Unfortunately, they may lack a quality just as important to your business: company loyalty. In these days of downsizing, belt tightening, and limited advancement openings, your best and brightest could be turning a roving eye to other opportunities. Think it won't happen to you? Think again. Because when businesses began to hack away at the employer-employee contract, they may have cut some of their losses, but they also severed a work-force mindset: Today's employees put their own welfare before their company's, and if that means packing up and heading somewhere else, then so be it.
With limited resources and a finite supply of talent, companies must pay extra attention to getting the right employees—and keeping them.
Smart companies recruit employees they can retain.
Dallas-based Texas Instruments was hiring more than 3,000 college graduates each year back in 1984. One decade and several downsizings later, the company extends only about 200 job offers to college grads each year. With this limited recruitment effort, retention depends on getting the right people in the right job in the first place. "The requirement has changed," says Dan McMurtrey, manager of placement services with TI's corporate HR department. "It's not: hire 200 good students. It's hire 200 superb students."
Unfortunately, not too long ago, Texas Instruments' recruitment strategy wasn't reaching the superb students. The company was visiting a limited number of campuses and administering an assessment test battery that took more than three hours for students to complete. "We were taking an awful lot of flack in working with campuses. Students didn't like it, deans didn't like it. This battery was worse than any final exam these students would take," says David Current, manager for TI corporate university relations.
That way of testing created a twofold problem. First, it restricted the number of students that TI could reach; second, it didn't give candidates much of a feel for what TI was like as a company, and it certainly didn't promote the company's best attributes. Current decided that for successful recruitment, TI would need a tool that would assess the student's fit with the company while serving as an introduction to Texas Instruments. But, in order to engage a large number of students in the first place, it also had to benefit the candidates. Says McMurtrey: "We said 'How do we package some sort of approach so that the student will want an assessment test?' It seemed ludicrous at the time, but we think we've done that."
The result was "Engineer Your Career," a tool that assesses candidates both professionally and personally for their fit with TI while introducing the student to the company's culture—and providing career planning information. The kit, designed by Personnel Decisions Inc., contains a disk which opens up a brochure that tells the student a little bit about TI—its products, its history, its values.
Following the introduction is a self-selection tool. "This gives the student an opportunity to basically open the doors of Texas Instruments, look inside and see what our environment is," explains Current. In the self-assessment, candidates respond to 32 questions about work preferences, such as work environment, working conditions and relationships. In answering, they also may respond to what degree they agree or disagree. For instance, one question asks how the candidate feels about smoking in the office, and the student can reply with a response from strong agreement to strong disagreement. At the end of this section, the computer displays a bar-like code to show the candidate's relative compatibility with the company. If there's a potential problem, it informs the student of this. So in the case of smoking in the office, if the student responded that he or she felt strongly in favor, the computer would signal that TI has a non-smoking environment, which may be an issue for the student. It also highlights strong matches. By being honest and open about TI's work environment and expectations, the company effectively allows a job candidate "inside" the company, so the applicant can make an informed choice rather than finding out too late that the situation won't work.
Following this section is a built-in resume writer for the student to complete, followed by job opportunities that are currently available at TI. Because the job listings are on disks, TI can update them each time it issues a new disk. A "career mapper" section gives TI further information about a candidate's skills and interests to better match the student with openings.
All students who complete the "Engineer Your Career" program and mail it to TI receive direct feedback on their fit—as well as a manual that informs students on getting started in the work force. "We think we've packaged assessment and product advertising in such a way that it's desirable even if the individual doesn't want to come to TI," says McMurtrey. "It's a useful, initial graduating-senior self-help kit."
TI is currently introducing the disks to campuses where it does not usually recruit, and is awaiting the results. McMurtrey predicts that the Engineer Your Career program will benefit recruiters on three levels. First, TI may use the disks to prescreen candidates in deciding which students they want to interview when visiting campuses. Second, TI can use the personality assessment to screen out individuals who just wouldn't fit, no matter how well-qualified they are. For instance, the company is evolving toward self-directed work teams, so a person's inability to be a team player would definitely weigh against him or her. "Our decision to select an individual certainly won't be based just on skills; it will be biased heavily toward such things as interpersonal relationships," explains McMurtrey.
