CareerJournal.com offers this quick read – Hiring and Cultivating Employees Who Succeed – which covers the critical topics of hiring and retaining top talent. This opening statement obviously caught my attention:

Business owner Andrew Field says he used to hire based on gut instinct. No longer.

My kind of owner – one who has experienced the debacle of bad hiring decisions made on instinct instead of objective analysis. Their solution has been to use a multiple interviewer process that I would question, but they have lowered their turnover by half. If they were to objectively assess in their process, they could lower that turnover rate even further.

Here is the retention item of note:

New hires receive 14 weeks of training, dubbed “PFL University,” requiring hands-on work, one-on-one coaching and classroom sessions. Mr. Field, 47, teaches two of the classes.

Mr. Field is the owner of the company and he teaches two classes during their onramping program. That approach is quite progressive and one that I am certain has a positive impact on their retention rate. One thing we often see with new sales hires is an overly aggressive revenue expectation with an under-serving training program. I suspect this misalignment is the driving force behind companies desiring to hire salespeople from their competitors. The inaccurate belief is that those salespeople will be quicker to book revenue and will require less training.

Rarely is that true.

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Turnover is a symptom of a deeper disease in most companies. A consistent turnover level typically speaks to one of two problems – poor management skills or hiring the wrong employees. Corporate culture, compensation and other topics can come in to play, but I want to focus on the former topics.

One of our placements resigned this week after only 6 weeks in the role. This is not a sales position so it is somewhat outside of our expertise. Nonetheless, I contacted the former employee and discussed with her what went sideways. She laid most of the blame at the feet of one of the co-owners of the company and the fact that she was being asked to work on projects that were not the main focus of her job (for this co-owner).

I pursued the topics in detail and heard some real angst in her voice as she relayed the issues that led to her walking in and resigning at 8:00am. She painted a dark picture of her experience.

At the end of this discussion, I purposely stammered through one last question, “What did the other co-owner say when you approached her about these topics?”

The former employee tripped all over herself trying to answer and ended the call shortly after my question. She didn’t discuss it, she simply quit. The issue here is that she was doing well in the role and both owners were pleased with her performance up until this point.

I’ve come to learn since then that there are many personal issues occurring in the former employee’s life right now. My point here is that even though the employee characterized this situation as a management issue, the weak link was actually the employee. She was not the right fit for this position based on outside issues in her life.

The exit interview that I was afforded from her was the impetus for determining the root of the turnover. If you have an employee that leaves the company, especially in a sudden manner, it is imperative that you locate them to walk through an exit interview. Secondly, stay pragmatic through the entire discussion. Look for the gaps in the situation and ask an assumptive question. Sometimes you will be surprised by the answer.

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CareerJournal.com provides an interesting look at one Minnesota company in Manager Shortage Spurs Firms to Grow Their Own. Schwan found itself with a significant shortage of leadership talent that is symptomatic of the national hiring landscape.

The tight labor market puts a premium on retaining top talent and raises the cost of outside hires. And leaner corporate structures make it harder for managers to naturally hone their skills through incremental steps up the ladder; companies must instead formally teach them. Demographics play a role, too: The looming retirement of baby boomers is forcing companies to think about replacements.

Schwan has developed an internal solution to combat this problem:

Schwan is one of many U.S. companies paying more attention to grooming their next generation of leaders. Selected employees typically enter multi-year programs involving management classes, coaching sessions and so-called stretch assignments that throw them into big, unfamiliar challenges.

This program is a good idea – usually there isn’t a better return than investing in an employee you know has potential. One of our services is to objectively assess leadership talent for internal promotions. This activity and investment provides a significant return on investment.

“There’s a huge shortage of leaders,” says Ravin Jesuthasan, a managing principal at Towers Perrin, the consulting firm. For smaller companies in a fierce competitive landscape, “growth rates and expectations for growth have ratcheted up, requiring you to be much more diligent and proactive and structured in how you manage the flow of talent.”

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There are certain windows for sourcing salespeople that are better than other times of the year. Right now we are in the best window for sourcing salespeople for the entire year. The reason is that many salespeople are on commission plans that pay out the highest total after the year is completed. In many instances, that commission payout occurs towards the end of January.

I spent many years selling on these types of plans and can tell you that I would not leave in January since I was waiting for my largest commission check of the year. The different variations of commission plans I sold under usually had some accelerated clause or a cumulative commission that increased through the year with the Q4 payout being the largest.

