Improving Retention with Effective Employee Onboarding
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Improving Retention with Effective Employee Onboarding Thomas E. O’Rourke Connolly Clarke, LLC March 1, 2018 www.connollyclarke.com © Connolly Clarke, LLC Agenda I. Introduction and Session Objectives II. Workforce Challenges Facing WI Manufacturers III. Effective Employee Onboarding Programs a) Overview of Employee Retention Factors and Impact b) Business Case and Best Practices for Onboarding Programs c) Steps in Building an Effective Onboarding Program IV. Q&A www.connollyclarke.com © Connolly Clarke, LLC 1 Speaker Background: Tom O’Rourke Background: • President and CEO of Connolly Clarke (HR Consulting) [email protected] • 20+ years of Internal and External Organizational Consulting Experience . Including: Amoco (now BP), Alliant Energy, Arthur Andersen, Accenture, Baker Tilly, Connolly Clarke, CUNA & Affiliates • UW-Madison: BA Psych, MS Org Behavior/HR • Strategic partner with the Wisconsin Manufacturing Extension Partnership on human capital services. Work with a number of small to midsize manufacturers in addressing human resource issues and planning – Strategic Workforce Planning, Org Design, Employee Retention, Employee Engagement, Onboarding Programs, Succession Planning. Competency Models, Performance Management • Co-author of three books on Business Ethics www.connollyclarke.com © Connolly Clarke, LLC Session Objectives •Discuss Some of the People Challenges Facing Wisconsin Manufacturers •Share Insights on Factors Impacting Employee Retention •Discuss the Impact of Onboarding Programs and Best Practices •Review Steps in Building Effective Onboarding Programs •Answer Questions . On Any HR-related topics Note: Slides are available to participants www.connollyclarke.com © Connolly Clarke, LLC 2 Our Point of View See me after if you’d like a copy www.connollyclarke.com © Connolly Clarke, LLC Agenda I. Introduction and Session Objectives II. Workforce Challenges Facing WI Manufacturers III. Effective Employee Onboarding Programs a) Overview of Employee Retention Factors and Impact b) Business Case and Best Practices for Onboarding Programs c) Steps in Building an Effective Onboarding Program IV. Q&A www.connollyclarke.com © Connolly Clarke, LLC 3 2017 WMEP Manufacturing Industry Priorities Survey •Having a Clear Company Vision and Plan •Plan to Follow for Revenue Growth •Having a Culture of Continuous Improvement •Eliminate Waste/Reduce Undesirable Variation •Industry Certifications •Using Technology •Human Capital Plan See me after session if you’d like to www.connollyclarke.comreceive a pdf copy © Connolly Clarke, LLC Importance vs. Effectiveness (Gap Assessment) The three largest gaps between Importance and Effectiveness were: •Having a Defined Human Capital Plan – including Workforce Planning and Engagement (1.19) •Having a Culture of Continuous Improvement (1.17) •Having a Plan to Eliminate Waste and Reduce Variation (1.12) www.connollyclarke.com © Connolly Clarke, LLC 4 Top Challenges Facing Wisconsin Manufacturers: Human Capital 83% A further analysis of the Human Capital challenges was conducted. The Three Top Human Capital Challenges Categories Were: •Attracting/Hiring Talent •Labor Shortage/Quality of the Workforce •Employee Retention www.connollyclarke.com © Connolly Clarke, LLC Impending Labor Shortage Annual Growth Rate of US Labor Force 3 2.5 2 1.5 1 0.5 0 -0.5 1955 1965 1975 1985 1995 2005 2015 2025 2035 Source: Bureau of Labor Statistics www.connollyclarke.com © Connolly Clarke, LLC 5 Sources of Talent Shortage Source: Deloitte OK, Tom. We know we have a workforce shortage, www.connollyclarke.comwhat are we going to do about© Connolly it? Clarke, LLC wmep.org “Strategic Workforce Planning Program: A Critical First Step in Workforce Optimization” With the labor market Fastest growing area within HR. tightening, companies are getting more planful and strategic. https://www.wmep.org/wp-content/uploads/2018/02/Strategic-Workforce- Planning-sheet-WMEP-020618.pdf www.connollyclarke.com © Connolly Clarke, LLC 6 Agenda I. Introduction and Session Objectives II. Workforce Challenges Facing WI Manufacturers III. Effective Employee Onboarding Programs a) Overview of Employee Retention Factors and Impact b) Business Case and Best Practices for Onboarding Programs c) Steps in Building an Effective Onboarding Program IV. Q&A www.connollyclarke.com © Connolly Clarke, LLC Four Step Model for Retention Program Design Step 1 Conduct Initial Diagnosis See me after if Step 2 you’d like a Probe Root Causes copy of the slides sent Step 3 Design Retention Programs Step 4 Implement and Monitor www.connollyclarke.com © Connolly Clarke, LLC 7 Average Industry Turnover Rates 10% is the typically referred to as the Golden Number for Voluntary Turnover