Employee Retention - Critical Skill At A Critical Time
By Mike Goldman, Sat Dec 10th

Many of you have probably heard about the "pending" laborshortage. The Herman Group predicts that by 2010, there will bea shortage of over 10 million employees in the U.S. This is nota problem that will magically appear in 5 years. The problem isNOW!!

We are currently in the tightest labor market of the past 40years. Data already suggests we have a shortage of almost 5million employees. Much of this is due to the impact of the 20%drop in birth rate we saw after the Baby Boomer generation. Atthe same time these Baby Boomers begin to retire, fewer peopleare entering the job force. Unemployment rates are at theirlowest levels since early 2001 and they will only get lower.

If you haven't given this problem much thought, you're notalone. Most companies have been lulled to sleep by the up anddown economy and fickle job market of the last few years. That'sgreat news for those of you reading this because the fewcompanies who understand the importance of this problem, andproactively do something about it, will gain incrediblecompetitive advantage.

The Impact You will feel this impact in two ways: 1.Increasedemployee turnover According to the Gallop organization, only 29%of employees are truly engaged in the work they do. That means71% of your employees would probably not think twice beforeleaving for a better (or maybe just different) opportunity. Atthe same time, the current positive state of the economy, lowunemployment rate and flexible work arrangements have givenemployees more choices than ever before. And, by the way, yourbest employees have the most choices, and therefore more reasonto leave! Think about the impact that would have on yourcustomers, employee morale, hiring costs, training and number ofnon-gray hairs on your head.

If you haven't begun to see this problem in your organization,you will. If you don't tackle this problem today, you will paydearly to solve it tomorrow.

2.Increased difficulty in recruiting Some of you may havealready experienced the increased time it takes to findqualified employees. Two years ago, a job candidate was happy tohave one good job opportunity. Today, most good job candidateshave several opportunities to choose from.

This will cause two types of problems: either your company willbe understaffed as you wait longer to fill those open spots, oryou'll rush to fill open spots by settling for employees thatare not really qualified for the job.

The Solution So how do you weather this storm?

What follows are eight ways to dramatically increase the chancesof keeping and maximizing your best employees.

1.Hire the right people The first step for any company hopingto become great is to hire superior people. "A" players breedmore "A" players. Companies filled with "B" and "C" employeeswill not have the ability to attract "A" players. In addition,the "A" players you do have will be de-motivated and/or leave.

Research has shown that companies mis-hire 75% of the time! Thatmeans most companies need to hire four mediocre orunder-performing employees in order to find one "A" player. Thecost of this poor performance is astounding when you estimatethe impact on company performance and/or employee turnovercosts.

Therefore, the first step in your retention process should be toimprove your hiring process. You will need to develop a systemfor recruiting, evaluating and hiring superior people. This isan extensive topic unto itself, which has spawned hundreds ofbooks. I suggest you read "Hire With Your Head" by Lou Adler or"Topgrading" by Bradford Smart as a great starting point. 2.Know your employees Do you adhere to the adage that allemployees should be treated equally? If so, your employees willnever achieve their true potential, and never be truly happy intheir work.

Each one of your employees has different strengths, weaknesses,likes, dislikes, goals, motivations and learning styles. Byunderstanding and acting on these differences you will be ableto bring the best out of your team.

Let's look at an example concerning motivations... One employeeis motivated by money and/or status while the second employee ismotivated by free-time and flexibility. Should both be offeredthe same type of work incentives? Of course not.

Let's look at one more example. This time concerning learningstyles... Some employees learn best by studying everything thereis to know about task before trying it. Forcing them to begin atask before they're ready will result in poor execution anddiminished confidence. Other employees like to learn by doing.They like to understand the basics of the task and then be "letloose" to learn from their mistakes. Studying the details of atask for too long only bores and de-motivates them. Would youtrain these different types of employees in the same manner? Ihope not.

The sad thing is that most managers don't know their employeeswell enough to understand these differences. If that's the casein your situation, the first step is incredibly easy. Just askthem. Ask them what they like and dislike about the job. Askthem what motivates them and how they like to learn best. Notonly will you find out

an incredible amount of usefulinformation, you'll also show them how much you care.

