Make the best use of human capital

Jan 3, 2012

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By Corey Switzer

OK – for once I don’t care what the numbers are saying, and as always I don’t believe what politicians are and aren’t saying. In my own observation, in my small little corner of the world, I see that hiring is picking up.

Believe it or not, Buffalo did not see the economic crash of 2008 as badly as many US cities – mostly because we never experienced the hiring boom either. Buffalo has been a city/area that maintains status quo really well, and over the past 4 years – while there were some months that were excruciatingly slow, there was always someone hiring (and typically I was helping them sort through the mountains of resumes of the nation’s unemployed to find the gems).

That time is what many of us referred to as a “buyer’s market” for hiring. There were a lot of extremely talented folks who found themselves out of a job who would ask “How High?” when companies told them to jump. Job candidates were relocating to areas they previously wouldn’t bat an eyelash at. They were accepting salaries that slashed their earning by 20%, 40%, 60% and more. Because of this time of desperation, employees got the short end of the stick – well, everyone got the short end of the stick.

BUT NOW that things have been slowly but surely picking back up, I urge companies to be cognizant of their ability to retain talent. Retention is becoming an increasing problem for companies who cut their employee benefits, and overworked but underpaid their employees during our recession. Precious few companies realized that retention is always and will always be the key to success. It’s one thing to attract top talent, it’s another thing to be able to keep it! It marks the difference between a company being able to talk the talk, and actually walk the walk.

Always at the ready on my Kindle is my subscription to INC Mag where I saw an interesting article by Paul Spiegelman, “Your Best ROI Measure? Employee Loyalty” that prompted this post. In his article, Paul cites that “According to the American Society of Training and Development, it costs $56,000 to train, onboard, and fully enable a new employee”. That’s a lot of money spent on a candidate who leaves after 6 months or a year for a new job. The point of Paul’s article was that creating employee loyalty through a positive and productive work environment inevitably increases retention, which increases a lot of other positive things like revenue.

Read the article here – there’s a beautiful, albeit sad anecdote that Paul used as inspiration for his piece: http://www.inc.com/paul-spiegelman/employee-loyalty-your-best-return-on-investment-measure.html

THE SAME DAY I read this article (which I heartily agree with, and wish that every business owner who ever lived would read and understand this message), I found YET ANOTHER INC Mag piece called “How to Keep Morale High When Salaries Aren’t”.

It was an interesting premise, not unrelated to employee retention. Actually, there are a lot of businesses out there that can’t afford to pay top dollar for their employees. How do they stay afloat? Again, it harkens back to establishing employee loyalty and high morale through a positive and productive work environment. Here are some bullet points from the article (as referenced by TerraCycle – a biz that consistently pays UNDER market value for their employees)

1. Build an environment that empowers EVERY team member
2. Be fully transparent
3. Make work a place to play

You can read the full article here: http://www.inc.com/michael-waas-smith/keeping-morale-high-when-salaries-arent.html

You know what the most interesting thing I’ve learned from both of these articles is?

THAT A HIGH PAYING SALARY ISN’T THE KEY TO RETENTION – CREATING A WORKPLACE PEOPLE ENJOY COMING TO EACH DAY IS! It’s a refreshing notion. Of course, the money doesn’t hurt either!

Oh, and P.S. – Happy New Year!

Corey over AND out.