JOA: Rethinking Retention

Is your company attracting to quality candidates? Are you hiring for cultural fit? “Employees are always changing, and you can’t assume tomorrow’s will want what today’s do, if you build that nimbleness around how you attract, develop, recruit, promote, and retain, you’re constantly in tune to what your current workforce wants, and then you don’t have to guess.” Retensa’s Chason Hecht said. Below is an article form Journal of Accountancy by Courtney L. Vien:

Rethinking retention

One-size-fits-all initiatives won’t solve your retention problems. The key to retention, according to Retensa’s Chason Hecht, is culture.

Employee retention is — for CPA firms. In fact, according to the 2015 PCPS CPA Firm Top Issues survey, retaining staff is the No. 1 concern of firms that employ 11 or more people. In fiscal year 2015, turnover rates reached 13.4% at firms with revenues of over $10 million, the AICPA and CPA.com’s 2016 National Management of an Accounting Practice survey found, up slightly from 2014.

The strong economy is a key reason firms struggle with retention, said Shelly Guzzetta, CPA, manager—Firm Services at the AICPA. “Since the economy has gotten better, people have gotten bolder,” she said. “They feel more comfortable and are willing to take the calculated risk of leaving.” Social media is also a factor, she said, as it’s made it easier for CPAs to find new job opportunities and to get candid opinions on what it’s like to work at different firms.

Given the heavy costs of turnover, it’s no wonder that employers of CPAs are so concerned about retention. When employees leave, their employers must incur the cost of recruiting, hiring, onboarding, and training a new employee, and they’ll likely see a drop in productivity as the new hire gets up to speed. Estimates of the cost of turnover vary widely, but one reliable source, the Society for Human Resource Management, calculates that it can cost anywhere from 50% to 60% of an employee’s salary to replace him or

The challenge firms face is that -informed employees in high demand—such as CPAs—know that they have choices about where they work. And they’re looking for more than just a paycheck and good benefits from an employer. According to retention expert Chason Hecht, employees want to work at jobs they find personally fulfilling and where they connect to the culture. To appeal to the best employees, he said, employers need to rethink the way they approach retention.

DEFINE CULTURE, PROMOTE CONNECTION

Conventional wisdom says that Millennials won’t stay loyal to one employer for long. Hecht, president and founder of human resource consulting firm Retensa, sees things differently.

“There’s very little evidence that Millennials lack loyalty,” he said. “What they lack is a tolerance for boredom. They lack a tolerance for discontentment, disengagement, for feeling disconnected from their peers, community, and society.”

What’s more, he said, it’s no longer just Millennials who feel this way. He believes that we’re all undergoing a fundamental shift in the way we view work—and it’s making employees from all generations more likely to leave work they find unsatisfying.

“If you’re not getting fulfilled, if you’re not challenged and engaged, if you’re not doing things that are meaningful and interesting,” Hecht said, “then it’s at this point that you’ll, like most people in modern society, reflect and consider, ‘How long am I going to do this?’ ”

Consequently, employees who are in demand and enjoy a high degree of mobility—such as CPAs—are more likely to leave jobs where they don’t feel engaged and fulfilled.

Yet, too few organizations think about retention in terms of culture and engagement, Hecht said. Instead, he said, what often happens is that organizations look for — solutions to their retention problems. A company will learn about the latest trend in retention—be it unlimited vacation or nap pods in the break room—and implement it without considering whether it’s what staff really wants. Though employees do value such perks, Hecht said, they’ll be a stopgap solution at best if an organization’s staff and its culture are -matched.

A DIFFERENT KIND OF RETENTION STRATEGY

Hecht advised that, instead, organizations should define their values and culture, then attract and retain staff whose passions align with their

Your first step, Hecht said, should be to determine what aspects of your culture set you apart as an organization—”what you provide, where you excel in supporting, engaging, and delivering to your workforce,” he said. For one firm, that might mean a culture that promotes transparency; for another, it might be a sense of being innovative and cutting-. (To read more about how a firm’s culture can inspire retention, see the sidebar “Brown Smith Wallace: Investing in the Whole Employee.”)

To pin down how employees view your culture, and when and how they want to work, Hecht said, continually solicit feedback from them through a variety of means: surveys, performance management data, -ended suggestions, town halls, and the like. The important thing is to do so continually—an annual survey is not enough, he said. (For a different approach to information gathering, see the sidebar “The Stay Interview.”)

