How can a company deal with a severe labor shortage that has slowly been creeping up over the last few years?
Keep in mind that the cost of turnover has been determined to be anywhere from 1.5 to three times the salary of the departing individual. That does not include the “downtime” that the company will have to deal with the vacancy, nor does it include the “ramp up” time needed for an individual to learn the job and the company before this person starts to make a contribution.
The most important thing a company can do is to retain employees it doesn’t want to lose. While I have given this advice in the past, now, more than ever, business owners, CEOs and leaders need to take the time to actually make lists of key employees that they do not want to lose to the competition or to another industry.
One approach to this process is to make three lists. First list those employees whose employment is critical to the current and ongoing success of the firm. The second list includes employees that the company would prefer to keep, given a choice, but their loss would not be critical. The third list consists of all other employees.
Every organization needs to follow the simple rule of “always be recruiting.”
Companies can no longer wait until there is a vacancy before they start looking for good people. The “help wanted” sign must always be up and the door must always be open to accepting résumés and applications. This doesn’t mean that the company is hiring; it means that it is always looking for good candidates for future openings.
To that end, every organization’s web site should have a way for job seekers to apply for future openings on line. Or, perhaps, a separate web site devoted to the openings, both current and future, that the company is seeking to fill. Applications should be available from the receptionist for “walk-ins.” Every company should have a program to pay employees for individuals that are referred to be hired. It might be worth considering the investment time and money to have a constant presence on social media sites such as Facebook.
Companies seeking employees must learn to market for them just as they have marketed for clients. When recruitment ads are written, the same time, effort and consideration should go into creating and placing those ads as is done when seeking new business. This critical task cannot be delegated to individuals with little or no formal marketing experience because the task is marketing – not hiring.
The most appropriate ads are written not from a benefits perspective, because that is what every other labor market competitor is doing. Rather, recruitment ads should be written based on the values that the company subscribes to, which then leads to benefits. This provides and describes a competitive employment advantage.
As an example, many companies offer medical benefits, and most help wanted ads state that fact in a boring “we offer it too” way. A different approach would be to state in the recruitment ad, “We care about the health of every employee, and every family member of our employees; we want people to be happy and healthy, and that is why we offer a better medical plan than other employers that you could go to work for.”
If retaining and hiring people are priorities for the company, they need to be priorities for the leader of the company too. How much time is actually spent on the challenge will determine if these are actual priorities or just chatter.
This labor shortage is not going away; it will be here for decades. When it comes to recruiting and retaining employees, the choice is to continue to do what everyone else does (and what your company has always done) and expect a different result, which is business insanity, or do learn to market for employees, which holds the potential for achieving far different, and better results.
Ken Keller is an executive coach who works with small and midsize B2B company owners, CEOs and entrepreneurs. He facilitates formal top executive peer groups for business expansion, including revenue growth, improved internal efficiencies, and greater profitability. Please contact him at Ken.Keller@StrategicAdvisoryBoards.com. Keller’s column reflects his own views and not necessarily those of The Signal.