Finally, by providing an honest view of TI values and culture, students go into the process with open eyes. Says McMurtrey: "Many may decide to self-select out, and that's good. It's going to increase the quality of the face-to-face interviews that we do have on campus."
Current sees nothing but benefits from the new process: "This disk is an important tool. We can't continue to use the same apparatus to mount a campaign at a wide range of universities. It's cost prohibitive. With this approach, you can effectively reach every campus in the nation. This will allow us to find the ones who are the best, who fit the best, and allow us to engage those individuals."
Another company using testing in its recruitment process is ServiceMaster. The Downers Grove, Illinois-based company, which employs people for pest control, lawn treatment, and cleaning services, knows that to run a successful business, each of its 36,000 employees must have certain work ethics.
For one thing, these employees, who often work at people's houses and businesses unattended, must be trustworthy and responsible. "Our first objective is to keep risky employees out of the organization," says Bill Selkirk, senior administrator of loss control, claims and safety management. "We believe that every applicant is a potential success or a potential loss. We want to make sure that we're on the potential win side of the picture."
Pre-employment testing plays a major part of ensuring retention. Screening out those who will not succeed with the company saves it time and money. ServiceMaster's test screens for seven risk factors not wanted in the organization. These are:
- Drug Use
- Poor customer relations
- Poor work values
- Unsatisfactory cognitive skills
- Unsafe work habits.
The test, developed by London House, doesn't just cover whether a worker has engaged in certain activities in the past, but whether the candidate has a propensity toward certain behavior or even tolerance of it. For instance, to keep drug users out of the company, ServiceMaster goes beyond physical testing to find candidates' psychological viewpoints. "Alcohol or drugs are only tested for during a short window of time in a person's application process," says Selkirk. "We look at a person's attitude toward alcohol or drugs. If they are tolerant of it in the workplace, we don't want them. This doesn't mean that they take drugs or alcohol, it just means that they have that propensity."
Attitude toward safety was another important issue in employee retention. Because 90% of workplace injuries are due to people's behaviors and attitudes, rather than any sort of malfunction, screening out candidates who ignore safety considerations is a must. And it worked: After the test was in place, ServiceMaster enjoyed a 44% reduction of injuries in those employees hired by testing.
Just as important, the test enabled ServiceMaster to extend employment invitations to only those employees who indicated that they would stay with the company for a substantial amount of time. This is significant, because ServiceMaster is in an industry that traditionally has trouble with retention. "Being a housekeeper is not exactly most people's ultimate goal in life," says Selkirk. "So for many, many people it's a stepping stone. We really want to control that. We want people who want to be in a service-minded career, who are not ashamed of being a housekeeper or a maintenance mechanic or a bug sprayer. We want people who have a high level of service-mindedness and low turnover propensity, who will give their best no matter what job they have in life." The testing has helped screen out these job hoppers: The company went from turnover rates of about 180% a year down to about 14% after testing.
First impressions can make or break a relationship.
Every good salesperson knows the customer makes a decision to buy sooner rather than later. Likewise, employee loyalty needs to be cemented in a new hire's early days. With a good initiation, the company can continue to build employee loyalty from the beginning. With a shaky introduction, the company must backpedal to right its wrongs before it can proceed. Corning Inc. has made a strong commitment to getting employees off on the right foot. After implementing an orientation program in 1983, the Corning, New York-based company watched retention rates rise 25% among employees who underwent orientation.
So important is a smooth introduction to Corning that orientation is the first thing an employee does. "They don't even report to their place of work the first day," says Susan Richter, senior education consultant. Instead, orientation classes are available each Monday, with only two new hires necessary to form a class.
On the first day of orientation, new hires are steeped in the Corning culture. They learn about its history, heritage, values and the various positions within the company. On the second half of the day, they take care of some business like signing up for benefits and receiving their security badges.
