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 From Acres of Diamonds: Retaining Your Employees In February 1999, Alan Greenspan said that the only thing on the horizon that could significantly limit unprecedented economic growth for the United States would be a shortage of workers. Additional credibility was added to this statement when the US Bureau of Statistics went on record saying that by the year 2006, there will be 151 million jobs, yet only 141 million people to staff those jobs. The validation for this dire prediction is the fact that the unemployment figures nationally, have reached a new all-time low hovering around 3.8%, the lowest in over 30 years. In many industries such as telecommunications, and in some geographic areas, the actual figure is 0%! That means anyone who truly wants to work can find a job, and if someone is dissatisfied with the job they have, they can easily find something else. Today's workforce has an unprecedented ability to jump from job to job and a great many are exercising that option regularly. With the tremendous shortages looming on the horizon, businesses today are spending billions of dollars annually in advertising and recruiting campaigns to attract new workers. The cost of actually bringing someone in the door is estimated to be between 70 and 200% of that person's salary! If the figure is actually on the high end, near the 200% level, a business would need to keep someone on the payroll for over two years to justify the expenditure. And the average American worker today only stays on the job a little over 2.5 years! Acres of Diamonds Dr. Russell Conwell, the founder of Temple University, traveled around the United States in the mid-1800's lecturing about a story he called "Acres of Diamonds." The story was about a South African farmer who had diligently worked a small plot of ground for most of his life without doing much beyond achieving a bare subsistence existence. One day he heard of the tremendous wealth that was being acquired in other parts of Africa by people who were discovering diamonds. He immediately sold his farm and started traveling around the continent looking for the diamonds that would make him wealthy. After years of wandering and searching, yet finding nothing, he became so distraught that he committed suicide. Shortly afterwards, the person who had purchased his land discovered a very large crystal-type rock in the streambed that crossed the land. When told that he had found a diamond, and that all it needed was some cutting and polishing to bring out its true beauty and value, he was amazed. There were many more shining in the gravel of the stream. All he had to do was pick them up. The moral of the story is that all of us have "Acres of Diamonds" in our own back yard and yet fail to realize it because we are too busy looking beyond the horizon. Much of the time, we overlook the obvious, which is close at hand. Many businesses do the same when it comes to staffing. It takes a tremendous effort to locate, attract and hire new workers. Yet many companies overlook and are grossly negligent in nurturing the most valuable asset they currently have on the books - their present employee base. They have failed to effectively "Mine their own Acres of Diamonds." One of the ways to uncover that rock that becomes the diamond is through the management team. An organization must have people in leadership positions who understand the key role they play in employee retention and who have the skills and competencies to cut and polish those diamonds in the rough. The Problem Clouded by the mindset of a decade ago, many managers have not taken seriously, the high level of attrition that is occurring daily within their own company. And when they do look at it, they tend to attribute the reason for the departures as a matter of simple economics…those people leave because they can get more money elsewhere! By pigeonholing the problem so simply, managers do not have to take accountability for the attrition and do not have to rethink their role as a key to employee retention and the corresponding loss to the company. In a study completed for the June 1988 issue of the Harvard Management Update said that nine out of ten managers believe people leave one job for another because of salary. Yet the research actually shows something very different from what the majority of managers believe. In actual surveys completed within the last few years, of 50 identified reasons to stay with or leave a particular company, money was rated LAST. In today's current market environment of high employee turnover, an environment where many companies are experiencing 50% per year, businesses need to ask themselves some hard questions as to why this is occurring. They also need to be prepared to take steps and make changes in staffing, procedures, and training, changes which will cut the rate of loss down significantly. Corporations need to hire better, train better, and develop leaders who will polish their people into the brilliant diamonds that are in their own backyards. After all, it costs far less to keep and maintain your current Acres of Diamonds of today than to try and fill their vacancies once they have left. Why Do People Really Leave Among the reasons cited for people leaving, one of the most prevalent is a lack of leadership. They leave because no one took the time to develop them, to train and groom them, to polish them into the gems that they could be. They leave because they do not feel appreciated, that their contribution is not recognized, and are not valued by their boss. They leave because they are looking for leaders to develop them, give them a greater sense of purpose, and share a vision. People want leaders who set standards and live by a code of values, leaders who give them power, not hold onto it. Buckingham and Coffman, in researching their book First Break All The Rules, discovered that "the manager - not pay, benefits, perks, or a charismatic corporate leader - was the critical player" in the retention of employees. They went on to say: "...people leave managers, not companies. So much money has been thrown at the challenge of keeping good people, in the form of better pay, better perks, and better training, when in the end turnover was mostly a manager issue. If you have a turnover problem, look first to your managers." A recent Gallup Organization study found that most workers rated having a caring boss much higher than money or fringe benefits. In interviews with over two million people across more than 700 companies across the nation, Gallup found that how long employees remained with their employer and how productive they were when at work was a product of their relationship with their direct manager.A Wake-Up Call For Executives: What They Can Do Executives today need to evaluate the attrition rate realistically, and then put the appropriate steps in place to stem the tide. The first place to look, based on the research done so far, is to assess your current management team. If the managers know their job, have the skills necessary, and understand how they impact employees, they may need an updated coaching program to cut and polish their own abilities. However, in our seminars and work with managers in all fields of business around the country, what we have found is that many managers truly do not know what to do. Many managers in today's environment, are new to management, and never had any training on the functions and expectations of the job. They lack the core competencies necessary to be successful. A Wake-Up Call For Managers: What They Can Do Based on the assumption that managers have the core competencies needed, know what to do, or have been trained in what their roles are in the retention dilemma, here's what managers can do:
Many companies complete what they call "Loss Reviews" whenever they lose a valued customer or do not win a bid through a contract proposal. They need to perform the same diligence when they lose an employee. Instead of "Loss Review" many know these as "Exit Interviews," yet maybe the name should be changed to Loss Review, since it is just as catastrophic a loss to the company as the loss of a major customer. Don't Wait: Assessing The Climate Today If you have a retention problem, odds are that a large group of the present employees are also dissatisfied and would be willing to share what caused them to feel that way. Ask some of the same questions you would in the exit interview. These fact-finding searches can be either formal or informal. Accountability: The Buck Stops Here Managers need to be held accountable for their retention rate. Those with a high turnover of employees need to be evaluated to determine if they have the core competencies and skills necessary. If not, they need to be trained. If they do, they need to be coached and if necessary put on a performance plan until the attrition can be turned around. Part of their effectiveness as a manager should be tied to their attrition level. It is not just the managers who need to be held accountable though. There also needs to be support and direction from higher leadership within the organization. The top leadership must be committed to the importance of training and recognize the value of the Acres of Diamonds at all levels within the organization. In research done on those companies with the highest levels of retention, top leaders truly work at mining and then polishing the rough diamonds within their organizations. Key Questions To Answer
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