Although many people see the economy in a slump, most know that the U.S. economy is cyclical and continues to move up and down. But what will remain constant is the shortage of workers. That shortage is projected to last for more than ten years and for skilled workers even longer. How can that be? With unemployment growing to over five percent how can we have labor shortages? There are many answers. Here are some of them.
· Low birth rates and a preference for white collar jobs in the most developed countries (like the United States) have resulted in industrial labor shortages.
· High birth rates and a desire to move up into non-existent industrial jobs in the less formally educated, third world countries have created labor surpluses. That’s why so many immigrants seek employment in the United States. It’s also why almost every developed country that is growing its economy is doing it with immigrant workers.
· U.S. unemployment at just over five percent, is just about the lowest in the world. In some cases, less than half the rate of other developed countries.
· U.S. economic growth has almost doubled in the past ten years and has absorbed many millions of new workers.
· The “U.S. Economic Outlook Survey” of 16,000 companies reported that more than 30 percent of those companies plan to hire more staff over the next year.
· The federal government recently announced that it has over 200,000 job openings and is starting a major hiring blitz.
· The U.S. Department of Labor estimates that there will be a shortage of ten million workers by the end of 2008.
A high percentage of unemployed workers do not have the skills for jobs that are available. Fewer companies today can accommodate very many workers who have no skills. So the difficulty of finding competent workers adds to the shortage.
Now let’s shift our focus to this observation; keeping one good worker in your company for ten years is far better than having to find ten workers to replace him for every one of those years. And let’s not even start on what the cost of that turnover will be. So how do we go about keeping our best workers? Here are the basics.
1. Train supervisors in good management skills
An Illinois survey reported that over 40 percent of all turnover was related to bad supervisors. Supervisors need to know how to clearly give direction, provide coaching, be good communicators and do lots of monitoring and follow up.
2. Match and cross train employees to jobs that fit them
Identify the skills and talents of each employee and try to delegate to them those things they do best.
3. Use and encourage grievance procedures
Don’t be afraid to hear problems. To know what is troubling your employees is a gift. It allows you the opportunity to make better decisions, head off problems before they get too big. And employees like it. Grievance procedures can head off many labor charges and law suits.
4. Recognize success when you see it
Few supervisors realize just how much influence they have on employee’s lives. 30 years later employees still remember and tell their grandchildren of the day their boss told them how good they were and how important they were to the company. Don’t flatter dishonestly but recognize good work. Praise in public, criticize in private.
5. Bring employees into the decision making process
Often the person doing the job has ideas about better ways of doing it. Employees want to work and want to stay where they are participants in the process and their ideas get heard.
6. Improve communications
Employees need to know what is expected of them. They need clear direction. They need to be heard. They need to know what is going on in the company and they need to hear all this in a respectful manner.
7. Don’t be too quick to terminate
When you are unhappy with an employee’s performance, don’t start looking for a legal way to get rid of him. Look for ways to get the performance you want. Let the individual know what is good, what is bad and describe clearly and respectfully the changes he must make and the end results you want to see. Allow him ample time and provide support. Only when you can see that this effort has been fruitless is it time to terminate. (And don’t forget to document, document, document.)
8. Do employee surveys
At least once a year give your employees a chance to anonymously tell you what they’re thinking and don’t be so afraid to hear it. Employee surveys can open your eyes to underlying problems and head them off before they become disasters. It lets employees know you care about them and their welfare. It’s important to do them regularly and track the trends.
9. Conduct exit interviews
Exit interviews are overlooked by most companies as an embarrassing process that will only yield a lot of gripes and belly-aching. Although it’s true that no one single exit interview should be considered the norm for all employees, they are invaluable in tracking the larger trends. After examining them over months and years, trends do start to appear and can be tracked.
10. Treat employees as individuals
The major reasons employees leave in the first 90 days is the lack of individuality they feel. They often feel separated from the organization and never assimilate. Employees say the three reasons this happens are:
· Anonymity: No one knows who I am, what I like or what I think. I’m invisible and no one cares.
· Irrelevance: What I do doesn’t make much difference. Whether I show up each day or not makes no difference in what gets done. I don’t know of anyone that my work has an impact on.
· No measurements: I never know if I’m doing better or worse. Nothing I do is ever measured. I can see no progress. I just keep on keeping on.
To measure your turnover rate, take the number of people who terminated during the previous month and divide that number by the average number of employees you had during the month. (That’s the actual number of people you had each day divided by the number of days in the month.) And multiply that number by 100. (# of terminations divided by number of employees times 100 = turnover rate) That number expressed as a percentage is your monthly turnover rate. Track it each month and each year.
Once you’ve grown those flowers, don’t let someone else pick them.
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Dateline: September 2008
Note. Although we attempt to provide the HRU update on the first of each month, we are normally delayed awaiting the release of several monthly government statistical reports. We will hereafter update the information as each report becomes available without waiting for all of them to be released.
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© William J. Cook