by Fronetics | Apr 15, 2015 | Blog, Leadership, Strategy, Talent
You might be surprised to find currently untapped financial gains just by putting employee happiness at the top of your priority list.
The way we work has fundamentally changed. There’s no doubt it is still evolving, but what we know about the way we work is that it can no longer be summed up by the decades-old “going to work” experience. Company-owned buildings, offices, and cubicles are no longer required to accommodate employees and the growing trend of companies offering flexible scheduling and remote work options for employees has substantial implications. There’s good news in that these new employment structures are impacting employee satisfaction and productivity in ways that employees and employers alike can celebrate.
Of the most significant factors affecting employee satisfaction is the employee-manager relationship. Communication is essential for relationships to flourish – especially employee-manager relationships. A recent Gallup poll found that employee engagement was highest among those with daily communication with their managers. By leveraging digital communication tools, employees who work remotely are able to have just as much, if not more, interaction with supervisors. Consistent, regular access to management creates a culture of connectedness and accountability – a culture where employee satisfaction is high. Not only does this allow for nimble adaptations in project approach or client strategy, but the immediate feedback loop positively affects employee engagement and motivation. The emergence of this unique employee-manager structure has allowed for managers to effectively monitor work and provide meaningful feedback, but to avoid micromanagement.
The most effective managers have been shown to be the ones who have respect for their employees as individuals. These managers actively work to help their employees find an ideal work-life balance. Recognizing and responding accordingly to situations where employees are disengaged, either physically or emotionally, from their work responsibilities is at the heart of building a relationship of trust and conviction.
Even though remote work arrangements seem to run counterintuitive to expanding the capacity of workplace productivity, giving employees the flexibility to fit work around their life actually improves worker productivity. The effects of building a company culture where employee satisfaction is valued translates into increased efficiency. That is, a happy and well-managed staff is likely to stay engaged, motivated, and committed to company objectives.
The flexibility that working remotely provides makes it easier for workers to strike their ideal work-life balance. A significant finding emerged from a 2000 study in which researchers found that on average workers reached peak productivity in their 30s and 40s. Most often concurrently, these same workers are tasked in their home lives with parenting responsibilities and the care of aging parents. Giving employees options to maintain flexible work schedules allows employees to give equal attention to both home and work life, enabling maximum productivity. What’s more, by eliminating commute time and spending less time in meetings, people who work from home actually spend more time working. Some find managing work responsibilities from a quieter environment, as opposed to a noisy office, more conducive to productivity.
Presented with all the benefits flexible scheduling and remote work options have to offer, some companies might find it tempting to quickly implement a flexible work program in order to start realizing benefits. But consider that this new work structuring also brings with it a new set of issues for managers to navigate. Supervising employees who aren’t location-specific and monitoring performance without personally interfacing require companies to put thoughtful initial focus on building a solid communication structure and setting manageable expectations for employees. Clear articulation of these expectations and structures is required for success.
While this type of work structuring might not be a good match for every employee or every workplace, the opportunity exists for employers to positively affect worker happiness while simultaneously increasing productivity. If your company is interested in exploring the benefits of offering flexible scheduling and remote workplaces, consider a trial period or experimental program. You might be surprised to find currently untapped financial gains just by putting employee happiness at the top of your priority list.
by Fronetics | Apr 14, 2015 | Blog, Leadership, Marketing, Talent
As much as 80 percent of employee turnover is due to bad hiring decisions, which doesn’t fare well for a company since a poor hiring choice can cost from 1.5x to 3.5x of that person’s annual salary. Consider an employee who earns $50,000 a year. If that person is a bad hire it could cost a company up to $175,000. The higher the position, the higher the salary, the higher the cost is to lose or fire that person.
More than ever companies are hiring project-based professionals who provide a specific skill-set. These placements might be short-term or long-term, depending on the company’s needs. According to the Wall Street Journal, in March 2014, more than 2.8 million workers, or 2.5% of the workforce, held temporary jobs, up from 1.7 million in 2009. One reason for the spike in numbers is due to companies having to reassess their processes and spending after the recession. Some of these employees, many of whom hold multiple part-time jobs as temps or contractors, are the new semi-permanent, temporary, or “perma-temp” work force. They are in charge of their own brand, skill-set, and advancement.
Why do companies continue to lean in this direction, even while the economy is recovering?
Let’s have a look at the benefits for employers:
- Hiring a temp or contractor allows a company to meet work demand and deadlines without having to make rushed decisions about long-term, expensive, permanent staffing.
- By hiring a contractor or temp employee companies cut expensive benefit, administrative, and payroll costs, not to mention unemployment insurance.
- Bringing in temps or contractors can boost morale amongst other employees who may feel overtaxed. A temp or consultant can take some of the work overflow from other employees.
