Retention

Last modified on 2011-03-18 18:12:44 GMT. 0 comments. Top.

The temptation to hide incompetence with buzz words extends from business models to HR Strategies. We watch in wonder as lemmings who want a career in marketing try to talk about “modifying the value proposition”. We think this is something they do to avoid the harder work of identifying potential customers. “Modifying the value proposition” is the current code for “nobody wants what we’re selling”.

Sometimes, it seems like we’re surrounded by zombies who can only repeat what they’ve read and are incapable of independent thought. The “search” for a “business model” (which means “we haven’t figured out how to make more money than we spend”) has become the fuzzy cover-up for what, in other times, might be referred to as “failure”. The problem is roughly analogous to the old joke “we’re losing money on each unit we ship but we’re going to make it up on volume”. This latter notion can be generalized as “we’re discovering the path to profitability”.

There is an inverse correlation between college Grade Point average and tenure. That’s right, the higher the GPA, the shorter the tenure. When people talk about “retention” as an HR Strategy, this is the dynamic they are trying to fix. The “attrition” problem (which “retention” is supposed to fix) means that the really bright ones who work hard and exceed their objectives don’t stay very long. Nobody is really trying to retain the “D” students. We all secretly hope that their attrition rates will skyrocket. They never do.

Getting the high performers to stay a little longer is a resource decision. As they get better at working the culture, the value they deliver grows disproportionately to the rest of the culture. It’s tough to want to pay them directly for the value; that creates the tough managerial problem of explaining why two workers who seem to have the same job make discrepant salaries. Ultimately, the difference between compensation and performance sends the high performers elsewhere.

People leave their companies when the cost of staying exceeds the reward of leaving. Without burrowing too far into the details, cost includes a broad range of compensation variables from challenge and responsibility to actual financial gain. If a retention program focuses on the delivery of additional responsibility and challenge, it simply shortens the tenure of the high performer. Responsibility and challenge equate to additional compensation on the open market.

This raises counterintuitive questions:

- “Isn’t it better to have lots of high performers leaving faster than a few who stay for a long time?”

- “Can’t you make the case that high attrition rates are a symptom of a powerfully successful culture?”

- “Isn’t ‘retention’ an indicator of failure?”

The reason that the logic is so murky is that “retention”, like “business model”, is a code word. It means “we can not allocate Human Capital with precision” and “we don’t know exactly how long we need to keep a person with X qualities”. When you encounter a company busily working on retention programs, you are witnessing a failure of planning at a detailed level.

Retention II

Last modified on 2011-03-18 18:11:59 GMT. 1 comment. Top.

Like lemmings, the vendors in our industry have latched on to the concept of retention as an alternative to solid Labor Supply Management. Like most ill considered fads, it’s just plain stupid as a generality. Sure, workplaces should be places that employees find challenging and like to visit. Certainly, equity (both financial and political) is a critical workplace issue. But, keeping everybody forever is not a good idea.

Consider the federal government, the acknowledged master of retention. (That should scare you adequately…get a retention program so you can mold your management to follow the government example.) The particularly outrageous retirement benefits lock employees into jobs and career tracks. Challenge is a secondary concern, getting the job done every day is the basic mode.

The retention programs are so good that it has been hard, for a generation, to get a job in government. Essentially, someone must die for an opening to be created. The same holds true for advancement.

Now, the government is facing the consequences of really good retention. In many offices, from the IRS to the CIA, 50% of the employees in the agency will retire during the comingyears. And, guess what? There is nobody in line for the jobs.

Successful retention programs caused the government to lose its touch with the real changing market dynamics of acquiring and maintaining employees. As a result, the restaffing of the government will require increased pay, modified benefits and a host of alternative approaches. Their extremely successful retention packages will force them to become a very aggressive player in the competition for Human Capital over the next five years.

Meanwhile, the real information worker labor shortage is escalating out of the sight of the economists..

The point is that very clear thinking is required on the subject of human capital and inventory management. There are no generalities that work at the top level. An organization is no more likely to want to retain all of its employees than it is to want to fire them all. Retention programs must be tailored to achieve very precise objectives.

Retention is not a panacea.

Job Boards Are Like Kudzu

Last modified on 2011-03-18 18:11:33 GMT. 1 comment. Top.

