage of well-qualified candidates from which to select. Here are some key points to keep in mind.

Warren Buffett once observed, “When you hire someone, you look for brains, energy, and integrity, and if they don’t have the third, integrity, you better watch out, because the first two will kill you.” Recent Gallup research indicates that, on average, 16% of those in a workforce are “actively disengaged” in that they are doing whatever they can to undermine their employer’s efforts to succeed. They have a toxic impact on their associates and, in many instances, on customer relations.

In Topgrading: How Leading Companies Win by Hiring, Coaching, and Keeping the Best People (Revised and Updated Edition), Bradford Smart asserts that, the sum of costs of a mis-hire (on average) are as follows:

Base salary Less than $100,000: 14 times annual salary
Base Salary $100,000-250,000: 28 times annual salary
All Salaries: 24 times annual salary

Now go back and re-read those statistics while keeping in mind that, for various reasons that Smart briefly explains in the book, “the numbers are probably conservative” but even if these averages are divided by half, mis-hires still cost 7-14 times their annual salary.

Most experts agree (1) that an organization should be constantly alert for outstanding candidates even if there are no positions to fill now or soon, (2) that its “best and brightest” people should be involved in the interview process, (3) that it should hire slowly and carefully, (4) that performance expectations be made crystal clear to each new hire, and (5) that there be frequent feedback from each new hire’s supervisor during the first 3-6 months.

By the way, there are two excellent magazines that now offer free online and/or print subscriptions: Chief Learning Officer and Talent Management. You can check them out and sign up for one or both at these Web sites:

http://www.clomedia.com/

http://www.talentmgt.com/

Comments, questions, requests, or suggestions? Please share them. They will be most welcome and I thank you for them. Best regards, Bob