Successful companies measure everything, from the effectiveness of a marketing campaign to sales quotas to the productivity rate of a new manufacturing operation. But most companies rarely measure the people side of the equation: human capital investments.
“A business’s wealth and competitive advantages are not only based upon the hard assets it owns, such as buildings, land and inventory, but also by the knowledge employees bring to a company,” says Michael Manser, vice president of human capital solutions for Talent Tree of Houston. “Companies that understand how to measure human capital are the ones that have become the most successful companies today and will hold that success in the future.”
Smart Business spoke with Manser about the importance of measuring human capital and some simple formulas to get you started on measuring the “people power” of your own business.
First, what exactly is considered ‘human capital,’ and why has it become so important?
Human capital is the collective set of skills, dexterity, intelligence and psychological makeup and judgment of your staff.
What we have seen in the past 10 years is an increasing importance in human capital in relation to the revenue of a company. For example, when a company changes its CEO, you will see the stock either go up or down. If the CEO makes a difference in future performance, why not the vice president of sales, a CFO or a key scientist? These employees all have value and an impact on the bottom line.
It has become so important that stock analysts are now looking very closely at the movement of employees.
How can business owners measure human capital?
Employees are often not part of the financial table of the company. But there is a simple way business owners can get some basic information about the value of their human capital.
Employees can be measured in terms of productivity and efficiency. Productivity equals revenue per employee. For example, if you have 100 employees and your annual revenue is $100 million, the average productivity per employee is $1 million. Efficiency is the net income of a company divided by the employee base. For example, if your $100 million revenue business makes $10 million in net income, your 100 employees drive $1,000 net income per employee.
What can a business owner do with this information?
The interesting part is when you compare these numbers from your own business to that of your competitors. The numbers show if your employees’ performance (human capital) is positioning your company to be a leader in market share or return on investment.
Below is a real example of three publicly traded firms. Company A uses this competitive information to confirm it is achieving its desired market strategy of being the profit leader in the space. It is going to also use these benchmarks for value pricing strategies and productivity goals as it expands its presence in the coming years.
|Company A ||Company B |
|Rev. ($mill.)||14,448 ||13,270 ||13,535|
| Net inc. ($mill.)||708 ||173 ||336 |
|Employees||65,078 ||41,000 ||47,000 |
| Margin ||27.4% ||19.3%||31.4% |
| Net income ||3.7%||1.3% ||2.5% |
|$222,017 ||$323,663 ||$288,611 |
| Efficiency |
|$10,885||$4,220 ||$7,138 |
| Prior Year |
|9.6% ||60.9% ||9.6% |
|Observations||Lowest productivity, but highest efficiency ||High productivity; low efficiency situation||Highest margin, meaning |
value proposition, middle of the pack on productivity and efficiency
*Company A confirmed the statistics fit with their desired market strategy of being the profit leader in the space. But they are going to expand their presence in the coming years and will leverage their existing employee base to be even more productive.
Is this the human resources department’s role rather than financial department to analyze these statistics?
Yes, HR departments should step up, present this information and take a more strategic role in driving a company’s growth. The CFO wil not traditionally show human capital performance metrics as a formula in the financial statement. HR can drive strategy by sharing benchmark data with executive teams and utilizing these financial measures to drive performance standards, and determine staff size relative to market goals.
In today’s sophisticated and competitive landscape, we need to ensure we are strategically maximizing every capital investment. These basic human capital measures serve as a bridge between HR and finance, giving CEOs a comprehensive perspective on performance and how it impacts their strategies.
MICHAEL MANSER is the vice president of human capital solutions for Talent Tree, based in Houston. Reach him at (713) 361-7303 or by e-mail at email@example.com.
In the 1990s, strong economic growth out-paced the rate of growth in the nation. That prompted an increase in demand for recruiting/staffing firms that supply direct-hire recruitment to their clients and temporary help services to fill short- or long-term positions during peak seasons, absences, vacations and medical leaves. For nearly 15 years, there has been an increasing demand for such temporary help services. According to the American Staffing Association, at least 90 percent of companies in the U.S. use some form of temporary staffing. The demand for temporary help persists because staffing services have proved invaluable in helping businesses cut costs while still maintaining a functional employee base.
Smart Business spoke with Cindy Biter of Delta Dallas to learn more about how temporary staffing firms can send employers the candidates they need and prepare those candidates to function successfully with employers, and how employers and recruiting firms can work together to satisfy current staffing needs.
How do temporary staffing firms benefit companies?