- Temporary and contracted employees are often eager to work hard to prove themselves and gain experience. Some may be coming off of a period of unemployment and anxious to get back to work. Temporary and contract workers may work creatively and tirelessly to meet their own financial obligations. They might not have the same loyalty as full-time, permanent employees, but since they have to fend for themselves, they are not complacent. According to University of Illinois professor Joe Broschak, “On average, these temporary workers displayed better performance relative to goals compared to their full-time counterparts.” When those temps were hired on as full-time employees “they continued to become better workers after becoming permanent.”
- Temp and contract workers can offer an area of specialization that a company might be lacking in current staffing. It might be less expensive to hire a new contracted employee with years of experience in a specific skill-set than to train a current employee.
Semi-permanent work is not ideal for everyone. Some employees, especially those seeking security, certainty, and the full gamut of benefits will not be satisfied with this work. One concern is how temporary or semi-permanent employees are paid and treated. If paid fairly and treated well, this paradigm will work smoothly for some people.
What are the benefits for employees?
- Many contracting and temporary positions allow for flexibility. The jobs might be part-time and allow for adjusted hours that could accommodate an employee’s home life, another part-time job, or other interests. Because these workers have a different status than permanent, full-time employees, the same “in-office face-time” expectations may not apply to a consultant or temporary worker.
- If a temporary worker or consultant is hired for a specific skill set, they are able to focus on work they’re good at and interested in. If they’ve been out of work they can use this as an opportunity to sharpen their skillset or, perhaps, learn a new one.
- Working on a short-term project might be freeing and invigorating. Having more of a sense of control over one’s own branding, hours, and projects is exciting for many people.
- This can be a wonderful opportunity for people to network, build their personal “press kit”, and garner new, current references.
- Temporary positions often turn into long-term, semi-permanent project based consulting positions. Some people find the combination of interesting work and flexibility perfect for their lives.
It is important to remember that every dollar paid to employees –temporary, semi-temporary, “perma-temp”, full-time, or part-time—is not a dollar taken away from the bottom line, but an investment in the company. Finding the right fit that benefits employers and employees is critical.
by Fronetics | Mar 23, 2015 | Blog, Supply Chain, Talent
What you need to know about the supply chain talent gap.
The supply chain talent gap has been called a “perfect storm.” Few topics are shrouded in such doom and gloom. Every report cites doomsday statistics of the impending crisis when, by 2025, 60 million baby boomers will exit the workforce, leaving a gigantic gap when 40 million millennials take their place. To make matters worse, the retirement exodus is only one factor contributing to the sinking ship. Future supply chain professionals need to master not only the hard analytical skills but also the soft leadership skills fueled by the transition from an industrial economy to an economy grounded in service and information. In numbers, it means only 20% of the workforce will possess the skills required of 60% of all new supply chain jobs.
But listen up, all you forward-thinking millennials and midlevel supply chain managers with cross-functional expertise. There’s some good news: The market can’t get enough of you.
Yes, amid all the dire facts, there is opportunity. There has never been a better time to be, so to speak, on the other side of the table — a college graduate or a motivated professional looking for a career with upward mobility? What other field of work can offer as much promise to new recruits and current employees as the supply chain industry?
Just as all reports predict a brewing crisis, they also tout talent management as the primary remedy. For a self-motivated individual, fresh out of college or in the midst of a corporate climb, this focus on professional development presents a smorgasbord of options. Many companies have taken note and adopted a strategy of action for recruiting and retaining new talent. A growing number of university program offerings reflect a strengthening partnership between academia and the supply chain industry. Many supply chain companies are building partnerships with academic programs to offer internship opportunities; a move that’s creating strong early relationships with students and will likely have a positive effect on future recruitment efforts. A company that can offer its current staff competitive salaries in addition to cross-functional training is much better positioned to meet the challenges of the talent shortage and the evolving nature and demands of the supply chain.
Another way companies within the logistics and supply chain industries are attracting top talent is through their use of social media. Considering the global reach and vast talent pool of LinkedIn’s 300 million users, the business-focused social network is helping companies with open positions that might require a unique and specific skill set to connect with candidates across the globe.
What’s clear is that companies that follow a plan of inaction will be left behind. This new talent pool will swiftly turn down a company that remains stuck on strict functional divisions and favors the old siloed approach to doing business. Many supply chain managers have grown up in such divided organizations themselves, so they have been slow to take appropriate action to retain and train talent, according to a Supply Chain Insights survey, leaving those better prepared with a competitive advantage.