“Employees are always changing, and you can’t assume tomorrow’s will want what today’s do,” he said. “If you build that nimbleness around how you attract, develop, recruit, promote, and retain, you’re constantly in tune to what your current workforce wants, and then you don’t have to guess.”

The next step, Hecht said, is to use the data you continually gather to plan ways to give employees what they value at different points during their tenure. “At each stage of the employee life cycle your workforce is either being engaged and appreciated, developing trust in you—or they’re not,” he observed.

Once you understand what it is about your culture that employees value, Hecht said, you can then create opportunities for people to engage with one another that allow for connectedness and -expression. You can create events, social opportunities, and policies that you know will appeal to them, because they’re not being implemented from the top down, he said. That way, you won’t spend a lot of money to send your staff to a pro football game when they don’t really care for sports, for example.

RETENTION STARTS WITH HIRING

Hecht stressed the fact that organizations that want to retain employees need to start by hiring the right ones.

Hire for cultural fit, he said. “Authenticity starts with who you hire and who’s recruited, who’s interviewed, and the filter you create for people who join your organization,” he noted, adding that, naturally, firms in need of help will need to balance cultural fit against their other hiring needs.

Retention is about providing the best client service, but, ultimately, it’s also about finding a balance between maximizing productivity and shaping an organization where your employees want to work. As Hecht pointed out, we spend about a third of our lives at work—so whether we’re happy there matters.

“We win when organizations have the people that want to work there,” he mused. “Can you imagine a country where everybody loves their job and how different that would be?”

Advertisements

GT: 7 Ways to Outsmart Your Competition

How much do you know about your competition? Below is a blog from the Growthink Blog by Dave Lavinsky:

7 Ways to Outsmart Your Competition

“Knowledge is power.” This is a well known saying commonly attributed to Sir Francis Bacon, who was an English philosopher, statesman, scientist and author.

In business, knowledge certainly is power. For example, if you knew where your market was heading, you would have a massive leg up on your competition.

So, how can you gain more knowledge to outsmart your competition? Here are 7 ways.

1. Learn from your customers.
Marketing consultant Jay Abraham once said, “your customers are geniuses; they know exactly what they want.”

Because your customers know what they want, speak to them. And don’t just speak to your current customers, but speak to your competitors’ customers too. Learn to listen deeply to your customers and to ask probing questions. And when you hear consistent feedback (and not just one customer saying something), take action.

2. Learn from your competitors.
Watch your competitors closely and learn from them. What do they seem to be doing well, and how can you better emulate them in this respect? What are they doing poorly that you can capitalize on?

Importantly, don’t just copy your competitors until you know that what they are doing works. For example, if a competitor starts offering a 25% off discount for new customers, don’t copy them right away. Rather, wait and see what happens. If the competitor stops offering the discount quickly, then the promotion probably didn’t work. Conversely, if the competitor is still offering the discount 6 months later, it probably did work. Only copy the competitor’s “winners.”

Also try to figure out what competitors are saying about you. And, if criticism from a competitor gets back to you, don’t become defense or dismiss it casually. Rather, engage critically with it. The criticism may prove to be quite helpful. A competitor may be aware of your weaknesses in a way a friend or customer cannot be. So don’t disregard negative feedback, but rather consider it carefully, and take corrective action as appropriate.

3. Learn from your employees.
Oftentimes your employees have a lot more information than you do. They are the ones who are interacting with customers, and they are the ones that are building your products and providing your services.

Speak to your employees and get their feedback, ideas and suggestions. As an example, nearly all new innovation at Toyota comes from front-line employees. Encourage your employees to come up with ideas and give you feedback. They may also alert you to changes in the marketplace and customer behavior that you need to understand in order to adapt.

4. Learn from your community.
This is particularly true for local businesses. Find out what is going on in your community. For example, if your community is heavily involved in recycling, or if the local high school football team just won a championship, then you need to know about it since these are things your community cares about. Importantly, leverage this information. In these two examples, you could offer a sale related to the football team’s victory. Or post signs explaining how your business recycles. These actions would position you as part of the community and cause customers to flock to your business.

