It was a dark and stormy economy, and all across the landscape companies competed to attract and retain the top producers who could turn around their numbers…
Here’s the story of how one company decided to leverage their employer brand to grow revenue and staff in 2010, while another has unwittingly let income slip away with fleeing talent.
#1 – Outdated Thinking: Left in the Dust
Company # 1 was unconcerned about their employer brand in 2009. After all, jobs are in short supply, right? This company prides itself on an ‘old school’ approach.
The hiring process takes longer than some employees stay with the company.Without the insights that job benchmarks and employee assessments provide, management relies on months of resume reviews and interviews to select new employees. This inefficiency wastes management time and results in a staff with little diversity or breadth of skill sets. Candidates often find another job before the hiring process is over.
Investment in technology is mistakenly viewed as optional. Company #1 is always the last to get on board with marketing trends, and their revenue stream reflects it. Employees who suggest making even small investments of resources in advancements are actively discouraged.
There is no investment in staff development. The longer employees stay, the more outdated their skills become, and they know it. Costs are routinely managed by delaying the replacement of exiting staff for 4 – 6 months. Years of high turnover have resulted in weary employees who must expend precious energy to train a revolving door of new hires and then shoulder a heavier load when they quit.
Only top management is generously compensated. Raises are minimal for everyone else. Salaried workers are expected to work regular weekly overtime throughout the year without recognition, including additional nights and weekends 5 – 6 times a year.
Once on board, employees realize that the culture is more like a punitive parent/child relationship than one of mutual respect. When friends ask, employees warn that this is not the company to work for. Undervalued, they correctly assess this employer’s brand as undesirable.
#2 – Leaders in a Down Economy: The Enlightened Company
Knowing that the economic downturn has been stressful even for those who are still employed, the leadership at Company #2 took decisive action to recognize employees’ needs when planning the strategy for 2009. It started with “looking at the view from their chair,” as the CEO put it. “We realized that even though they had a job, many of their loved ones didn’t. We were sensitive to the secondary effects the downturn was having on them.” Here’s what the company did – and didn’t – do:
They didn’t cut 401-K contributions or holidays. In fact, they awarded raises. A lean year did mean temporarily suspending the company bonus program and delaying staff expansion, but management clearly communicated this as a temporary part of the strategy for weathering the downturn. They wisely chose to outsource projects rather than ‘piling on’ staff. Since employees weren’t overextended, morale and productivity stayed up. Employees, many of whom were hearing work horror stories from friends, were grateful, and that goodwill flowed naturally to customers.
They allocated budget for staff development and technology integration. While many employees are holding their breath until they can jump ship, these employees are making substantial progress in their careers because the employer recognizes the value of helping motivated employees to upgrade their skills. Staff feels valued and up to the challenge of growing the business in 2010. Why should they leave? The grass is greener on this side of the fence.
They looked for low cost ways to reward performance. Employees who achieved sales call goals were given paid time off as an incentive. Stars were given internal recognition, and the ‘free time’ bonus was the right to leave work at 2 pm on the following Friday, scheduled in advance so employees could make plans. It didn’t cost any additional out of pocket expense, but it did buy substantial goodwill.
Humanitarian or philanthropic involvement was instituted one day a month for those who enjoy giving back to the community, with staff choosing the charitable activities close to their hearts. Participation was truly voluntary.
They minimized potential losses of both talented employees and their productivity by using behavioral style and motivator assessments to hire people into the best fit position. When employees are in the right job, they are happier and more likely to stick around. And employees are in the position where they can have the biggest impact on the bottom line.
How did it turn out? At Outdated Company #1 revenues are substantially down, and they just lost one of their all-time top performers. Despite consistently overachieving financial goals and consistent overtime on nights and weekends, she was badgered for arriving 2 minutes late. Imagine the exodus that will happen at this business when the economic climate changes.
At Enlightened Company #2, things are looking up. They’ve restored the bonus plan and 2010 sales are already on track to match their second best year ever. After promoting from within, they’ve increased the staff by 22%, thanks in part to current employees and business associates who highly recommend them. They are likely to achieve their goal of being widely recognized as one of the best places to work in their region. The CEO advises, “Give careful thought to your Employee Value Proposition. Always know in your heart that you’re doing right by employees.”
Have you already made mistakes by cutting costs like staff development? If you have, call End Game Business for an evaluation to see how you can position your business as an employer of choice.
End Game Business is a Value Added Associate of TTI, authors of this weeks guest post.