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WORKFORCE STRATEGIES FOR GROWING COMPANIES
By Lee J. Colan
Limited talent pool. Rising recruiting costs. Retraining. Entrepreneurial flight.
Have you experienced any of these lately? Today your greatest, sustainable competitive advantage is your workforce. Harness that advantage by using the 3 steps to maximizing your workforce effectiveness in this Report.
Today’s U.S. labor market is characterized by:
Falling unemployment Decreased workforce growth Increased job growth Severe shortage of knowledge workers Continued increase of woman and other minorities entering the workforce Generational differences in terms of talent and work environment expectations.
These labor market conditions have forced many companies to focus on their Workforce Strategy.
However, we are still frequently asked by executives, “Why do we need a workforce strategy?” We generally skip the “your people are your competitive advantage in today’s world” response and point directly to data like these: Present Value of $1,000 invested in 1990:
Russell 3,000 Index = $3,900 Fortune’s 100 Best Companies to Work For = $80,000.
The best companies to work for, or Employers of Choice, know that the following recruiting techniques are necessary but not sufficient to attract and retain employees:
Rigorous selection/interview processes Employee referral programs/incentives Increased advertising Job fairs Community outreach Enhanced web presence Encourage nepotism Signing and Retention bonuses
Although today’s tight labor market has forced more companies to use creative recruiting techniques, these techniques only prevent you from falling farther behind in your recruiting efforts - they don’t really differentiate your company. Workforce effectiveness is only partially about recruiting. Workforce effectiveness is really about attraction and retention – true differentiators of Employers of Choice.
Consistent with our Guiding Principle of Simplicity, we use a 3-Step process to improve workforce effectiveness. It is based on work by Ed Gubman in "The Talent Solution" (McGraw-Hill, 1998).
Step 1: Align
Alignment starts with translating your business strategy into your people requirements, such as culture, competencies and the implicit contract you will create with your employees. This enables you to then define your organization’s structure, systems and processes.
When creating your Culture, what we call the organizational glue, incorporate 4 key values that exist in all high-performing cultures:
Customer (do whatever it takes for the customer) Excellence (be the best at what we do) Group (we care for and treat each other fairly) Individual (we make work satisfying for and respect the individual)
Although these 4 basic values can manifest themselves very differently from culture to culture, they can be predictably seen as the foundation for high-performing cultures.
Culture can be a complex topic, but we simplify with this equation: Culture = Behavior. The trick is to align your organizational systems to reinforce the behavior you need to achieve your business objectives. Culture is created and reinforced by:
- Rules and policies
- Goals and measures
- Rewards and recognition
- Staffing and selection
- Training and development
- Ceremonies and events
- Leadership behavior
- Communications
- Physical environment
- Organizational structure.
Once you identify your desired culture, the most important thing you can do to reinforce and build it is to rigorously select for fit with your culture (our next Report will address employee selection).
Ask yourself these questions to assess your company’s alignment:
Step 2: Engage
This step describes how you relate to your workforce. This relationship should evoke the same emotions as a marriage engagement for employees: excitement, commitment, loyalty and joy. The payoff for engaging your workforce is their discretionary effort and productivity.
The most obvious question in this step is, “How do we engage our people?”
First, explain the big picture to employees. Specifically, employees need to know the answers to 4 questions in order for them to be fully engaged:
Where are we going? (Strategy) What are we doing to get there? (Plans) How can I contribute? (Roles) What’s in it for me? (Rewards)
Second, ask employees for their input and ideas about more effectively performing doing their jobs. Do not ask if you will not listen – this will only lead to cynicism. Ensure that your managers are skilled at listening and responding effectively.
Finally, involve employees in the decision/problem solving process. It is challenging to let employees run with their ideas, particularly if they are different from our own ideas! This takes skill and trust by managers who really believe that involvement leads to commitment – and it does.
Ask yourself these questions to assess how engaged your workforce is:
What is your employees’ financial stake in your company? How much opportunity do they have to get information and exercise influence? Is your organization set-up to create a more intimate work environment?
Step 3: Measure
This is the last but most important step if your want to ensure that changes are made. Do not bother doing the prior two steps if you do not plan to do this one. Here are a few key points top consider when designing measures:
Ask yourself these questions to assess how effectively you are measuring your workforce’s performance:
Do you manage the business and execute your strategy through your performance management process? Are you clear about what behaviors and results you need for business success? What could you stop doing today in your performance management process that would not affect the way you do business?
To reinforce these basic principles of improving workforce effectiveness, here are some lessons a sampling of “Fortune 100 Best Companies to Work For”:
Value and respect the individual Hire to your culture – do not compromise Communicate, communicate, communicate to build trust Lead by values not policies Take the long view People strategy is essence of business strategy.
The L Group helps companies work toward “Employer of Choice” status. Contact us to see how your employers and shareholders would benefit from this journey.
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