This piece is 11 years old, from the Spring of 1999. In those days, the job boards that were about to die were the giants…Monster & CareerBuilder. Conventional wisdom held that no one really needed a gigantic database; that niche and regional job boards would quickly rep[lace the majors.

It didn't happen like that then. Today's breathy assurances that social media is going to be the death of the job boards is equally misplaced. Recruitment advertising is becoming a complex ecosystem of communications channels. Each channel has its pros and cons. Some are better for some things. Some are better for others.

Don't expect to see another catastrophe like the newspapers experienced. From here on out, advertising and communicating about the availability of work and workers is going to evolve in a whole set of unexpected ways.

Our house on the East Coast (too many years ago) had a plant called Kudzu in the gardens. Kudzu is a vine that creeps everywhere and can't be killed off. Every Spring, we'd try to tame the Kudzu. The best we were ever able to do was trim it back. Kudzu seemed to be everywhere. Weed killers didn't work. Fire wouldn't kill it. The roots were shallow but massive. Like a hydra, when you lopped off one head, seven grew back.

Job Boards are like Kudzu.

There is a growing sentiment, driven more by desire than understanding, that the Electronic Recruiting Marketplace is on the verges of an imminent shakeout. The proponents of this scenario imagine that "global dominance" for a small group of entrepreneurs is possible, desirable and likely. Somehow, the fact that no one has ever amassed a market share of more than 3% or 4% in this space escapes their notice. Time and again, we are reassured that one or two "Yahoo like brands" will emerge from the 25,000 fee based job boards that litter the net.

We think that they are forgetting that a hiring transaction is an incredibly intimate thing that relies on trust, chemistry, intuition and regional differences. We're sure that they are overlooking the incredible ease with which proprietary Internet technology is duplicated. Once an idea is enunciated, it is easy to implement.

We know that they are forgetting the incredible turnover in Recruiting companies and departments. Customer loyalty is a reasonably fickle thing in this market. It depends on being able to deliver the right results at the right time. It depends on clear close relationships with the current customer when s/he needs it.

At its very simplest, a Job Board can be started by four people...an engineer, a salesperson, a traffic developer and someone to filter the phone calls. Building the simple board into a sustainable (if small) business simply requires a small book of local contacts in the HR Departments of major employers. The first Million dollars in revenue is easy.

Given the simplicity with which these little businesses can be started, they tend to proliferate faster than a big company with a big marketing budget can identify them and deal with them. Job Boards are like Kudzu.

This doesn't mean that some Job Boards won't be bigger than others. Far from it. But, as usual, the Spring crop of "How To Find A Job On The Internet" articles are cropping up. This year, they tend to focus on the regional boards, poo-pooing the idea that a big database is good for anyone. It's no accident. Being regional eliminates at least on click from all of the search processes. The information and the opportunities are all close to home. Very few people have the need for a massive national database. They want to work close to home.

Unlike the advocates of consolidation (which might happen at an ownership level), we see an imminent flowering of niche by niche regional services. The best result of a consolidation attempt might be to prune back some of the big bushes so that the rest of the Kudzu can really take root.

Just In Time Candidates

Last modified on 2011-03-18 18:09:19 GMT. 0 comments. Top.

The best candidate arrives prepared to negotiate from a position of strength.

I  wonder why that isn't the clear objective of all employment sites. A candidate, fully armed with the right facts and details, fully qualified and vetted, is what you want the recruiting team to handle.

"I have navigated your qualifications process, chosen my supervisor and am here to work out the details of my assignment and compensation."

There is no practical reason that online Recruiting systems couldn't deliver this product today.

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Editorial Advisory Board

Last modified on 2011-03-18 18:09:59 GMT. 0 comments. Top.

You may have noticed we just published a post about Jay Cross's new un-book Working Smarter with an accompanying book review by Julian Seery Gude. This post marks the first of many you'll see in the future by founding members of the HRExaminer.com Editorial Advisory Board. I've prepared some background on the Editorial Advisory Board that you'll find below. As we move forward with more posts from EAB members you'll see a lot of names you know and trust, and some you'll appreciate hearing for the first time, adding their own voices to the HRExaminer dialog.

- John

Introducing The HRExaminer Editorial Advisory Board

Our mission is to shed light on the things that matter most to successful HR leaders. Our view is that Optimal HR requires a different mix of practices depending on the circumstances. Focusing the HR effort on the few things that create real competitive leverage is what separates the transformative from the run of the mill.