In a constantly fluctuating economy, temporary help services can provide qualified workers on short notice and on an as-needed basis by matching an employer’s work-flow needs to economic ups and downs. Temporary help services can offer a variety of short- and long-term savings for businesses and organizations. These could include: controlling recruitment costs, saving on benefits and taxes, and even managing long-term personnel costs. It is important for an employer to partner with a recruiting firm that can aid in the evaluation and streamlining of present recruitment processes and costs.
What are the primary criteria when selecting a recruiting firm to fill temporary positions?
Let’s face it, companies look to partner with recruiting services that have their best interest at heart. The primary concern when searching for a recruiting firm is to ensure its screening process will bring you the best temporary help available. It is important to make sure that firms are screening candidates thoroughly. Each firm has its own procedural policies for sourcing candidates, and you should deal only with firms that have thorough criteria for both their recruiters and the candidates that are sent to you.
1. Is your recruiter certified in temporary staffing? (Certified Temporary Specialist) 2. How does the firm ensure the temporary candidates sent to you have the skills you need? (How does the firm test candidate skill sets?) 3. Does the firm guarantee the quality of its temporary employees? (Does it monetarily stand by its screening process?)
What criteria do staffing firms look for when selecting well-qualified temporary employees to present to companies?
Reputable staffing firms will adhere to a strict set of tangible and intangible attributes in their hiring criteria. Other than the obvious assets, such as punctuality, a skill set compatible with the job requirements and a professional appearance, there are a number of intangible items the staffing agency looks for when selecting temporary employees. Clients often report that it is, in fact, the intangibles that count when it comes to temporary employees. For employers, temporary employees who demonstrate positive attitudes and have a strong work ethic set themselves apart from ordinary workers who are simply looking to the short-term payday at the end of the week.
How important is a temporary employee’s attitude in the hiring process?
Quite possibly, the No. 1 attribute of a good temporary employee is attitude. A good attitude will carry a candidate through the toughest situations and potentially to a full-time opportunity. Even if the employee doesn’t like an assignment, optimism and a proactive attitude will help him or her stand out from the crowd. Every temporary assignment is an opportunity for an employee to learn new skills. Even if employees are not ultimately offered a full-time position, they can still walk away with expertise that will help them in the future.
Do temporary employees gain anything from their assignments?
Sure. Staffing firm personnel encourage candidates to see the networking opportunity in every temporary assignment. They may not be offered a full-time job with an employer that temporarily utilizes their talents, but good news travels fast. If temporary employees perform well for a company, their supervisors will give positive feedback to the staffing agency.
Should temporary employees maintain contact after their jobs are completed?
Temporary employees should stay connected with their staffing firm and specifically their staffing professional throughout their job search. If temporary employees stay connected to their recruiter, it is an indication of communication skills, diligence and professionalism. All of these are qualities a recruiter will feel confident presenting to its clients.
CINDY BITER is vice president of business development with Delta Dallas. Reach her at (972) 788-2300 or firstname.lastname@example.org.
Companies seeking candidates to fill open positions can do the hiring themselves or work with staffing firms to complete the process. If they choose the latter route, they have options. One is to work with firms that employ certified staffing professionals, rather than those that do not. There may not be any significant differences in the fees charged or the time consumed in the hiring process either way. However, there may be some in the quality of the services provided. That is because certified specialists offer significant benefits to clients that are a step above those provided by their noncertified counterparts.
Smart Business spoke with Dana Lee, CTS, to gain an understanding about the certification process that staffing specialists undergo and how the certification designation can benefit hiring companies.
What is the purpose of certification in the staffing industry?
Viewed as a whole, certification is a means of self-regulation for the staffing industry. On the individual level, it allows staffing professionals to expand their expertise in employment law, changing regulations, best business practices and ethical standards. Both of these purposes translate to more efficient services from staffing firms. Remember, certification is as important in the staffing industry as it is in any other professional field. For example, people who retain a professional to calculate their income taxes might be better off hiring a CPA rather than someone fresh out of an accounting class in college. That professional certification makes a lot of difference. The same holds true in the staffing industry.
How do staffing professionals earn their certifications?
After the initial required classroom training and testing, certification is ongoing. Staffing professionals are not only responsible for attaining initial certification but maintaining it as well. Certification can be earned through various national professional associations, such as the National Association of Personnel Services and the American Staffing Association. NAPS awards two designations of certification: the Certified Temporary Staffing Specialist (CTS) and the Certified Personnel Consultant (CPC). The ASA grants a Certified Staffing Professional Designation to enhance professionals’ competency and knowledge of labor and employment law.