The new hire also receives a new-employee workbook, which covers each of the seven learning modules that new employees will go through, along with questions and summaries of each section. Richter says that the workbook gives orientation a sense of validity—it seems like a carefully thought—out program rather than a series of time-consuming lectures. "It's designed to let employees know what is going to happen throughout the orientation process—and the fact that it is indeed a process. It's not something you just go through, sit there and be done with it."
Corning then waits six weeks before finishing the remaining five modules of orientation. This time period allows the new employees to become more familiar with the company as well as to spend some time learning about their new division. At the end of the six weeks, all those hired within a six to eight-week time period attend a two-day orientation session. They begin the day learning about Corning's performance development and review process-what to expect and how to prepare for it.
Because diversity is high among Corning's values, new employees also attend a module called Valuing the Individual. Here, employees break into three groups and discuss the advantages and disadvantages of being a white male, a woman and a minority at Corning. Richter says this module is particularly important in opening the diversity discussion among new hires and sending a signal that Corning values diversity. "It's a real eye-opener for some people who think that there are no disadvantages to being a white male. Well there are. Or those who think there are only disadvantages to being a woman. Well that's not true, there are advantages to being a woman at Corning as well," says Richter.
The second day begins with teaching new employees how to read parts of the annual report so that they understand what it means to them as an individual and how their actions effect the company. Speakers introduce such simple ideas as encouraging doublesided copying to save paper and discouraging first-class flying on business trips. This is important, because spending habits at an employee's former company could be very different from what's accepted at Corning. This makes it clear from the start what is OK and what is not.
Because new employees may feel hesitant about using the company's resources at the beginning, a person from the Employee Assistance Program tries to encourage the program's use. Says Richter: "It really makes everyone as an employee feel that if they're just having a really rotten day, and they want someone to talk to, these people are here to listen. You don't have to have a drug problem or be in bankruptcy or have marital problems. They really eliminate some of the myths that are there."
Finally, members of Corning's research and development, and engineering groups present some of their projects. "It really is a big show and tell," says Richter. "They set up a table full of products. For some people this may be the only time they see some of the end products that Corning sells. A lot of people are familiar with the cup or plate that Corning sells, but they're not familiar with headlamps or TV tubes or cellular ceramics." Again, it's a matter of making the employee feel familiar with the company.
Richter says that although orientation is currently only for salaried employees, Corning is looking into shaping up its non-salaried employee orientation as well. She says that Corning's orientation plays a major role in employee retention. It provides new employees with a lot of contacts within the company, and it ensures that they have a smooth move into the culture. "Employees decide when they join a new company within the first six or eight weeks whether they're going to stay at that company. That first impression is such a lasting impression, which is why we try to get the orientation done in that time frame. It gives people the sense of belonging and being valued and important. We try to capitalize on that."
A little attention goes a long way.
Turnover doesn't always happen right away. Most employees want to make their situation work, and leave only when they feel they have no other choice. The Big Six accounting firm Deloitte & Touche discovered a major problem of this sort two years ago: It was losing its women employees.
It wasn't that the Wilton, Connecticut-based company was hiring unevenly; in fact, for the past 10 years, approximately 50% of its new hires have been women. and because it takes about 10 years to become a partner, the firm was expecting to see an increase in the number of women coming up the pipeline for candidacy to partnership. Instead it was seeing a decline. "That concerned us from one primary standpoint," says Jim Wall, national director of HR. "We were having a talent drain of capable women. We had to do something about it."
Deloitte & Touche took action. It launched a Task Force on the Retention and Advancement of Women to find the problem and fix it. It retained the services of such groups as Catalyst, the Charles Rogers Group and Work/Family Directions. It also interviewed women at all levels of the company, as well as women who had left the firm.
