ATTRACTING AND RETAINING QUALITY PEOPLE The Center for Family Business

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ATTRACTING AND RETAINING QUALITY PEOPLE!The
Center for Family Business

• Dr. Clinton O. Longenecker
• Stranahan Professor of Leadership and
  Organizational Excellence
• Toledo, Ohio
• May 2, 2006

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THINK!The Only Sign Found in the Office of IBM
Founder Tom Watson Sr.!

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ROI ?

• 10
• 8
• 5
• 2

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THE REAL CHALLENGE! A managers ultimate job
these days is to get desired resultsthe results
that the organization ultimately needs to
satisfy the customer, make money and create a
quality workplace This is the true test of
leadership and is extremely hard to do without
great people.
A CEOs View
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LEADERSHIP DEFINED

• Someone who influences others toward the
  achievement of goals
• An individual who causes others to do things they
  might not otherwise do
• A person who demonstrates prowess in a given
  endeavor and/or
• Someone who makes things happen and gets results.

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POP QUIZ TIME!
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WHAT SPECIFIC RESULTS ARE YOU REALLY BEING PAID
TO ACHIEVE?
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WHAT SPECIFIC ACTIONS AND PRACTICES ARE MOST
IMPORTANT TO YOU GETTING RESULTS?
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Our Research Shows

• Overall Cost Containment
• Increased Competition
• Growing Customer Expectations
• Protecting the Bottom-line/Earnings
• Attracting/Retaining Good People
• Workforce Productivity
• Healthcare Costs
• Alignment - Strategic and Operational
• Faster Continuous Improvement
• Fostering Teamwork and Cooperation
• Technology Issues/Mandates
• Extreme Time Pressures/Stress
• CAN YOU RELATE??

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WHAT FACTORS ATTRACT PEOPLE TO AN
ORGANIZATION?Lets hear from YOU!
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• THE JOB OPPORTUNITY ITSELF
• ORGANIZATIONAL REPUTATION
• GOOD FEELING
• ATTRACTIVE COMPENSTION/PERKS
• ORGANIZATIONAL SUCCESS
• SALESMANSHIP
• PROMISES
• POTENTIAL OPPORTUNITIES
• PERSONAL CONNECTIONS

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WHAT ARE THE KEY FACTORS IN RETAINING THE GOOD
PEOPLE IN YOUR WORKFORCE?
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TO ANSWER THIS IMPORTANT QUESTION REQUIRES
UNDERSTANDING THE FACTORS THAT CAUSE TURNOVER!
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Turnover Defined When an employee or manager
voluntarily or involuntarily leaves an
organization.
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• FACT 52 of organizations in a national
  survey report that their turnover is increasing
  at a significant level.
• FACT Quit rates are running at a 10-year high
  of 1.1 a month.
• (Williams, 2003)

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• FACT On average, organizations nationwide will
  have to replace more than one seventh of their
  workforce each year.
• FACT 1 in 10 workers was a quitter 5 years ago.
  Today, 1 in 6.5 quit.
• (AMA, 2005)

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• When the costs of a single incidence of turnover
  are considered, the growing number of quits is
  even more alarming.
• A computer programmer who quits might incur as
  much as 24,080 to a company.
• A pharmaceutical salesperson can cost an employer
  62,708 in total expenses.

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• Human resources professionals and researchers
  project that the cost of ONE turnover incidence
  ranges between 93 to 200 of a leavers salary,
  depending on his or her skill, level of job
  responsibility, replacement costs and lost
  opportunities.

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• Turnover is not always bad. Vacating employees
  can increase promotional opportunities for other
  employees or can infuse new ideas and technology
  when new employees replace those who left.
• Certain kinds of job exits quits among marginal
  performers or overpaid employees are even
  desirable.

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• To manage turnover effectively, organizations
  must monitor not only the extent of turnover, but
  also its costs.
• The issue of turnover must be understand and
  analyzed by each organization to determine if it
  is an issue affecting an organizations ability
  to compete.

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• Separation Costs
• Costs Directly Produced by Turnover

• Replacement Costs
• Costs of Replacing Leaver

Overall Cost of One Turnover Incidence

• Training Costs
• Costs of Training Orienting New
  Replacement
• Inefficient Productivity of New
  Replacement

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Yes
Yes
Cost Savings of Proposed Solution Exceed Its
Costs?
No
No
Yes
No
Turnover Is Not Problem or
Too Costly to Solve
Implement Solution
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Understanding Turnover
TURNOVER 15.0
VOLUNTARY 90
INVOLUNTARY 10
FUNCTIONAL 30
DYSFUNCTIONAL 70
UNAVOIDABLE 15
AVOIDABLE 85
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BASED ON YOUR EXPERIENCE, WHY DO PEOPLE LEAVE
THEIR EMPLOYER?? WHAT ARE THE CONSEQUENCES?
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WHY PEOPLE VOLUNTARILY SEPARATE FROM AN EMPLOYER

• Bad Boss
• Boredom/Work No Longer Challenging
• Lack of Career Development/Opportunities
• Compensation Issues
• Unproductive Work Environment
• Demotivating Organizational Culture
• Factors within the control of organizations

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KEY POINT! THERE IS A DIRECT RELATIONSHIP
BETWEEN THE FACTORS THAT DRIVE RETENTION AND
PERFORMANCE!
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WHAT ARE KEY PRACTICES FOR MAKING YOUR WORKFORCE
MORE PRODUCTIVE (and retaining your workers)?
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GETTING RESULTS
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SUMMARY THE FIVE ABSOLUTES

• EVERYONE ON THE SAME PAGE
• PREPARING FOR BATTLE
• CLIMATE FOR RESULTS
• PEOPLE POWER
• RENEWAL
• Managers must lead and develop people with
  extreme care!

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• The Human Side of Manufacturing Improvement
• Key People Practices
• (n 60 facilities)

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• Work Force Performance Model
• Performance Outcomes f (Ability x Motivation x
  Support)

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The Story of John Pat

• What results are key to my/our success?
• What specific things do I /we need to do to get
  better results?
• What skills/practices and habits do I need to
  perfect to get better performance/results?

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• Do I really spend time doing the things that lead
  to better results?
• Do my working relationships really work?
• Do I have a real plan for myself and our
  operation?
• Who is helping me and holding me accountable for
  improvement?

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Question of the Day Am I really serious about
making my workforce more productive in 2006?
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THREE QUESTIONS FOR RESULTS ORIENTED
PROFESSIONALS To improve the performance of our
organization 1. What must I keep doing??
2. What must I stop doing?? 3. What must I
start doing??