Problems with staffing and retention may not be due to bad hires or a low unemployment rate. In fact, they may be related to poor management insight by not recognising your employees as a core competency in your business strategy. Although employees may not fit the strictest definition of a core competency, it is a fact that your employees are the ones responsible for creating many of your core competencies. It is an undisputable fact that failure to recognise the importance of employee contributions will lead to failure regardless of your business strategy.
Recruitment and Retention
Creating a strategic plan and definitive initiatives is the easy part of the formula for success. The difficult part is finding, recruiting and retaining the appropriate talent combination in today’s market to carry out that plan. Recruitment and retention are major issues in most industries today. These issues are especially critical to the wholesale distribution industry for two reasons:
Under these circumstances, how in the world does a company not only recruit new talent, but protect the talent they have? Questions about compensation, training, incentives, benefits and work environment always come to the forefront. The answer is committing to becoming an employer of choice (EOC) with as much tenacity as you commit to being a supplier of choice, always wanting the first call and last look.
Pay Attention
Many company executives pay far too little attention to this part of their businesses. Often the mindset is that this is the “touchy-feely” stuff that’s a non-revenue producing necessary evil. Maybe that thought process didn’t hurt the company in the 80’s or early 90’s when unemployment in some areas reached 10%, but that’s not the case today where the labor unemployment rate in many markets is less than 4%. When unemployment is that low, most people who are unemployed just don’t want to work. As a result, there is a lot of corporate raiding going on. Even with the recent massive layoff announcements by the automotive industry and some high-tech industries, unemployment remains at a level that just is not conducive to recruitment and retention.
So what’s the answer?
Going on midnight raids? Offering BMWs as signing bonuses? Paying way above market wages? NO, the answer is building a human resource strategy into your business plan. Get over the old paradigm that human resource departments are too costly and of little value. In fact, those companies that adopt that philosophy actually spend more money by having highly compensated managers, particularly sales managers, running ads, receiving resumes and doing preliminary interviews when they should be selling. The costs associated with that process as well as the revenue lost due to extended position vacancies inevitably far exceeds the annual costs of dedicated human resource professionals. Secondly, a huge percentage of new hires will jump ship within 18 months if they sense the company is not committed to its employees. They will jump if the company does not accept them into the fold properly by offering initial orientation, subsequent training and a culture that treats the employee as the company’s most precious assets.
The question is not, “Can you afford to invest in this soft touchy-feely stuff?” The question becomes, “Can you afford to not invest in your most important asset, your employees?”
The old paradigm creates a bias against paying attention to the human element of the workforce. Many company executives that do strategic business plans initiate from the top down instead of the bottom up often ignoring the real value of a strategic plan. The real value is the involvement and education of your employees in completing the plan, not in the document itself.
Are you at the mercy of your workforce?
This bias that exists in many companies is almost as though admitting that employees are the most precious of corporate assets will lead to an anarchy on which owners and managers will fall at the mercy of the workforce. Well, shake your head in disbelief if you want to, but the reality of the situation is that you are at the mercy of your workforce. The rules have to continue to change. If you aren’t willing to admit that and get your head in the game then you won’t survive in the new millennium.
“People are not profits but without people there are no profits.”
Some companies recognised their dilemma years ago. Many of the top performers in your industry are at the top because they strive to be employers of choice. These are forward thinking companies that have found solutions to their recruitment and retention challenges. Following in their footsteps requires an initial “gut check.” Honestly ask yourself how your employees would answer questions like:
These questions relate to the basic core competencies of human resources: staffing, training, rewarding, recognising and organising. The business strategic plan cannot succeed without paying attention to this part of the business. You must facilitate your employees’ involvement and feedback into this process. This basic premise in implementation across steel service centers varies according to size. The same plan for a $20 million privately held company would not work for a $500 million private or public company..
EOC
To solve your recruitment and retention problems you must strive to become an Employer of Choice. To accomplish that objective you must have a Human Resources strategy that is integrated into your corporate strategic plan that acknowledges and recognises the employees as the company’s most precious asset.
R2 = EOC
About The Author
Eric “Rick” Johnson is the founder of CEO Strategist LLC., an experienced based firm specialising in Distribution. CEO Strategist LLC. works in an advisory capacity with distributor executives in board representation, executive coaching, team coaching and education and training to make the changes necessary to create or maintain competitive advantage.
As a veteran of the wholesale distribution industry with more than 30 years of executive management experience, Rick Johnson knows exactly what it takes to create leaders within a company, and how to maximise every sale to its full potential.
Through his on-site speaking engagements he can educate and train your team to succeed. As an executive coach he'll help you develop the skills you need to take your business to the next level. And he'll work closely with you and your leadership team for maximum results in the shortest time possible.
Dr. Rick Johnson knows a little about success. Starting out on the ground floor, Rick spent the first 10 years of his career employed by the largest steel distributor in the world. Then challenging himself to take what he had learned and forge a venture of his own, he built a $25 million wholesale distribution business in less than 10 years (before earning a college education!). Deciding to succeed on the industrial front lines and in the classroom, Rick went after his bachelor’s degree at 40, his MBA at 50, and his Ph.D. in Business Strategy at 58.
After selling his business, he decided to share his success secrets by taking the helm of troubled businesses as a “turnaround” expert. He helped set new directions for companies with revenue from $50 to $400 million, leading them from loss to profit. More recently, Rick has brought his expertise to the business consultant arena, where he utilises his unique formulas for making businesses profitable.
With his significant real-world experience and impressive academic credentials, today Rick travels the United States speaking to CEOs, business leaders, and employees about how to increase their bottom line. His down-to-earth presentations of key business principles help companies succeed as total solution providers. His keynote speeches and popular workshops focus on strategic leadership, sales effectiveness and the power of unlocking employee potential, all the while imparting rubber-meets-the-road leadership skills 35 years in business have taught him.
Rick has become the “go to” guy for maximising profits because he’s been there, done it all, from the mailroom to the boardroom, and has the experience and the knowledge to prove it.
Visit www.ceostrategist.com for more information or email rick@ceostrategist.com.
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