Description
This Project work is submitted for partial fulfillment of my Fellowship on Certified Retention & Engagement Professional from AHRB / CAMI
Project Report On Certified Retention & Engagement Professional
This document was created on 25th May 2012 as part of my project work, contains Assignments and it is prepared and submitted for the purpose of partial fulfillment for Fellowship from ASIAN HR BOARD – AHRB / CAMI – USA. During the month of May 2012. This template is a draft document that has been as a working template for an IT Organization based in Hyderabad. Submitted by Puli. Srinivas Rao
AHRBHYD0211010
Acknowledgement
Its great pleasure to have worked on a Project work on CREP for An IT organization as part of my AHRB – Fellowship Program, Certified Retention & Engagement Professional – CREP. This project work has been carefully carried out taking the courseware, workshop conducted by experts, on the job work experience of the aspirant & books referred which were recommended in the courseware – CREP. I would like to express my sincere thanks to the entire team of AHRB, CAMI & MEC for conducting such a value based program & designed a well structured, informative courseware to all participants. I take this opportunity to express my profound gratitude and respect to my Faculty Ms. Nandita Shankar, she introduced me to this topic of Retention & Engagement Professional, which has created lot of interest, his support and guidance has inspired me to put in the right efforts for this assignment. Thank you Srinivas Rao Puli. CREP - AHRB. (Fellow Aspirant)
Table of Contents
S.no 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Topics Project Objective Scope of the Project. Methodology Followed. Brief Overview of findings Conclusions – Project report. About Organization – Profile. Services & Operations. The challenges of HRM
Causes of Employee Turnover in I T Industry.
Cost of Employee – Turnover to Company. Retention based hiring.
Latest Strategies in implementing Niche Hiring Employee Retention through Employee engagement Retention Tips & Ideas. Employee Retention building through Org-Culture. Attrition Details & Categorization. Turnover cost of Attrition. Solutions to reduce Attrition. Return on Investment on Retention Summarization of the Project Report.
Project Objective
The objective of the project assignment is to do a detailed review and analysis of attrition, its impact to the business. The focus of this assignment is one of the divisions of Information Technology Services. An Information Technology Services Organization where the attrition levels have been the highest for the year 2011-12. This project assignment would also propose a plan with set of initiatives and actions to prevent attrition and retain the Talent. This objective would be achieved by computing attrition percentages, doing a deeper analysis of its impact to the organization, diagnosing the root causes of attrition thus enabling a formation of a well thought out plan and strategy to increase retention of Talent within this Vertical.
Scope of the Project
The scope of the project is limited to the Information Technology single vertical Division of WebSynergies India Private limited and all facts, data that is analyzed is from this Microsoft Division.
Methodology Followed
The methodology followed is to categorize the attrition into functional & dysfunctional attrition, calculate the overall cost of turnover for this attrition, do a detailed diagnosis and a root cause analysis of various causes, evaluate and propose a plan of action with a set of initiatives in the short, medium to long term to prevent attrition and retain the Talent within the organization.
Brief Overview of Findings
Reasons for Attrition
Jan to Apr 2012, 39 Exits
Underperformance, 1, 3% Termination, 1, 3% Wrong Hire, 4, 10% No Role Clarity, 3, 8%
Better Pay, 9, 23%
Personal Others Marriage, Relocations, etc.,, 8, 20% No Career Planning, 13, 33%
Wrong Hire Personal Others - Marriage, Relocations, etc., Better Pay Underperformance No Role Clarity No Career Planning Termination
The attrition for the Information Technology Division of Web synergies has been extremely high for the year 2011-12 which stands at 17.87 which is much higher than the company average of 12.12% and compared to 2010-11 it has been more than double. The Section I has details on the categorization of attrition and the Dysfunctional / Voluntary are a major area of concern. The Section II focuses on computing the Cost of Turnover which in the case of IT division has been 1.20 times the average cost of salary. The Section III details out the root cause & analysis of Attrition considering various factors. A total of 56.11% - of total Voluntary attrition are from Controllable factors which are within the direct control of Web Synergies India Private limited. The key reasons which have made a higher impact on attrition are: ? Compensation is not as per IT Industry standard ? Unhappy with the Manager & no Specific KRA’s. ? Monotonous Work & No Challenge. ? No Scope for onsite opportunity. The other observations from the detailed root cause analysis reveal:
? There is a huge talent drain at the Middle management level. Even the levels of attrition in the Junior management bands have been higher than 10%+ ? The attrition has been high for employees who have been with the organization between the 1-3 year tenure & < 1.5 year ? The organization is taking a real hit with the loss of talent in the 2-4 years tenure as they are the Team Leaders of the future. ? All the involuntary exits are related to performance issues either with ability, competence and attitude. Need to also examine the Hiring & evaluation process for these employees, performance improvement plans to see if there are any gaps in assessment / judgment.
The Section IV outlines a range of proposed solutions matching to the need for the Division and the Company is divided into 3 sets of Initiatives which are as follows: i. Retention Initiatives - Short Term which are easier to implement with minimal budgets [0-3 months timeframe] ii. Retention Initiatives - Medium Term which can give quicker results but would have higher budget impact [3-6 months timeframe] iii. Retention Initiatives - Long Term which would give long term stability & better predictability [6-12 months timeframe] The Section V provides details on the ROI for retention outlining the specific Pilot program –CLIMB for coaching Managers [CLIMB – Coaching on Leadership, Involvement, Motivation to become good Team Leaders, Project Managers & Sr. Consultants].
Company Factor - Reasons
Individual Factor - Reasons
10 9 8 7 6 5 4 3 2 1 0
3 2.5 2
3 2
10
1.5 1 0.5
4 2
Compensation is not industry standard Unhappy with HR Unhappy with policies & promotions recruitment / Unhappy with processes Attrition Number
0 Personal - Health Personal - Relocation
Attrition Number
Conclusions of Project Report.
As they say, “Happiness can be contagious”. So every organization needs to work on making sure the “Work place is a happy one”, which every employee would love to spend time. HR department along with senior management must take steps to make sure of this. Feeling “Engaged” depends on the “Strength” of the workplace not necessarily on the corporate leadership - Buckingham & Coffman, ‘First Break all the Rules’ To attract & retain the RIGHT Talent we have to offer them a unique Emp Value Proposition. ? Companies do not retain people, People decide to stay, they decide to stay when they feel “engaged”, and “Engaged” employees stay longer. ? The “Boss / Manager” is the key factor in building a strong work place. Talent retention strategy will work if we have the “Boss / Manager” in right place. ? “Boss / Leader” who “nurture” and “mentor”. Creates nurturing environment for the employees to imagine, explore, pioneer, invent etc.
Effective human resource management must be practiced at both strategic and at day-to-day levels. HR management practices must reflect company policy as to how it will manage and relate to its employees. The HR strategy should evolve from a transactional support role to partnering in the organizations business strategy. HR must take steps to be aware of employee problems and try to solve them, creatively. The organizations must focus on building an Ethical Brand which is identified by the employees resulting in a commitment to live the Brand Character, the values the company holds dear about itself, its brand, and its consumers. When employees identify themselves with the Brand they work for and pride themselves about it we would have certainly reached a status of Best Places to Work and retention of employees becomes second nature to the organization & it’s DNA.
T eam Factor - Reasons
6 5 4 3 2 1 0
Health issues due to night shifts Unable to maintain work life balance Unhappy as there is no work / on bench Unhappy Unhappy withUnhappy with because of Project the Manager work environment & role pressure
6
3 2 1 2 1
Attrition Number
Company Profile – Web Synergies India Private Limited.
Web Synergies, founded in 1998 by Mr. Gideon Lim, a veteran of the web industry in Singapore, is a regional IT company with offices in Singapore and India, occupying niche markets in the multimedia, wireless and web development, electronic commerce, hosting and Internet applications arena. The company's clientele encompasses Fortune 50 companies, SMEs and Government bodies. Clients include the Housing and Development Board (HDB), Hewlett Packard, Great Eastern Life Insurance, Sony, SPRING Singapore, the Singapore Police Force, among others. Web Synergies (S) Pte Ltd clients are mostly located in Singapore, Japan and Hong Kong but also in Europe, and in USA. As a one stop interactive web agency working on diverse computing platforms, Web Synergies provides holistic business IT solutions in enterprise programming with an equally strong focus on eye catching multimedia and web design developments. Application performance (specifications, budget and deliverables met) is the key element on which Web Synergies apprehend any single project. As an IT consultant, Web Synergies also assists companies in validating Web-based projects, in driving the implementation of innovative wireless applications and in solving technology related business development issues. Web Synergies India Private Ltd corporate objectives are to focus on profit ratio rather than pure growth. In that aspect we share the philosophy of Dr. Jan Hruska, CEO of Sophos anti-virus software: "Turnover is vanity. Profit is sanity". Of course, we understand that some economies of scale can only be achieved through sheer size and volume. But we also believe that the latest IT technologies, much more than in the first 20 years after the invention of the PC, can lead to tremendous productivity gains, improved work quality and, of course, sizeable profits. These profits can then be reinvested in people, processes, technology and of course in community deeds. 10% of Web Synergies monthly profits are systematically poured into non-profit organizations. Core Values: 1. Integrity - delivering as promised, on time. 2. Excellence - Striving to give the best to our clients on all tasks and projects. 3. Forefront Expertise - Always in touch with cutting-edge trends and opportunities to help clients grow by implementing relevant strategies. 4. Partnership - Most clients know what they want, though it may come in bits and pieces. We believe in working closely with client from start to finish, hearing their feedback, and in doing so provide the most optimal, need-focused services. 5. Giving - We believe in using whatever financial resources or human talents given by God, to be a blessing to the community on a regular basis.
Mission: "To be a corporation that epitomizes godly values in our dealings with clients and business partners alike." Web Services: Web Solutions. These are exciting words. These days, it's a much-talked about subject, that you are either a ".Net" or a "Linux/Open standard" fervent supporter. We, at Web Synergies India Private Limited, have been talking about Web Services for a bit longer, actually since our inception. We were born for that. We may do it may be a bit differently, but the spirit is the same: deliver you web applications, fast and neat. As a matter of fact, our Web Solutions cover the five main web applications that any organization requires to function properly using web technologies or to do business on the web: Maintenance, Hosting, Intranet, Extranet, Content Management Solutions. To support all these applications and to design the best architecture for your current and future needs, Web Synergies India Private Ltd has developed a sixth expertise: Web Consulting IT Services: As an experienced "web system Integrator" and outsourcing vendor, Enterprise Synergies has developed along the years a consulting expertise in a wide range of IT Services. This includes software outsourcing and business process outsourcing out of our Singapore and Indian software development offices. Of course, that expertise is synthesized in Enterprise Synergies' internal knowledge and processes. As a matter of fact, it all fall down to human capital and to the faithful team of programmers and project leaders and managers that we have groomed, that we keep grooming and cherishing (see People and Expertise). Our natural dedication to serving our clients pushes us to constantly study IT projects in new territories, from complicated integration work to supply chain solutions and business intelligence. Schematically, our IT consulting services cover Programming works, System Integration, web based e business applications development (supply chain, e fulfillment, ecommerce). Development Practices Analysis In the Analysis Phase of a new project the company completes a review of client business processes and system requirements. The key deliverable of this Phase is typically a Functional Requirements document (FRD). Clients are asked to review and sign-off on this document prior To moving forward in the project. Key events in the Analysis Phase are:
? Project preparation & planning ? Conduct of requirements gathering interviews & workshops ? Preparation & review of functional requirements
Design Phase : In the Design Phase, the proposed system design will be delivered in the form of a System Design Document (SDD) and accompanying software demonstrations. An Implementation Proposal, including a go-forward budget & project schedule, will be presented to client steering committee members. The client is asked to sign off on the final design and Implementation Proposal prior to moving to the Development & Testing Phase. Key events in the Design Phase include: ith project team members
led Software Design & Build Plan Preparation Development & Testing In the Development & Testing phase, Clients are asked to test each Build as delivered. Key events in the Development & Testing phase are: tem integration testing
Deployment In the Deployment Phase the system is fully implemented at the client site and all user training is completed. Key events in the Deployment Phase are: -up -through
THE CHALLENGES OF HUMAN RESOURCE MANAGEMENT The role of the Human Resource Manager is evolving with the change in competitive market environment and the realization that Human Resource Management must play a more strategic role in the success of an organization. Organizations that do not put their emphasis on attracting and retaining talents may find themselves in dire consequences, as their competitors may be outplaying them in the strategic employment of their human resources.
With the increase in competition, locally or globally, organizations must become more adaptable, resilient, agile, and customer-focused to succeed. And within this change in environment, the HR professional has to evolve to become a strategic partner, an employee sponsor or advocate, and a change mentor within the organization. In order to succeed, HR must be a business driven function with a thorough understanding of the organization’s big picture and be able to influence key decisions and policies. In general, the focus of today’s HR Manager is on strategic personnel retention and talents development. HR professionals will be coaches, counselors, mentors, and succession planners to help motivate organization’s members and their loyalty. The HR manager will also promote and fight for values, ethics, beliefs, and spirituality within their organizations, especially in the management of workplace diversity. This paper will highlight on how a HR manager can meet the challenges of workplace diversity, how to motivate employees through gain-sharing and executive information system through proper planning, organizing, leading and controlling their human resources. Workplace Diversity According to Thomas, dimensions of workplace diversity include, but are not limited to: age, ethnicity, ancestry, gender, physical abilities/qualities, race, sexual orientation, educational background, geographic location, income, marital status, military experience, religious beliefs, parental status, and work experience. The Challenges of Workplace Diversity The future success of any organizations relies on the ability to manage a diverse body of talent that can bring innovative ideas, perspectives and views to their work. The challenge and problems faced of workplace diversity can be turned into a strategic organizational asset if an organization is able to capitalize on this melting pot of diverse talents. With the mixture of talents of diverse cultural backgrounds, genders, ages and lifestyles, an organization can respond to business opportunities more rapidly and creatively, especially in the global arena, which must be one of the important organizational goals to be attained. More importantly, if the organizational environment does not support diversity broadly, one risks losing talent to competitors.
This is especially true for multinational companies (MNCs) who have operations on a global scale and employ people of different countries, ethical and cultural backgrounds. Thus, a HR manager needs to be mindful and may employ a ‘Think Global, Act Local’ approach in most circumstances. The challenge of workplace diversity is also prevalent amongst Singapore’s Small and Medium Enterprises (SMEs). With a population of only four million people and the nation’s strive towards high technology and knowledge-based economy; foreign talents are lured to share their expertise in these areas. Thus, many local HR managers have to undergo cultural-based Human Resource Management training to further their abilities to motivate a group of professional that are highly qualified but culturally diverse. Furthermore, the HR professional must assure the local professionals that these foreign talents are not a threat to their career advancement. In many ways, the effectiveness of workplace diversity management is dependent on the skilful balancing act of the HR manager. One of the main reasons for ineffective workplace diversity management is the predisposition to pigeonhole employees, placing them in a different silo based on their diversity profile. In the real world, diversity cannot be easily categorized and those organizations that respond to human complexity by leveraging the talents of a broad workforce will be the most effective in growing their businesses and their customer base. The Management of Workplace Diversity In order to effectively manage workplace diversity, Cox (1993) suggests that a HR Manager needs to change from an ethnocentric view ("our way is the best way") to a culturally relative perspective ("let's take the best of a variety of ways"). This shift in philosophy has to be ingrained in the managerial framework of the HR Manager in his/her planning, organizing, leading and controlling of organizational resources. As suggested by Thomas (1992) and Cox (1993), there are several best practices that a HR manager can adopt in ensuring effective management of workplace diversity in order to attain organizational goals. They are: Planning a Mentoring ProgramOne of the best ways to handle workplace diversity issues is through initiating a Diversity Mentoring Program. This could entail involving different departmental managers in a mentoring program to coach and provide feedback to employees who are different from them. In order for the program to run successfully, it is wise to provide practical training for these managers or seek help from consultants and experts in this field. Usually, such a program will encourage organization’s members to air their opinions and learn how to resolve conflicts due to their diversity. More importantly, the purpose of a Diversity Mentoring Program seeks to encourage members to move beyond their own cultural frame of reference to recognize and take full advantage of the productivity potential inherent in a diverse population.