3.Focus on employee strengths When creating and giving employeeevaluations, how much time do you spend on strengths versusweaknesses? If you're like most managers, you rack your brain tofind every possible weakness and development need for theemployee you're evaluating. I remember having a hard timewriting reviews for my best performers since it was moredifficult to find areas of weakness. Telling them where theywere doing a great job was almost an afterthought and not muchmore than a pat on the back. Focusing on weaknesses might helpan employee become a bit more "well rounded", however, being"well rounded" is incredibly overrated. Employees will rarelybecome strong in an area of weakness. The best we can hope foris that they will rise to become mediocre. However, where anemployee has talent, they can become world-class. In addition,focusing on maximizing those areas where we have true talent isincredibly motivating.

This doesn't mean we should ignore weaknesses. By all means, ifweaknesses are getting in the way of doing the job, you need tofind ways to manage around those weaknesses. These can includelooking for ways to get them to acceptable levels ofperformance, changing their responsibilities or counseling themout of your organization. But don't expect them to become"expert" tomorrow in those areas they're weak in today.

Your return on investment will be significantly greater byfocusing the employee's efforts on continuing to build on theirtalents by adding new knowledge, experience and tools. Would yourather have a "well rounded" employee or a world-class employee?

4.Create a compelling mission I'm not talking here about yourtypical mission statement, created by high level executivesduring a 2-day retreat. I'm talking about something youremployees feel in their gut. Something that makes them believetheir work is important. Something that gives them pride in whatthey do.

If you work for a brokerage firm, wouldn't it be more powerfulto state your mission as "We help our clients provide for theirchildren and live comfortably into their old age" than to say"We will be the leading brokerage firm in our industry". If yourcompany makes smoke alarms, wouldn't it be more powerful to havea mission to keep families safe instead of a mission to be the#1 provider of smoke alarms.

Think about what makes your work important and make that yourmission.

5.Trust your people Conventional management wisdom says you'llget the most out of your employees by defining specific goalsand detailed procedures for getting there. This is only halfright. Creating challenging goals is critical, however, let youremployees figure out how to get there.

Most of us know it's the people on the front lines who trulyunderstand the best way to get things done. Defining everydetailed procedure for them not only stifles their motivationand creativity, but also lowers the chance they'll createbreak-thru performance.

If you've hired the right people and given them the toolsnecessary to do the job, you should give them the freedom to getthe job done. Giving them ownership will allow them to reachtheir true potential.

6.Show your appreciation There's a reason why teams play betterin front of a home town crowd. There's a reason why stand upcomics feed off the laughter of the crowd. Appreciation works!

Find ways to measure and reward positive outcomes. Complimentand celebrate your teams' accomplishments big and small. There'sno such thing as too much praise as long as it's genuine.

7.Cultivate strong managers Research shows that employees leavetheir managers, not the companies they work for. It does no goodfor a company to invest in great compensation plans, missionstatements and performance management systems if front linemanagers can't execute against the previous six ideas.

Simply put, managers need to know how to effectively select,manage, develop and reward their employees. Missing any onethese pieces will lead to poor performance and high employeeturnover.

Therefore, a company's biggest investment should be in theselection and development of great managers.

8.Have fun! We spend half our waking lives at work. Shouldn'twe figure out how to make it fun? Not only will a fun workenvironment breed happier employees, it'll breed creativity,outstanding service and tremendous teamwork.

Allow your employees to play, have fun and experiment. Encouragethem to contribute to others (employees, customers and thecommunity) in extraordinary ways. Most of all loosen up. Letpeople bring their true selves to work and have a good time.Your customers, employees and bottom-line will be better for it.

Following these eight steps will actually do a great deal morethan help you keep your best employees. Happier, more productiveemployees will lead to improved innovation, quality, customerservice and, best of all, profitability.

About the author:Mike Goldman is the owner of Pridestaff of Paramus, providingworkforce solutions to companies in Northern New Jersey. Mikealso spent 17 years consulting to Fortune 500 companies and is awriter and speaker in the areas of career management andworkforce strategies.