As the economic recovery gathers momentum, attracting and retaining quality staff in a tightening and competitive labour market are at the top of the agenda for many businesses.
As Jim Collins observed in the international best seller, Good to Great [Harper Collins Publishers Inc., New York (2001)]:
The old adage, “People are your most important asset” turns out to be wrong. People are not your most important asset. The right people are.
John Smith, CEO of Human Resources consultants, DSTpeople4business, spoke to me about the key ingredients for building a committed, engaged and productive workforce.
A Healthy Workplace Culture: The Cornerstone Of Building Human Capital
JS: Over my 18 years in manufacturing and 8 years heading up a national recruitment company, my philosophy has always been: “Build a really good environment which attracts good people, one in which people want to excel and succeed.”
If you can build a healthy workplace culture -one that is balanced between achievement-orientation and people-orientation- then you’ll attract and hang on to good people, and they will take you a long way.
Workplace culture is a very big topic. However, in brief, the key elements that determine workplace culture are:
- Leadership; and
- Processes and systems to ensure that you
- hire the right people,
- train your people, and
- effectively communicate with them.
Research suggests and continues to suggest that the top 5 reasons for people leaving employers have not changed and don’t change much, even with changes in the economic environment. All of these come back to workplace culture issues.
Workplace Culture Starts With The Leader
JS: Culture is impacted first and foremost by the leader; and culture is predominantly a reflection of the leader.
You look at a footy team. Why does one team exist 120 years in the competition and win 1 premiership; and another one exists for the same amount of time and wins 15? With the one that’s won 15, there’s been better leadership, better performance at the top for an extended period of time. I don’t think it’s too much different in businesses.
Qualities of a good leader
A good leader has a clear vision for the business. As the old saying goes, “if you don’t know where you are going, you are going to get there.”
Staff engagement with the vision is critical or you’ll end up with a lot of politics within the organisation. I’ve witnessed businesses with very political cultures, where it’s all about individual gain and not overall company gain. This is usually because the vision is not shared between the individuals and the leadership, or there isn’t a clear vision, or there aren’t mechanisms for communication of the vision and getting the involvement of the key people.Values & Behaviours
Values like respect, recognition, reward, strong work ethic, integrity etc coming through strongly not just in words but in behaviour by the leader will contribute positively to a good workplace culture.
If a leader screams and carries on in the middle of the office, and sinks the boots in every time someone makes a mistake, you’ll soon get people putting their heads down and not taking any risks or making any decisions. You end up with an avoidance, approval-seeking culture. Indeed, this type of leadership is usually surrounded by approval-seeking people who put their heads in the sand and avoid making any decisions.
A business may actually be financially quite successful that way for some time with this type of passive-aggressive leadership but it is not sustainable. As soon as that leader moves on, the business will fall apart very quickly.
Business owners who have very good insights into their own strengths and weaknesses usually have very good insight into their workplace culture and really work at making it a healthy one. They are the ones who recognise if they need others around them to complement their own natural behavioural styles.
Then there are those who have little insight into themselves. They are often so focussed on achieving something that they can be totally oblivious to the prevailing workplace culture. They are usually the ones who can’t comprehend why they’ve got a really high turnover of staff.
Systems & Processes: The ‘Organs’ To Create And Support A Healthy Workplace Culture.
JS: Once a business gets up to around 6 to 8 employees, the owner should start thinking about putting formal HR systems and processes in place to address key issues such as:
- Good communications
- Attracting & selecting the right employees
- Performance management
- Training and development
I will deal with the issues of communications and staff selection in greater detail here.
Strong employee engagement in the business is key to a healthy workplace culture. This requires having mechanisms in place to ensure good two-way communications with staff .
Good communications has to happen at all levels-from strategic planning right down to the individual’s performance and development.