If a company does not appeal to the desires of top candidates, individuals will take their talent elsewhere. And there will always be another company to welcome them. As Rebooting Work author Maynard Webb points out in a 2013 interview with Elance, in order for companies to remain competitive they’ll need to adapt to the modern workforce. “Companies have traditionally thought of people as a disposable resource,” he says. “They have valued their buildings much more than employees… this doesn’t make sense in a world where the best people can choose to work wherever they want. Businesses have to realize that some jobs can be done from anywhere, anytime, and save the brick and mortar buildings for the few jobs that demand a physical presence.”
Touting the unlimited opportunities and unparalleled growth in the supply chain field should be part of turning the tide. Sure, there is a lot of talk about doom, but mainly for those companies that fail to attract and retain top talent.
by Fronetics | Mar 18, 2015 | Blog, Strategy, Talent
Here’s why paying out actually pays off.
Contract buyouts within the sports and business worlds aren’t exactly a novel approach to making personnel changes. But what about paying employees — employees who don’t have contracts and haven’t yet earned further compensation — to quit? It’s a move that’s finding ground in the business world.
Take Zappos for example. The company pays employees $4,000 to quit. Yes, the company shells out $4,000 to employees who say just two words: “I quit.”
Here’s why it is a great idea.
All Zappos employees must participate in a four-week training program when they are hired. When they complete the four weeks, they are given a choice: They can continue to work for Zappos, or they can quit. Those who quit will be paid a bonus of $4,000.
Essentially, Zappos is putting their money where their mouth is when it comes to cultivating its company culture. Zappos leadership believes an employee who is not happy after participating in the training program or is not excited about the company and its culture won’t be a good match. By offering such employees an out, Zappos can quickly and effectively weed out employees who are not a good fit within the company’s culture.
This may seem crazy, but the reality is that when unhappy employees leave the company within their first four weeks of employment, the financial implications are much, much lower than the cost of unhappy employees who are likely to be uninspired at work and quit in less than a year.
Why does Zappos do this?
It wants to attract and retain great talent. In his book Delivering Happiness: A Path to Profits, Passion, and Purpose, Zappos CEO Tony Hsieh says: “Your personal core values define who you are, and a company’s core values ultimately define the company’s character and brand. For individuals, character is destiny. For organizations, culture is destiny.” In short, Zappos is big on company culture. This focus has made it successful — very successful.
So how many Zappos employees take the money and run? You might be surprised to learn that only between 2 to 3 percent of people quit and take the $4,000.
Another example of front-end hiring processes from eBay
During his time as the COO of eBay, Maynard Webb also employed front-end hiring processes to determine if a candidate would be a good fit within the company’s culture. To assemble a solid team, he recommends asking the right questions during the hiring process. He gives as an example of a question he would routinely ask job candidates to determine fit at eBay. “If something breaks at 2 a.m. but miraculously resolves itself before anyone understands it, is it okay to unplug and go to sleep? The answer should be no.”
With the U.S. Department of Labor currently estimating the average cost of a bad hiring decision to be as much as 30% of an individual’s first-year potential earnings, a single bad hire with an annual income of $50,000 can equal a potential $15,000 loss for a company. It might actually pay to create a company payment system that is designed to weed out new hires who reveal themselves to be less-than-stellar prospects for long-term employment.
What do you think about the idea of paying your employees to quit? What processes do you have in place to detect personnel issues up front?
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by Fronetics | Mar 17, 2015 | Blog, Talent
Losing an employee is expensive. Here are 5 strategies to improve employee retention.
The cost of replacing an employee can range anywhere from 50 to 400 percent of an employee’s annual salary according to the Society of Human Resources Management. Meanwhile, The US Department of Labor Bureau of Labor Statistics reports that more than 2 million people voluntarily leave their jobs each month. What do these numbers mean? They mean that the cost of replacing an employee with an annual salary of $45,000 could be between $16,000 and $160,000. And the cost of replacing your employee with an annual salary of $150,000 could range from $60,000 to $600,000. Losing an employee is costly — very costly. Yet, many organizations don’t know how to ensure that its human resource assets don’t just walk away.
Here’s what Maynard Webb, author of the New York Times Best Seller Rebooting Work had to say in a 2013 interview with Tech Crunch about cultivating a company culture in which employees choose to stay.
“You can create an environment where people have a say…the best way to have your people be happy and satisfied is to earn the right to have them come back to work for you the next day, knowing that there are tons of other places… you are going to create an environment where they’re challenged, and inspired, and learning.”