5. Learn from coaches and consultants.
The right coach and/or consultant will have lots of knowledge that you don’t. They will have worked with other business owners and “been there, done that” – that is, they will have seen challenges and overcome them already. Because you won’t have to “reinvent the wheel,” these paid experts can allow you to make the right decisions, avoid mistakes, and grow more quickly. Plus, paid experts can give your business a reality check and keep you focused and accountable.

6. Learn from mentors.
The right mentor serves a similar function as a paid coach and/or consultant in that they have experience, expertise and connections that allow you to avoid mistakes and grow your business more quickly. The challenge is finding the right mentor, and setting up the appropriate structure to get ongoing feedback (this naturally happens when you pay a coach or consultant).

7. Learn from other business owners. In previous articles, I have mentioned the massive power of mastermind groups. Mastermind groups are groups of business owners who work together to grow everyone’s business. Mastermind groups are incredibly powerful since other members of the group will have already overcome the challenges you face, and thus can give you the answers you need.

Likewise, in many cases, skills and knowledge that have taken other business owners months or years to learn can be transferred to you in minutes. So, you gain massive knowledge quickly, and gain a support group that all shares the common goal of building a great company.

Knowledge certainly is power. Leverage these seven ways to gain knowledge, and you will be able to outsmart and dominate your competition.

 

The Amazing Life and Times of James McParland

Back in 1881, the Pinkerton’s agency was keeping track of its employee’s strengths and weaknesses. Below is an excerpt from the book Pinkerton’s Great Detective: The Amazing Life and Times of James McParland by Beau Riffenburgh.

 

In the midst of these changes and traumas, McParland was required to submit an agency form entitled History of Pinkerton's Great Detective: The Amazing Life and Times of James McParlandDetectives, in which he detailed his background. The supplement to the form, completed by Chicago superintendent Frank Warner, gives an intriguing look at how the famous operative was seen by his superiors, including his strengths and weaknesses:

General deportment and appearance Genteel Irishman
Classes of society can become readily adapted to; whether higher orlaboring class, sporting men or thieves Both
Class of “Roper”; whether makes acquaintance easily, and ability to obtainfriendship and confidence Good
Class of “Shadow” Not good
Ability for making investigations Good
Knowledge of criminals Not good
Whether Moderate in expenditures or inclined to be extravagant Medium
Impulsive or cautious Impulsive
Determined or timid Determined
Secretive or talkative Talkative
Self-reliance and ability to originate a plan of operations beyond instructions Good
Failings to be guarded against Operating too fast

 

The report is as interesting for what it says about the attitudes at Pinkerton’s as what it records about McParland. To the hierarchy of the agency, “Genteel”- refined or well-mannered-differentiated McParland from the stereotype it long had held of the common Irishman: the low-class, hard-drinking, undesirable thug personified by some of the men in the Molly Maguires. The report also shows that McParland was not particularly good at one of the basic skills of being a spy-“shadowing,” or tailing a suspect-and that he clearly was not guarded enough, as he was listed as both “impulsive” and “talkative.”

In his remarks, Warner noted that “whilst in Philadelphia Agency [while undercover] he acquired the habit of excessive drinking. He reformed however and married previous to joining Chicago Agency. He is suspected of having fallen from grace since employed here, but no harm resulted,’?’ The abstemious Pinkerton abhorred drinking, and in 1875almost fired even Bangs for being intoxicated on the street.” It is almost certain that McParland’s “fall from grace” -a term used by those in the temperance movement-referred to his heavy drinking, which, although curtailed again, is rumored to have reap- peared on and off for the rest of his life.

Retailers Should Invest More in Employees

Below is a blog post from Harvard Business Review by Zeynep Ton. This is one of many articles and videos from “HBR Insight Center: The Future of Retail”. Also, there is a list of related articles from The Future of Retail which might be of interest to you.

Retailers Should Invest More in Employees

by Zeynep Ton

Doug Rauch, the former president of Trader Joe’s, visited my Service Operations class at MIT last week. When he mentioned that Trader Joe’s invests in its employees a lot more than its competitors do, he was challenged by one of my students: “Isn’t it a bad idea to invest in employees in settings like yours where shopping is transactional and can easily be done online?”

Doug had a strong reaction. “Nowadays you can go through an entire day without a single person acknowledging your existence. But don’t forget that we are people who generally like connecting with other people.” He went on to explain how profitable it is to invest in employees, even for a supermarket that competes on the basis of low prices, and how most online grocers have not found a way to make money.

