Last week I had the opportunity to sit in on a discussion about the 2020 economic forecast. While the information presented showed a relatively good forecast there were some statistics that I think business owners should be concerned about, there are just not enough available people to fill the demand for workers! What does this mean for your company? How do you become the employer of choice for the limited supply of employees?
Employer of Choice
Last week while I was listening to an economist talk about his 2020 projections, he said something that kind of caught me off guard. I had written about economic forecasts before, but he mentioned that business are actually CLOSING because they can’t find enough workers! Most business owners prefer the problem of too much work versus not enough work, but if it puts you out of business what is the difference? In a tight labor market (for both skilled an unskilled workers) your competition will eventually try to hire YOUR employees. What are you doing to keep your best employees, and maintain your competitive edge?
I was recently contacted by the HR director of a local company. She was looking for some help with new employee training and was looking for some resources. The turnover rate at her company was so high that she was spending most of her time recruiting, interviewing, hiring, and onboarding that she had very little time to devote to training, let alone her other job responsibilities. This isn’t a unique situation either. I know many HR consultants that are expanding their practices because many in-house HR representatives are just overloaded. Every hour that your HR department is focused on hiring and replacing staff, is an hour they aren’t focused on their other job responsibilities. Are you spending energy on unnecessary turnover?
The costs of replacing staff can also be a silent killer. There isn’t generally an expense line item that highlights costs of hiring. I just wrote about how unnecessary hiring is a time drain for your HR department, but how does it impact cost. There are studies out there that say that to replace skilled workers it could cost about 150% of their salary. I speculate that cost can grow even higher, as it is going to take longer and longer to find talented people to replace those that leave. Aside from the costs, there are lost productivity, potential damage to your reputation and customer satisfaction. What is unnecessary turnover costing your company, and how do you actively prevent it?
This may sound like common sense, but I can tell you that it isn’t common practice: Pay attention to your employees! Without employees, your business cannot survive. Without thriving employees, your business cannot thrive. I know that in the hectic, ever changing world we live in, that taking time from your busy day to talk to your team sounds like an overwhelming burden, but I can tell you that the time investment will pay off.
Would you rather spend an hour a month developing talent, ensuring your team is motivated and loyal, or hire anther HR person for recruiting and developing talent? Do you want to keep your best performers, and even your average performers, or see them work for your competition? Spend some time understanding WHO your employees are, and developing them around their capabilities and desires, and you will become the employer of choice!
This Week’s Challenge
Make a commitment to learn more about your employees, what motivates them and what challenges them. Spending a few minutes a week talking to them about their needs will pay huge dividends. Andrew Shaffer Consulting offers a low-cost assessment to help you understand your employees and can get you on the fast track to becoming the employer of choice! Ask us how!