Executive Briefing (Part 2)

Did you know that in the United States theft by employees leads to over 36,000 business failures every year?

Employees steal, on average, $10 for every $1 taken by shoplifters.

Absenteeism costs a 50-employee business $31,000 a year. It’s surprising how often organizations fail to recognize how much simple absenteeism effects them.

It is important to know that the people who cause these problems are found in large numbers in your applicant pool. You need information and protection.

You will be happy to know that you can obtain extensive information and protection in a safe, easy, and cost-efficient manner through the use of assessments.

Six Truths about Employee Turnover—truths 4-6

Truth No. 4: More Money Is Not the “Silver Bullet”Talented workers want to feel they are being paid comparably to what other companies pay for similar work in the industry. They also care about being paid equitably with others in similar positions making comparable contributions. When these two conditions exist along with interesting and meaningful work, acceptable working conditions and good management practices, the prospect of making a little more money in an another organization where these softer factors are unknown is usually not enough to pull the employee away.
Truth No. 5: Managers Hold Most of the Keys to Keeping the Right TalentOne recent study showed that 50 percent of the typical employee’s job satisfaction is determined by the quality of his/her relationship with the manager. Many companies are floundering today in their attempts to improve employee retention because they have placed the responsibility for it in the hands of human resources instead of the managers. Many companies have begun to measure managers’ turnover rates and vary the size of their annual bonuses accordingly.
Truth No. 6: Reducing Turnover Starts with CommitmentThe organizations that achieve the most dramatic reductions in turnover and maintain those lower levels are usually the ones where the top executive or owner makes it a priority. Even when the top executive is not committed, however, one committed manager can still make a difference.
Adapted from—KEEPING THE PEOPLE WHO KEEP YOU IN BUSINESS: 24 Ways to Hang on to Your Most Valuable Talentby F. Leigh Branham (AMACOM; October 2000)

Six Truths about Employee Turnover—Truths 1-3

By F. Leigh Branham
Truth No.1: Turnover HappensAchieving zero percent turnover is not realistic, especially in today’s job market.
Truth No. 2: Some Turnover Is DesirableZero percent turnover is not desirable for a couple of reasons. First, if all employees stayed and the organization grew steadily, most employees would be at or near the top of their pay ranges and salary expenses would be extremely high. Secondly, new employees bring new ideas, approaches, abilities, and attitudes and keep the organization from becoming stagnant.
Truth No. 3: Turnover Is CostlyMost managers know that turnover is expensive, but two-thirds of 1,290 managers were unable to quantify the cost of turnover when asked in a recent poll. The cost of hiring and training a new employee can vary greatly—from only a few thousand dollars for hourly employees to between $75,000 and $100,000 for top executives. Estimates of turnover costs may range from 25 percent to almost 200 percent of annual compensation. Costs that are more difficult to estimate include customer service disruption, emotional costs, loss of morale, burnout/absenteeism among remaining employees, loss of experience, continuity, and “corporate memory.”

Executive Briefing (Part1)

“Have you ever made a conscious decision to hire a non-performer?”

Of course, the answer is “no,” so how, then, do so many poor performers get hired?

To answer THAT question, let’s begin with an examination of the traditional hiring process as practiced by most employers today.

This is a process that has from one to three components:

The first component is Historical Information. It consists of resume, past employment, education, personal references, and – maybe – a background check for verification. I highly recommend background checks before making a formal offer of employment. It helps create a legal safety net that protects you and your company

To help prevent this from happening, most companies add the second component, The Interview, which deals with the present. The information gathered in the interview revolves around the first impression a candidate presents, and our judgement are generally based on gut feeling, appearance, and personality. Unfortunately, we try to get all of this information in a very short period of time.

The biggest cause of bad hiring decisions is when those decisions are made.

That’s right – according to a study conducted by the Society of Human Resource Management, as reported in USA TODAY, 63% of all hiring decisions are made in the first 4.3 minutes of an interview.

That means that too many people are hired solely on their ability to make a good first impression. Let me suggest that when you are hiring, you are not trying to find a friend – you are selecting an employee. You might want to make a note of that… You are not trying to find a friend – you are selecting an employee.

JOB MATCH, the THIRD COMPONENT, is the most important, but least understood, element of the hiring process, and can only be achieved by assessing both the job and the individual.

Remember, the only way we can make our best hiring decisions is to consistently use ALL THREE COMPONENTS.

As Unemployment drops, employee theft may rise?

By Noelle KNOX
The New York Times (Sep. 1998)
.
One of the few disadvantages of a robust economy, human resource administrators say, is its effect on hiring practices, especially among retailers. The nation's unemployment rate has held at well below 5 percent this year. The shrinking labor pool, consultants say, gives employers fewer hiring choices, exacerbating other changes in employment patterns that have contributed to worker theft in recent years.
"The employment base is low, and retailers are not getting a lot of people who are extremely qualified," said David Johnston, director of training and research for LP Innovations, the loss-prevention subsidiary of J. Baker Inc., a Canton, Mass., retailer that owns the Casual Male Big and Tall clothing chain. "If the company doesn't have an effective screening program, they're going to get whoever comes in off the street."

Retailers reported a surge in employee theft last year, according to the latest National Retail Security Survey by the University of Florida. The companies in the survey attributed 47 percent of all lost cash and merchandise to the light fingers of their workers, up from 41 percent in
1996.
If the survey results are accurate for the industry as a whole, workers stole $13.3 billion of the $28.1 billion in cash and merchandise that retailers lost last year. By comparison, shoplifting -which gets far more publicity as a source of retail crime - accounted for only $9.6 billion, or 34 percent. The remainder was lost to vendor fraud and administrative error.