My class had already discussed QuikTrip, a convenience store chain with over 500 stores, and Mercadona, Spain’s largest supermarket chain. We also talked briefly about Costco, a large and publicly-traded wholesale club. All of these retailers, along with Trader Joe’s, invest significantly more in their employees than is typical for their retail peers. They also have high profits, low prices for their industry, excellent operational metrics, and a reputation for great customer service. These retailers deliver great value to their customers, employees, and investors all at the same time. (My article in the January-February 2012 issue of Harvard Business ReviewWhy “Good Jobs” Are Good for Retailers, analyzes how they manage to do this.)

Even so, I was not surprised that my student was questioning Doug on his company’s choice to invest in its employees. Many in the business community still see employees in low-cost retail as interchangeable parts. They can see with their own eyes that most large retailers, such as Wal-Mart, do not invest much in their employees. And it makes sense to them, as it made sense to my student, that low-cost retailers really have only one thing to offer their customers: the quick, cheap sale. That’s what the customers are there for and there’s no point in offering more.

These people miss two things.

1. Even in low-cost retail, it takes a lot of human effort and judgment to get the right product to the right location at the right time and to make an efficient transaction.

It’s the low-paid employee, not the inventory-management software, who notices that a shelf looks messy or that some of the products are in the wrong place. It’s the low-paid employee who notices that some of the lettuce has gone bad or that there are still signs up for last week’s promotion. It’s the low-paid cashier who can tell the difference between serrano peppers and jalapeno peppers during checkout. It’s the low-paid employee who notices that there are too many customers waiting in the checkout and offers to open an additional cash register. When retailers don’t invest in human capital, operational execution suffers and the company pays with lower sales and lower profits than it could have had.

2. Even in low-cost retail, there is still interaction between customers and employees.

It’s the employee who notices a customer standing in the aisle looking lost and offers help. It’s the employee who can read from a familiar customer’s face that he’s had a bad day and could use a friendly smile. It’s also the employee who can turn a customer off — maybe permanently — by being rude or even just not very helpful. It’s the people who make you want to shop here even though you can easily buy the same stuff there. Yet most low-cost retailers forget about that.

Those are what we could call the business reasons for more investment in employees. But business on the scale of these retail chains is never just business. It’s people’s lives — the employees’ and the customers’.

I care that millions of retail employees are not given decent wages, benefits, work schedules and an opportunity for growth, even though doing so is free for retailers. I care that a lot of human talent is wasted. When I’m shopping with my children, I care what view they are forming of the society they live in. I try to go to places where they will see what people are like at their best, not at their most disengaged. I want them to live in a society in which people acknowledge each other’s presence and are kind and respectful to each other, and I think that begins with being brought up to see kindness and respect as normal. What Doug Rauch and others have shown is that what I want for my children is not at all incompatible with what they want for their companies.

Related Articles:

Twelve Questions to Measure Employee Engagement

Cover of "First, Break All the Rules: Wha...
Cover via Amazon

The other day I found this questionnaire I’ve used to capture my employees productivity, profitability, retention, and customer satisfaction. These are from First, Break All the Rules: What the World’s Greatest Managers Do Differently by Marcus Buckingham. You could download the PDF by clicking on the Title:

The Twelve Questions

Please answer the following questions.  1 is “no, I strongly disagree” and 5 is “yes, I strongly agree”.  These questions will help to improve your workplace. Please return by[Insert Date].  Please do not write your name on the survey.

  1. Do I know what is expected of me at work?          1  2  3  4 5
  2. Do I have the materials and equipment I need to do my work right?        1 2 3 4 5
  3. At work, do I have the opportunity to do what I do best every day?       1 2 3 4 5

4. In the last seven days, have I received recognition or praise for doing good work?   1 2 3 4 5

5. Does my supervisor, or someone at work, seem to care about me as a person?   1  2 3 4 5

6. Is there someone at work who encourages my development?         1  2 3 4 5

7. At work, do my opinions seem to count?                                                  1 2 3 4 5

8. Does the mission/purpose of my company make me feel my job is important?          1 2 3 4 5

9. Are my co-workers committed to doing quality work?                   1    2    3    4    5

10. Do I have a best friend at work?                                                    1    2    3    4    5

11. In the last six months, has someone at work talked to me about my progress?   1 2 3 4 5

12. This last year, have I had opportunities at work to learn and grow?                 1 2 3 4 5