Organizing Talents Strategically Many companies are now realizing the advantages of a diverse workplace. As more and more companies are going global in their market expansions either physically or virtually (for example, E-commerce-related companies), there is a necessity to employ diverse talents to understand the various niches of the market. For example, when China was opening up its markets and exporting their products globally in the late 1980s, the Chinese companies (such as China’s electronic giants such as Haier) were seeking the marketing expertise of Singaporeans. This is because Singapore’s marketing talents were able to understand the local China markets relatively well (almost 75% of Singaporeans are of Chinese descent) and as well as being attuned to the markets in the West due to Singapore’s open economic policies and English language abilities. With this trend in place, a HR Manager must be able to organize the pool of diverse talents strategically for the organization. He/She must consider how a diverse workforce can enable the company to attain new markets and other organizational goals in order to harness the full potential of workplace diversity. An organization that sees the existence of a diverse workforce as an organizational asset rather than a liability would indirectly help the organization to positively take in its stride some of the less positive aspects of workforce diversity. Leading the TalkA HR Manager needs to advocate a diverse workforce by making diversity evident at all organizational levels. Otherwise, some employees will quickly conclude that there is no future for them in the company. As the HR Manager, it is pertinent to show respect for diversity issues and promote clear and positive responses to them. He/She must also show a high level of commitment and be able to resolve issues of workplace diversity in an ethical and responsible manner. Control and Measure ResultsA HR Manager must conduct regular organizational assessments on issues like pay, benefits, work environment, management and promotional opportunities to assess the progress over the long term. There is also a need to develop appropriate measuring tools to measure the impact of diversity initiatives at the organization through organizationwide feedback surveys and other methods. Without proper control and evaluation, some of these diversity initiatives may just fizzle out, without resolving any real problems that may surface due to workplace diversity. Motivational Approaches Workplace motivation can be defined as the influence that makes us do things to achieve organizational goals: this is a result of our individual needs being satisfied (or met) so that we are motivated to complete organizational tasks effectively. As these needs vary from person to person, an organization must be able to utilize different motivational tools
to encourage their employees to put in the required effort and increase productivity for the company. Why do we need motivated employees? The answer is survival. In our changing workplace and competitive market environments, motivated employees and their contributions are the necessary currency for an organization’s survival and success. Motivational factors in an organizational context include working environment, job characteristics, and appropriate organizational reward system and so on. The development of an appropriate organizational reward system is probably one of the strongest motivational factors. This can influence both job satisfaction and employee motivation. The reward system affects job satisfaction by making the employee more comfortable and contented as a result of the rewards received. The reward system influences motivation primarily through the perceived value of the rewards and their contingency on performance. To be effective, an organizational reward system should be based on sound understanding of the motivation of people at work. In this paper, I will be touching on the one of the more popular methods of reward systems, gain-sharing. Gain-sharing: Gain-sharing programs generally refer to incentive plans that involve employees in a common effort to improve organizational performance, and are based on the concept that the resulting incremental economic gains are shared among employees and the company. In most cases, workers voluntarily participate in management to accept responsibility for major reforms. This type of pay is based on factors directly under a worker’s control (i.e., productivity or costs). Gains are measured and distributions are made frequently through a predetermined formula. Because this pay is only implemented when gains are achieved, gainsharing plans do not adversely affect company costs. Managing Gain-sharing In order for a gain-sharing program that meets the minimum requirements for success to be in place, Paulsen (1991) and Boyett (1988) have suggested a few pointers in the effective management of a gain-sharing program. They are as follows: • A HR manager must ensure that the people who will be participating in the plan are influencing the performance measured by the gain-sharing formula in a significant way by changes in their day-to-day behavior. The main idea of the gain sharing is to motivate members to increase productivity through their behavioral changes and working attitudes. If the increase in the performance measurement was due to external factors, then it would have defeated the purpose of having a gain-sharing program. • An effective manager must ensure that the gain-sharing targets are challenging but legitimate and attainable. In addition, the targets should be specific and challenging
but reasonable and justifiable given the historical performance, the business strategy and the competitive environment. If the gain-sharing participants perceive the target as impossibility and are not motivated at all, the whole program will be a disaster. • A manager must provide useful feedback as guidance to the gain-sharing participants concerning how they need to change their behavior(s) to realize gain-sharing payouts. The feedback should be frequent, objective and clearly based on the members’ performance in relation to the gain-sharing target. • A manager must have an effective mechanism in place to allow gain-sharing participants to initiate changes in work procedures and methods and/or requesting new or additional resources such as new technology to improve performance and realize gains. Though a manager must have a tight control of company’s resources, reasonable and justifiable requests for additional resources and/or changes in work methods from gain-sharing participants should be considered. Executive Information Systems Executive Information System (EIS) is the most common term used for the unified collections of computer hardware and software that track the essential data of a business' daily performance and present it to managers as an aid to their planning and decisionmaking. With an EIS in place, a company can track inventory, sales, and receivables, compare today's data with historical patterns. In addition, an EIS will aid in spotting significant variations from "normal" trends almost as soon as it develops, giving the company the maximum amount of time to make decisions and implement required changes to put your business back on the right track. This would enable EIS to be a useful tool in an organization’s strategic planning, as well as day-to-day management. Managing EIS As information is the basis of decision-making in an organization, there lies a great need for effective managerial control. A good control system would ensure the communication of the right information at the right time and relayed to the right people to take prompt actions. When managing an Executive Information System, a HR manager must first find out exactly what information decision-makers would like to have available in the field of human resource management, and then to include it in the EIS. This is because having people simply use an EIS that lacks critical information is of no value-add to the organization. In addition, the manager must ensure that the use of information technology has to be brought into alignment with strategic business goals Conclusion The role of the HR manager must parallel the needs of the changing organization. Successful organizations are becoming more adaptable, resilient, quick to change directions, and customer-centered. Within this environment, the HR professional must learn how to manage effectively through planning, organizing, leading and controlling the human resource and be Knowledgeable of emerging trends in training and employee development
Causes of Employees Turn over in IT Industry.
Common causes of employee turnover and workforce managers role in how to prevent them. Workforce managers, workforce management systems, human resources professionals as well as industrial psychologists all have their own theories on the question of – “What causes employee turnover”. Among the most common causes of employees leaving companies are: 1. Excessive workload, an employee doing the work of more than one person. This Often entails overtime and necessitating the employee having to take work home. Many employees say that they become overwhelmed and overloaded with work. The Increase in stress levels and pressure means that they cannot sustain it and will Eventually seek employment elsewhere. 2. Management not giving the employee sufficient recognition for the work done, or Taking the credit themselves of giving it to the wrong person. 3. Not giving the staff member sufficient power to make decisions to get the job done And to progress in the organization. 4. Ongoing change initiatives giving the employee a sense of instability. 5. Management not giving clear briefs and clear guidelines on their expectations of the employee. 6. Poor leadership skills other reasons could range from anything from job mismatch, inadequate training or even inadequate compensation plans. The costs of turnover in a company are huge. It is necessary to understand the role that turnover of employees play and the reasons for it.
Cost of the Employee Turnover in the Organization
It’s one of the largest costs in all different types of organizations, yet it’s also one of the most unknown costs. It’s employee turnover. Companies routinely record and report costs such as wages and benefits, Workman’s Compensation Insurance, utilities, materials, and space, yet most companies have no and report the cost of employee turnover. It can be much higher than you think. How much is it costing you? Several well-regarded studies have recently estimated the cost of losing an employee: •SHRM, the Society for Human Resource Management, estimated that it costs $3,500.00 to replace one $8.00 per hour employee when all costs — recruiting, interviewing, hiring, training, reduced productivity, et cetera, were considered. SHRM’s estimate was the lowest of 17 nationally respected companies who calculate this cost! •Other sources provide these estimates: It costs you 30-50% of the annual salary of entry-level employees, 150% of middle level employees, and up to 400% for specialized, high level employees! •Do a quick calculation: Think of a job in your organization where there has been some turnover, perhaps supervisors. Estimate their annual average pay and the number of supervisors you lose annually. For example, if their average annual pay is $40,000, multiply this by .125% (or 125% of their annual pay, a reasonable cost estimate for supervisors). This means it costs $50,000 to replace just one supervisor. If this company loses ten supervisors a year, then 10 times $50,000 equals $500,000 in replacement costs for just supervisors. This is the bottom line cost. The top line cost? If the company’s profit margin is 10%, then it costs $5,000,000 in revenues to replace these ten supervisors. Do these numbers seem unbelievable? Here’s an actual calculation from a well-regarded organization in my community. The HR Manager of this human services organization (housing for disabled persons, sheltered Workshops, etc.), estimated that 30 entry level people leave his organization on average every quarter. This averages out to ten people per month. Let’s be extra conservative and shave SHRM’s estimate (see above) down to $3,000.00 to replace each employee. This amounts to $30,000 per month, or $1,000.00 in employee turnover costs every day of the month! Annually, this totals $360,000.00. Actual turnover costs are usually much higher than we think they are — until we estimate them. You may be thinking, “Some employee turnover is unavoidable, even desirable.” You’re right. Some turnover is necessary, to replace marginal or poor employees with more productive ones and to bring in people with new ideas and expertise. However, high turnover costs are both avoidable and unnecessary.
This is where companies need to focus their efforts. The goal is to retain valued performers while replacing poor ones. Most companies group both types of performers together when looking at turnover. By doing so, they’re missing the cost and significance of replacing the good performers. Why don’t more companies see this as a costly problem? There are a variety of reasons this is not seen as a problem, all of which cost companies in expertise and dollars. How many of these occur in your organization? 1. No process is in place to tabulate costs. One survey found that only 44% of its respondents had a process in place to estimate turnover costs; 43% of companies relied on intuition, and 13% had no process at all. 2. Costs are not reported to top management. It’s a business axiom that one of the best ways to get top management’s attention is to show them what something costs. However, most top management never gets to see turnover cost estimates because most companies don’t measure them — or if they do, they don’t report them to top management. 3. It is an inescapable cost of doing business. Except, it’s not! While some turnover is unavoidable and desirable, most turnovers, especially among your better and top performers are largely avoidable. Thinking that turnover is just a normal cost of doing business is the same quality of thinking which says that accidents are just an inescapable part of being in the construction business. 4. It is an HR problem. While HR needs to be a key partner in reducing turnover cost, this is a strategic issue requiring top management’s attention and actions, in addition to HR’s efforts, to resolve it. 5. Costs are underestimated, and so they register less concern. If costs are underestimated because the organization doesn’t agree on or know what to measure, the statistics generated either register less concern than they should, or are disputed and held in disregard. What costs need to be fully estimated? A comprehensive program measures the following costs: • Exit costs • Recruiting • Interviewing • Hiring • Orientation • Training • Compensation & benefits while training • Lost productivity
• • • • •
Customer dissatisfaction Reduced or lost business Administrative costs Lost expertise Temporary workers
There needs to be advance agreement among Human Resources, Finance, and Operations as to which cost measures will be considered valid. Then, it has to be measured and reported. 6. Waiting until there’s a crisis. I was amazed when the executive director of one organization told me she knew that one of her capable managers was unhappy, but decided it wasn’t necessary to take action because she hadn’t received a letter of resignation yet. Prevention is what works best. Begin to measure your turnover costs and, very importantly, look at who is leaving so you’ll know if you’re retaining your best people. The time to do this is now. Waiting until there’s a crisis to take action limits your options and success rate. It also often triggers the common response of offering more money to get someone to stay, instead of fixing the original problem. Why do so many retention efforts fail? These are among the most common reasons company retention efforts fail, even when they’re implemented by capable people. 1. No assessment, so ineffective solutions are chosen. In their hurry to correct a costly problem, companies often forgo conducting a relatively brief and cost-efficient assessment in order to correct the situation faster. However, implementing a solution without diagnosing who is leaving, and why they’re leaving often results in solutions that are incapable of solving the root causes behind turnover. Diagnosing the reasons behind turnover always pays for itself. Don’t start without an assessment. 2. Implementing too many solutions instead of the most effective solutions. Managers often brainstorm a number of plausible solutions, then implement many of them especially those favored by top management. However, what is most needed is to select and implement a limited number of solutions which will be most effective at solving the problem. Implementing too many solutions, even good ones, will diffuse your resources and weaken your efforts and success. 3. No way of measuring success to know what works. How do you know which retention solutions you’ve implemented are working effectively and which aren’t, where you need to make refinements, and what strategies you need to drop if you don’t have a way of measuring your results?
How do we do a better job of retaining employees — especially our most valuable ones?
First, rank your employees in three categories: best performers, middle performers, and lowest performers. Your objective is to retain your top performers; develop and retain your middle performers, turning them into near-top or top performers if possible; and potentially replace your lowest performers. Second, agree internally on the measures you’ll use to calculate turnover costs. Be certain you’re taking all costs into Consideration. Most organizations greatly underestimate them. Third, report turnover costs to top management on a monthly, quarterly, and annual basis. When turnover cost is unacceptably high, or higher than your industry’s average, do an assessment. Find out who is leaving and why they’re leaving. Exit interviews can help you find out why. You need to know if it is your top, middle, or lowest performers who are leaving so you can gauge the expertise level leaving your organization. You’re obviously going to employ (and pay for) different strategies if your top performers are voluntarily leaving, compared to middle or lowest level performers. Develop solutions capable of solving the problems you uncover, and only implement a limited number of them. Measure the success of your retention efforts, and refine them. Two key strategies to save a large amount of time and money. Very key strategy # 1: Don’t wait until turnover costs become unacceptably high before you implement an ongoing retention program. Put a retention program in place before you have crisis situation. You not only must find out why employees leave your Organization, you must also find out why others stay. Very key strategy # 2: Survey your top performers now in order to find out what keeps them there, why they might leave, what type of competitive offers they may find attractive, and what they need to be happier and more productive in their jobs. You’ll do a better job of keeping them (along with their expertise and value). You’ll also find out highly beneficial information about improvements your organization needs. This means driving improvements in your organization by what your best people tell you, instead of focusing on taking care of the ever-present complainers in every organization. Just how valuable are retention efforts? One source estimated that a 10% reduction in employee turnover was worth more money than a 10% increase in productivity, or a 10% increase in sales! Retain and gain.
Retention Based Hiring
One of the major concerns of any corporation, particularly a high-growth business, is employee retention. Without minimizing the importance of roles such as compliance, diversity, compensation, and benefits, if the basic exercise of getting, keeping, and growing a company's talent is done well, the other HR functions will reflect this excellence There are few things in business more important than hiring the right people. Without the right people, no amount of money can make a company succeed. Dot.com companies and their recent ups and downs point out clearly how lots of money did not create success. While hiring the right people may appear more obvious in small, Entrepreneurial companies, it is also true in larger companies. Even the big ones collapse occasionally. Montgomery Ward is the most recent example of a giant company folding. Could the right people have made a difference? Probably. The right people might have had the foresight to help Wards change and keep up with their industry. Some companies depend entirely on the strength of their employees to perform Services; Others sell products or manufacture products for sale. Even companies that make or sell products depend on people to make the products or sell the products. No machine can ever replace the ability of humans to think, create and act appropriately. Even government agencies and public organizations need the right people to perform their functions well. Many managers feel they have too much work to spend their time interviewing potential employees. If you have this attitude, you need to realize that there are few things more important to your career than having competent people to support you. With the wrong people, you cannot do your job well and will find your career is short-lived. With the right people, you can move ahead and you will have a team that supports your success. Planning to Hire As a manager in today’s tight job market, what can you do to ensure you hire the right people? This article addresses key points to help you make sure you hire the right people for your particular situation. Before you place an ad or start interviewing, be sure you know these things: Know your working style Write down a few things about your working style and the type of people you work best With. Some things to consider in making your list are: • Are you a hands-on manager that likes to supervise people closely or do you like? People who work independently? • Do you like regular written status reports from the people who report to you or do you? like to get a general feel for what they are doing from occasional conversations?
• Do want copies of all the e-mail or memos sent by your employees to others in the Company or would you rather only see messages under certain conditions? What are those conditions? • Is your working style the similar to your boss? Is your working style similar to your peer managers? • If your style is different from theirs, are your employees expected to work with those other managers and are you able to help them understand the different styles? If you have made hiring mistakes in the past (all good managers have), pay attention to what you did wrong and avoid repeating the mistake. If you know that certain types of people or certain personality traits make you cringe or have caused you problems in the past, be sure you are clearly aware of what to look for so you do not hire those types of people.
2. Know your company’s culture
Do you expect people to be at work at a specific time or are you more concerned that they get their work done within a reasonable time period? Do you expect people to work at home, in the evening or on weekends and/or holidays? Do you expect people to dress in suits or is casual ok? How casual is "casual" at your company? Are people expected to compete with each other, work independently or to work together? Are employees expected to participate in company social functions? Are they encouraged to develop friendship with co-workers or is social activity not favored? Do you have specific production or sales quotas that must be met? How closely are these monitored and what is the reward or punishment for making or not making the quota? Does your company drag out the interviewing process or do they make fast hiring decisions? Is your Human Resources department involved in screening job candidates or is this handled by line managers? What are the top 3 reasons people stay with your company? What are the top 3 reasons they leave?
