Motek Inc. is a software development company sitting on the fringes of the Silicon Valley in Beverly Hills, Calif.
In an industry in which some companies pray to keep turnover at 50 percent, Motek has virtually none. It’s a distinction that has earned the company the first, and so far only, Employer of Choice designation.
“They take care of their people,” says Roger E. Herman, co-author with Joyce L. Gioia of “How to Become an Employer of Choice,” a book which outlines the importance of and means to becoming a company that is sought after by employees.
“We saw that employers were in an increasingly competitive situation to attract, optimize and hold their good people,” says Herman, who is also CEO of The Herman Group. “As companies are struggling to do this, they were beginning to say, ‘We’re an employer of choice.’ We heard a lot of noise out there about this. What is an employer of choice? Nobody really had any definition.”
So Herman and Gioia (pronounced joy-uh) decided to define the phrase and begin to recognize those companies that attain that level. It hasn’t been easy. Motek is the only one so far to earn the honor. There are many reasons for the recognition, Herman says.
“All the people participate in making major decisions in the company,” he says. “They insist that people take (30-day) vacations. A lot of people in the software business keep working, keep working. Motek insists that they take a vacation, and to make sure that they do, (the company) gives them $5,000.”
Don’t think your company could survive if you were to offer every employee so much? The question might be, can you survive if you don’t?
Getting the recognition
“This will not be an easy recognition to get,” Herman says. “The application process is similar to the (Malcolm) Baldrige (National Quality) Award. So far, only one company has earned it. That’s even after all the companies that went through the beta test. The estimate that we have is that only 5 percent of the companies will be able to achieve it.
“The process includes different aspects,” he says. “One is completing an extensive application (online). The other is an employee survey. We’re going to be surveying a number of their employees to find out whether what management says is actually believed and is validated by the employees. What we’re laying out there is what people are looking for in a company today; what’s important to them when they select their next employer.
“It really is their choice today. This is what people are telling us; this is what they’re looking for.”
What it means to succeed
In their book, Herman and Gioia outline the benefits of becoming an employer of choice. Here are a few of the things that becoming an EOC can do for you:
Marketing and recruiting. “As the company becomes more widely known as a good place to work, an Employer of Choice will find that recruiting will be considerably easier. People will even approach the company inquiring about employment opportunities.”
Optimizing performance. “With higher quality people on board, productivity will become significantly higher.”
Choosing to work, choosing to stay. “People will choose to join an employer, and may also make a conscious choice to stay.”
Reduced turnover, enhanced loyalty. “Certainly, the happier the employees are, the less turnover there will be.”
Less stress, more fun. “Employers of Choice have less stress and more fun. It’s that simple.”
Greater attractiveness to investors. “Employers of Choice will be more attractive to investors because they will be recognized for their stability and their ability to respond more quickly to market opportunities and fluctuations.”
What it means to fail
“If companies are not able to do this, it doesn’t necessarily mean that they’re going to go out of business,” says Gioia, who is also president of The Herman Group. “It may be harder for them to find the people that they need, so they may be less profitable. What it does mean is that it won’t be as fun to work there.
“Their workers may be a little more stressed out because they’ve got higher turnover. It may mean that they have more recruiters that they have to allocate their resources toward. The key is to create an employee-centered environment where people feel like they are contributing and making a meaningful contribution.”
What it takes
A company’s culture defines its personality and decides whether or not it can be an Employer of Choice. Herman and Gioia offer numerous suggestions for taking your company to next level. Here are a four:
Eschew mediocrity. “A sense of high standards inspires people to do their work right the first time.”
Honor older workers. “Employers of Choice honor older workers for their wisdom, maturity and experience.”
Encourage fun in and out of the office. “Life is not all serious business and nose-to-the-grindstone at an Employer of Choice. Fun must be a central part of the culture.”
Eliminate the parking hierarchy. “A status symbol — a differentiator — in many organizations has been the privileged parking space in the company lot or nearby parking garage. Enlightened employers have abolished this perk, expecting executives of all ranks to park their cars just like everyone else does.” How to reach: The Herman Group, www.herman.net
Daniel G. Jacobs ([email protected]) is senior editor of SBN.