Should clients look for certification designations when retaining hiring firms?
Actually, the firm you are working with will not hold the certification. It is the staffing professionals in the firm that are responsible for attaining their certification. Therefore, clients should be looking at the certified staff members’ profiles for certification designations when retaining staffing firms. You can begin by asking your staffing professional if he/she is certified. My suggestion is to deal exclusively with firms in which staff certification is a key objective. At Delta Dallas, we have found that getting and maintaining the knowledge required for certification makes a big difference in the day-to-day operations of the firm as a whole. In the end, certification becomes an asset to the staffing professional, the firm, and, ultimately, their clients and candidates.
What are the benefits of working with certified staffing professionals?
Above all, clients know they will be working with people who are dedicated to their profession. They have to earn their designations through rigorous training programs, testing and continuing education courses, so they are not likely to take lightly the responsibilities that are inherent to certification. Also, certified staffing professionals stay current on the latest trends, employment laws, human resources practices, etc., regarding job markets. Staffing specialists who have attained certification are generally among the most experienced personnel in the industry, in large part because of their dedication. Individuals who spend the time and effort to earn their certifications are not likely to leave their professions. So, in the end, you have a staffing professional who not only has experience but also has pertinent knowledge regarding the intricacies of the hiring process.
How can certified staffing specialists help clients?
Certified specialists can provide service at a deeper level than noncertified staffing personnel. Certified specialists can take on the role of a consultant. They are qualified to do more than simply fill an order, they can help their clients understand the relevant issues associated with the positions they are filling. This could include issues like EEOC regulations, best hiring practices, employment trends, ADA questions, FMLA concerns and more. A certified specialist will take all of these regulations into consideration when negotiating on behalf of a client. The client provides the requirements of the position and the certified specialist can guide his or her client through the hiring process in light of regulations and trends in each of these areas.
DANA LEE, CTS, is a senior associate with Delta Dallas and TAPC’s Top Producer for 2006. Reach her at (972) 788-2300 or email@example.com.
As recently as 12 months ago, it was not difficult for companies to find employees willing to work on a temporary basis. At the time, it did not matter what the salary was or how long the assignment would last. Temporary job opportunities were limited, and there was little risk that the temporary would leave for a full-time job. With a thriving job market, things have changed and temporary employees now have multiple temporary job opportunities from which to choose. Consequently, recruiting firms and companies that rely on supplemental work forces are having to educate themselves on how they can attract and retain sought-after temporary employees.
Smart Business talked with Michelle Cook, vice president at Delta Dallas, to learn more about how to attract and retain temporaries in this market and how companies and staffing firms can adapt to it.
How do companies benefit from hiring temporaries?
Some of the benefits include flexibility, reduced liability, and time and cost savings. Whether it is a temporary job lasting a few hours or several years, using a temporary allows companies to adjust their work forces to meet their ever-changing needs and to remain fully staffed during busy times. Since temporary employees are fully employed by the staffing firm, companies are not financially responsible for their unemployment or workers’ compensation claims. That translates into reduced liability and costs for them should problems arise. Companies also save time by working with a staffing firm to design a screening process that fits their hiring strategies. It might include personality tests, credit checks, background checks, drug tests, and/or software evaluations. As a result, companies will only see qualified candidates saving them time from going through resumes and interviewing unqualified candidates.
How can companies attract and retain temporary employees to be competitive in this tightening labor market?
In order to attract temporary employees, companies need to know why someone would want to work for them and should be able to communicate the reasons clearly. Those reasons are typically the same ones that attract permanent employees. Pay and perks are high on the list. Regarding pay, temporaries are becoming more educated on their market value. The pay of a temporary position should be in line with the salary the company would pay for the position if it were full time. Taking the annual salary for the position and calculating it on an hourly basis is a practical approach. In the current employment market, candidates are shopping around, so perks such as paid parking, casual dress codes or even free lunches are attractive.
Should companies interview for temporary positions?
If your company is requiring interviews for temporary positions chances are you are losing out on top talent. Those candidates will take other temporary positions that start immediately and do not require interviews. The person you should be interviewing is your staffing firm or H.R. Department. Making sure that they have a clear understanding of your needs and expectations will result in a successful selection for that position. After all, that is what you are paying them for.
Once temporary employees are aboard, companies are now faced with ways to retain them. It is always a good idea to do a modified orientation for them and cover items like parking, bathroom and break room locations. Anything you can do to make a temporary employee feel more at home will benefit you greatly.