To get the best out of your employees, you need to share your vision for the business with them and get them to jump on board with your vision for the business. Equally, you have got to understand what their vision is for themselves-the WIIFM (What’s In It For Me”) factor.In my experience, good performance management is all in the quality of the communication. It’s about sitting down with your direct reports and having them understand what objectives are expected of them but at the same time, allowing them to have an input. “This is what we expect. What help do you need to get there?”
In other words, in setting goals, you should hold them accountable but be supportive at the same time. This is something that many people find difficult to do and many avoid it. Yet the ones who embrace this concept find that it works very well for the business.
Quite often, if someone’s performance is a bit off, it ‘s something outside of the work environment that is impacting them. If you don’t have a good connection with your employees so that they feel that they can talk to you, you will not find out what what’s really going on.
Attracting & Selecting The Right Employees
Consider some interesting statistics on staff turnover.
- A number of research studies indicate that 47% of staff turnover happens in the first 90 days.
- Staff turnover across all companies in recent years is about 18%. This has risen from the historical average of 15%.
- The recruitment industry-these are the experts helping businesses to recruit – has a turnover of anywhere between 40% to 60%. The very best medium to large size recruiter will be at around 20% turnover.
What all this suggests to me is that we don’t recruit very well in Australia at all. Not enough time is spent identifying the specifications of the role correctly.
“Cultural fit” isn’t undertaken with sufficient rigour. The recruitment industry is rewarded by and large by commissions which are paid on “getting a bum on the seat’. Most of the industry doesn’t use assessments to identify cultural fit because they don’t know how to sell the extra cost of using assessments in the selection process, and then half the time, they don’t want to run a selection assessment because they are afraid that the fit won’t be good, which means they won’t get a bum on the seat to get their fee.
That’s not to say there aren’t any good recruiters. There are some very good ones who are very thorough and professional in their approach but they are in the minority.
At DSTpeople4business, we have put together packages to guide businesses, particularly SMEs who don’t have or need a full-blown HR function within the business, through the necessarily thorough process to ensure that they get the right person. [See: How To Hire The Right People]
Our “fee for service” solutions are not based on the salary package of the employee being hired.
Don’t rush the hire. Don’t put off the fire.
Another common issue I have frequently observed is that businesses businesses hire too quickly and fire poor performers too slowly.
There is this urgency to fill a position and the process is rushed. The cost of a wrong hire or bad hire is so expensive that it is far better to invest the time and effort to find the right person, even if it takes longer than you would like.In my experience, I have found that companies are so frightened of not being able to find the right person that they persevere with ‘bad apples’.
Bad apples are cancers in the business. They will affect the retention of your really good employees. Once you make the decision that a person is the wrong person for your business, get them out as quickly as you can or you will end up losing your good employees.
Please note that decisiveness in termination doesn’t mean cutting corners or lack of due process when you are firing. You must get your termination processes right but don’t hang onto someone just because you think it will be difficult to fill the position.
Whilst your HR management needs to include supportive and humanistic, it also needs a hard edge when it comes to eliminating poor performers or misfits. If you don’t cut gangrenous limbs off, the rot will spread through the body. Likewise, failing to quickly cut out unsuitable employees will result in a rotting workplace culture which will then impact on your business.
JS: DSTpeople4business was really set up to help SMEs get a good workplace culture going in their business by providing a cost effective outsourced HR service-on demand.
Most SMEs don’t have full time internal human resources function to deal with issues such as staff communications, training and development, performance management etc. And frankly, a business does need to get fairly large before it can justify having a full blown in-house HR function.
What we’ve done at DSTpeople4business is put together products and tools to “attract, retain and develop” people. These tools have been have been selected on the basis of proven effectiveness in the workplace by our team of experienced business professionals. For example, we’ve got a performance management product that is very simple to use, promotes great communication, is non-threatening, helps goal setting and gets good behaviours going.
Building a great workplace culture needs time and effort but a business will be more than amply rewarded for your investment. Talk to John about how DSTpeople4business can assist.