For companies that are willing to put in the effort to create the culture that Webb describes, the payout will be particularly sweet in the face of recent jobs outlooks. The Tompkins Supply Chain Consortium projected an increase in turnover within the supply chain industry in its most recent 2013 Supply Chain Talent Report. The report expected the most impacted positions to be in planning, procurement, and manufacturing. Reasons for employee departure included plant closures, outsourcing, and the need for more specialized skillsets. The Consortium isn’t the only one to recognize employee retention is worthy of attention. Accenture conducted a study (across industries) and found the top four reasons why employees quit their jobs are: a lack of recognition (43 percent), internal politics (35 percent), a lack of empowerment (31 percent), and because they don’t like their boss (31 percent). For managers, there are several lessons to be learned here.
Consider these employee retention strategies before prematurely bidding adieu.
Build buy-in and create opportunities for success
It’s important to gain buy-in from your employees. If an employee is going to be motivated to not just do their job, but to excel at their job — they need buy-in. Gain buy-in from employees by giving constructive feedback regularly and creating opportunities for employees to succeed and realize progress. A great resource on achieving buy-in and enabling success is The Heart of Change by John P. Kotter and Dan S. Cohen.
Recognize employees
Much in the same way that creating buy-in is so key to an organization’s success, employee recognition motivates and encourages employees – leading to happier clients and customers. Whether you use informal or formal employee recognition techniques, it’s important to acknowledge a job well done. Recognition lets your employees know you appreciate them and strengthens communication, which is especially helpful when working through tough issues that might arise.
Empower employees
Take steps to ensure your employees feel empowered. Make the path to advancement clear and regularly provide challenging work that expands an employee’s skill set. Set clear expectations for employees; beyond conveying unambiguous responsibilities, make certain employees know how and with what frequency they can expect to have their performance measured.
Remove the red tape
Staid bureaucracy and tumultuous internal politics can make anyone want to leave a work environment. Create a culture that values openness by eliminating red tape and increasing communication between departments and employees working within different functions. Start by moving financial reporting from monthly to quarterly, making senior managers responsible for their own strategies, or broadening approval levels of internal reports.
Explore a transfer within the company
If an issue is only germane to your team, or if it is impacting productivity and team morale within only your department, consider the transfer of an employee within the company. This approach addresses the specific issue at hand, but ensures the company retains top, and importantly, already trained talent.
While the time and expense of retaining an employee may seem daunting, the cost of losing an employee is much greater. Want to learn more about improving employee retention and hiring top talent? At Fronetics we work with clients to understand and execute on talent acquisition, performance management, learning and development, and succession management. Additionally, we offer management and leadership solutions to organizations within the supply chain and logistics industries during times of transition.
by Fronetics | Jan 29, 2015 | Blog, Supply Chain, Talent
Millennials are Poised to Change the Supply Chain Industry
This is part two in a two-part series examining the role of Millennials in the supply chain industry. Part one highlights strategies for attracting and retaining top Millennial talent.
With supply chain industry leaders lamenting a growing talent gap, tapping the Millennial generation may be key to filling that gap. But how, exactly? A closer look at the generational characteristics emerging from the influence of digital technology and pervasive interconnectedness allows us to draw inferences about the potential Millennial contributions to the supply chain industry.
Here are four areas where Millennials are poised to change the supply chain industry.
Internet of Things (IoT)
The Internet of Things (IoT), loosely defined as the growing and pervasive use of interconnected devices, is rising concurrently with Millennials entering the workforce. Born and raised during the digital revolution, they’re accustomed to products and processes that are highly integrated and interconnected. Supply chain companies should tap Millennials to leverage their unique perspective by engaging them in creative and strategic thinking about optimizing operational processes using interconnected devices, sensors, and tracking tools and soliciting ideas to grow revenue through the production of devices.
Marketing and Sales Approaches
Targeted for advertisements from an earlier age than their parents and grandparents, Millennials have been desensitized to overt branding messages. Instead, they respond to more organic marketing and sales approaches – strategies that can be expected to carry over into their work. Further, following current trends that deploy digital and social media, Millennials will seek to shift sales and marketing activities online to develop more meaningful, solutions-based relationships with buyers.
Global Partnerships
Ubiquitous and immediate virtual access to resources, information, networks, and people make Millennials the most interconnected generation. That unencumbered access, coupled with a tendency to favor collaborative decision-making in their work, creates opportunities for global work spaces and more complex industry partnerships – particularly relevant and significant advantages to companies within the supply chain industry.
Big Data
Similar to the way Millennials relate to the Internet of Things, so too will big data emerge as a tool Millennials will use to transform the supply chain industry. Their digital confidence and understanding of the types of information and data being collected and analyzed by companies will lead to gains in supply chain operational efficiency as Millennials seek to analyze robust data and apply their findings in practical ways.
With Millennials positioned to outnumber Baby Boomers in the workplace by 2020, shifts in ideas and processes are inevitable. What other supply chain elements do you see as ripe for transformation by Millennials?
