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22 Steps That Will Help You Improve Your Selection and Retention Track Record: A recipe for increasing employee and organization performance By Phil Schechter, SPHR The Business and Legal Reports (BLR) in its 12/05 update on Background Checks reveals “that surveys report 30 to 50 percent of job applicants either lie or exaggerate on applications and during interviews and the need to investigate and confirm applicant data in more important than ever”. Some studies indicate the lie and exaggeration rate could be as high as 80 percent. Couple the BLR findings with reports that indicate a dramatic increase in employment related lawsuits centering on such issues as defamation, harassment, race and religious discrimination, negligent hiring and retention, in addition to a continued rise in workplace violence and employee theft and embezzlement. Add the fact that in 2002 the average cost to defend and settle a jury verdict employment discrimination case was $750,000. As the economy becomes more robust many employers are experiencing a rise in voluntary turnover, and increased cost of recruiting and training and longer time to fill open positions. You know when recruiting qualified employees is becoming more difficult when you hear that places like Mc Donald’s are offering sign-up bonus that are in the thousand plus dollar range. The cost of that burger is going to rise and you might even have to supply your own ketchup. In 2004 the average employee turnover rate was 43.4%. The United States Department of Labor (DOL) reports that turnover in the high-tech industry among programmers, systems analysts and computer engineers is 25 percent, 97 percent for retail clerks and over 30 percent for call center telephone representatives. BLR reports that “this rate of turnover could cost industry up to 50 percent of its annual earnings.” One survey organization says that for every one percent reduction in stockbroker turnover would increase profitability by two percent. The Bureau of Labor Statistics (BLS) reports that we will be experiencing that greatest shortage of labor since World War II. It is estimated that the shortage of qualified workers could, within the near future exceed 10,000,000 workers. Do you know where your workers are going to and coming from? The Recipe for success: What your organizations can do to gain and maintain a competitive edge: 1. Have a clear understanding of the job and the required skills. They also define the workplace culture and inform people as to what are: the dos and don’ts, the good, the bad and the dirty. Many use the concept known as –Realistic Job Preview (RJP). 2. Use broad based recruiting strategies and think out-side-of-the-box. We worked with a major senior healthcare provider who was having trouble finding and keeping dietary workers. Running traditional “Want Ads” proved useless. We then put articles about working with the senior community in local newspapers’ food sections. The results we great and the cost “zero”. 3. When and where appropriate, they do pre-employment screening and professionally conducted background checks; use validated and objective assessment devices in both pre and post employment situations and train interviewers. Tests can be very effective in helping identify coaching and training needs of current employees and an individual’s readiness for promotion and career development opportunities. 4. Conduct timely orientations sessions and communicate, communicate, communicate who we are, where we are going, how you are going to get there; and why your organization is; where it is going. 5. Explain, in detail, what the jobs performance expectations and accountabilities are and how they will be measured. 6. Establish and maintain an appropriate rewards system that addresses both intrinsic and extrinsic needs. 7. Establish a clear “line-of-sight” between performance and rewards. 8. Maintain a “Goals” based environment. 9. Continually and clearly communicate your company’s mission and expectations. 10. Have an open, honest and defensible grievance process. 11. Measure and manage turnover. 12. Conduct frequent and objective climate studies. 13. Have in place a formal and aggressive career development system. As the employment landscape changes, companies will have to “Build” employees because they will not be able to “Buy” them. 14. Conduct timely and effective training sessions to keep employee skills up-to-date. According to BLS more than 70 percent of employers are providing employee job training. The study also found that employers who train less and spend less on training have higher rates of turnover and low productivity rates. 15. Establish effective succession planning systems to ensure that you have the right person(s) with the right talents when the need arises. 16. Have resources available to conduct timely, effective and professional coaching in order to help staff deal with problem situations. 17. Establish mentorship relationships to support individual development initiatives. 18. Conduct 360% assessments to measure managerial effectiveness and practices. 19. Survey customers to gain their insight as to how the organization is performing. 20. Regularly evaluate your human resource activities and their effectiveness through the use of broad-based and objective measures…HR Metrics. 21. Have an HR professional staff that can “Speak the Language of Money”. 22. Acknowledge that you can learn from others. Don’t lose site that, “We hire people for their skills, but the whole person shows up”. Chester Bernard DO YOU KNOW WHAT YOUR TURNOVER RATE IS AND WHAT IT COSTS TO HIRE? There are many formulas for calculating turnover costs. Please feel free to e-mail us at pkschechter@usfamily.net and we will send you free of charge the formulas that we have found helpful. Phil Schechter, SPHR is a principle in the human resource management consulting firm of Schechter & Associates, Inc. and is the former founder and director of the MBA in Human Resource Management Program at the University of St. Thomas. He currently holds the position of Associate Professor at St. Mary’s University where he teaches international strategic management with a focus on doing business in China. If you have any questions about this article please contact Phil at 952-937-2640, e-mail pkschechter@usfamily.net or visit his website: www.schechterhr.com. Copyright © 2005 Schechter & Associates, Inc. Back to the library Reproduction of this article cannot be accomplished without the expressed consent of Human Resource Staffing. Don Schmitz is a popular speaker and writer on all aspects of HR and CEO of Human Resource Staffing. Don holds graduate degrees in Education, Administration and Human Development. Contact Don@HumanResourceStaffingInc.com 952 854 6040