Source: CompData Surveys www.connollyclarke.com © Connolly Clarke, LLC Cost of Hiring Mistakes • The cost of interviewing, hiring, training and then losing employees is costly. Several factors should be considered when determining the cost of hiring mistakes. Direct Costs Indirect Costs • Placement fee • Lost revenue See me after if • Interview • Lost training you’d like a • Training • Project slippage more detailed • Ads • Ramp-up time T.O. costing • Relocation • Employee stress template • Signing bonus • Learning curve • Overtime • Project paybacks • Administrative/Legal www.connollyclarke.com © Connolly Clarke, LLC 8 Thumbnail Cost of Turnover Sample Tool: Formula for High Level Total Cost of Turnover Exempt Employees: total annual exempt turnover X (average exempt annual salary X 1.5) Non-Exempt Employees: total annual non-exempt turnover X (avg. non-exempt annual salary X.75) Total Company Cost of Turnover cost of exempt turnover + cost of non-exempt turnover It is really, really costly and adds up quickly – but often never taken into consideration www.connollyclarke.com © Connolly Clarke, LLC Why People Stay ___ Career growth, learning, and development ___ Exciting work and challenge ___ Meaningful work, making a difference and a contribution ___ Great people ___ Being part of a team ___ Good boss ___ Recognition for work well done ___ Autonomy, sense of control over one’s work ___ Flexible work hours and dress code ___ Competitive pay and benefits Source: The Hay Group www.connollyclarke.com © Connolly Clarke, LLC 9 Why People Stay 1 Career growth, learning, and development 2 Exciting work and challenge 3 Meaningful work, making a difference and a contribution 4 Great people 5 Being part of a team 6 Good boss 7 Recognition for work well done 8 Autonomy, sense of control over one’s work 9 Flexible work hours and dress code 10 Competitive pay and benefits Source: The Hay Group www.connollyclarke.com © Connolly Clarke, LLC Why Do People Leave? NUMBER ONE REASON WHY PEOPLE LEAVE?????????: PEOPLE DON’T LEAVE JOBS -- THEY LEAVE BOSSES! www.connollyclarke.com © Connolly Clarke, LLC 10 Who Will Be Most Likely To Leave? • Most Talented • Most Recently Hired • Reluctant Re-entrants to the Workforce • Limited Career Mobility (Not Advanced in Past 2-3 Years) www.connollyclarke.com © Connolly Clarke, LLC The Workforce with New Expectations • Signing Bonuses • Work-Life Balance • Contemporary Skill Sets • Loyalty to Career/ Not Company • Multiple Job Changes • Career Development/Ladder • Company Brand • Making a Difference www.connollyclarke.com © Connolly Clarke, LLC 11 wmep.org “Taking a Fact-Based, Data Driven Approach to Employee Retention” https://www.biztimes.com/2017/biz-insights/taking-a-fact-based- data-driven-approach-to-building-effective-employee-retention- programs/ Don’t rely on “gut checks” wmep.org www.connollyclarke.com © Connolly Clarke, LLC WMEP’s Retention Value Analysis • Fact-based, data-driven approach to addressing Employee Retention • Capture input from employees on the following Retention Factors: •Career Opportunity •Communication •Compensation, Benefits and Rewards •Leadership and Management •Recruitment and Selection •Vision, Values and Culture •Work Environment • Results are plotted against a Retention Value Maturity Model (five levels of maturity – Innocence, Awareness, Understanding, Competence, Excellence) • Recommendations are made based on https://www.wmep.org/wp-content/uploads/2017/08/Retention-Value-Analysis- retention best practices Infosheet.pdf • A plan is developed for addressing www.connollyclarke.comemployee retention © Connolly Clarke, LLC 12 Identify One Best Practice or Technique You Use to Retain Employees •Establish career path •Work environment • Good benefits •Work schedule 4/40 •Employee referral programs – stay longer •Meet all supervisors on first day – detailed onboarding plan •Demonstrate appreciation • Celebrate successes-new business for company, company –wide celebrations, maybe including employee families • Clearly defined advancement opportunities • Golden Rule • Asking for targeted/specific feedback from employees www.connollyclarke.com © Connolly Clarke, LLC What is Employee Engagement . Definition: “employee engagement is the emotional commitment the employee has to the organization and its goals.” NOTE: IT IS DIFFERENT FROM JOB SATISFACTION www.connollyclarke.com © Connolly Clarke, LLC 13 . And Why Does It Matter? (The Business Case) Operating Income • Companies with low engagement scores earn an operating income 32.7 percent lower than companies with more engaged employees. • Similarly, companies with a highly engaged workforce experience a 19.2 percent growth in operating income over a 12-month period. Profitability and Turnover • Engaged companies grow profits as much as 3X faster than their competitors.