3. Know your expectations of the job position
What is the official job description of the position you are hiring? Does that really describe what you expect? If not, make sure you are clear about what you expect. For each skill, duty or requirement listed in the official job description, estimate how much (by hours per week or % of time) the person will spend using each one. Rank the most important skills and duties. Identify any skills and duties that are "nice to have" or "not critical" to day-to-day performance of the job. If you cannot find someone with all the skills in the job description, this exercise will give you a good basis for gauging whether someone has the most important skills you need.
4. Know your expectations of the person who will fill the position
Will the person work closely with others on your team? If so, give the others a change to meet potential employees before you hire them. This shows respect for your team and gives the job candidate a chance to meet their potential co-workers before they make a decision to take the job. Are there certain weaknesses on your existing team that you expect a new person to fill? Be clear about what those are and that the person knows they are being recruited for those reasons. Do you enjoy different personality types in your staff or do you want everyone to be the same way? Different people provide an opportunity for potential conflict. However, they also provide the greater opportunity for the entire team to be stronger and for people to help each other learn and grow. Very few companies give personality tests to potential applicants because of the inherent problems they can cause. However, be aware of the types of personality that work well in your company and those that do not. Also, be aware that some jobs require personality traits to be successful. For example, don't hire someone who is not an enthusiastic selfstarter into a sales position or hire an outgoing, creative person for a job where they will be stuck in a cubicle doing financial reports.
Interviewing Job Candidates
You have done the exercises above, know what you want and what you expect. You have placed an ad, posted the job or let others know you are ready to start interviewing. You have received job applications, resumes or enquiries from potential job candidates. Now, how do you decide who is the right person?
The Interview Process
We suggest you use a team approach to interviewing. You may want to use telephone interviews for the first contact using the Human Resources department, a professional search firm, a recruiter, yourself or a member of your staff. The phone interview covers the basic skills and experience before you schedule the in-person interview. Ideally, you will have 3 or 4 people interview each candidate. If possible, have one of the interviewers be a co-worker or someone in a similar job. Each person is looking for
different things. For example for a technical position, one person might be assessing technical skills, another is assessing the candidate's ability to communicate and their teamwork skills, another is looking at how well they will fit into the company culture. In some companies, a job candidate meets with several people in one session. Again, each person is looking for specific attributes to make a decision. Following the Interview, a decision should be made as quickly as possible on that person. Either they are being considered for the position or they are not. Let them know as soon as possible where they stand. If they are not to be considered further, it is better to let them immediately than drag on an unworkable situation. In fast-paced, well-organized companies, a person leaves their interview with a job offer. In that situation, the last person to interview the person knows the results of the prior interviews and is prepared to make an offer that day. Do not be afraid to hire the first person if they fit your criteria. In today’s tight job market, employers who delay may lose their best candidates by delaying.
Interview Questions
Ask a variety of questions about skills and education, relevant experience and about a person will get along with people in your company. Some specific type of questions are to be asked as follows:
Ask about prior experience
Ask information about the positions the candidate held that are relevant to the job you are filling. You may use their resume/application for specifics or ask general open-ended questions. You may use the following points to develop specific questions or use your own questions. The goal of experience questions is to learn: • • • • • • • • • The candidate's duties and responsibilities in each job. What was most rewarding about each position? What personal responsibility they felt for quality and meeting the goals of the company? What improvements in productivity and efficiency they made? How valuable their contribution was to the overall profitability of the company? How well they worked with other employees? How much initiative and/or leadership they showed? How they dealt with problems and challenges? What new ideas, products or innovations they contributed. What they learned from each that helped them in their career? • What motivated them to take the position, achieve promotions and/or leave the position? • How that prior experience contributes to their ability to do a good job for your
company?
• How they get along with different types of people. Ask questions relevant to the job and to your company culture? • How well they will deal with the specific people they will interact with on a regular basis (clients, customers, co-workers, peers, other departments, etc.)?
Ask about how well the candidate can do the job
• Review job description details, working conditions and physical demands of the job. • Give the applicant a copy of the job description, and review the job in general with them. If they are still interested and feel they can do the job, review each component of the job with them, asking about their ability to do each component. The goal of job detail questions is to learn: • Whether the applicant understands each job requirement and can do each part of the job function. • What experience and background the applicant has to perform the job as described. • Whether there is any accommodation (under the Americans with Disabilities Act) needed for the applicant to perform the job described. • How well the applicant can match their own skills and background to your company’s requirements.
Ask about education and training
Ask about educational background and other training, as appropriate. The goal of education/training questions is to learn: • How the applicant uses their education in their job. • What initiative they have taken to improve their own training and skills (particularly extra work taken on their own to obtain or maintain skills). • What plans they have for continuing to maintain or improve their education. • How well they can foresee future needs to maintain or upgrade their own skills, both on the job and outside. • What motivates the applicant to take on extra training (or why they don’t take the initiative)?
Ask about the company and its functions
Explain the product or service your company offers, its history, market strategy and how the job described fits into the overall scheme of things. Ask questions to describe how they can add value to your company. The goal of these questions is to learn: • How much prior knowledge they have of your company, your industry and your
corporate culture. • How well they can apply their own experience to your needs. • How well they will fit into your corporate culture. • What contribution they will make to the overall success of the company. • How well the applicant is able to communicate their skills and abilities into what is appropriate for your company. • What initiative the candidate took in preparing for the interview and for a possible position with your company. • What culture works best for them? Ask about the company culture or team environment in their previous positions and compare that to your culture.
Ask about health and safety practices
Ask about how much prior training and/or knowledge the applicant has had in SB 198 Requirements (California only), ADA, workers’ compensation, health care procedures and other federal or state laws. The goal of health and safety questions is to learn: • How an employee views their responsibilities toward the overall corporate effort to maintain a safe and healthy workplace. • How much safety training they have had. This is particularly important for jobs that have high accident or injury rates. • How much the applicant knows about workers’ comp laws, regulations and requirements? • Watch for minimal or inaccurate knowledge of these requirements for applicants who should be expected to remain current on these topics.
Ask about decision-making and creativity
One effective and interactive interviewing technique is to describe an actual situation or project that you are familiar with. Describe the situation, the goals and the people involved. Set up a dialog where as you describe the scenario and major decision points, the candidate is asked, "what you do at this point?" Let them know if they chose the answer you were seeking. Describe another decision point and ask them what they would do next. Do this with several decision points and gauge how well their responses fit with your expectations. The goal of decision-making questions This technique helps you understand the candidate's thinking process, their ability to think on the spot, to communicate and to think creatively. Allow them to ask questions and pay attention to what information they are using to make their decisions.
Ask about management and leadership ability
If you are hiring managers or executives (managers who manage managers), you will want to ask about their management/leadership style and how they have been effective in other positions. If you want someone who will be different from the person who held the job previously, be sure to delve into how they plan to make that transition and help their direct-reports make the change. You should have the person meet with some of their peer managers, some of your peers, some of the people above you and the people who will report to them before the final decision is made. This gives the candidate a better understanding of the personalities involved and gives your people a chance to be part of the hiring process. It also helps the new manager gain support before they show up for work. Strong managers and executives will ask for such meetings if you don't offer them. The goal of management and leadership questions is to learn: • How well they understand the management function in your company • Their leadership style and how they have produced results in other assignments • How they interact with their direct reports, their peer managers and the company's executive team • What additional benefits they can bring to your company (increasing productivity, increasing revenue, decreasing costs, etc.) • How well their style will fit with your company's management style and your company culture • How quickly they can become effective • How well they may deal with any lingering issues left from the previous manager or executive (if appropriate).
Ask about non-work activities and interests
Ask about hobbies, civic and community efforts that might be relevant to the job. Warning: DO NOT go into areas that are unrelated to the job. Be aware of the laws regarding appropriate interview questions. The goal of outside activity questions is to learn: • How much energy and vitality an applicant has. • How much leadership and organizational experience they have that contributes to their job qualifications that may be gained outside their structured work environment. • How well they manage their time. People who have time for hobbies and community activities must manage their time well. Busy people tend to get things done; very active people tend to accomplish a great deal in many areas. • How much personal satisfaction they gain from outside activities. Positively rewarding outside activities contributes to reducing stress from job pressures and
contributes to a better-rounded person. • How well they work with various types of people in different organizations. This indicates tolerance, adaptability and maturity. • How available the applicant is for overtime, travel and/or relocation. • How well they are able to balance family needs with job demands. (Be careful about which questions may be asked in this category. If the applicant mentions family members, then questions may be asked). Making the Hiring Decision After you have done your planning, screened the applicants and interviewed job candidates, your decision to hire a person ultimately rests on your intuitive sense of whether this is the right person for the job. Nothing can prepare you for that decision except your own experience supplemented with hard facts and discussions with the other interviewers. If you interview a lot of people, you will learn the signs that tell you a person is right. If you interview or hire infrequently, you will have to depend on lessintuitive methods and other people to help you. Some situations may allow you to hire someone for a short-term project or through a temporary agency. This allows you and the job candidate to work together before making a longer term commitment. If you work for a company that believes in high quality employees, you should be really Enthusiastic about the person you want to hire, not just lukewarm. Hiring someone just because you are tired of interviewing, because you don't like the process or because you are in a hurry are the worst reasons for hiring someone. Probably they won't work out and you'll have to fire them or they will quit and you will have to do it all over anyway. A bad employee is far more damaging that an empty position. You may have to rework your position requirements or change the places you advertise if you are not getting job applicants that meet your criteria.
Latest Innovative Strategies in Hiring Niche Skills
Companies are reworking their recruitment strategies to win the talent war. Social networking websites such as LinkedIn are only new ammunition to claim victory
? ? ? ? ? ? ? ? ? ? ? Employee referrals Internal job postings Social networking on websites such as LinkedIn Job portals such as www.naukri.com Employee branding Campus recruitments Placement consultants Hiring teams instead of an individual Targeting public-sector employees, ex-servicemen Hiring housewives, senior citizens, fresh school pass-outs for - part-time work Partnering with educational and training institutes Job fairs
Employee Retention through Employee Engagement
An organization that provides top wages and benefits loses a great employee to a competitor for no apparent reason. Of course, some employee turnover is to be expected, but if your company is truly engaging your employees, there is no good reason for the unexpected loss of quality staff members. Many companies already know that wages and benefits are important to employees, but compensation alone is not enough to keep the highly skilled, motivated and experienced workforce your business needs to excel. Defining employee engagement What is employee engagement exactly? Alpha Measure defines employee engagement as the level of commitment and involvement an employee has towards their organization and its values. The primary behaviors of engaged employees are speaking positively about the organization to coworkers, potential employees and customers, having a strong desire to be a member of the organization, and exerting extra effort to contribute to the organization’s success. Many smart organizations work to develop and nurture engagement. It is important to note, the employee engagement process does require a two-way relationship between employer and employee. Why is employment engagement so important? An organization’s capacity to manage employee engagement is closely related to its ability to achieve high performance levels and superior business results. Engaged employees will stay with the company, be an advocate of the company and its products and services, and contribute to bottom line business success. Engaged employees also normally perform better and are more motivated. There is a significant link between employee engagement and profitability. Employee engagement is critical to any organization that seeks not only to retain valued employees, but also increase its level of performance. Factors of engagement Many organizational factors influence employee engagement and retention such as: ? ? ? ? ? ? ? ? A culture of respect where outstanding work is valued Availability of constructive feedback and mentoring Opportunity for advancement and professional development Fair and appropriate reward, recognition and incentive systems Availability of effective leadership Clear job expectations Adequate tools to complete work responsibilities High levels of motivation
Many other factors exist that might apply to your particular business and the importance of these factors will also vary within your organization. Engagement essentials How will you know to what degree your employees are engaged? The first step is to Determine the current level of employee engagement. The best tool to determine this base line is a comprehensive employee satisfaction survey. A well administered satisfaction survey will let you know at what level of engagement your employees are operating. Customizable employee surveys will provide you with a starting point towards your efforts to optimize employee engagement. The key to successful employee satisfaction surveys is to pay close attention to the feedback from your staff. This is the only way to identify their specific concerns. When leaders listen, employees respond by becoming more engaged. This results in increased productivity and employee retention. Engaged employees are much more likely to be satisfied in their positions, remain with the company, be promoted, and strive for higher levels of performance. Listening to employee ideas, acting on employee contributions and actively involving employees in decision making are essential to employee engagement. Taking action to improve employee engagement Nothing is more discouraging to employees than to be asked for their feedback and see no movement toward resolution of their issues. Even the smallest actions taken to address concerns will let your staff know that their input is valued. Feeling valued will boost morale, motivate and encourage future input. Taking action starts with listening to employee feedback. Then the data needs to be analyzed. Next, a definitive action plan will need to be put in place and finally, change will be implemented. It is important that employee engagement is not viewed as a onetime action. Employee engagement should be a continuous process of measuring, analyzing, defining and implementing. Human diversity There needs to be some diversity to bring about a healthy level of differences. These are Everything from cultural and societal to personality and motivation. Having diversity with people will bring out questions, differing opinions, curiosity, conflict, and perhaps even Personality clashes. All of these are useful at a reasonable level to promote engagement. If everyone was the same, there would be little reason to even discuss anything and so communication wouldn’t be all that important and that can’t be true since it’s my next item on my list.
Open communication Communication that is open is really about an environment or attitude about the Communication that is comfortable in an organization. It should be welcoming to new ideas, disagreements and opinions while being presented with sincerity, respect and intent of trust. If these things are not there with communication, then the employee engagement suffers as that is when communication will begin to break things down. An appropriate style and expectation for communication needs to be presented and more importantly, demonstrated by the leaders in an organization. There are many ways to bring about more communication and they all work in different situations and with different people. They might include any forms such as common chitchat, sharing of stories and experiences, discussing lessons learned, collaborative tools to allow individual content, a feedback system with regular reviews, suggestion boxes (NOT anonymous), and a willingness of any leader to accept feedback from others including their directs without judging it or holding it against that person. There is much in the topic of communication that they deserve several other articles just on there own, so I’ll leave it at this for now, but I think that open communication really has the largest impact on employee engagement and they really go hand in hand in a lot of ways. Common goals / visions When people have a common goal or vision to work together on, it’s easier to dismiss personal differences and specific likes and dislikes between individuals. A common goal is the easiest way to have an immediate purpose together, even with someone you don’t know and it leads to a working relationship that opens new lines for building deeper relationships. The extreme of this is when enemies can even unite to work to one goal. Enemies will quickly realize that if they are after the same thing, it’s more effective to work together and set aside their differences to reach the common goal. In order to make progress towards a common goal, those involved have expectations of each other and will begin to communicate these things, whether it is encouraged or not. Getting a group of people to a common goal or vision is a whole other article (or ten perhaps) but once its truly in place, people will help each other and engage with one another to meet that goal at a higher level than if there was no common goal. Individuals will begin to look from themselves and from others the next level of engagement. Commitment That next level where there is an engagement between people is that of commitments. Commitments are a way to ensure that there is discussion between each other and that true engagement is when people hold each other accountable to any commitments made. Encourage this heavily, be true to your commitments yourself and work hard to ensure that trust is not broken where commitments may not be met. You can salvage that trust even when commitments are not met by bringing it up early (before a deadline is past), accepting the consequences of it and by apologizing to those you made the commitment to. All these reinforce the trust and ensure that you can stay engaged with those
Individuals. Ask for help when it’s needed and continue to talk about the commitments of others instead of simply ignoring them or letting them get by without a commitment. Doing this at an individual level or as a leader to set an example is a powerful way to get more engaged and engage others in your work. Training I’m a huge advocate for internal training in the workplace and I’ve seen how this has a huge impact on employee engagement. Internal training programs should be made as visible and public as possible with ideally, a sizable group of people. Generally having more people discuss, learn and share ideas on a given topic will generate more discussion and engagement among that group and training is a great avenue to bring this into the workplace. I’ve found that the best courses and training for engagement ensures that every single person in attendance has to participate and that this is done out loud and with some kind of opinion, answer or comment. I love content that has self-reflection or questions about oneself that you share in a group. This helps everyone learn more about each other as well as have discussion on one’s own perspective and opinion on things. Make it part of the system None of these methods work entirely on their own and they are all interdependent at some level. In order to ensure that employee engagement is something that gets attention, is measured and has various methods contributing to it, it’s important that it is part of a system. Not many things work on their own in business and it’s important to look at ways to embed it into the business practices. I regularly read Mission Minded Management where I love Michelle’s tag line of, “ I’m OK. You’re OK. Let’s fix the system. “This is true with employee engagement as well as there are always examples where individuals do things right, but unless it’s fixed at a larger scale, it doesn’t become cultural or lasting, which I think is crucial for engagement. Employee engagement takes a lot of effort to build and as outlined here, have a number of methods. To make them stick, they need to be driven on a continual basis, they should have regular discussion with various groups, they should be presented and taught to new employees, measured and used as an evaluation basis for employees, put into procedures and any relevant policies, shared with investors, clients and other business partners and in general, made to be part of the company’s business system in as many ways as possible. The more ingrained it is into the system, the more likely employee engagement will expand and retain itself as part of the culture in the workplace. What is the alternative to employee engagement? Conditions that prevent employee engagement seldom alleviate themselves. They should be assessed and addressed as soon as possible. Left to multiply, negative employee satisfaction issues can result in: Higher employee turnover – Employees leave, taking their reservoir of knowledge
and experience to another workplace Diminished performance – Competency of the workforce is reduced, at least short term, until new employees are trained Lost training dollars – Time and money invested in training and development Programs for departing workers is wasted Lower morale – Remaining employees can be overburdened with new duties, in addition the unresolved issues that already prevent their full engagement How can you attain employee engagement? Listen to your employees and remember that this is a continuous process. The Information your employees supply will provide direction. Insist upon increased engagement at the managerial level, and create and deploy a customized employee satisfaction survey from Alpha Measure to assess your current level of employee engagement. Identify problem areas, make a plan and take action towards.
