An increasing number of organizations are laying claim to being employers of choice, effectively turning the label into a buzz phrase. But what does it really mean to be an employer of choice? Even earning the right to this claim is not an ironclad guarantee of success as a growing, profitable enterprise. Why are some companies better at this than others?
One of the answers lies in the fact that enlightened employers strive to become true “employers of choice.” They recognize that to create and build a reputation as a sought-after place to work and grow, they have to understand not only their own human resources and organizational needs, but also the needs, desires and aspirations of the talent pool they wish to attract.
Then they must deliver what they say they will deliver: the leadership, values, vision, education, caring, opportunity, reward system, benefits and involvement that galvanizes a workforce. It is all about integrity.
In recent years, many high-tech companies charged out of the starting gate with leading-edge human resources policies and programs offering competitive salaries and benefits, flexible hours, attractive stock options and incentive schemes. However, over the past 12 months, they have watched in horror as their stock prices tumbled, profits disappeared and dynamic growth reversed into rapid decline.
This demise was not due to “passive aggressive” behaviour on the part of disgruntled, demotivated employees, but resulted from the collapse of global technology markets over which they had little control.
The good news is that an even greater number of truly consistent performers, such as General Electric, have enjoyed leadership that effectively communicates a vision that everyone understands and supports. Most important of all, it is a vision that places premium value on people and their well-being. Such organizations know how to take the pulse of employees and craft human resources strategies, policies and programs that are an integral part of long-range business plans. As well as these organizations mentor, coach and develop key talent. They acknowledge that nothing motivates and retains employees more than making them part of the team in every sense of the word. They “walk the talk.”
At the other end of the spectrum, a well-known corporation openly touting itself as an “employer of choice” was baffled by the fact that the response rate to its most recent employee survey was less than 35 per cent. Five years ago, it was as high as 80 per cent. Further investigation revealed that virtually none of the concerns, criticisms and suggestions voiced in earlier survey returns had ever been acted upon. The obvious conclusion on the part of its employees: no one is listening, and no one cares. It is not surprising or coincidental that the company’s productivity has sagged in relation to its competition.
Employers of choice
The term employers of choice has been defined as “an employer of any size in the public, private or not-for-profit sector that attracts, optimizes and holds top talent for long tenure because the employees choose to be there.”
Employers of choice don not have to find the talent because the talent finds them and, more importantly, stays with them. More often than not these organizations enjoy higher return on investment and levels of customer satisfaction, and lower turnover rates than competitors.
The key to becoming an employer of choice is to foster a culture that values employees as much as its customers.
Here are seven ways that demonstrate an employer of choice:
1. Ensure the leadership style is facilitative, not autocratic
Do not pay lip service to the term “empowerment.” Employees at all levels who are not just allowed, but encouraged to make decisions — to come forward with ideas, suggestions and recommendations — are employees who are more creative, innovative and productive than those who simply do what they are told to do. The best talent thrives under facilitative leadership.
2. Be a thorough, open and honest recruiter
Thorough: Using competency-based selection methods, ensure new recruits not only have the skills required, but exhibit the behaviour and share the values that are essential for the best “fit” with your company’s culture.
Open: Companies that embrace diversity are often at the top of publicized lists of employers of choice. In some instances, recent arrivals to Canada who possess outstanding education and experience are rebuffed by companies which claim to only hire people with “Canadian experience.” This excuse is clearly irrelevant when it applies, for example, to individuals with in-depth computer systems and software experience — technology that has a common language around the globe.
Honest: Be realistic and objective when describing the company’s strengths, weaknesses and opportunities. In particular, be honest and forthright in communicating the career potential, growth and learning opportunities the organization is offering the candidate.
3. Ensure you are a learning organization
True learning organizations adopt a culture that accepts learning as an investment in the future. They avoid common pitfalls, such as creating a conflict between training and education, and productivity. In fact, they make learning — a well-constructed approach to cross-training, mentoring and off-site education — a requirement of the job and a component of the performance management system.