Is mentoring more important than training?
With retention as the ultimate goal, training and mentoring are equally as important. Companies need to make sure they clearly define the goals and objectives of the job, thereby setting the expectations from the beginning. This will help ensure that companies get the best ROI. Providing a mentoring program can be a nice addition. This means designating someone in the company to whom the temporary employee can go to for guidance and answers to any questions they may have.
Remember, attracting and retaining qualified temporary employees is all about supply and demand.
MICHELLE COOK is vice president of Delta Dallas. Reach her at (972) 788-2300 or firstname.lastname@example.org.
Receiving a paycheck each period is not enough to bond today’s employees to a company. So finding the creativity to connect employees with their companies for long-term relationships is vital in today’s work force management.
Smart Business spoke with the vice president of Delta Dallas Staffing, Kim Follis, to gain some insights into how corporations can attract and retain employees as one way to strengthen their competitive edge in today’s complex business environment.
How do employers create an atmosphere that helps retain top talent for the long haul?
Employers need to evaluate five critical factors when attracting and retaining top talent for their company: culture, empowerment, appreciation, communication and goals/direction.
Culture is the environment that represents the people, ideals, personality and overall style of the company. Empowerment is the ability for employees to impact the business, make decisions and take the initiative in solving problems or creating new ideas. Appreciation is the ability and desire to convey among employees the feeling that they are appreciated, needed and valued. Communication should be open, valued, candid, respected and welcomed. Goals/direction is the idea that the company and the employees know who they are and what they are striving for.
Recently, at an event sponsored by SMU Cox School of Business, a new topic was added, ‘Implementing Innovative Talent Management Strategies.’ Discussions included the process of horizontal and vertical alignment in hiring congruently with companies’ strategies. Additional areas that need to be addressed in attracting and retaining top talent were defining clear expectations, opportunities for development, talent fit, recognition and having committed co-workers.
Does addressing those five critical factors help employers retain their employees?
Once management ensures that the factors are in place, it should address them on a quarterly basis. Doing so opens communication and confirms that the parties are on the same page. It’s the role of the organization’s executives, management and leaders to have these conversations and to be in tune with their employees’ thoughts, ideas and feelings. Executives and HR personnel have to be conscientious about and hold true to those ideals and implement them in their hiring process.
Many times companies settle for a hire to fill a specific job rather than taking a look at the long-term effect of the hire and how this potential employee can help build a stronger business. In such cases, they do not share the expectations and goals that they have for this person. Consequently, they do not get a buy-in from the employee, who may have the abilities and skill sets required to do the job, yet is way off base from the other critical factors. They understand what they are to do and how to contribute, but the ‘fit factor’ is not there.
How do employers benefit from retaining their employees?
Employers benefit in tangible and intangible ways. For example, they foster a sense of stability among customers.
Employees feel that they do not have to tell their story over and over again, that the company knows them and that the people there have ‘company intelligence.’ That stability is complemented by ‘branding,’ which results in constancy in message, goals, direction, policies and procedures.
Another employer benefit is the sense of knowledge and confidence that employees develop in themselves and their employer regarding policies, business practices and decision-making, which contributes to a positive work environment.
Finally, financial benefits are derived from reduced costs of training, hiring and loss of business when transition occurs. Research from the Human Capital Institute suggests that corporate market value is increasingly defined as the sum of human intangibles, ranging from public perception of a company's intellectual capacity to its perceived ability to create new solutions, enter new markets and respond to change.
What benefits do employees accrue from staying with their employers?
Employees gain better senses of history, empowerment and accountability. They earn more leadership opportunities through training, mentoring, management and leading by example. All these factors create more personal and professional growth.
These benefits are made possible when the five critical factors mentioned earlier are in alignment with the personal and professional goals of employees. When this happens, employees and companies benefit, which refutes the idea that neither employer loyalty nor tenure exists in today’s world of business.
KIM FOLLIS, CPC/CTS, is a vice president with Delta Dallas Staffing. Reach her at email@example.com or (972) 788-2300.
Identifying and hiring the best qualified staff-level executive assistant is not something that most employers should do on their own. Rather, the process should be facilitated by an executive search firm, preferably one that specializes in hiring candidates who best meet the specified criteria.
Smart Business spoke with Andra Staggs, a customer development manager at Delta Dallas Staffing, about the value of a staff-level executive assistant to a company, why the selection of that person should not be left to chance and how an executive search firm can help in the process.
What should be considered when hiring an executive assistant for senior staff?