The most dangerous time for any employer to retain a strong salesperson is right after they receive their big commission check and are staring at a new quota. We have seen this play out recently in the sales positions we are sourcing across the country. The response rate has ticked up dramatically over the past few weeks as salespeople eye new career opportunities for 2007.

If you are thinking about hiring salespeople this year, now is an ideal time to start the process.

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Does ‘Thank You’ Help Keep Associates? from CareerJournal.com takes a look at turnover/retention issues at a major law firm. Scary, I know. However, there is a good lesson in here in regards to retaining top employees.

First the setup from the article:

Faced with a surge in turnover of its associates, the prestigious law firm Sullivan & Cromwell LLP has been putting on a charm offensive to hold onto junior lawyers.

The presentation showed that the New York firm, now with about 625 lawyers, lost 31% of its associates in 2004 and 30% in 2005. The average associate attrition rate for law firms of about that size or bigger for 2004 was 21%, up from 16% in 2002, according to a study by the National Association for Law Placement.

30% turnover! That is a staggering number when you think of the highly-skilled legal profession. Now, since they are lawyers they needed consulting help on something that probably seems trivial to you and me.

To deal with low associate morale and high attrition, a confidential slide presentation reviewed by The Wall Street Journal urged partners to say things like “thank you” and “good work” to associates they supervise.

Yes, it would seem the lawyers needed a high-powered slide presentation to explain good managerial etiquette. This caught my eye:

What else should partners do? “Return associates’ phone calls as quickly as you would a partner’s or client’s,” said one bullet. “Be sensitive to not canceling associates’ vacations,” said another.

Canceling vacations? Ah, yeah, don’t do that. In all seriousness, it is fun to make light of lawyers but I have encountered this behavior in sales roles too.

I once worked for a difficult sales manager who rarely gave out compliments and when he did, it was little more than a throw-away line – “Good job.” That was the extent of it. Of course, he was often enthused to offer criticism. In those instances I would usually receive a dissertation from him.

That behavior establishes the culture of the department and defines the morale. I realize managing is difficult and being a friend is not necessarily in the best interest of the company. But a manager does need to respect the employee’s effort, be fair in their management decisions and make sure their empathetically aware of the employee’s perspective. I believe that approach will have the greatest impact on improving employee retention.

Even in a law firm.

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From BusinessWeek online’s How To Take The Reins At Top Speed:

In today’s era of increasingly activist investors and boards, a heightened focus on fast results is making the first few months feel more like a trial by fire than a honeymoon.
…
“Many senior executives feel they have a much shorter time frame to prove themselves.”

This accelerated productivity demand is common to almost all positions within a company. I am appreciative of CEOs finally having this demand placed upon them also. In sales, it has been this way for years . . . maybe decades.

Despite having a name only a consultant or HR professional could love – onboarding is also known as management integration or, worse, assimilation coaching – the practice is taking off. Headhunters Egon Zehnder International and Heidrick & Struggles International (HSII ) both report rising levels of interest from companies for their onboarding services.

We are making adjustments to our sales offering also. One thing we learned years ago was that good salespeople still can fail in a new role if there is not a plan for onboarding (that is an awful word). Hence, we now include our Sales Development Plan for all sales candidates our customers hire. Since incorporating this approach, we have seen a drastic reduction in the new salesperson’s ramp-up time. The goal with any new sales hire is to get them up to speed on revenue production as soon as possible. Unfortunately, many companies hire a salesperson, train them on the product/service offering and then put them out in the field. I’m always amazed that a company would spend so much money acquiring and hiring an important piece to their business and then almost neglect them once they are in place.

At a time when CEO failure rates are running at 40%, after all, helping executives “stick” makes sense. “It’s like an insurance policy for your placement,” says Rich Rosen, a partner in Heidrick’s leadership consulting practice.

I’m not sure where that 40% number comes from, but it is noticeable. I wonder what sales position failure rates are? In sales, I would deem a failure to be a salesperson who simply performs at an average revenue level or below. I suspect it is greater than 40%.

Executive search firms counter that where coaching relationships exist they’re careful to make leadership teams off-limits to recruiters. And they note that headhunters aren’t necessarily trying to double as coaches. “We’re training our search consultants to recognize a need,” says Joseph E. Griesedieck, Vice-Chairman of Korn/Ferry International. “And then they bring in the people who are experts.”