Retention Tips & Ideas
Effective employee retention is based on the fact that people stay with something until the pain of staying exceeds the expected pain of leaving. Most people who are really good at something, like your top employees, have a low 'pain of leaving' because they know they can find something else quickly. So the trick to increased employee retention is to minimize the 'pain of staying'.
Key employee retention is critical to the long term health and success of your business. Managers readily agree that retaining your best employees ensures customer satisfaction, product sales, satisfied coworkers and reporting staff, effective succession planning and deeply imbedded organizational knowledge and learning. If managers can cite these facts so well.
Employee retention is one of the primary measures of the health of your organization. If you are losing critical staff members, you can safely bet that other people in their departments are looking as well. Exit interviews with departing employees provide valuable information you can use to retain remaining staff. Employee retention matters. Organizational issues such as training time and investment; lost knowledge; mourning, insecure coworkers and a costly candidate search aside, failing to retain a key employee is costly. Various estimates suggest that losing a middle manager costs an organization up to 100 percent of his salary. The loss of a senior executive is even more costly
Employee Retention building through Organization Culture
What Is a Learning Organization? An organization skilled a creating, acquiring, and transferring knowledge, and at modifying its behavior to reflect new knowledge and insights. A place where people continually expand their capacity to create results they truly desire, where new and expansive patterns of thinking are nurtured, where collective aspiration is set free and where people are continually learning how to learn Learning in an organization means the continuous testing of experience, and the transformation of that experience into Knowledge-accessible to the whole organization, and relevant to its core purpose. Why build a learning organization? Why commit ourselves to a lifelong attempt to understand and shift the ways we think and behave? Because we want superior performance To improve quality For Clients For competitive advantage For energized, committed work force To manage change For the truth Because time demands it Because we recognize our interdependence Thinking Strategically About Building A Learning Organization The essence of the learning organization The architecture of learning organizations The integrity of the architecture Putting it all together Attributes of “winning” organizations in the 21st century Replacing bureaucracy with aspirations, values and visions Systematic understanding Conversations Voluntary follower ship THE ESSENCE OF THE LEARNING ORGANIZATION The Deep Learning cycle is the essence of a learning organization
Not just the development of new capacities, but of fundamental shifts of mind, individually and collectively. The five basic learning disciplines – systems thinking, personal mastery, mental models, share vision and team learning activates this deep learning cycle. Sustained commitment to the disciplines keeps the cycle going. When the cycle begins to operate, the resulting changes are significant and enduring. New Skills and Capabilities Aspirations: To orient themselves towards what they really care about; and to change because they want to, not just because they need to. Reflection and Conversation: The capacity to reflect on deep assumptions and patterns of behavior both individually and collectively. Conceptualization: The capacity to see larger systems and forces at play; constructing coherent descriptions of the whole
New Awareness and Sensibilities
Ability to “see” underlying structures driving behavior. Increasingly aware of the ways in which we continually construct our views of the world. “Listening to the whole”, hearing not only what is said, but the deeper meanings New Attitudes and Beliefs New awareness is gradually assimilated into basic shifts in attitudes and beliefs. It takes time. When it does, it represents change at the deepest level in an organization culture. The set of beliefs and assumptions that develops over time in a learning organization is so different from the traditional hierarchical, authoritarian organizational world view.
Attrition details & Categorization
1. Section I – Attrition Details & Categorization The head count deployed in the Web synergies for the last 2 years is shown in Table 4.0: Head Count Data Opening Head Count 2010-11 105 2011-12 125
New Hires Attrition Closing Head Count Average Head Count Attrition % Head Count Growth
55 15 145 125 12.00% 38.10%
Table – 4.0
70 40 155 140 28.57% 24.00%
The Overall attrition for the Web synergies for the year 2011-12 as shown in Table 5.0 is at 28.57% which is much higher than the company-wide attrition of 18.82%. Opening Project Tracks Head Technology Project Manager PS Track 1 PS Track 2 PS Track 3 PS Track 4 HP Azar 22 6 8 24 23 26.09% Citrix Arjun 6 1 1 6 6 16.67% Count Apr '2011 Attritio n in 201112 New Hires in 201112 Closing Head Count Mar '2012 Avg Head Count 201012 Attrition % for 201012
IBM
Deepa
26
4
6
28
27
14.81%
Microsoft Oracle
Shyera Virendhar
31 20
17 7
30 14
44 27
38 24
45.33% 29.79%
PS
Track 5 PS Track 6 Total Sun Purnachand 20 125 5 40 11 70 26 155 23 140 21.74% 28.57%
Table – 5.0
The attrition analysis shows that the Project Manager – Shyera & the Project track which she manages which is PS Track 4 – Microsoft Technology stack had the highest attrition for the division with 45.33%. Even the number of back-fill and growth hires has been the highest for the track.
Categorization of Attrition
The categorization between Voluntary and Involuntary types of Turnover is as shown in Table 6.0: Number of Employees 5 35 40
Table – 6.0
Turnover Type Involuntary Voluntary Grand Total
Average Head Count Deployed 140 140 140
% of Attrition 3.57% 25.00% 28.57%
The categorization between Functional and Dysfunctional types of Turnover is as shown in Table 7.0: Number of Employees 5 35 40 Average Head Count Deployed 140 140 140
Table – 7.0
Turnover Type Functional Dysfunctional Grand Total
% of Attrition 3.57% 25.00% 28.57%
2. Section III – Diagnosis of causes & detailed analysis of Attrition.
The diagnosis and detailed analysis of the root causes of attrition based on the exit interview questionnaire enables us to categorize the Voluntary / Dysfunctional Attrition as: a. Individual, Team and Company factors. [Table 9.0] b. Specific to Projects, Technologies, based on band / level, tenure, Manager.
Categorization of Reasons - 3 factors for Voluntary Attrition
Factor Company Factor Individual Factor Team Factor Grand Total Total Attrition 16 5 15 36
Table – 9.0
% Contribution to Voluntary Attrition 44.44% 13.89% 41.67% 100.00%
16/36 Contribution to Attrition – 44.44%
16/36 Contribution to Attrition – 41.67%
5/36 contribution to Attrition – 13.89%
86.11%
86.11% - Of total Voluntary attrition are from Controllable factors
Turn over Cost of Attrition
3. Section II – Cost of Turnover for Attrition. To arrive at the cost of Turnover the following basic assumptions those have been made which include: ? ? Average number of work hours per week is 40 Hrs & 2080 Hrs per year Average Salary cost for Technical staff is assumed at Rs. 6,07,419/- per annum based on the total Salary cost / Total Number of employees. ? Average Salary cost for Administrative and HR staff assumed at Rs. 4,00,000/- per annum ? The rest of the assumptions to arrive at the cost column have been covered in the Remarks column. Sl.No Cost Head Individual Item Cost in Rs. Remarks
Cost of exit interviewer's time
Direct Salary cost @ Rs.4.0L p.a for HR personnel, avg time spent 7692 per exit - 1 hour, work week of 40 hours translates to Rs.192.30 per hour. 2 months of notice pay, 3735384 assuming an average salary of 6.07L for 40 exits Average of 4 hours spent across departments per exit, using the same 30768 average salary of Rs. 4.0L p.a the cost per hour of translates to Rs.192.30. 3735384 320 Hrs to compensate for 2 months time @ Rs.
1
Separation Cost
Cost of terminating employee's time
Cost of administrative functions related to termination
2
Vacancy
Cost of additional overtime
Cost
291.82 per hour of salary cost Cost of additional temporary help 40 Hrs of additional help 466924 deployed per exit @ Rs. 291.82 per hour Average of Rs. 2000/- per 80000 employee hired as replacement Average of Rs. 2000/- per 80000 employee hired as replacement 1 Hr per interview, Interview success ration of 56365 1:5, 200 Hours of Interviews for 40 hires Cost per test administered @ Rs.400/- per test. 667 266800 candidates took the test @ 30% test clearance ratio Average of 3 company checks @ Rs. 250/- per Background check cost company per employee 70000 hired, highest education check @ Rs. 800/- per employee, present address check @ Rs.200/40000 Average of Rs.1000/- per hire
Pre-employment administrative
Cost of attracting applicants
Cost of interview process per applicant
Assessment cost 3 Replacement Cost
Staff costs to meet & confer Consultant cost Post employment admin costs Post employment medical
2680000 @ 10% of Avg CTC paid 40000 Average of Rs. 1000/- per employee
40000 Rs. 1000/- per employee
exam Sign on bonus Cost of informational literature / Training material 4 Training Cost Formal training costs 80000 Average of Rs. 20000/paid per joinee
Rs. 800/- per joinee 32000 20 days @ Rs. 291.82 per 1867648 hour 8 days @ Rs. 291.82 per 747059 hour 3735296 2 months per exit Average billing loss per 12500000 customer @ 25 lakhs per annum, 5 customers lost Might loose another 10 resources due to the ripple 7572830 effect. Average cost of Rs. 7.57L per exit. 37864150
Informal training costs Lost productivity
5
Lost productivity & Business
Lost customers
Effect on team morale
Total Turnover Cost Table – 8.0
Total cost of turnover as shown in Table 8.0 is 1.56 times the annual salary cost or 156% of total annual salary cost. This cost could be higher if some of the assumptions like the loss of customers, loss of productivity and the overall effect on the morale of the team are estimated higher. Even the salary cost taken is average salary cost and the percentage could go up if we take actual salary cost for some of the more experienced resources at senior levels.
Solutions to Reduce Attrition
4. Section IV – Proposed Solutions to reduce Attrition. The Attrition analysis done in Section III does give us a set of clear issues the Division is facing right now and it would be important to see if some of these factors are common across the organization. The quicker the Organization identifies the controllable factors which are under its direct control and create action plans to address those factors which are resulting in Attrition it would automatically take care of Retention of Talent. It would always be better to take certain organization-wide initiatives to control attrition than just focus on a specific division. In order to control attrition and employ effective retention measures with a long term perspective it would be important for us to find answers to the following questions: i) Why people leave? In any industry the work can often be monotonous and opportunities for career growth minimal. So when opportunities beckon, the high rate of attrition is not surprising. However, there are some common reasons that especially cause people to leave. Most common reasons are the controllable factors [Company & Team factors] like money, inability to handle various types of stress, monotonous work; company policies, lack of career growth, problems with those in senior positions etc. ii) What is the cause? It would be important for organizations to have a system of doing a detailed Exit interview questionnaire, get granular details enabling the organization to capture real reasons / causes of attrition and evaluate whether they can his issues bear merit and whether they can be resolved and initiate steps to avoid similar reasons from occurring in future. We can consider doing: ? ? ? Exit Analysis, Attrition Diagnostics Analysis of reasons as Individual, Team and Company factors Analysis across locations, tenure, business units, functions, performance groups
?
Correlation studies with components of employee lifecycle such as sourcing, selection, training, engagement and retention
?
To work on specific and precise initiatives to prevent and control attrition
In addition to getting a detailed Exit interview assessment done organizations can consider doing a Root cause analysis of attrition, have specific plans for Top performing talent.
iii) What can be done? Though, it is impossible to scrap problems totally, there are certain ways by which management can tackle attrition. Since the most corporate environments are unique, companies need to develop innovative ways to tackle them. Human Resources function jointly with the key stake holders must address these issues, and along with the management need to evolve strategies to retain employees at all levels. Retention of key employees is critical to the long-term health and success of any organization. Hence, failing to retain a key employee is a costly proposition for any organization. The New Re-definition of Retention: Fundamental changes are taking place in the work force and the workplace that promise to radically alter the way companies relate to their employees. Hiring and retaining good employees have become the chief concerns of nearly every company in every industry globally. Retention is all the more important because of the severe competition among employers for Quality Talent. This fierce competition for quality talent results from a number of workplace trends, including: ? ? ? ? ? ? A robust economy Shift in how people view their careers Changes in the unspoken "contract“ between employer and employee A new generation of workers Changes in social mores Life balance
Proposed Solutions: The proposed solutions matching to the need for the Division and the Company are divided into 3 sets of Initiatives which are as follows: A. Retention Initiatives - Short Term which are easier to implement with minimal budgets [0-6 months timeframe] B. Retention Initiatives - Medium Term which can give quicker results but would have higher budget impact [3-9 months timeframe] C. Retention Initiatives - Long Term which would give long term stability & better predictability [10-14 months timeframe]
Return on Investment on Retention
Investment in strategic Human Resources initiatives can, when done effectively, produce a positive ROI. For example, coaching Managers and Human Resources professionals to conduct hiring interviews in a manner which accurately assesses candidates against the competencies required to be a top performer, will result in hiring more above average performers. If top performers produce, for example, 10% more than average performers, the organization Will realize a significant ROI. Consider this: If the cost of coaching managers to effectively interview candidates is $8,000.00 per year and the managers are successful in filling two sales positions each year with top performers who produce 110% of sales targets (i.e. target = 200,000.00/year) the ROI would be 400%. (Benefit [2x20, 000.00 = 40,000.00] – Cost [8,000.00] / Cost [8,000.00] x 100). A second example: assessing candidates for promotion to determine if they have the Required competencies to transition from the technical or hands on side of the business to management can reduce the risk of promotion failure, ensure effective succession Planning, reduce turnover costs, and maintain functional operations. When assessing for Interests, skills, abilities and attitudes of individuals reduces failed promotions, the ROI Can be significant: If the cost of assessment is $1,500.00 per promotion candidate, and two Candidates are assessed to determine the differences between them and, as a Result, the best candidate is chosen and is successful in the position (i.e. Productivity, quality and retention ratios increase in the first year) then Significant savings are accrued (turnover costs alone, which include lost Productivity, cost of new hire, severance etc. can be conservatively estimated at
$20,000 per employee). (Benefit [20,000.00] – Cost [3,000.00]/ Cost [3,000.00] x 100) ROI in this example is 566%. Conclusion Human Resources initiatives which impact organizations by more strategically aligning people and the strategic goals of the organization, will implicitly enhance the relationship of employees and the organization, strengthen the culture and lead to greater efficiency and productivity, resulting in a stronger and more enduring competitive advantage and significant ROI. Owners and leaders of businesses of any size can develop this effectiveness and profitability by acknowledging the importance of employees, and making their organizations places which provide opportunities for people to use their skills, interests and abilities to contribute to corporate goals, which in turn, will have a significant and positive impact on retention.
Summarization of the Project.
Employee engagement is the buzz word term for employee communication. It is a positive attitude held by the employees towards the organization and its values. It is rapidly gaining popularity, use and importance in the workplace and impacts organizations in many ways.