What they discovered were three main areas of complaint. Although work-life balance did play a part, it was really the work environment and what they felt was limited advancement opportunity that had women up in arms. They felt they were being left out of both informal networking and mentoring systems. Fixing this would be a challenge, because the exclusion was subconscious rather than deliberate. "In a male-dominated business society, men network, and often do so—I don't believe intentionally—but often at the exclusion of women," admits Wall. "Informal mentoring systems within the firm worked better for men. Men tended to sponsor other men. Mentoring occurred as a more natural process for men than it did for women."
To solve this problem, Deloitte & Touche knew it could do nothing less than retool the work environment itself. Beginning in early 1993, it made some changes. One such change was a renewed commitment to flexible work arrangements, such as reduced workload and flextime. The firm also developed plans for company-sponsored networking and formal career planning for women. Also, the firm's 5,000 partners, senior managers and managers attended two-day workshops concerning "Men and Women As Colleagues," at a price to Deloitte & Touche of about $3 million.
The result? Retention of women at all levels has risen, and for the first time in the history of the firm, turnover rates for senior managers—the last position before partnership—have been lower for women than men. Deloitte & Touche is finding that retaining talented women also attracts talented women: It now has the greatest number of female employees in the Big Six. Says Wall: "The external recognition in the marketplace is helping us retain people. It's helping us develop our own business. It's helping us tremendously in recruiting. The business reasons for doing this are coming home very quickly."
But it's not just women who need a commitment from their employer. All employees want recognition. All employees want to feel their employer takes an interest in their career. And today that desire for attention is elevating from a plea to a demand. "There's been a change in the employer-employee contract," says Lincoln Norton, CEO and chairman of HRSoft, Inc., which produces HR planning software systems. "Retention today is more about what's in it for the employee. Vertical growth in a down- sizing environment doesn't happen. So when you're down to that, the employee has to say, these are the reasons I work for this company: I'm learning, I'm growing, I'm evolving."
Kansas City, Missouri-based Hallmark works hard to identify its high-potential employees early on to ensure they are challenged and kept interested. It's a major part of the company's culture for senior managers to identify these employees, and take them under their wings, nurturing them into the company. "It ranges from inviting them onto special project teams or planning sessions or finding reasons for them to make presentations at higher-level staff meetings to senior execs," says Dave Pylipow, director of employee relations.
Pylipow estimates that the senior-level execs at Hallmark could name right off the top of their heads the 15 most important players in their divisions for the long-term. "Once they identify a high-potential, they begin to figure out 'How do I keep that person plugged in?'" says Pylipow. "Most of those folks just crave the opportunity to show you what they can do, and respond well when they know they're being recognized." Hallmark has indeed tapped an important part of employee retention. In a Robert Half survey of 150 executives, 34% said that it was lack of praise or recognition that most often caused employees to leave a company.
On top of providing this sought-after attention, Hallmark has a number of other initiatives to direct its employees toward a future with the company. For instance, Hallmark's profit-sharing system provides larger chunks of money to employees the more years they rack up.
Also, to demonstrate the value it places on long-term employees, the more seniority a worker has, the more steps must be taken for any termination proceedings. Wall himself must sign off on any termination for employees at Hallmark two to four years. If an employee has been with the company five years, it takes two vice presidents to approve termination. "Employees here know they're going to be treated fairly," says Wall. "It doesn't mean we don't fire people, because we do, but anybody who does lose their job has had a very thorough review of their case." This process not only emphasizes the importance of tenure, it also provides employees with a sense of security and the freedom to share thoughts or to disagree with superiors without worrying about it coming back to haunt them.
Finally, Hallmark celebrates seniority by recognizing employee anniversaries. In particular, the 25th anniversary brings a big celebration, with an appearance by the chairman of Hallmark if possible. Little gestures like recognition and praise have reaped big rewards for Hallmark—it has a turnover of only 5-1/2%—and 3,000 employees, some now retired, have made it to the 25-year mark with the company. "Folks tend to stick around for quite a while, so we think we're doing something right," says Pylipow.
With employees quickly becoming business's greatest asset, employee retention must become a company's highest priority. It's not enough to hope employees will stay. HR must give them the reasons to stay.
Personnel Journal, December 1994, Vol. 73, No. 12, pp. 44-49.