Tenure, experience and skill sets are all important factors to consider in the search process.
Hands-on experience supporting the same or higher-level executive helps provide the knowledge that would be difficult for an inexperienced assistant to possess. Most executive assistants at this level have advanced skills in office programs such as Word, Excel, PowerPoint and typing. Testing these skills and checking references provided by applicants are mandatory. A credit check should be done as well.
Those types of tasks are second nature to executive search consultants, whereas they might not be for employers.
What are some standard character traits sought in staff-level executive assistants?
Client relations skills are very important. Many executive assistants at this level have heavy contact with external clients, internal employees and community organization leaders.
Staff-level executive assistants often compose complex correspondence. For this reason, they should have strong writing skills.
Another important consideration is mastery of industry-specific skill set requirements. Most standard responsibilities involve heavy calendar management, meeting coordination, event planning and travel coordination.
Strong proficiency in technology such as trouble-shooting computer issues and working with mobile devices are important considerations.
Possibly the most important criterion is the need for confidentiality, since executive assistants may be entrusted with trade secrets, critical financial data and other classified information.
How do clients benefit from retaining executive search firms in hiring these positions?
One of the main objectives with any new hire is to have the relationship start off on the right foot. Executive recruiters help ensure a good start because they are responsible for the due diligence and negotiations that involve areas of sensitivity for both the company and the candidate.
Pre-screening of candidates is obviously big, because only the top two to three candidates have to be interviewed by the executive. All should have the experience, skill and personality that match the company’s and executive’s needs.
Another advantage of using executive recruiters is that they have access to candidates who are employed and who do not have their résumés posted on the Internet.
Another important benefit is that most good executive recruiters guarantee the skills and qualifications of the candidates they identify and present.
Is every search for a staff-level executive assistant treated as a new search?
Each search should be geared specifically toward a particular individual who is best suited for the client’s unique corporate culture. Ideally, the executive search consultant meets in person with each client to find out what is important to them. This meeting allows the consultant to take the specifics of the job and get an idea of intangible qualities that are also important in the search, such as personality traits.
What criteria should a company apply when retaining an executive search firm?
Companies should look for a search firm with a track record of success in identifying and placing the best qualified candidates. Ask for references.
Good recruiters will request a face-to-face meeting. Recruiters are able to make much better matches when they have met the executive and seen the environment. Have someone visit the recruiter’s office to verify the level of professionalism necessary to attract the type of individual you need.
Choosing the right executive search firm is as important as choosing the right person for the position.
ANDRA STAGGS is a customer development manager specializing in executive administrative assistant placement with Delta Dallas Staffing. Reach her at firstname.lastname@example.org or (972) 788-2300.
The recession has caused many businesses to cut back on expenses in many areas, including raises. While your employees may deserve raises, you may not have the money there to provide them with monetary recognition. Despite spending decreases, it’s important to recognize your employees’ hard work through other means of compensation.
“Employees are concerned and consumed with the prospect of reduced salaries, temporary layoffs or job losses,” says M.J. Helms, director of operations for The Ashton Group. “Now is the time to retain your super stars. You can attract and retain employees by offering rewards in exchange for time and effort.”
Smart Business spoke with Helms about how to recognize employees, how to keep track of employee performance for recognition and rewards, how to help employees understand the recognition tools, and how to use these tools to leverage your company during the hiring process.
What are the benefits of rewarding and recognizing your employees?
Recognition helps reinforce the actions and behaviors you most want to see people repeat. An effective employee recognition system is simple, immediate and powerfully reinforcing. When employees feel like they matter, they’re much more willing to give their all for your company.
When you praise employees, you let them know you’re aware of their hard work. You acknowledge they’ve put forth a great effort to accomplish something and you’re celebrating that accomplishment with them. It shows that you don’t necessarily need to spend money to make someone feel valued and appreciated.
How can you recognize employees for their hard work?
Employee recognition is not just a nice thing to do for people; it’s a communication tool that reinforces and rewards the most important outcomes people create for your business. You need to show your employees the value they add to the team and point out specific instances where they went above and beyond the call of duty. Recognition, such as identifying one employee each month who has gone above and beyond, needs to be a planned activity. Giving someone a pat on the back in private may make that employee feel good for a few minutes, but taking time to recognize that person during a staff meeting in front of his or her peers will extend that good feeling into days, if not weeks. This also entices others to strive for the same reward. You can even do something as simple as having a Wall of Fame in your office to post pictures of employees and their accomplishments.