Employee engagement emphasizes the importance of employee communication on the success of a business. An organization should thus recognize employees, more than any other variable, as powerful contributors to a company's competitive position. Therefore employee engagement should be a continuous process of learning, improvement, measurement and action. We would hence conclude that raising and maintaining employee engagement lies in the hands of an organization and requires a perfect blend of time, effort, commitment and investment to craft a successful endeavor.
doc_923869039.pdf
This Project work is submitted for partial fulfillment of my Fellowship on Certified Retention & Engagement Professional from AHRB / CAMI
Project Report On Certified Retention & Engagement Professional
This document was created on 25th May 2012 as part of my project work, contains Assignments and it is prepared and submitted for the purpose of partial fulfillment for Fellowship from ASIAN HR BOARD – AHRB / CAMI – USA. During the month of May 2012. This template is a draft document that has been as a working template for an IT Organization based in Hyderabad. Submitted by Puli. Srinivas Rao
AHRBHYD0211010
Acknowledgement
Its great pleasure to have worked on a Project work on CREP for An IT organization as part of my AHRB – Fellowship Program, Certified Retention & Engagement Professional – CREP. This project work has been carefully carried out taking the courseware, workshop conducted by experts, on the job work experience of the aspirant & books referred which were recommended in the courseware – CREP. I would like to express my sincere thanks to the entire team of AHRB, CAMI & MEC for conducting such a value based program & designed a well structured, informative courseware to all participants. I take this opportunity to express my profound gratitude and respect to my Faculty Ms. Nandita Shankar, she introduced me to this topic of Retention & Engagement Professional, which has created lot of interest, his support and guidance has inspired me to put in the right efforts for this assignment. Thank you Srinivas Rao Puli. CREP - AHRB. (Fellow Aspirant)
Table of Contents
S.no 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Topics Project Objective Scope of the Project. Methodology Followed. Brief Overview of findings Conclusions – Project report. About Organization – Profile. Services & Operations. The challenges of HRM
Causes of Employee Turnover in I T Industry.
Cost of Employee – Turnover to Company. Retention based hiring.
Latest Strategies in implementing Niche Hiring Employee Retention through Employee engagement Retention Tips & Ideas. Employee Retention building through Org-Culture. Attrition Details & Categorization. Turnover cost of Attrition. Solutions to reduce Attrition. Return on Investment on Retention Summarization of the Project Report.
Project Objective
The objective of the project assignment is to do a detailed review and analysis of attrition, its impact to the business. The focus of this assignment is one of the divisions of Information Technology Services. An Information Technology Services Organization where the attrition levels have been the highest for the year 2011-12. This project assignment would also propose a plan with set of initiatives and actions to prevent attrition and retain the Talent. This objective would be achieved by computing attrition percentages, doing a deeper analysis of its impact to the organization, diagnosing the root causes of attrition thus enabling a formation of a well thought out plan and strategy to increase retention of Talent within this Vertical.
Scope of the Project
The scope of the project is limited to the Information Technology single vertical Division of WebSynergies India Private limited and all facts, data that is analyzed is from this Microsoft Division.
Methodology Followed
The methodology followed is to categorize the attrition into functional & dysfunctional attrition, calculate the overall cost of turnover for this attrition, do a detailed diagnosis and a root cause analysis of various causes, evaluate and propose a plan of action with a set of initiatives in the short, medium to long term to prevent attrition and retain the Talent within the organization.
Brief Overview of Findings
Reasons for Attrition
Jan to Apr 2012, 39 Exits
Underperformance, 1, 3% Termination, 1, 3% Wrong Hire, 4, 10% No Role Clarity, 3, 8%
Better Pay, 9, 23%
Personal Others Marriage, Relocations, etc.,, 8, 20% No Career Planning, 13, 33%
Wrong Hire Personal Others - Marriage, Relocations, etc., Better Pay Underperformance No Role Clarity No Career Planning Termination
The attrition for the Information Technology Division of Web synergies has been extremely high for the year 2011-12 which stands at 17.87 which is much higher than the company average of 12.12% and compared to 2010-11 it has been more than double. The Section I has details on the categorization of attrition and the Dysfunctional / Voluntary are a major area of concern. The Section II focuses on computing the Cost of Turnover which in the case of IT division has been 1.20 times the average cost of salary. The Section III details out the root cause & analysis of Attrition considering various factors. A total of 56.11% - of total Voluntary attrition are from Controllable factors which are within the direct control of Web Synergies India Private limited. The key reasons which have made a higher impact on attrition are: ? Compensation is not as per IT Industry standard ? Unhappy with the Manager & no Specific KRA’s. ? Monotonous Work & No Challenge. ? No Scope for onsite opportunity. The other observations from the detailed root cause analysis reveal:
? There is a huge talent drain at the Middle management level. Even the levels of attrition in the Junior management bands have been higher than 10%+ ? The attrition has been high for employees who have been with the organization between the 1-3 year tenure & < 1.5 year ? The organization is taking a real hit with the loss of talent in the 2-4 years tenure as they are the Team Leaders of the future. ? All the involuntary exits are related to performance issues either with ability, competence and attitude. Need to also examine the Hiring & evaluation process for these employees, performance improvement plans to see if there are any gaps in assessment / judgment.
The Section IV outlines a range of proposed solutions matching to the need for the Division and the Company is divided into 3 sets of Initiatives which are as follows: i. Retention Initiatives - Short Term which are easier to implement with minimal budgets [0-3 months timeframe] ii. Retention Initiatives - Medium Term which can give quicker results but would have higher budget impact [3-6 months timeframe] iii. Retention Initiatives - Long Term which would give long term stability & better predictability [6-12 months timeframe] The Section V provides details on the ROI for retention outlining the specific Pilot program –CLIMB for coaching Managers [CLIMB – Coaching on Leadership, Involvement, Motivation to become good Team Leaders, Project Managers & Sr. Consultants].
Company Factor - Reasons
Individual Factor - Reasons
10 9 8 7 6 5 4 3 2 1 0
3 2.5 2
3 2
10
1.5 1 0.5
4 2
Compensation is not industry standard Unhappy with HR Unhappy with policies & promotions recruitment / Unhappy with processes Attrition Number
0 Personal - Health Personal - Relocation
Attrition Number
Conclusions of Project Report.
As they say, “Happiness can be contagious”. So every organization needs to work on making sure the “Work place is a happy one”, which every employee would love to spend time. HR department along with senior management must take steps to make sure of this. Feeling “Engaged” depends on the “Strength” of the workplace not necessarily on the corporate leadership - Buckingham & Coffman, ‘First Break all the Rules’ To attract & retain the RIGHT Talent we have to offer them a unique Emp Value Proposition. ? Companies do not retain people, People decide to stay, they decide to stay when they feel “engaged”, and “Engaged” employees stay longer. ? The “Boss / Manager” is the key factor in building a strong work place. Talent retention strategy will work if we have the “Boss / Manager” in right place. ? “Boss / Leader” who “nurture” and “mentor”. Creates nurturing environment for the employees to imagine, explore, pioneer, invent etc.
Effective human resource management must be practiced at both strategic and at day-to-day levels. HR management practices must reflect company policy as to how it will manage and relate to its employees. The HR strategy should evolve from a transactional support role to partnering in the organizations business strategy. HR must take steps to be aware of employee problems and try to solve them, creatively. The organizations must focus on building an Ethical Brand which is identified by the employees resulting in a commitment to live the Brand Character, the values the company holds dear about itself, its brand, and its consumers. When employees identify themselves with the Brand they work for and pride themselves about it we would have certainly reached a status of Best Places to Work and retention of employees becomes second nature to the organization & it’s DNA.
T eam Factor - Reasons
6 5 4 3 2 1 0
Health issues due to night shifts Unable to maintain work life balance Unhappy as there is no work / on bench Unhappy Unhappy withUnhappy with because of Project the Manager work environment & role pressure
6
3 2 1 2 1
Attrition Number
Company Profile – Web Synergies India Private Limited.
Web Synergies, founded in 1998 by Mr. Gideon Lim, a veteran of the web industry in Singapore, is a regional IT company with offices in Singapore and India, occupying niche markets in the multimedia, wireless and web development, electronic commerce, hosting and Internet applications arena. The company's clientele encompasses Fortune 50 companies, SMEs and Government bodies. Clients include the Housing and Development Board (HDB), Hewlett Packard, Great Eastern Life Insurance, Sony, SPRING Singapore, the Singapore Police Force, among others. Web Synergies (S) Pte Ltd clients are mostly located in Singapore, Japan and Hong Kong but also in Europe, and in USA. As a one stop interactive web agency working on diverse computing platforms, Web Synergies provides holistic business IT solutions in enterprise programming with an equally strong focus on eye catching multimedia and web design developments. Application performance (specifications, budget and deliverables met) is the key element on which Web Synergies apprehend any single project. As an IT consultant, Web Synergies also assists companies in validating Web-based projects, in driving the implementation of innovative wireless applications and in solving technology related business development issues. Web Synergies India Private Ltd corporate objectives are to focus on profit ratio rather than pure growth. In that aspect we share the philosophy of Dr. Jan Hruska, CEO of Sophos anti-virus software: "Turnover is vanity. Profit is sanity". Of course, we understand that some economies of scale can only be achieved through sheer size and volume. But we also believe that the latest IT technologies, much more than in the first 20 years after the invention of the PC, can lead to tremendous productivity gains, improved work quality and, of course, sizeable profits. These profits can then be reinvested in people, processes, technology and of course in community deeds. 10% of Web Synergies monthly profits are systematically poured into non-profit organizations. Core Values: 1. Integrity - delivering as promised, on time. 2. Excellence - Striving to give the best to our clients on all tasks and projects. 3. Forefront Expertise - Always in touch with cutting-edge trends and opportunities to help clients grow by implementing relevant strategies. 4. Partnership - Most clients know what they want, though it may come in bits and pieces. We believe in working closely with client from start to finish, hearing their feedback, and in doing so provide the most optimal, need-focused services. 5. Giving - We believe in using whatever financial resources or human talents given by God, to be a blessing to the community on a regular basis.
Mission: "To be a corporation that epitomizes godly values in our dealings with clients and business partners alike." Web Services: Web Solutions. These are exciting words. These days, it's a much-talked about subject, that you are either a ".Net" or a "Linux/Open standard" fervent supporter. We, at Web Synergies India Private Limited, have been talking about Web Services for a bit longer, actually since our inception. We were born for that. We may do it may be a bit differently, but the spirit is the same: deliver you web applications, fast and neat. As a matter of fact, our Web Solutions cover the five main web applications that any organization requires to function properly using web technologies or to do business on the web: Maintenance, Hosting, Intranet, Extranet, Content Management Solutions. To support all these applications and to design the best architecture for your current and future needs, Web Synergies India Private Ltd has developed a sixth expertise: Web Consulting IT Services: As an experienced "web system Integrator" and outsourcing vendor, Enterprise Synergies has developed along the years a consulting expertise in a wide range of IT Services. This includes software outsourcing and business process outsourcing out of our Singapore and Indian software development offices. Of course, that expertise is synthesized in Enterprise Synergies' internal knowledge and processes. As a matter of fact, it all fall down to human capital and to the faithful team of programmers and project leaders and managers that we have groomed, that we keep grooming and cherishing (see People and Expertise). Our natural dedication to serving our clients pushes us to constantly study IT projects in new territories, from complicated integration work to supply chain solutions and business intelligence. Schematically, our IT consulting services cover Programming works, System Integration, web based e business applications development (supply chain, e fulfillment, ecommerce). Development Practices Analysis In the Analysis Phase of a new project the company completes a review of client business processes and system requirements. The key deliverable of this Phase is typically a Functional Requirements document (FRD). Clients are asked to review and sign-off on this document prior To moving forward in the project. Key events in the Analysis Phase are:
? Project preparation & planning ? Conduct of requirements gathering interviews & workshops ? Preparation & review of functional requirements
Design Phase : In the Design Phase, the proposed system design will be delivered in the form of a System Design Document (SDD) and accompanying software demonstrations. An Implementation Proposal, including a go-forward budget & project schedule, will be presented to client steering committee members. The client is asked to sign off on the final design and Implementation Proposal prior to moving to the Development & Testing Phase. Key events in the Design Phase include: ith project team members
led Software Design & Build Plan Preparation Development & Testing In the Development & Testing phase, Clients are asked to test each Build as delivered. Key events in the Development & Testing phase are: tem integration testing
Deployment In the Deployment Phase the system is fully implemented at the client site and all user training is completed. Key events in the Deployment Phase are: -up -through
THE CHALLENGES OF HUMAN RESOURCE MANAGEMENT The role of the Human Resource Manager is evolving with the change in competitive market environment and the realization that Human Resource Management must play a more strategic role in the success of an organization. Organizations that do not put their emphasis on attracting and retaining talents may find themselves in dire consequences, as their competitors may be outplaying them in the strategic employment of their human resources.
With the increase in competition, locally or globally, organizations must become more adaptable, resilient, agile, and customer-focused to succeed. And within this change in environment, the HR professional has to evolve to become a strategic partner, an employee sponsor or advocate, and a change mentor within the organization. In order to succeed, HR must be a business driven function with a thorough understanding of the organization’s big picture and be able to influence key decisions and policies. In general, the focus of today’s HR Manager is on strategic personnel retention and talents development. HR professionals will be coaches, counselors, mentors, and succession planners to help motivate organization’s members and their loyalty. The HR manager will also promote and fight for values, ethics, beliefs, and spirituality within their organizations, especially in the management of workplace diversity. This paper will highlight on how a HR manager can meet the challenges of workplace diversity, how to motivate employees through gain-sharing and executive information system through proper planning, organizing, leading and controlling their human resources. Workplace Diversity According to Thomas, dimensions of workplace diversity include, but are not limited to: age, ethnicity, ancestry, gender, physical abilities/qualities, race, sexual orientation, educational background, geographic location, income, marital status, military experience, religious beliefs, parental status, and work experience. The Challenges of Workplace Diversity The future success of any organizations relies on the ability to manage a diverse body of talent that can bring innovative ideas, perspectives and views to their work. The challenge and problems faced of workplace diversity can be turned into a strategic organizational asset if an organization is able to capitalize on this melting pot of diverse talents. With the mixture of talents of diverse cultural backgrounds, genders, ages and lifestyles, an organization can respond to business opportunities more rapidly and creatively, especially in the global arena, which must be one of the important organizational goals to be attained. More importantly, if the organizational environment does not support diversity broadly, one risks losing talent to competitors.
This is especially true for multinational companies (MNCs) who have operations on a global scale and employ people of different countries, ethical and cultural backgrounds. Thus, a HR manager needs to be mindful and may employ a ‘Think Global, Act Local’ approach in most circumstances. The challenge of workplace diversity is also prevalent amongst Singapore’s Small and Medium Enterprises (SMEs). With a population of only four million people and the nation’s strive towards high technology and knowledge-based economy; foreign talents are lured to share their expertise in these areas. Thus, many local HR managers have to undergo cultural-based Human Resource Management training to further their abilities to motivate a group of professional that are highly qualified but culturally diverse. Furthermore, the HR professional must assure the local professionals that these foreign talents are not a threat to their career advancement. In many ways, the effectiveness of workplace diversity management is dependent on the skilful balancing act of the HR manager. One of the main reasons for ineffective workplace diversity management is the predisposition to pigeonhole employees, placing them in a different silo based on their diversity profile. In the real world, diversity cannot be easily categorized and those organizations that respond to human complexity by leveraging the talents of a broad workforce will be the most effective in growing their businesses and their customer base. The Management of Workplace Diversity In order to effectively manage workplace diversity, Cox (1993) suggests that a HR Manager needs to change from an ethnocentric view ("our way is the best way") to a culturally relative perspective ("let's take the best of a variety of ways"). This shift in philosophy has to be ingrained in the managerial framework of the HR Manager in his/her planning, organizing, leading and controlling of organizational resources. As suggested by Thomas (1992) and Cox (1993), there are several best practices that a HR manager can adopt in ensuring effective management of workplace diversity in order to attain organizational goals. They are: Planning a Mentoring ProgramOne of the best ways to handle workplace diversity issues is through initiating a Diversity Mentoring Program. This could entail involving different departmental managers in a mentoring program to coach and provide feedback to employees who are different from them. In order for the program to run successfully, it is wise to provide practical training for these managers or seek help from consultants and experts in this field. Usually, such a program will encourage organization’s members to air their opinions and learn how to resolve conflicts due to their diversity. More importantly, the purpose of a Diversity Mentoring Program seeks to encourage members to move beyond their own cultural frame of reference to recognize and take full advantage of the productivity potential inherent in a diverse population.