4. Create HR policies and programs that are in harmony with the nature of the business
Do not promote a flex-time program if the nature, pressures and demands of the particular business make it virtually impossible for employees to take advantage of it. Increasingly, people are seeking a quality of life that involves a workable and consistent balance of job and personal/family pursuits. Promote this balance as part of the company’s operating philosophy only if it can be supported.
5. Ensure compensation and benefit programs are highly competitive, and performance is rewarded
Keep in constant touch with marketplace salary trends, and how much top talent costs. Include an incentive component with a formula that is easy to understand, is realistically attainable and places significant emphasis on individual performance — not weighted purely on the company’s profitability, ROI or other factors. Employees who are told at year-end that they met or exceeded personal targets, but that corporate results would not allow for bonus payouts, will quickly become disenchanted and demotivated.
6. Create and foster a communicative environment
Always keep employees in the loop concerning individual group and overall company performance, future plans and how their efforts are contributing to the company’s success. People who are knowledgeable about their organization and its achievements, and know they have played a role — no matter how minor — are less likely to be wooed away by external recruiters.
Likewise, encourage and facilitate employee dialogue: discuss concerns, ideas, provide suggestions that could improve performance and/or cut costs. Listen to them, then act.
7. Maintain integrity
Broken promises are a sure way to create an atmosphere of distrust, and this leads to a lack of caring and an ambivalence about the company. Employees focusing only on their own jobs and protecting their own interests break down the team effort, with predictable and unfortunate results. An even more damaging outcome is the unwanted flight of the best talent to the competition.
Earn the right to call yourself “employer of choice”
Creating a culture that recognizes, listens to, communicates with, rewards and develops people sends a clear message that human capital is valued as much as marketshare, return on capital, share price and other quantitative measures of corporate performance.
This message should be heard loud and clear by existing employees and prospective employees. Only then can a company earn the right to promote itself truly as an employer of choice.
James Parr is vice-president of Michael Stern Associates Inc., a management consulting and executive search firm based in Toronto. He may be reached at (416) 593-0100 or at [email protected].
One of the answers lies in the fact that enlightened employers strive to become true “employers of choice.” They recognize that to create and build a reputation as a sought-after place to work and grow, they have to understand not only their own human resources and organizational needs, but also the needs, desires and aspirations of the talent pool they wish to attract.
Then they must deliver what they say they will deliver: the leadership, values, vision, education, caring, opportunity, reward system, benefits and involvement that galvanizes a workforce. It is all about integrity.
In recent years, many high-tech companies charged out of the starting gate with leading-edge human resources policies and programs offering competitive salaries and benefits, flexible hours, attractive stock options and incentive schemes. However, over the past 12 months, they have watched in horror as their stock prices tumbled, profits disappeared and dynamic growth reversed into rapid decline.
This demise was not due to “passive aggressive” behaviour on the part of disgruntled, demotivated employees, but resulted from the collapse of global technology markets over which they had little control.
The good news is that an even greater number of truly consistent performers, such as General Electric, have enjoyed leadership that effectively communicates a vision that everyone understands and supports. Most important of all, it is a vision that places premium value on people and their well-being. Such organizations know how to take the pulse of employees and craft human resources strategies, policies and programs that are an integral part of long-range business plans. As well as these organizations mentor, coach and develop key talent. They acknowledge that nothing motivates and retains employees more than making them part of the team in every sense of the word. They “walk the talk.”
At the other end of the spectrum, a well-known corporation openly touting itself as an “employer of choice” was baffled by the fact that the response rate to its most recent employee survey was less than 35 per cent. Five years ago, it was as high as 80 per cent. Further investigation revealed that virtually none of the concerns, criticisms and suggestions voiced in earlier survey returns had ever been acted upon. The obvious conclusion on the part of its employees: no one is listening, and no one cares. It is not surprising or coincidental that the company’s productivity has sagged in relation to its competition.