How do you keep track of employee performance so you know whom to recognize?
Reward those who make a difference. Keep a personal log of significant contributions your employees make to your company from day one. For example, how they saved the company money or boosted sales, how they handled a project successfully from start to finish or how they showed leadership under pressure. Use as many details as possible, with corresponding data. Remember to base their salary increase on the contributions made to the company.
If you don’t have the funds for bonuses or raises, you may want to consider offering other incentives like flextime, extra vacation time, stock options or telecommuting from home. Even if you cannot offer your employees pay increases, it’s important to show them you are sensitive to the tough times. Find ways to help them, short of spending more money on a raise right now, but always acknowledge they do deserve a raise if the money were there. Taking that approach and working with your employees will allow you to retain and motivate good employees.
You can also include employees in your company productivity planning; you might be surprised at the ideas they may bring forward. Those employees will feel more engaged and appreciated in the company, instead of discouraged because they are not receiving pay increases. Establish criteria for what performance or contribution in the meeting constitutes employee rewards. Ask employees to come to the meetings prepared with suggestions and ideas for increased productivity for the company.
How can you help employees understand the use of these recognition tools instead of pay increases?
There is always room for employee reward and recognition activities that build positive morale in the work environment — you just have to work on these programs. For example, you could have company lunches on Fridays, or prize drawings for those employees who met their goals for the week. Or give your team members who go above and beyond a new job title. Job titles don’t always mean more money, but sometimes receiving a title means more than getting a few more dollars in the paycheck. It show that’s you’re pleased with their performance.
How can you use these tools to leverage your company during the hiring process?
Point out to the potential employee your company recognition program and show you are committed to your employees’ well-being. A well-designed peer recognition program promotes organizational values. Candidates will want to work for a company that recognizes employees for their hard work.
M.J. Helms is the director of operations at the Ashton Group. Reach her at (706) 636-3343 or email@example.com.
Exit interviews, when done right, are opportunities that smart companies take advantage of. You can discuss the employee’s reason for departure, review what projects the employee had been working on, and even learn about what type of specific or confidential company information the employee may know. Good exit interviews can also help you determine any changes that need to be made to your organization.
“Exit interviews are a unique chance to survey and analyze the opinions of departing employees, who generally are more forthcoming, constructive and objective than employees still in their positions,” says Jessica Ford, director of sales and operations with Ashton Staffing. “Departing employees are liberated when leaving any organization, and provide a richer source of objective feedback than employed staff do when responding to normal staff attitude surveys.”
Smart Business spoke with Ford about conducting a successful exit interview, and effectively using that information.
What are some key things to cover in an exit interview?
Departing employees need to have a comfortable forum in which to reveal the full range of factors that led to their resignation. You should encourage departing employees to give an honest critique of expectations, conditions and requirements of their jobs.
Exit interviews can help you uncover the operational, organizational and personal variables affecting the employee’s decision to leave. This information is essential to highlighting the areas of perceived deficiency in the organization’s working environment, and can then be used to plan effective retention strategies and actions. Try to cover the following points.
- Identify what employees value most in the workplace.
- Identify the organization’s successes and failures.
- Identify specific management issues that may not be revealed during employment.
- Identify training resources and professional development needed for employees.
- Identify competitive advantages and disadvantages within your market.
How should the exit interview process be structured?
The interview can either be done in writing or face-to-face. Plan your questions before the interview, and determine what you want to know. Try to find out the departing employee’s suggestions to improve conditions, production or morale. Be sure to stay focused on the employee, use open-ended questions and save difficult questions until the end.
End on a positive note, and commit to using the information provided by the departing employee to improve your workplace. Wish your employee success in his or her new endeavor, and end the interview graciously. Avoid asking leading or subjective questions. This may lead the interviewee to bring personal feelings into the interview.
Some sample questions include:
- Why are you leaving?
- What did you like least and most about your position?
- How do you feel the company is run?
- How did you feel about your pay and/or benefits?
- What does your new company offer that encouraged you to accept its offer?
- How was your relationship with your manager? What could your supervisor do to improve his or her management style and skill?
- What is your experience of employee morale and motivation in the company?
- Were your job responsibilities characterized correctly during the interview process and orientation? Did you have clear goals and know what was expected in your job? Do you feel you had the resources and support necessary to accomplish your job?
- Did you clearly understand and feel a part of the accomplishment of the company mission and goals?
- Did management care about and help you accomplish your personal and professional development and career goals?
- What would you recommend to help us create a better workplace?