Organizing Talents Strategically Many companies are now realizing the advantages of a diverse workplace. As more and more companies are going global in their market expansions either physically or virtually (for example, E-commerce-related companies), there is a necessity to employ diverse talents to understand the various niches of the market. For example, when China was opening up its markets and exporting their products globally in the late 1980s, the Chinese companies (such as China’s electronic giants such as Haier) were seeking the marketing expertise of Singaporeans. This is because Singapore’s marketing talents were able to understand the local China markets relatively well (almost 75% of Singaporeans are of Chinese descent) and as well as being attuned to the markets in the West due to Singapore’s open economic policies and English language abilities. With this trend in place, a HR Manager must be able to organize the pool of diverse talents strategically for the organization. He/She must consider how a diverse workforce can enable the company to attain new markets and other organizational goals in order to harness the full potential of workplace diversity. An organization that sees the existence of a diverse workforce as an organizational asset rather than a liability would indirectly help the organization to positively take in its stride some of the less positive aspects of workforce diversity. Leading the TalkA HR Manager needs to advocate a diverse workforce by making diversity evident at all organizational levels. Otherwise, some employees will quickly conclude that there is no future for them in the company. As the HR Manager, it is pertinent to show respect for diversity issues and promote clear and positive responses to them. He/She must also show a high level of commitment and be able to resolve issues of workplace diversity in an ethical and responsible manner. Control and Measure ResultsA HR Manager must conduct regular organizational assessments on issues like pay, benefits, work environment, management and promotional opportunities to assess the progress over the long term. There is also a need to develop appropriate measuring tools to measure the impact of diversity initiatives at the organization through organizationwide feedback surveys and other methods. Without proper control and evaluation, some of these diversity initiatives may just fizzle out, without resolving any real problems that may surface due to workplace diversity. Motivational Approaches Workplace motivation can be defined as the influence that makes us do things to achieve organizational goals: this is a result of our individual needs being satisfied (or met) so that we are motivated to complete organizational tasks effectively. As these needs vary from person to person, an organization must be able to utilize different motivational tools
to encourage their employees to put in the required effort and increase productivity for the company. Why do we need motivated employees? The answer is survival. In our changing workplace and competitive market environments, motivated employees and their contributions are the necessary currency for an organization’s survival and success. Motivational factors in an organizational context include working environment, job characteristics, and appropriate organizational reward system and so on. The development of an appropriate organizational reward system is probably one of the strongest motivational factors. This can influence both job satisfaction and employee motivation. The reward system affects job satisfaction by making the employee more comfortable and contented as a result of the rewards received. The reward system influences motivation primarily through the perceived value of the rewards and their contingency on performance. To be effective, an organizational reward system should be based on sound understanding of the motivation of people at work. In this paper, I will be touching on the one of the more popular methods of reward systems, gain-sharing. Gain-sharing: Gain-sharing programs generally refer to incentive plans that involve employees in a common effort to improve organizational performance, and are based on the concept that the resulting incremental economic gains are shared among employees and the company. In most cases, workers voluntarily participate in management to accept responsibility for major reforms. This type of pay is based on factors directly under a worker’s control (i.e., productivity or costs). Gains are measured and distributions are made frequently through a predetermined formula. Because this pay is only implemented when gains are achieved, gainsharing plans do not adversely affect company costs. Managing Gain-sharing In order for a gain-sharing program that meets the minimum requirements for success to be in place, Paulsen (1991) and Boyett (1988) have suggested a few pointers in the effective management of a gain-sharing program. They are as follows: • A HR manager must ensure that the people who will be participating in the plan are influencing the performance measured by the gain-sharing formula in a significant way by changes in their day-to-day behavior. The main idea of the gain sharing is to motivate members to increase productivity through their behavioral changes and working attitudes. If the increase in the performance measurement was due to external factors, then it would have defeated the purpose of having a gain-sharing program. • An effective manager must ensure that the gain-sharing targets are challenging but legitimate and attainable. In addition, the targets should be specific and challenging
but reasonable and justifiable given the historical performance, the business strategy and the competitive environment. If the gain-sharing participants perceive the target as impossibility and are not motivated at all, the whole program will be a disaster. • A manager must provide useful feedback as guidance to the gain-sharing participants concerning how they need to change their behavior(s) to realize gain-sharing payouts. The feedback should be frequent, objective and clearly based on the members’ performance in relation to the gain-sharing target. • A manager must have an effective mechanism in place to allow gain-sharing participants to initiate changes in work procedures and methods and/or requesting new or additional resources such as new technology to improve performance and realize gains. Though a manager must have a tight control of company’s resources, reasonable and justifiable requests for additional resources and/or changes in work methods from gain-sharing participants should be considered. Executive Information Systems Executive Information System (EIS) is the most common term used for the unified collections of computer hardware and software that track the essential data of a business' daily performance and present it to managers as an aid to their planning and decisionmaking. With an EIS in place, a company can track inventory, sales, and receivables, compare today's data with historical patterns. In addition, an EIS will aid in spotting significant variations from "normal" trends almost as soon as it develops, giving the company the maximum amount of time to make decisions and implement required changes to put your business back on the right track. This would enable EIS to be a useful tool in an organization’s strategic planning, as well as day-to-day management. Managing EIS As information is the basis of decision-making in an organization, there lies a great need for effective managerial control. A good control system would ensure the communication of the right information at the right time and relayed to the right people to take prompt actions. When managing an Executive Information System, a HR manager must first find out exactly what information decision-makers would like to have available in the field of human resource management, and then to include it in the EIS. This is because having people simply use an EIS that lacks critical information is of no value-add to the organization. In addition, the manager must ensure that the use of information technology has to be brought into alignment with strategic business goals Conclusion The role of the HR manager must parallel the needs of the changing organization. Successful organizations are becoming more adaptable, resilient, quick to change directions, and customer-centered. Within this environment, the HR professional must learn how to manage effectively through planning, organizing, leading and controlling the human resource and be Knowledgeable of emerging trends in training and employee development
Causes of Employees Turn over in IT Industry.
Common causes of employee turnover and workforce managers role in how to prevent them. Workforce managers, workforce management systems, human resources professionals as well as industrial psychologists all have their own theories on the question of – “What causes employee turnover”. Among the most common causes of employees leaving companies are: 1. Excessive workload, an employee doing the work of more than one person. This Often entails overtime and necessitating the employee having to take work home. Many employees say that they become overwhelmed and overloaded with work. The Increase in stress levels and pressure means that they cannot sustain it and will Eventually seek employment elsewhere. 2. Management not giving the employee sufficient recognition for the work done, or Taking the credit themselves of giving it to the wrong person. 3. Not giving the staff member sufficient power to make decisions to get the job done And to progress in the organization. 4. Ongoing change initiatives giving the employee a sense of instability. 5. Management not giving clear briefs and clear guidelines on their expectations of the employee. 6. Poor leadership skills other reasons could range from anything from job mismatch, inadequate training or even inadequate compensation plans. The costs of turnover in a company are huge. It is necessary to understand the role that turnover of employees play and the reasons for it.
Cost of the Employee Turnover in the Organization
It’s one of the largest costs in all different types of organizations, yet it’s also one of the most unknown costs. It’s employee turnover. Companies routinely record and report costs such as wages and benefits, Workman’s Compensation Insurance, utilities, materials, and space, yet most companies have no and report the cost of employee turnover. It can be much higher than you think. How much is it costing you? Several well-regarded studies have recently estimated the cost of losing an employee: •SHRM, the Society for Human Resource Management, estimated that it costs $3,500.00 to replace one $8.00 per hour employee when all costs — recruiting, interviewing, hiring, training, reduced productivity, et cetera, were considered. SHRM’s estimate was the lowest of 17 nationally respected companies who calculate this cost! •Other sources provide these estimates: It costs you 30-50% of the annual salary of entry-level employees, 150% of middle level employees, and up to 400% for specialized, high level employees! •Do a quick calculation: Think of a job in your organization where there has been some turnover, perhaps supervisors. Estimate their annual average pay and the number of supervisors you lose annually. For example, if their average annual pay is $40,000, multiply this by .125% (or 125% of their annual pay, a reasonable cost estimate for supervisors). This means it costs $50,000 to replace just one supervisor. If this company loses ten supervisors a year, then 10 times $50,000 equals $500,000 in replacement costs for just supervisors. This is the bottom line cost. The top line cost? If the company’s profit margin is 10%, then it costs $5,000,000 in revenues to replace these ten supervisors. Do these numbers seem unbelievable? Here’s an actual calculation from a well-regarded organization in my community. The HR Manager of this human services organization (housing for disabled persons, sheltered Workshops, etc.), estimated that 30 entry level people leave his organization on average every quarter. This averages out to ten people per month. Let’s be extra conservative and shave SHRM’s estimate (see above) down to $3,000.00 to replace each employee. This amounts to $30,000 per month, or $1,000.00 in employee turnover costs every day of the month! Annually, this totals $360,000.00. Actual turnover costs are usually much higher than we think they are — until we estimate them. You may be thinking, “Some employee turnover is unavoidable, even desirable.” You’re right. Some turnover is necessary, to replace marginal or poor employees with more productive ones and to bring in people with new ideas and expertise. However, high turnover costs are both avoidable and unnecessary.
This is where companies need to focus their efforts. The goal is to retain valued performers while replacing poor ones. Most companies group both types of performers together when looking at turnover. By doing so, they’re missing the cost and significance of replacing the good performers. Why don’t more companies see this as a costly problem? There are a variety of reasons this is not seen as a problem, all of which cost companies in expertise and dollars. How many of these occur in your organization? 1. No process is in place to tabulate costs. One survey found that only 44% of its respondents had a process in place to estimate turnover costs; 43% of companies relied on intuition, and 13% had no process at all. 2. Costs are not reported to top management. It’s a business axiom that one of the best ways to get top management’s attention is to show them what something costs. However, most top management never gets to see turnover cost estimates because most companies don’t measure them — or if they do, they don’t report them to top management. 3. It is an inescapable cost of doing business. Except, it’s not! While some turnover is unavoidable and desirable, most turnovers, especially among your better and top performers are largely avoidable. Thinking that turnover is just a normal cost of doing business is the same quality of thinking which says that accidents are just an inescapable part of being in the construction business. 4. It is an HR problem. While HR needs to be a key partner in reducing turnover cost, this is a strategic issue requiring top management’s attention and actions, in addition to HR’s efforts, to resolve it. 5. Costs are underestimated, and so they register less concern. If costs are underestimated because the organization doesn’t agree on or know what to measure, the statistics generated either register less concern than they should, or are disputed and held in disregard. What costs need to be fully estimated? A comprehensive program measures the following costs: • Exit costs • Recruiting • Interviewing • Hiring • Orientation • Training • Compensation & benefits while training • Lost productivity
• • • • •
Customer dissatisfaction Reduced or lost business Administrative costs Lost expertise Temporary workers
There needs to be advance agreement among Human Resources, Finance, and Operations as to which cost measures will be considered valid. Then, it has to be measured and reported. 6. Waiting until there’s a crisis. I was amazed when the executive director of one organization told me she knew that one of her capable managers was unhappy, but decided it wasn’t necessary to take action because she hadn’t received a letter of resignation yet. Prevention is what works best. Begin to measure your turnover costs and, very importantly, look at who is leaving so you’ll know if you’re retaining your best people. The time to do this is now. Waiting until there’s a crisis to take action limits your options and success rate. It also often triggers the common response of offering more money to get someone to stay, instead of fixing the original problem. Why do so many retention efforts fail? These are among the most common reasons company retention efforts fail, even when they’re implemented by capable people. 1. No assessment, so ineffective solutions are chosen. In their hurry to correct a costly problem, companies often forgo conducting a relatively brief and cost-efficient assessment in order to correct the situation faster. However, implementing a solution without diagnosing who is leaving, and why they’re leaving often results in solutions that are incapable of solving the root causes behind turnover. Diagnosing the reasons behind turnover always pays for itself. Don’t start without an assessment. 2. Implementing too many solutions instead of the most effective solutions. Managers often brainstorm a number of plausible solutions, then implement many of them especially those favored by top management. However, what is most needed is to select and implement a limited number of solutions which will be most effective at solving the problem. Implementing too many solutions, even good ones, will diffuse your resources and weaken your efforts and success. 3. No way of measuring success to know what works. How do you know which retention solutions you’ve implemented are working effectively and which aren’t, where you need to make refinements, and what strategies you need to drop if you don’t have a way of measuring your results?
How do we do a better job of retaining employees — especially our most valuable ones?
First, rank your employees in three categories: best performers, middle performers, and lowest performers. Your objective is to retain your top performers; develop and retain your middle performers, turning them into near-top or top performers if possible; and potentially replace your lowest performers. Second, agree internally on the measures you’ll use to calculate turnover costs. Be certain you’re taking all costs into Consideration. Most organizations greatly underestimate them. Third, report turnover costs to top management on a monthly, quarterly, and annual basis. When turnover cost is unacceptably high, or higher than your industry’s average, do an assessment. Find out who is leaving and why they’re leaving. Exit interviews can help you find out why. You need to know if it is your top, middle, or lowest performers who are leaving so you can gauge the expertise level leaving your organization. You’re obviously going to employ (and pay for) different strategies if your top performers are voluntarily leaving, compared to middle or lowest level performers. Develop solutions capable of solving the problems you uncover, and only implement a limited number of them. Measure the success of your retention efforts, and refine them. Two key strategies to save a large amount of time and money. Very key strategy # 1: Don’t wait until turnover costs become unacceptably high before you implement an ongoing retention program. Put a retention program in place before you have crisis situation. You not only must find out why employees leave your Organization, you must also find out why others stay. Very key strategy # 2: Survey your top performers now in order to find out what keeps them there, why they might leave, what type of competitive offers they may find attractive, and what they need to be happier and more productive in their jobs. You’ll do a better job of keeping them (along with their expertise and value). You’ll also find out highly beneficial information about improvements your organization needs. This means driving improvements in your organization by what your best people tell you, instead of focusing on taking care of the ever-present complainers in every organization. Just how valuable are retention efforts? One source estimated that a 10% reduction in employee turnover was worth more money than a 10% increase in productivity, or a 10% increase in sales! Retain and gain.
Retention Based Hiring
One of the major concerns of any corporation, particularly a high-growth business, is employee retention. Without minimizing the importance of roles such as compliance, diversity, compensation, and benefits, if the basic exercise of getting, keeping, and growing a company's talent is done well, the other HR functions will reflect this excellence There are few things in business more important than hiring the right people. Without the right people, no amount of money can make a company succeed. Dot.com companies and their recent ups and downs point out clearly how lots of money did not create success. While hiring the right people may appear more obvious in small, Entrepreneurial companies, it is also true in larger companies. Even the big ones collapse occasionally. Montgomery Ward is the most recent example of a giant company folding. Could the right people have made a difference? Probably. The right people might have had the foresight to help Wards change and keep up with their industry. Some companies depend entirely on the strength of their employees to perform Services; Others sell products or manufacture products for sale. Even companies that make or sell products depend on people to make the products or sell the products. No machine can ever replace the ability of humans to think, create and act appropriately. Even government agencies and public organizations need the right people to perform their functions well. Many managers feel they have too much work to spend their time interviewing potential employees. If you have this attitude, you need to realize that there are few things more important to your career than having competent people to support you. With the wrong people, you cannot do your job well and will find your career is short-lived. With the right people, you can move ahead and you will have a team that supports your success. Planning to Hire As a manager in today’s tight job market, what can you do to ensure you hire the right people? This article addresses key points to help you make sure you hire the right people for your particular situation. Before you place an ad or start interviewing, be sure you know these things: Know your working style Write down a few things about your working style and the type of people you work best With. Some things to consider in making your list are: • Are you a hands-on manager that likes to supervise people closely or do you like? People who work independently? • Do you like regular written status reports from the people who report to you or do you? like to get a general feel for what they are doing from occasional conversations?
• Do want copies of all the e-mail or memos sent by your employees to others in the Company or would you rather only see messages under certain conditions? What are those conditions? • Is your working style the similar to your boss? Is your working style similar to your peer managers? • If your style is different from theirs, are your employees expected to work with those other managers and are you able to help them understand the different styles? If you have made hiring mistakes in the past (all good managers have), pay attention to what you did wrong and avoid repeating the mistake. If you know that certain types of people or certain personality traits make you cringe or have caused you problems in the past, be sure you are clearly aware of what to look for so you do not hire those types of people.
2. Know your company’s culture
Do you expect people to be at work at a specific time or are you more concerned that they get their work done within a reasonable time period? Do you expect people to work at home, in the evening or on weekends and/or holidays? Do you expect people to dress in suits or is casual ok? How casual is "casual" at your company? Are people expected to compete with each other, work independently or to work together? Are employees expected to participate in company social functions? Are they encouraged to develop friendship with co-workers or is social activity not favored? Do you have specific production or sales quotas that must be met? How closely are these monitored and what is the reward or punishment for making or not making the quota? Does your company drag out the interviewing process or do they make fast hiring decisions? Is your Human Resources department involved in screening job candidates or is this handled by line managers? What are the top 3 reasons people stay with your company? What are the top 3 reasons they leave?
