For many investors, business is going good these days. And those with more than they can or their current staff can handle are growing the size of their workforce to cope with the extra workload. Right now, there’s a big opportunity to avoid the problems that plague companies which have been in ‘hiring mode’ for some time, and also to avoid new issues that employers have not encountered in the past.
Where Did all the Talent Go?
Because of the downsizing, hour cutting, and overall contraction of corporations during the last recession, many senior managers lost sight of the pending shortage of talented, engaged, and loyal employees. This is happening at a time when the workforce is aging and baby boomers are retiring in their droves. Also, the upcoming generations expect a better mix of personal and work life.
The payroll consultancy company PayScale reports that some of the most recognized businesses have some of the highest employee turnover rates. These businesses include Google, Amazon, Wynn Resorts, and Berkshire Hathaway. These companies pay among the highest salaries to attract top talent but can’t retain these employees. At Google, the average tenure is just over a year. This is despite the fact that Google pays its average employee a salary of $107,000 a year. While it’s true that the company has been hiring at a frantic pace for years, it still points to the fact that money isn’t everything.
Flex Time is a Big Motivator
The single biggest non-financial incentive one can offer to their employees is flexible work time. The Center for Talent Innovation reports that 87 percent of Boomers, 79 percent of generation Xers, and 89 percent of Millennials view flex time as being important. Flex time enables employees to better integrate their work and personal time. In cities with heavy commuter traffic, simply allowing employees to vary their start times can add an hour or more to their day by reducing drive time. Another simple solution is allowing more time for lunches so that employees can take care of some personal business.
When companies treat time as currency, they have more options to retain high caliber employees rather than relying only on pay raises. Another popular option is working from remote locations. Today, about 10 percent of the U.S. workforce works from home. Skeptical mangers shy away from this option, fearing people will do less work from home than in a traditional work environment.
Stanford University conducted a nine month controlled experiment in cooperation with a large Chinese (NASDAQ listed) travel agency call center employing 16,000 employees. The airfare and hotel operation employees were dived into a control group that worked from the office and another group working from home. Otherwise, everything was kept the same. They used the same equipment, had to manage the same call flow, and were compensated under the same pay system. The results from the work at home group were impressive. Overall work performance by the work from home group increased 13 percent, the number of minutes they worked each day (both groups were required to log out of the system when taking a break or not available) increased by 9 percent. And there was a 4 percent increase in the number of calls the experimental group handled.
Call centers are notorious for having a very high attrition rate. The turn over rate of the work from home group was only 50 percent compared to the control group. From surveys, it was determined that the work from home employees were much more satisfied with their work and had a much more positive opinion of the employer. The one downside is that being out of sight led to fewer promotions for those working from home. After widely implementing the work from home policy, the employer was able to dramatically reduce its office footprint.
Other Non-financial Incentives
A simple thank you brings the manager a significant reward in the form of loyal and motivated employees. Employees want to be recognized for their hard work and in return will remain loyal to the manager and the company. A full 35 percent of employees say they worker harder for bosses that occasionally give them a personal thank you.
Both personal and public appreciation is beneficial to the organization. Spending a few minutes stopping by individual workstations shows employees that the boss cares about them as a person as well as an employee. Something as simple as keeping a few movie theater tickets on-hand to immediately recognize a superior effort from an employee is a tremendous incentive to keep up the good work.
When recognizing large groups for their efforts or for reaching a goal, take the time to recognize the individuals in the group with a short comment about each. Don’t make the mistake of only recognizing those in the spotlight. Often some of your hardest workers are in the background and go unrecognized. These are the ones most at risk for looking for employment elsewhere.
Making sure your employees take an occasional break from work can increase efficiency. In a work environment where employees feel threatened of losing their jobs, they often feel that they can’t afford to take an occasional short break from work. Many studies have shown that just taking a five or ten minute brisk walk away from the work environment increases productivity.
Gone are the days when financial compensation and promotions were the only ways to motivate and retain talented employees.
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