It is well-established that employee turnover is both costly and wasteful. High employee turnover is, in fact, one of the biggest impediments to positive business growth, no matter the industry. In the majority of instances, the cost to recruit, hire and train new employees and the additional workload that the process puts on management and existing employees adds no value to the business. When good employees leave a company by choice, it is just a loss. So employee turnover has a huge effect on profitability. For that reason alone, companies with high church should work hard to reduce the employee turnover rate.
However, if the sheer cost of employee turnover is not reason enough, managers should consider that cohesive teams are much more productive and creative than workplaces where the people are learning to work together and don’t really know or trust one another. A department in which employees come and go – like a revolving door — will have more confusion, communication breakdowns and mistakes than one in which all of the people have been working well together for a long time. It is human nature that people get to know and understand how others on the team work and are able to work more harmoniously and intuitively. Turnover also causes loss of memory of vital information. Learning from both mistakes and successes helps employees find better solutions to challenges. Reports or other people’s recollection only offer a snapshot of that information. Workers have to actively experience and remember losses and gains in order to be influenced by them. And, business contacts and deeper networks of connection are lost if new department heads or salespeople are lost, NOT because of promotions from within, but because the company is hemorrhaging workers.
Another good reason for companies to focus on reducing employee turnover is reputation. Companies with high employee turnover get a reputation for churn. In every industry, there are companies that everyone knows have a “high churn and burn rate.” These are firms where management is quick to both hire and fire. Those firms are unlikely to attract top talent, unless that talent is specifically being brought in to fix the “churn and burn” problem. Companies that cannot attract top talent are unlikely to disrupt a market, revolutionize a field or become industry leaders. All of these reasons should motivate companies with high employee turnover to tackle the issue? Thankfully, there are ways to improve employee loyalty and reduce turnover and many of them don’t cost a cent. Last week, we looked at five reasons employees stay with their employer: compensation, mentoring, challenges, promotions and involvement. Here five more reasons. Continue reading →

Once upon a time, in the age-old, gritty world of business mergers and acquisitions, the focus was on acquiring companies in order to get its patents, property, products, processes, power or prestige. Think of AT&T acquiring Bell South in 2006 for $83 Billion and Exxon acquiring Mobile in 1998 for $80.3 Billion. The advertising industry used serial mergers to achieve a global presence, attain substantial influence over media, and offer a full range of marketing services to international clientele. In some cases, corporate acquisitions have been used to keep patents out of the hands of those who might be tempted to assert them against a mega corporation. But, while companies still want to acquire innovative institutions and inventive ideas, corporate acquisition efforts have taken an odd and interesting turn in the 21st century. Instead of buying the competition’s better widgets or customer base, today’s mega corporations are acquiring companies just to get its employees.
Big business has begun acquiring companies – sometimes lackluster startups — just to get the staff who work there. The world of corporate acquisitions has expanded into the realm of recruiting and HR. It is perhaps the ultimate confirmation that a company’s greatest assets are its people. But this approach is now becoming a common – if not a common sense — approach for tech giants fighting to hire the most brilliant leaders, engineers and programmers in the world. The real question is whether this approach to talent acquisition is effective and can it work for other industries too? Does it make sense to spend money – sometimes big money — buying a company in the hopes that the talent will stay long-term? And does that mean, in essence, that companies are selling “human talent”? Continue reading →

When looking to hire employees, managers often confuse talents, skills, knowledge and strengths. A talent is an innate ability, while a skill is an ability that is learned and nurtured over time. A person might be a naturally-gifted writer even while never having taken any kind of writing class. That is a talent. That same person might also take a course in online advertising and attain the Google Adwords Certification. That is a skill. If that person attends a college and takes a host of classes in business, sales and marketing, that person attains knowledge – and perhaps a degree – in business administration. If that person then gets a job in which she is using her writing talents, online marketing skills, and sales and marketing knowledge, over time this will become her strength. A strength is the ability to consistently produce a positive outcome through superior performance of specific tasks. When a company recruits and hires staff, it looks for people who have particular talents, skills and knowledge.
However, there are certain qualities that are very important for employees to have which are not innate talents, nurtured skills or learned knowledge. These are often traits that are simply a part of who the person is. Over time, some of these traits can be honed, but they are generally not “learnable”. Last week, we considered five of these innate qualities: being on time every day; having a strong work ethic; putting forth maximum effort; having affirmative body language; and having a passion for work. While these might seem like things that can be learned, the truth is that people don’t generally change their work ethic, effort, passion, or body language. They can try to improve those things for a short time, but they usually revert back to their normal level of energy, their true degree of passion, their ingrained body language and their usual work ethic in time. The same is true of their attendance and punctuality. A person might do better for a while, but eventually a person who has a problem with punctuality or attendance will revert back to those bad habits. That is why screening for these qualities in new hires is so important.
Here are five more invaluable qualities that an employee should have and employer should want that requires absolutely zero talent. Continue reading →