3. Know your expectations of the job position
What is the official job description of the position you are hiring? Does that really describe what you expect? If not, make sure you are clear about what you expect. For each skill, duty or requirement listed in the official job description, estimate how much (by hours per week or % of time) the person will spend using each one. Rank the most important skills and duties. Identify any skills and duties that are "nice to have" or "not critical" to day-to-day performance of the job. If you cannot find someone with all the skills in the job description, this exercise will give you a good basis for gauging whether someone has the most important skills you need.
4. Know your expectations of the person who will fill the position
Will the person work closely with others on your team? If so, give the others a change to meet potential employees before you hire them. This shows respect for your team and gives the job candidate a chance to meet their potential co-workers before they make a decision to take the job. Are there certain weaknesses on your existing team that you expect a new person to fill? Be clear about what those are and that the person knows they are being recruited for those reasons. Do you enjoy different personality types in your staff or do you want everyone to be the same way? Different people provide an opportunity for potential conflict. However, they also provide the greater opportunity for the entire team to be stronger and for people to help each other learn and grow. Very few companies give personality tests to potential applicants because of the inherent problems they can cause. However, be aware of the types of personality that work well in your company and those that do not. Also, be aware that some jobs require personality traits to be successful. For example, don't hire someone who is not an enthusiastic selfstarter into a sales position or hire an outgoing, creative person for a job where they will be stuck in a cubicle doing financial reports.
Interviewing Job Candidates
You have done the exercises above, know what you want and what you expect. You have placed an ad, posted the job or let others know you are ready to start interviewing. You have received job applications, resumes or enquiries from potential job candidates. Now, how do you decide who is the right person?
The Interview Process
We suggest you use a team approach to interviewing. You may want to use telephone interviews for the first contact using the Human Resources department, a professional search firm, a recruiter, yourself or a member of your staff. The phone interview covers the basic skills and experience before you schedule the in-person interview. Ideally, you will have 3 or 4 people interview each candidate. If possible, have one of the interviewers be a co-worker or someone in a similar job. Each person is looking for
different things. For example for a technical position, one person might be assessing technical skills, another is assessing the candidate's ability to communicate and their teamwork skills, another is looking at how well they will fit into the company culture. In some companies, a job candidate meets with several people in one session. Again, each person is looking for specific attributes to make a decision. Following the Interview, a decision should be made as quickly as possible on that person. Either they are being considered for the position or they are not. Let them know as soon as possible where they stand. If they are not to be considered further, it is better to let them immediately than drag on an unworkable situation. In fast-paced, well-organized companies, a person leaves their interview with a job offer. In that situation, the last person to interview the person knows the results of the prior interviews and is prepared to make an offer that day. Do not be afraid to hire the first person if they fit your criteria. In today’s tight job market, employers who delay may lose their best candidates by delaying.
Interview Questions
Ask a variety of questions about skills and education, relevant experience and about a person will get along with people in your company. Some specific type of questions are to be asked as follows:
Ask about prior experience
Ask information about the positions the candidate held that are relevant to the job you are filling. You may use their resume/application for specifics or ask general open-ended questions. You may use the following points to develop specific questions or use your own questions. The goal of experience questions is to learn: • • • • • • • • • The candidate's duties and responsibilities in each job. What was most rewarding about each position? What personal responsibility they felt for quality and meeting the goals of the company? What improvements in productivity and efficiency they made? How valuable their contribution was to the overall profitability of the company? How well they worked with other employees? How much initiative and/or leadership they showed? How they dealt with problems and challenges? What new ideas, products or innovations they contributed. What they learned from each that helped them in their career? • What motivated them to take the position, achieve promotions and/or leave the position? • How that prior experience contributes to their ability to do a good job for your
company?
• How they get along with different types of people. Ask questions relevant to the job and to your company culture? • How well they will deal with the specific people they will interact with on a regular basis (clients, customers, co-workers, peers, other departments, etc.)?
Ask about how well the candidate can do the job
• Review job description details, working conditions and physical demands of the job. • Give the applicant a copy of the job description, and review the job in general with them. If they are still interested and feel they can do the job, review each component of the job with them, asking about their ability to do each component. The goal of job detail questions is to learn: • Whether the applicant understands each job requirement and can do each part of the job function. • What experience and background the applicant has to perform the job as described. • Whether there is any accommodation (under the Americans with Disabilities Act) needed for the applicant to perform the job described. • How well the applicant can match their own skills and background to your company’s requirements.
Ask about education and training
Ask about educational background and other training, as appropriate. The goal of education/training questions is to learn: • How the applicant uses their education in their job. • What initiative they have taken to improve their own training and skills (particularly extra work taken on their own to obtain or maintain skills). • What plans they have for continuing to maintain or improve their education. • How well they can foresee future needs to maintain or upgrade their own skills, both on the job and outside. • What motivates the applicant to take on extra training (or why they don’t take the initiative)?
Ask about the company and its functions
Explain the product or service your company offers, its history, market strategy and how the job described fits into the overall scheme of things. Ask questions to describe how they can add value to your company. The goal of these questions is to learn: • How much prior knowledge they have of your company, your industry and your
corporate culture. • How well they can apply their own experience to your needs. • How well they will fit into your corporate culture. • What contribution they will make to the overall success of the company. • How well the applicant is able to communicate their skills and abilities into what is appropriate for your company. • What initiative the candidate took in preparing for the interview and for a possible position with your company. • What culture works best for them? Ask about the company culture or team environment in their previous positions and compare that to your culture.
Ask about health and safety practices
Ask about how much prior training and/or knowledge the applicant has had in SB 198 Requirements (California only), ADA, workers’ compensation, health care procedures and other federal or state laws. The goal of health and safety questions is to learn: • How an employee views their responsibilities toward the overall corporate effort to maintain a safe and healthy workplace. • How much safety training they have had. This is particularly important for jobs that have high accident or injury rates. • How much the applicant knows about workers’ comp laws, regulations and requirements? • Watch for minimal or inaccurate knowledge of these requirements for applicants who should be expected to remain current on these topics.
Ask about decision-making and creativity
One effective and interactive interviewing technique is to describe an actual situation or project that you are familiar with. Describe the situation, the goals and the people involved. Set up a dialog where as you describe the scenario and major decision points, the candidate is asked, "what you do at this point?" Let them know if they chose the answer you were seeking. Describe another decision point and ask them what they would do next. Do this with several decision points and gauge how well their responses fit with your expectations. The goal of decision-making questions This technique helps you understand the candidate's thinking process, their ability to think on the spot, to communicate and to think creatively. Allow them to ask questions and pay attention to what information they are using to make their decisions.
Ask about management and leadership ability
If you are hiring managers or executives (managers who manage managers), you will want to ask about their management/leadership style and how they have been effective in other positions. If you want someone who will be different from the person who held the job previously, be sure to delve into how they plan to make that transition and help their direct-reports make the change. You should have the person meet with some of their peer managers, some of your peers, some of the people above you and the people who will report to them before the final decision is made. This gives the candidate a better understanding of the personalities involved and gives your people a chance to be part of the hiring process. It also helps the new manager gain support before they show up for work. Strong managers and executives will ask for such meetings if you don't offer them. The goal of management and leadership questions is to learn: • How well they understand the management function in your company • Their leadership style and how they have produced results in other assignments • How they interact with their direct reports, their peer managers and the company's executive team • What additional benefits they can bring to your company (increasing productivity, increasing revenue, decreasing costs, etc.) • How well their style will fit with your company's management style and your company culture • How quickly they can become effective • How well they may deal with any lingering issues left from the previous manager or executive (if appropriate).
Ask about non-work activities and interests
Ask about hobbies, civic and community efforts that might be relevant to the job. Warning: DO NOT go into areas that are unrelated to the job. Be aware of the laws regarding appropriate interview questions. The goal of outside activity questions is to learn: • How much energy and vitality an applicant has. • How much leadership and organizational experience they have that contributes to their job qualifications that may be gained outside their structured work environment. • How well they manage their time. People who have time for hobbies and community activities must manage their time well. Busy people tend to get things done; very active people tend to accomplish a great deal in many areas. • How much personal satisfaction they gain from outside activities. Positively rewarding outside activities contributes to reducing stress from job pressures and
contributes to a better-rounded person. • How well they work with various types of people in different organizations. This indicates tolerance, adaptability and maturity. • How available the applicant is for overtime, travel and/or relocation. • How well they are able to balance family needs with job demands. (Be careful about which questions may be asked in this category. If the applicant mentions family members, then questions may be asked). Making the Hiring Decision After you have done your planning, screened the applicants and interviewed job candidates, your decision to hire a person ultimately rests on your intuitive sense of whether this is the right person for the job. Nothing can prepare you for that decision except your own experience supplemented with hard facts and discussions with the other interviewers. If you interview a lot of people, you will learn the signs that tell you a person is right. If you interview or hire infrequently, you will have to depend on lessintuitive methods and other people to help you. Some situations may allow you to hire someone for a short-term project or through a temporary agency. This allows you and the job candidate to work together before making a longer term commitment. If you work for a company that believes in high quality employees, you should be really Enthusiastic about the person you want to hire, not just lukewarm. Hiring someone just because you are tired of interviewing, because you don't like the process or because you are in a hurry are the worst reasons for hiring someone. Probably they won't work out and you'll have to fire them or they will quit and you will have to do it all over anyway. A bad employee is far more damaging that an empty position. You may have to rework your position requirements or change the places you advertise if you are not getting job applicants that meet your criteria.
Latest Innovative Strategies in Hiring Niche Skills
Companies are reworking their recruitment strategies to win the talent war. Social networking websites such as LinkedIn are only new ammunition to claim victory
? ? ? ? ? ? ? ? ? ? ? Employee referrals Internal job postings Social networking on websites such as LinkedIn Job portals such as www.naukri.com Employee branding Campus recruitments Placement consultants Hiring teams instead of an individual Targeting public-sector employees, ex-servicemen Hiring housewives, senior citizens, fresh school pass-outs for - part-time work Partnering with educational and training institutes Job fairs
Employee Retention through Employee Engagement
An organization that provides top wages and benefits loses a great employee to a competitor for no apparent reason. Of course, some employee turnover is to be expected, but if your company is truly engaging your employees, there is no good reason for the unexpected loss of quality staff members. Many companies already know that wages and benefits are important to employees, but compensation alone is not enough to keep the highly skilled, motivated and experienced workforce your business needs to excel. Defining employee engagement What is employee engagement exactly? Alpha Measure defines employee engagement as the level of commitment and involvement an employee has towards their organization and its values. The primary behaviors of engaged employees are speaking positively about the organization to coworkers, potential employees and customers, having a strong desire to be a member of the organization, and exerting extra effort to contribute to the organization’s success. Many smart organizations work to develop and nurture engagement. It is important to note, the employee engagement process does require a two-way relationship between employer and employee. Why is employment engagement so important? An organization’s capacity to manage employee engagement is closely related to its ability to achieve high performance levels and superior business results. Engaged employees will stay with the company, be an advocate of the company and its products and services, and contribute to bottom line business success. Engaged employees also normally perform better and are more motivated. There is a significant link between employee engagement and profitability. Employee engagement is critical to any organization that seeks not only to retain valued employees, but also increase its level of performance. Factors of engagement Many organizational factors influence employee engagement and retention such as: ? ? ? ? ? ? ? ? A culture of respect where outstanding work is valued Availability of constructive feedback and mentoring Opportunity for advancement and professional development Fair and appropriate reward, recognition and incentive systems Availability of effective leadership Clear job expectations Adequate tools to complete work responsibilities High levels of motivation
Many other factors exist that might apply to your particular business and the importance of these factors will also vary within your organization. Engagement essentials How will you know to what degree your employees are engaged? The first step is to Determine the current level of employee engagement. The best tool to determine this base line is a comprehensive employee satisfaction survey. A well administered satisfaction survey will let you know at what level of engagement your employees are operating. Customizable employee surveys will provide you with a starting point towards your efforts to optimize employee engagement. The key to successful employee satisfaction surveys is to pay close attention to the feedback from your staff. This is the only way to identify their specific concerns. When leaders listen, employees respond by becoming more engaged. This results in increased productivity and employee retention. Engaged employees are much more likely to be satisfied in their positions, remain with the company, be promoted, and strive for higher levels of performance. Listening to employee ideas, acting on employee contributions and actively involving employees in decision making are essential to employee engagement. Taking action to improve employee engagement Nothing is more discouraging to employees than to be asked for their feedback and see no movement toward resolution of their issues. Even the smallest actions taken to address concerns will let your staff know that their input is valued. Feeling valued will boost morale, motivate and encourage future input. Taking action starts with listening to employee feedback. Then the data needs to be analyzed. Next, a definitive action plan will need to be put in place and finally, change will be implemented. It is important that employee engagement is not viewed as a onetime action. Employee engagement should be a continuous process of measuring, analyzing, defining and implementing. Human diversity There needs to be some diversity to bring about a healthy level of differences. These are Everything from cultural and societal to personality and motivation. Having diversity with people will bring out questions, differing opinions, curiosity, conflict, and perhaps even Personality clashes. All of these are useful at a reasonable level to promote engagement. If everyone was the same, there would be little reason to even discuss anything and so communication wouldn’t be all that important and that can’t be true since it’s my next item on my list.
Open communication Communication that is open is really about an environment or attitude about the Communication that is comfortable in an organization. It should be welcoming to new ideas, disagreements and opinions while being presented with sincerity, respect and intent of trust. If these things are not there with communication, then the employee engagement suffers as that is when communication will begin to break things down. An appropriate style and expectation for communication needs to be presented and more importantly, demonstrated by the leaders in an organization. There are many ways to bring about more communication and they all work in different situations and with different people. They might include any forms such as common chitchat, sharing of stories and experiences, discussing lessons learned, collaborative tools to allow individual content, a feedback system with regular reviews, suggestion boxes (NOT anonymous), and a willingness of any leader to accept feedback from others including their directs without judging it or holding it against that person. There is much in the topic of communication that they deserve several other articles just on there own, so I’ll leave it at this for now, but I think that open communication really has the largest impact on employee engagement and they really go hand in hand in a lot of ways. Common goals / visions When people have a common goal or vision to work together on, it’s easier to dismiss personal differences and specific likes and dislikes between individuals. A common goal is the easiest way to have an immediate purpose together, even with someone you don’t know and it leads to a working relationship that opens new lines for building deeper relationships. The extreme of this is when enemies can even unite to work to one goal. Enemies will quickly realize that if they are after the same thing, it’s more effective to work together and set aside their differences to reach the common goal. In order to make progress towards a common goal, those involved have expectations of each other and will begin to communicate these things, whether it is encouraged or not. Getting a group of people to a common goal or vision is a whole other article (or ten perhaps) but once its truly in place, people will help each other and engage with one another to meet that goal at a higher level than if there was no common goal. Individuals will begin to look from themselves and from others the next level of engagement. Commitment That next level where there is an engagement between people is that of commitments. Commitments are a way to ensure that there is discussion between each other and that true engagement is when people hold each other accountable to any commitments made. Encourage this heavily, be true to your commitments yourself and work hard to ensure that trust is not broken where commitments may not be met. You can salvage that trust even when commitments are not met by bringing it up early (before a deadline is past), accepting the consequences of it and by apologizing to those you made the commitment to. All these reinforce the trust and ensure that you can stay engaged with those
Individuals. Ask for help when it’s needed and continue to talk about the commitments of others instead of simply ignoring them or letting them get by without a commitment. Doing this at an individual level or as a leader to set an example is a powerful way to get more engaged and engage others in your work. Training I’m a huge advocate for internal training in the workplace and I’ve seen how this has a huge impact on employee engagement. Internal training programs should be made as visible and public as possible with ideally, a sizable group of people. Generally having more people discuss, learn and share ideas on a given topic will generate more discussion and engagement among that group and training is a great avenue to bring this into the workplace. I’ve found that the best courses and training for engagement ensures that every single person in attendance has to participate and that this is done out loud and with some kind of opinion, answer or comment. I love content that has self-reflection or questions about oneself that you share in a group. This helps everyone learn more about each other as well as have discussion on one’s own perspective and opinion on things. Make it part of the system None of these methods work entirely on their own and they are all interdependent at some level. In order to ensure that employee engagement is something that gets attention, is measured and has various methods contributing to it, it’s important that it is part of a system. Not many things work on their own in business and it’s important to look at ways to embed it into the business practices. I regularly read Mission Minded Management where I love Michelle’s tag line of, “ I’m OK. You’re OK. Let’s fix the system. “This is true with employee engagement as well as there are always examples where individuals do things right, but unless it’s fixed at a larger scale, it doesn’t become cultural or lasting, which I think is crucial for engagement. Employee engagement takes a lot of effort to build and as outlined here, have a number of methods. To make them stick, they need to be driven on a continual basis, they should have regular discussion with various groups, they should be presented and taught to new employees, measured and used as an evaluation basis for employees, put into procedures and any relevant policies, shared with investors, clients and other business partners and in general, made to be part of the company’s business system in as many ways as possible. The more ingrained it is into the system, the more likely employee engagement will expand and retain itself as part of the culture in the workplace. What is the alternative to employee engagement? Conditions that prevent employee engagement seldom alleviate themselves. They should be assessed and addressed as soon as possible. Left to multiply, negative employee satisfaction issues can result in: Higher employee turnover – Employees leave, taking their reservoir of knowledge
and experience to another workplace Diminished performance – Competency of the workforce is reduced, at least short term, until new employees are trained Lost training dollars – Time and money invested in training and development Programs for departing workers is wasted Lower morale – Remaining employees can be overburdened with new duties, in addition the unresolved issues that already prevent their full engagement How can you attain employee engagement? Listen to your employees and remember that this is a continuous process. The Information your employees supply will provide direction. Insist upon increased engagement at the managerial level, and create and deploy a customized employee satisfaction survey from Alpha Measure to assess your current level of employee engagement. Identify problem areas, make a plan and take action towards.