We are constantly on the lookout for those thinkers whose work illuminates HR Management. You are extremely unlikely to find much in the way of so called 'best practices' or implementation guides on HRExaminer. These things lead directly to mediocrity. Mediocrity is extremely easy to find.

Instead, we're assembling a unique panel of leaders who think outside of the boxes that most HR is stashed in. Our Editorial Advisory Board is composed of extremely successful players who think hard about the questions of HR Management. They collectively wonder about the things that keep HR executives up at night.

These are voices you won't hear elsewhere. They offer a variety of perspectives with one common goal - to expand the conversation about being a leader in HR. In their work, you will find insights that will help you build an HR operation that is a competitive weapon.

We believe that big thinking about the deployment of human beings in the organization is where the rubber meets the road.

We're always open to having new people join the EAB. The qualifications are simple:

- an earned perspective (executive/leadership experience in the HR Industry)
- clear views on approaches to managing all or part of an HR function
- willingness to work with a ruthless and amazing editor (the ability to use strong feedback)

As we publish articles from Founding Members of the HRExaminer Editorial Advisory Board their names and links to their full profiles and posts will appear in the Editorial Advisory Board page here on HRExaminer.com.

Working Smarter

Last modified on 2011-03-18 18:10:25 GMT. 2 comments. Top.

Jay Cross | Founding Member, HRExaminer Editorial Advisory Board

Jay Cross is a champion of informal learning, web 2.0, and systems thinking. He has challenged conventional wisdom about how adults learn since designing the first business degree program offered by the University of Phoenix. Full Bio

No, as a matter of fact we don’t always know what working smarter means.

Jay’s new un-book Working Smarter (available in on-demand paperback or PDF download) examines how to boost an organization’s collective brainpower. You’ll find an excerpt of his book below that might strike a chord with you in the ongoing conversation that we’re having here at HRExaminer.com on the effective and perceived value of HR.

Cross mashes up his considerable experience in training, business consulting and web 2.0 thinking to put forth a straight forward book designed for managers who want a natural way to improve performance – without the typical management consulting crapola. When Cross does delve into charts, models and mind maps you can rest assured he does so with an aim to clarify, not to earn his business book writing chops. While I’m not done with the book yet I will say what stands out to me so far; Cross does a nice job of balancing the theoretical with the practical – and that’s really useful to us as people who want fresh ideas we can use to improve our team’s results.

I hope you try the book – I’m finding it a worthwhile investment of time. Don’t forget that you can buy the online copy, save some money, kill one less tree and convert the PDF into an online book reader for your iPhone, Android phone and many others.

- Julian Seery Gude, HRExaminer Collaborator and Editorial Advisory Board Member.

Picture this Meeting between VP of HR and the CEO:

“Next week, we will close the training department. We are shifting our focus from training to performance. Any remaining training staff will become mentors, coaches and facilitators who work on improving core business processes, strengthening relationships with customers and cutting costs.

“I’m changing my title from VP of training to VP of core capabilities. My assistants will become the director of sales readiness and the director of competitive advantage, respectively. The measure of our contributions will be results, not training measures. We’re scrapping the LMS posthaste. Wherever possible, we’re replacing proprietary software with open source.

Working Smarter, Jay Cross. Click on image to buy

“All of our energies will go into peer-to-peer, self-service learning. If something doesn’t dramatically improve the capabilities of our people, we won’t do it. We are scrapping lengthy program development projects in favor of quick-and-dirty rapid development. We are abandoning classrooms.

“We are eliminating all travel and helping others do the same by introducing Skype and free real-time conferencing. We’re setting up a corporate FAQ on a wiki to capture and distribute the information we once received from people who are no longer with us. In this and all of our efforts, we intend to work smarter, not lower our standards or quality of service.

“Recognizing that informed customers make better customers, we are opening up most of our platforms for learning to them, as well as our employees and former employees. To the extent that we help them cut costs, improve performance and implement better methods, we both win.

“Everything has a price tag. When we wring out costs, I want commitment from senior management to allocate time for people to help one another, exploit the benefits of social networks and converse with one another freely. This is a multiyear program. It will not work if we try to implement it while still doing business as usual. Burning people out is not a survival strategy.

“That is my plan for this week. If I have your support, I’ll be happy to come back with a few more things next week.”