Exit interviews are important in situations where employees have been asked to leave. This gives an individual a chance to air any grievances and provide feedback. Expect the unexpected and be prepared for negative responses, even if the employee is leaving on his or her own accord.
Exit interviews are only effective if results are analyzed. Try to determine any trends in answers if you’ve had a few people quit. Use results to identify changes that allow you to keep other employees. Use this opportunity to listen, learn and make necessary changes within your business.
How do you make sure there’s an atmosphere of open feedback during the exit interview?
One option is to ask only objective questions, and don’t ask for their personal opinions. If a person is uncomfortable, have him or her complete a survey in private, and refrain from discussing the answers with the person.
Always listen to, recognize and respect a disgruntled worker’s opinions and insight. Simply listen, but do not respond with your own thoughts if he or she is venting. Think of the exit interview like a therapy session. Let the person talk and just take notes.
How do you use the information from an exit interview in your company?
Well-orchestrated exit surveys, in combination with other human resources initiatives related to maximizing employee attitudes and behavior, have the potential to become valuable tools to help reduce turnover and increase employee satisfaction and commitment. An effective reduction in turnover has clear economic and organizational benefits that can more than pay back the investment made in an exit survey system.
Jessica Ford is the director of sales and operations with Ashton Staffing. Reach her at (770) 419-1776 or firstname.lastname@example.org.
Employee compensation has been a hot topic during the recession. Many employees have taken on additional responsibilities due to downsizing within the company but may not have received additional compensation for these new duties. Some of these employees may have even taken a pay cut just to keep their jobs.
You may run into problems retaining these employees after the recession ends if you don’t properly compensate them or negotiate a fair salary. Offering pay increases or bonuses may not be an option at this time, so you need to develop nonmonetary compensation options, continue to maintain a positive work environment and address any concerns upfront with employees.
“Ignoring salary negotiations only exacerbates an already bad situation,” says Jessica Ford, director of sales and operations with Ashton Staffing. “Employees may feel discontent about their salary and simply not discussing the issue may make them feel that they are not important and their worth is solely based on salary. Try to involve employees when possible and let them understand the company’s current financial situation.”
Smart Business spoke with Ford about key things to include in salary and compensation negotiations and how to develop nonmonetary compensation packages.
What are some key things you should understand about salary negotiations and employee compensation?
Negotiation is not about winning, unless both parties win. If either party feels they have not negotiated, both parties lose. Make every effort to identify the most recent salary and benefits your employee or potential candidate received. Ask an employee candidate to provide a W2 or proof of salary during negotiations instead of simply asking about his or her desired salary. You can also find this out from former employers when conducting reference checks. You may not be able to match the salary, but you will have a good idea of what the candidate will seek during negotiations.
Arm yourself and do your research. Be sure to reference your current internal salary ranges, the salary of current employees in similar positions, the profitability of your company, as well as the job search market in your area and the economic climate.
Even if an employee has positively impacted your company, you need to keep your salary limits in mind. You will save yourself years of headaches and prohibitive costs by doing this, even if you have to start your recruitment process over or tell an employee that salary negotiation is not an option at this time.
What are some common mistakes employers make regarding employee compensation, and how can they mitigate those mistakes?
Some employers have simply blamed the maintenance or reduction in employee compensation on the recession and have not come up with alternative ways to reward employees. Reducing employee discontent due to employee compensation is dependent on the total work environment you offer employees. Think outside of the box. Sometimes the biggest mistake employers make is to think that employees only care about a monetary salary. Offer other incentives that shift the focus away from monetary awards to employee recognition. This can lead to higher productivity.
How can you develop nonmonetary compensation packages for employees?
- Offer a balance between work and life. Allow flexible starting times, core business hours, work from home options and flexible ending times. Employees will deter from a fixation on salary if they feel like they have a balance and some freedom.
- Offer an attractive and competitive benefits package, if you are able to, with components such as life and disability insurance and flexible hours. An employee can be content with a low- to midrange salary if a strong benefits package is offered.
- Select the right people from the beginning through behavior-based testing and competency screenings. Offer performance feedback and praise good efforts and results.
- Do your best to create a fun work environment, because people want to enjoy their work. Engage and employ the special talents of each individual, and involve employees in decisions that affect their jobs and the overall direction of the company, such as the discussion of company vision, mission, values and goals.
- Continue company traditions, such as holiday parties. This gives everyone something to look forward to and adds an element of fun into the workplace.