Employers of choice
The term employers of choice has been defined as “an employer of any size in the public, private or not-for-profit sector that attracts, optimizes and holds top talent for long tenure because the employees choose to be there.”
Employers of choice don not have to find the talent because the talent finds them and, more importantly, stays with them. More often than not these organizations enjoy higher return on investment and levels of customer satisfaction, and lower turnover rates than competitors.
The key to becoming an employer of choice is to foster a culture that values employees as much as its customers.
Here are seven ways that demonstrate an employer of choice:
1. Ensure the leadership style is facilitative, not autocratic
Do not pay lip service to the term “empowerment.” Employees at all levels who are not just allowed, but encouraged to make decisions — to come forward with ideas, suggestions and recommendations — are employees who are more creative, innovative and productive than those who simply do what they are told to do. The best talent thrives under facilitative leadership.
2. Be a thorough, open and honest recruiter
Thorough: Using competency-based selection methods, ensure new recruits not only have the skills required, but exhibit the behaviour and share the values that are essential for the best “fit” with your company’s culture.
Open: Companies that embrace diversity are often at the top of publicized lists of employers of choice. In some instances, recent arrivals to Canada who possess outstanding education and experience are rebuffed by companies which claim to only hire people with “Canadian experience.” This excuse is clearly irrelevant when it applies, for example, to individuals with in-depth computer systems and software experience — technology that has a common language around the globe.
Honest: Be realistic and objective when describing the company’s strengths, weaknesses and opportunities. In particular, be honest and forthright in communicating the career potential, growth and learning opportunities the organization is offering the candidate.
3. Ensure you are a learning organization
True learning organizations adopt a culture that accepts learning as an investment in the future. They avoid common pitfalls, such as creating a conflict between training and education, and productivity. In fact, they make learning — a well-constructed approach to cross-training, mentoring and off-site education — a requirement of the job and a component of the performance management system.
4. Create HR policies and programs that are in harmony with the nature of the business
Do not promote a flex-time program if the nature, pressures and demands of the particular business make it virtually impossible for employees to take advantage of it. Increasingly, people are seeking a quality of life that involves a workable and consistent balance of job and personal/family pursuits. Promote this balance as part of the company’s operating philosophy only if it can be supported.
5. Ensure compensation and benefit programs are highly competitive, and performance is rewarded
Keep in constant touch with marketplace salary trends, and how much top talent costs. Include an incentive component with a formula that is easy to understand, is realistically attainable and places significant emphasis on individual performance — not weighted purely on the company’s profitability, ROI or other factors. Employees who are told at year-end that they met or exceeded personal targets, but that corporate results would not allow for bonus payouts, will quickly become disenchanted and demotivated.
6. Create and foster a communicative environment
Always keep employees in the loop concerning individual group and overall company performance, future plans and how their efforts are contributing to the company’s success. People who are knowledgeable about their organization and its achievements, and know they have played a role — no matter how minor — are less likely to be wooed away by external recruiters.
Likewise, encourage and facilitate employee dialogue: discuss concerns, ideas, provide suggestions that could improve performance and/or cut costs. Listen to them, then act.
7. Maintain integrity
Broken promises are a sure way to create an atmosphere of distrust, and this leads to a lack of caring and an ambivalence about the company. Employees focusing only on their own jobs and protecting their own interests break down the team effort, with predictable and unfortunate results. An even more damaging outcome is the unwanted flight of the best talent to the competition.
Earn the right to call yourself “employer of choice”
Creating a culture that recognizes, listens to, communicates with, rewards and develops people sends a clear message that human capital is valued as much as marketshare, return on capital, share price and other quantitative measures of corporate performance.
This message should be heard loud and clear by existing employees and prospective employees. Only then can a company earn the right to promote itself truly as an employer of choice.
James Parr is vice-president of Michael Stern Associates Inc., a management consulting and executive search firm based in Toronto. He may be reached at (416) 593-0100 or at [email protected].