We are working on a similar model at Select Metrix and hope to have more to report on this topic soon.

Lastly, a quick excerpt from the article that caught my eye:

For Citrin, who co-wrote the new-leader guide You’re in Charge – Now What? with fellow kingmaker Thomas J. Neff, onboarding can be as simple as giving a client a copy of his book and sharing insights over a leisurely breakfast.

I have a general disgust with this approach. I have worked with consultants in the past who believe their book is the definitive authority for a specific topic. I prefer consultants who roll up their sleeves and get down in the mud with their clients.

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I’m a little late to the party on this post from Spherion’s The Big Time blog. The post covers many interesting topics. To start (emphasis mine):

• 23 percent of companies are already dissatisfied with the talent available.
• One-third of HR managers mention turnover/retention as a key concern.
• On average, employers expect 14 percent of their workforce to leave within the next year.
• 31 percent of workers believe there is a turnover or retention problem at their company, and 39 percent of workers themselves expect to leave in the next year.
• Less than half (44 percent) of workers believe their company is taking steps to retain its employees.

You can see where these survey results are leading – there is a disconnect between the employer’s perception and the employee’s perception of the same company. That disconnect is illustrated in the next section of the post involving the drivers of retention. The summary from the post:

Employers and employees wholeheartedly disagree on what drives retention. In fact, employers and employees ranked every factor of retention differently in terms of priority. The most concerning of which relates to time and flexibility. Work/life balance was the most important career priority for 86 percent of workers surveyed. It is ranked first on the employees list of retention drivers after standard priorities salary and benefits. Employers on the other hand ranked time & flexibility last among all factors relating to retention of employees.

A key point to all of these stats is simple – if you have a retention problem, you have a recruiting problem. Strong companies hire the right people that are rewarded by the culture. Any misalignment in the retention factors leads to a turnover problem.

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A couple of months ago we posted on an article from the Pioneer Press titled Speaking Up Helps Keep Star Workers. One of the surprising findings was that 47% of the 16,273 stellar workers surveyed are mailing out resumes, going on job interviews, even contemplating other offers.

I just recently caught up to an article from a WorkForce Management newsletter of a survey Yahoo HotJobs conducted on 5,300 people. They found that nearly two-thirds are open to switching jobs, with an improving job market cited as the chief cause for such optimism. Here are some interesting points they found:

• 39% cited unhappiness with wages as the chief issue
• 75% cited 2006 raises or bonuses were below their expectations

So where is retention on your list of priorities? You may want to put some thought into it because it is a safe bet that more than half of your employees are looking for new opportunities.

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We met this morning with a sales manager from one of our clients and had an interesting discussion about turnover. This company is in an “old-line” industry and has an established salesforce. In fact, the newest salesperson has been with the company for more than 5 years. Most have a 10 to 20 year tenure – retention is not a problem since this is a good employer.

The problem is this – their business has had to change over the past year to match the marketplace. There has been no layoffs, but some restructuring and new management has been added. These changes, according to our sales manager, have caused much angst amongst the team.

The team consists of some strong performers, but there is much dead weight. The company has offered sales training and many of the established salespeople have openly resisted. These same salespeople have declining performance.

One significant issue in this culture is the fact that there has been little turnover. 5 years ago they did have some targeted layoffs, but no new blood has been brought into the team. As strange as it sounds, turnover often has some benefits. Much like properly pruning a plant, sales turnover can eliminate the under-performers and bring in stronger, fresher talent.

I’m no fan of the Jack Welch approach to eliminate your bottom 10% of performers every year (especially with the current market). But his approach is not without some merit. Our customer would benefit greatly from the energy that will come from new salespeople taking over old territories.

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Google and work-life balance – this story may make you sick with envy. In case you haven’t heard, Google was ranked as the best company to work for in the US. The aforementioned link is a slide show that reveals what the culture of Google. All I can say is amazing.

Just to give you a partial idea of the Google campus:

Google takes the work-life balance to a new level. A Googler who’s pressed for time can get plenty of errands done while at work. Employees can do laundry for free in company washers and dryers (free detergent too) or drop off dry cleaning.Among Google’s many other conveniences offered to its employees: a workout room with weights and rowing machine, locker rooms, a massage room, child care, onsite notaries, car services and five onsite doctors available for employee checkups, free of charge.

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