To deal with theft problems, more retailers are running employee back-ground checks through organizations like; the United States Mutual Association, a clearinghouse on theft and fraud cases.
Robert Ralicki, vice president of marketing for United States Mutual which counts Sears, Roebuck and Gap Inc. among its subscribing companies~ said it had 2.5 million cases of employee theft in its database. That number, he said, should double within two years as more retailers contribute information.

"Retailers have limited resources they can devote to background checks for entry-level personnel," he said, "but they' want to know if John or Jane Doe has a track record of dishonesty before they give them access to their cash and merchandise."
According to the University of Florida study, an employee who steals will take an average of $1,058 in cash or merchandise in a year, while a shoplifter will walk away with an average of $212.

High turnover, another a bettor to theft, also dogs the industry, because an entry-level retail job no longer is seen as a first step on a career path. And working conditions at retail jobs also can lead to a discontented work force.

Steve Kasserman, a loss-prevention officer at the Bi-Mart Corp., a discount chain based in Eugene, Ore., has his own explanation for this kind of thinking. "If you pay someone $6.50 an hour to stand on their feet," he said, and to take whatever insults the public dishes out for seven to nine hours a day, "they get mad, and eventually they'll take it out by stealing."

Why Use Employee Assessments

Historically, employers have depended on resumes, references and interviews as sources of information for making hiring decisions. In practice, these sources have proved inadequate for consistently selecting good employees. Ninety five percent of your applicants will “exaggerate” to get the job and most hiring decisions will be made in haste during the first 5 minutes of an interview. Because of this 66% or your new hires with be disappointments in the first year.

When selecting people for promotion, otherwise excellent employees have too often been miscast into roles that they could not perform satisfactorily and the “one size fits all” approach in training has failed to product the desired results. As a result two of three employees would rather work somewhere else and one of three business will be sued over an employment issue.

Clearly, an essential ingredient in making “people decisions” has been missing from the formula. Turnover costs thousands for every departing employee and studies have shown eighty percent of employee turnover is avoidable. It makes sense in today’s working environment to use every tool available to make your hiring choices. Many companies now spend extra time and money when it comes to hiring, coaching and training employees. They do background checks, check references, do drug testing and use employee assessments in this process. They realize the importance of assessing new and existing employees.

How Effective Is Your Sales Force

In today’s corporate environment, organizations face many challenges with identifying, developing, retaining and leveraging top performers. In fact, the number one priority for companies with an interest in human capital is talent acquisition and retention. When it comes to talent acquisition and retention of sales representatives employers find this position the most difficult to fill. Because of this situation, organizations must rely on a select few to maintain sales effectiveness.

In a survey of over 1000 company’s research shows that:
85% say too few sales people meet their expectations.
80% have high turnover in their sales department.
90% need more sales.
95% want more sales

More than 50% of those individuals in sales positions are not suited for sales. Another 25% may have the skills to sell, but are selling the wrong product, are in the wrong industry or do not fit within their employer’s corporate culture.

This situation is more common than you might think, but imagine if you could predict results before they happen “Sales drive companies and top sales performers drive sales.”
Think of the competitive advantage you could gain by predicting who will become a top sales performer.

Job Fit A Paradigm Shift

A business consultant once defined Insanity: As doing the same thing over and over again and expecting different results!

That statement best defines our efforts to hire and train employees in our working environment. We use the same procedure over and over again, but rarely get the results we want. How many times have you hired an employee and discover that he or she could not do the job? And, in an effort to keep that employee, we modify the job. Even after doing that we are met with non productive employee, or an employee that just leaves the organization. The bottom line is that trying to fit the job to the employee is rarely successful, yet, we do the same thing over and over again.

It is time for a paradigm shift—by matching the employee to the job. Look around your organization—do you have employees that consistently out perform other employees? (a top performing employee can be 4 to 8 times more productive that a bottom performing employee) What is it about that top performer that allows them to be so successful in the job? If we could take a snap shot of that employee, we would discover that they have a certain learning style, a certain interest, and certain behavioral tendencies that allow them to be product at what they are doing within the job. You may have several employees that are top performers! Doesn’t is make sense, to assess those employees and use the results of the assessment to create a benchmark or a pattern for success. Then start screening and hiring to the benchmark? If you could clone your best employees wouldn’t you do it?

No Employee Turnover-Is that good?

No turnover or low turnover may be costing your hundreds of thousands in bottom line profits.

In today’s work place, you can find many articles on how much employee turnover is costing you. There are even ways to calculate the cost of turnover. And the bottom line is that we all know that employee turnover is costly.

But we rarely consider the employee that quits the company but continues to come to work, and collect a paycheck….Or the disengaged employee(s) I know you have encountered these people…and why is this a problem?

When a employee quits and leaves, the cost is measurable and more importantly it allows the company to move forward with new and possibly more productive workers.

A disengaged employee will continue to hurt your bottom line for years. Who knows how much damage this type of employee can do you your customer service reputation, or how many employees he/she can drive away from you company, or how they affect your overall product quality.

How can you identify a disengaged employee?
Have you ever run into a situation where you have or had an employee that manages to do just enough each year to “get by” on performance evaluations? You know, they do just enough to keep from getting fired, but there performance is below that standard that you really want?
Or how about the employee that complains most of the time, is always negative towards other employees, or negative towards management, or most importantly negative toward your customers?

Signs of a disengaged employee can be, constantly late for work, frequent absences from work, poor quality work, does not follow the work procedures, constantly complains about work or other employees, an employee who always causes problems, or is critical of others.
In summary, we often think that employee turnover is the worse possible situation, but in reality Employee Disengagement can cost you 10-20-30 times as much money.