Retention Tips & Ideas
Effective employee retention is based on the fact that people stay with something until the pain of staying exceeds the expected pain of leaving. Most people who are really good at something, like your top employees, have a low 'pain of leaving' because they know they can find something else quickly. So the trick to increased employee retention is to minimize the 'pain of staying'.
Key employee retention is critical to the long term health and success of your business. Managers readily agree that retaining your best employees ensures customer satisfaction, product sales, satisfied coworkers and reporting staff, effective succession planning and deeply imbedded organizational knowledge and learning. If managers can cite these facts so well.
Employee retention is one of the primary measures of the health of your organization. If you are losing critical staff members, you can safely bet that other people in their departments are looking as well. Exit interviews with departing employees provide valuable information you can use to retain remaining staff. Employee retention matters. Organizational issues such as training time and investment; lost knowledge; mourning, insecure coworkers and a costly candidate search aside, failing to retain a key employee is costly. Various estimates suggest that losing a middle manager costs an organization up to 100 percent of his salary. The loss of a senior executive is even more costly
Employee Retention building through Organization Culture
What Is a Learning Organization? An organization skilled a creating, acquiring, and transferring knowledge, and at modifying its behavior to reflect new knowledge and insights. A place where people continually expand their capacity to create results they truly desire, where new and expansive patterns of thinking are nurtured, where collective aspiration is set free and where people are continually learning how to learn Learning in an organization means the continuous testing of experience, and the transformation of that experience into Knowledge-accessible to the whole organization, and relevant to its core purpose. Why build a learning organization? Why commit ourselves to a lifelong attempt to understand and shift the ways we think and behave? Because we want superior performance To improve quality For Clients For competitive advantage For energized, committed work force To manage change For the truth Because time demands it Because we recognize our interdependence Thinking Strategically About Building A Learning Organization The essence of the learning organization The architecture of learning organizations The integrity of the architecture Putting it all together Attributes of “winning” organizations in the 21st century Replacing bureaucracy with aspirations, values and visions Systematic understanding Conversations Voluntary follower ship THE ESSENCE OF THE LEARNING ORGANIZATION The Deep Learning cycle is the essence of a learning organization
Not just the development of new capacities, but of fundamental shifts of mind, individually and collectively. The five basic learning disciplines – systems thinking, personal mastery, mental models, share vision and team learning activates this deep learning cycle. Sustained commitment to the disciplines keeps the cycle going. When the cycle begins to operate, the resulting changes are significant and enduring. New Skills and Capabilities Aspirations: To orient themselves towards what they really care about; and to change because they want to, not just because they need to. Reflection and Conversation: The capacity to reflect on deep assumptions and patterns of behavior both individually and collectively. Conceptualization: The capacity to see larger systems and forces at play; constructing coherent descriptions of the whole
New Awareness and Sensibilities
Ability to “see” underlying structures driving behavior. Increasingly aware of the ways in which we continually construct our views of the world. “Listening to the whole”, hearing not only what is said, but the deeper meanings New Attitudes and Beliefs New awareness is gradually assimilated into basic shifts in attitudes and beliefs. It takes time. When it does, it represents change at the deepest level in an organization culture. The set of beliefs and assumptions that develops over time in a learning organization is so different from the traditional hierarchical, authoritarian organizational world view.
Attrition details & Categorization
1. Section I – Attrition Details & Categorization The head count deployed in the Web synergies for the last 2 years is shown in Table 4.0: Head Count Data Opening Head Count 2010-11 105 2011-12 125
New Hires Attrition Closing Head Count Average Head Count Attrition % Head Count Growth
55 15 145 125 12.00% 38.10%
Table – 4.0
70 40 155 140 28.57% 24.00%
The Overall attrition for the Web synergies for the year 2011-12 as shown in Table 5.0 is at 28.57% which is much higher than the company-wide attrition of 18.82%. Opening Project Tracks Head Technology Project Manager PS Track 1 PS Track 2 PS Track 3 PS Track 4 HP Azar 22 6 8 24 23 26.09% Citrix Arjun 6 1 1 6 6 16.67% Count Apr '2011 Attritio n in 201112 New Hires in 201112 Closing Head Count Mar '2012 Avg Head Count 201012 Attrition % for 201012
IBM
Deepa
26
4
6
28
27
14.81%
Microsoft Oracle
Shyera Virendhar
31 20
17 7
30 14
44 27
38 24
45.33% 29.79%
PS
Track 5 PS Track 6 Total Sun Purnachand 20 125 5 40 11 70 26 155 23 140 21.74% 28.57%
Table – 5.0
The attrition analysis shows that the Project Manager – Shyera & the Project track which she manages which is PS Track 4 – Microsoft Technology stack had the highest attrition for the division with 45.33%. Even the number of back-fill and growth hires has been the highest for the track.
Categorization of Attrition
The categorization between Voluntary and Involuntary types of Turnover is as shown in Table 6.0: Number of Employees 5 35 40
Table – 6.0
Turnover Type Involuntary Voluntary Grand Total
Average Head Count Deployed 140 140 140
% of Attrition 3.57% 25.00% 28.57%
The categorization between Functional and Dysfunctional types of Turnover is as shown in Table 7.0: Number of Employees 5 35 40 Average Head Count Deployed 140 140 140
Table – 7.0
Turnover Type Functional Dysfunctional Grand Total
% of Attrition 3.57% 25.00% 28.57%
2. Section III – Diagnosis of causes & detailed analysis of Attrition.
The diagnosis and detailed analysis of the root causes of attrition based on the exit interview questionnaire enables us to categorize the Voluntary / Dysfunctional Attrition as: a. Individual, Team and Company factors. [Table 9.0] b. Specific to Projects, Technologies, based on band / level, tenure, Manager.
Categorization of Reasons - 3 factors for Voluntary Attrition
Factor Company Factor Individual Factor Team Factor Grand Total Total Attrition 16 5 15 36
Table – 9.0
% Contribution to Voluntary Attrition 44.44% 13.89% 41.67% 100.00%
16/36 Contribution to Attrition – 44.44%
16/36 Contribution to Attrition – 41.67%
5/36 contribution to Attrition – 13.89%
86.11%
86.11% - Of total Voluntary attrition are from Controllable factors
Turn over Cost of Attrition
3. Section II – Cost of Turnover for Attrition. To arrive at the cost of Turnover the following basic assumptions those have been made which include: ? ? Average number of work hours per week is 40 Hrs & 2080 Hrs per year Average Salary cost for Technical staff is assumed at Rs. 6,07,419/- per annum based on the total Salary cost / Total Number of employees. ? Average Salary cost for Administrative and HR staff assumed at Rs. 4,00,000/- per annum ? The rest of the assumptions to arrive at the cost column have been covered in the Remarks column. Sl.No Cost Head Individual Item Cost in Rs. Remarks
Cost of exit interviewer's time
Direct Salary cost @ Rs.4.0L p.a for HR personnel, avg time spent 7692 per exit - 1 hour, work week of 40 hours translates to Rs.192.30 per hour. 2 months of notice pay, 3735384 assuming an average salary of 6.07L for 40 exits Average of 4 hours spent across departments per exit, using the same 30768 average salary of Rs. 4.0L p.a the cost per hour of translates to Rs.192.30. 3735384 320 Hrs to compensate for 2 months time @ Rs.
1
Separation Cost
Cost of terminating employee's time
Cost of administrative functions related to termination
2
Vacancy
Cost of additional overtime
Cost
291.82 per hour of salary cost Cost of additional temporary help 40 Hrs of additional help 466924 deployed per exit @ Rs. 291.82 per hour Average of Rs. 2000/- per 80000 employee hired as replacement Average of Rs. 2000/- per 80000 employee hired as replacement 1 Hr per interview, Interview success ration of 56365 1:5, 200 Hours of Interviews for 40 hires Cost per test administered @ Rs.400/- per test. 667 266800 candidates took the test @ 30% test clearance ratio Average of 3 company checks @ Rs. 250/- per Background check cost company per employee 70000 hired, highest education check @ Rs. 800/- per employee, present address check @ Rs.200/40000 Average of Rs.1000/- per hire
Pre-employment administrative
Cost of attracting applicants
Cost of interview process per applicant
Assessment cost 3 Replacement Cost
Staff costs to meet & confer Consultant cost Post employment admin costs Post employment medical
2680000 @ 10% of Avg CTC paid 40000 Average of Rs. 1000/- per employee
40000 Rs. 1000/- per employee
exam Sign on bonus Cost of informational literature / Training material 4 Training Cost Formal training costs 80000 Average of Rs. 20000/paid per joinee
Rs. 800/- per joinee 32000 20 days @ Rs. 291.82 per 1867648 hour 8 days @ Rs. 291.82 per 747059 hour 3735296 2 months per exit Average billing loss per 12500000 customer @ 25 lakhs per annum, 5 customers lost Might loose another 10 resources due to the ripple 7572830 effect. Average cost of Rs. 7.57L per exit. 37864150
Informal training costs Lost productivity
5
Lost productivity & Business
Lost customers
Effect on team morale
Total Turnover Cost Table – 8.0
Total cost of turnover as shown in Table 8.0 is 1.56 times the annual salary cost or 156% of total annual salary cost. This cost could be higher if some of the assumptions like the loss of customers, loss of productivity and the overall effect on the morale of the team are estimated higher. Even the salary cost taken is average salary cost and the percentage could go up if we take actual salary cost for some of the more experienced resources at senior levels.
Solutions to Reduce Attrition
4. Section IV – Proposed Solutions to reduce Attrition. The Attrition analysis done in Section III does give us a set of clear issues the Division is facing right now and it would be important to see if some of these factors are common across the organization. The quicker the Organization identifies the controllable factors which are under its direct control and create action plans to address those factors which are resulting in Attrition it would automatically take care of Retention of Talent. It would always be better to take certain organization-wide initiatives to control attrition than just focus on a specific division. In order to control attrition and employ effective retention measures with a long term perspective it would be important for us to find answers to the following questions: i) Why people leave? In any industry the work can often be monotonous and opportunities for career growth minimal. So when opportunities beckon, the high rate of attrition is not surprising. However, there are some common reasons that especially cause people to leave. Most common reasons are the controllable factors [Company & Team factors] like money, inability to handle various types of stress, monotonous work; company policies, lack of career growth, problems with those in senior positions etc. ii) What is the cause? It would be important for organizations to have a system of doing a detailed Exit interview questionnaire, get granular details enabling the organization to capture real reasons / causes of attrition and evaluate whether they can his issues bear merit and whether they can be resolved and initiate steps to avoid similar reasons from occurring in future. We can consider doing: ? ? ? Exit Analysis, Attrition Diagnostics Analysis of reasons as Individual, Team and Company factors Analysis across locations, tenure, business units, functions, performance groups
?
Correlation studies with components of employee lifecycle such as sourcing, selection, training, engagement and retention
?
To work on specific and precise initiatives to prevent and control attrition
In addition to getting a detailed Exit interview assessment done organizations can consider doing a Root cause analysis of attrition, have specific plans for Top performing talent.
iii) What can be done? Though, it is impossible to scrap problems totally, there are certain ways by which management can tackle attrition. Since the most corporate environments are unique, companies need to develop innovative ways to tackle them. Human Resources function jointly with the key stake holders must address these issues, and along with the management need to evolve strategies to retain employees at all levels. Retention of key employees is critical to the long-term health and success of any organization. Hence, failing to retain a key employee is a costly proposition for any organization. The New Re-definition of Retention: Fundamental changes are taking place in the work force and the workplace that promise to radically alter the way companies relate to their employees. Hiring and retaining good employees have become the chief concerns of nearly every company in every industry globally. Retention is all the more important because of the severe competition among employers for Quality Talent. This fierce competition for quality talent results from a number of workplace trends, including: ? ? ? ? ? ? A robust economy Shift in how people view their careers Changes in the unspoken "contract“ between employer and employee A new generation of workers Changes in social mores Life balance
Proposed Solutions: The proposed solutions matching to the need for the Division and the Company are divided into 3 sets of Initiatives which are as follows: A. Retention Initiatives - Short Term which are easier to implement with minimal budgets [0-6 months timeframe] B. Retention Initiatives - Medium Term which can give quicker results but would have higher budget impact [3-9 months timeframe] C. Retention Initiatives - Long Term which would give long term stability & better predictability [10-14 months timeframe]
Return on Investment on Retention
Investment in strategic Human Resources initiatives can, when done effectively, produce a positive ROI. For example, coaching Managers and Human Resources professionals to conduct hiring interviews in a manner which accurately assesses candidates against the competencies required to be a top performer, will result in hiring more above average performers. If top performers produce, for example, 10% more than average performers, the organization Will realize a significant ROI. Consider this: If the cost of coaching managers to effectively interview candidates is $8,000.00 per year and the managers are successful in filling two sales positions each year with top performers who produce 110% of sales targets (i.e. target = 200,000.00/year) the ROI would be 400%. (Benefit [2x20, 000.00 = 40,000.00] – Cost [8,000.00] / Cost [8,000.00] x 100). A second example: assessing candidates for promotion to determine if they have the Required competencies to transition from the technical or hands on side of the business to management can reduce the risk of promotion failure, ensure effective succession Planning, reduce turnover costs, and maintain functional operations. When assessing for Interests, skills, abilities and attitudes of individuals reduces failed promotions, the ROI Can be significant: If the cost of assessment is $1,500.00 per promotion candidate, and two Candidates are assessed to determine the differences between them and, as a Result, the best candidate is chosen and is successful in the position (i.e. Productivity, quality and retention ratios increase in the first year) then Significant savings are accrued (turnover costs alone, which include lost Productivity, cost of new hire, severance etc. can be conservatively estimated at
$20,000 per employee). (Benefit [20,000.00] – Cost [3,000.00]/ Cost [3,000.00] x 100) ROI in this example is 566%. Conclusion Human Resources initiatives which impact organizations by more strategically aligning people and the strategic goals of the organization, will implicitly enhance the relationship of employees and the organization, strengthen the culture and lead to greater efficiency and productivity, resulting in a stronger and more enduring competitive advantage and significant ROI. Owners and leaders of businesses of any size can develop this effectiveness and profitability by acknowledging the importance of employees, and making their organizations places which provide opportunities for people to use their skills, interests and abilities to contribute to corporate goals, which in turn, will have a significant and positive impact on retention.
Summarization of the Project.
Employee engagement is the buzz word term for employee communication. It is a positive attitude held by the employees towards the organization and its values. It is rapidly gaining popularity, use and importance in the workplace and impacts organizations in many ways.
Employee engagement emphasizes the importance of employee communication on the success of a business. An organization should thus recognize employees, more than any other variable, as powerful contributors to a company's competitive position. Therefore employee engagement should be a continuous process of learning, improvement, measurement and action. We would hence conclude that raising and maintaining employee engagement lies in the hands of an organization and requires a perfect blend of time, effort, commitment and investment to craft a successful endeavor.
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