- Remember to take an interest in your employees. Respect their ideas and listen to them. This small gesture can make an employee feel needed and that he or she has a purpose in everyday tasks, beyond just receiving a paycheck.
- Provide opportunities within the company for cross-training and career progression. People like to know that they have room for career movement.
How can you handle employees who are not happy with their salary and the negotiation process?
Remember to always be honest with your employees and never promise them anything that you cannot offer. Tell your employees upfront if it’s absolutely impossible for your organization to address salaries at this time. Be sure to balance this with some kind of nonmonetary reward. This is necessary in order to maintain a healthy and happy work environment. But if you are confident that your company will have a good year, set a date as to when your employees can expect a raise or bonus.
Jessica Ford is the director of sales and operations at Ashton Staffing. Reach her at (770) 419-1775 or email@example.com.
Deciding whether to promote an employee from within or hire from outside the company can be a difficult decision, with many factors to be weighed. Promoting from within allows you a significant reduction in recruitment, hiring and training expenses but does not allow you a fresh perspective or new ideas. Hiring from outside the company gives you a renewed perspective and potentially different skill sets but can result in an adjustment period for the new hire and current employees.
“You must make an honest evaluation of your company’s needs and consider if those needs can be met with current talent,” says Michelle Elson, corporate director of operations with Ashton Staffing. “Consideration of company structure and politics must also be made, as well as if internal changes would harm or inspire company morale.”
Smart Business spoke with Elson about the pros and cons of promoting from within and hiring from outside and how to make the best decision regarding hiring.
What are the pros and cons of hiring from within?
- The current employee’s familiarity with the company and a reduced adjustment period should allow for a faster transition.
- Significant reduction in recruitment and training expenses, which is a benefit for any company.
- An increase in motivation and loyalty from internal employees, which boosts company morale.
- A fresh perspective is sometimes lost if an employee has preconceived ideas or thoughts on the position.
- A reduction in morale may occur if other employees feel slighted by a colleague’s promotion or lateral move.
- Internal hiring reduces the size of the prospective talent pool, limiting your access to the broad experience base available.
What are the pros and cons of recruiting from outside your company?
- Access to a larger talent pool, with knowledge and skills that are not currently available in the company.
- New hires bring in a fresh perspective and do not have company-specific experience to cloud their outlook.
- The combined experience of recruiters and access to an established pool of prescreened candidates makes an agency a good resource for external hiring.
- An increased expense to the company for advertising, recruiting and screening.
- Potential resentment from current employees.
- An increased adjustment period, learning of company culture, and training on specific software and products.
How can you decide which route would be best for your company and particular hiring need?
Consider the following:
- What is your budget for this hiring?
- Is there a viable candidate already established within your company?
- Is your company in need of new ideas and fresh perspectives?
- How will company morale be affected by an internal or external hiring decision?
Each company will have different answers to these questions and careful thought will ensure that an informed decision has been made. If you are on a tight budget, internal hiring would be the most cost-effective solution. An internal hire generally does not require a large monetary investment, other than a possible salary increase. Costs such as advertising, screening and more in-depth training would need to be planned and budgeted for if you choose to hire from outside the company. You also need to prepare for a training period and allocate necessary staff for either promoting from within or hiring from outside.
How can you deal with any backlash if you decide to recruit from outside the company?
Careful planning can neutralize the potential for unhappy employees. Post the position both internally and externally for a reasonable period of time, and make the job description as specific as possible. Make sure all skills, education and requirements for the position are outlined carefully. Interested employees may initially feel like they are qualified for the position, but may decide to include or preclude themselves after being presented with well-written qualifications. Be open-minded; an internal employee may be qualified and should be considered, as well, for the position. Establish trial periods, set reasonable goals and plan an evaluation at the end of the probation period. This allows you to cite an impartial process and feel confident in your decision if backlash does occur.
Bringing new people in or moving someone internally can affect company morale, both positively and negatively. You can’t control people’s feelings. You can minimize the impact by making fair hiring decisions and making sure the management team is proactive and addresses negativity with positive statements.
How do you make sure employees are well-trained and prepared so you are able to promote from within?
Cross-train and reward your talented and committed employees. Don’t let talent go to waste. You would be foolish to dismiss an employee’s initiative if he or she is interested in learning a new skill. Mentoring also establishes a culture of teamwork and preparation. Offering reimbursement and recognition for the completion of relevant continuing education classes will encourage employees to sharpen and maintain their skills.
Michelle Elson is the corporate director of operations at Ashton Staffing. Reach her at firstname.lastname@example.org or (770) 419-1776.