Your employees are one of your biggest upfront expenses. But they are also one of your greatest long-term investments.
As the chief executive of a manufacturing company that is now in its 150th year, I have seen how both internal and external factors can impact an organization’s recruitment and retention. On the outside, competitiveness in the labour market affects the talent pool. Internally, cost structures can pinch recruitment budgets.
But investing in employee engagement now pays dividends later. This is not a new concept, nor should it be. However it’s integral to maximizing your return on investment and establishing a competitive edge in the marketplace.
Every company knows about the cost-per-hire metric. According to Deloitte, the average cost-per-hire is $4,000. It may seem high, but it is minuscule compared with the cost of a candidate leaving further down the road before you’ve ever had a chance to recoup these costs.
Though there is no simple or one-size-fits-all solution to reduce employee turnover, building an organizational culture of recognition for exceptional ideas and performance can help. Leaders just need to take the time to lay down a strong foundation that supports long-term talent retention. As they say, “It starts from the top down.”
Employees are driven to perform meaningful work – and leaders need relevant metrics on employee performance. Herein lies the opportunity – engaged employees are more likely to fulfill the requirements of their role. They also go above and beyond those requirements. When this happens, everybody wins.
Investing in employee engagement generates long-term value for your business. The collective ideas, skills and knowledge employees bring to your organization are your company’s greatest assets. Engaged employees ultimately increase your knowledge capital while lowering turnover. They are also, on average, 22 per cent more productive.
Recruitment marks an important first step. Again, think of the candidate as a long-term investment, not an immediate cost.
Instead of thinking about today’s salary or hourly wage, consider them a million-dollar investment. Take that cost and multiply it by 10 to 20 years. How will you make that investment appreciate in value? How will you nurture their success and provide the tools necessary to maximize their contributions and help you reach your organization's goals?
The value a candidate brings to your company should appreciate over time. Make sure you have professional development steps in place to meaningfully engage them early on.
On-boarding should include a performance agreement and appraisal system that is revisited frequently. Once a year is not enough. Encourage employees to create performance milestones that track their growth. In order to take full ownership of their role within your company, they need to actively partake in co-creating that role.
Employees also value appreciation for good effort. Recognition systems that acknowledge brilliant ideas and exceptional performance are self-perpetuating because they encourage further ideas to be exchanged. Regardless of rank, all employees have the potential to contribute valuable suggestions, particularly in an environment that implements those ideas.
Encouraging the sharing of creative ideas – and recognizing exceptional performance – can be more meaningful for the employee than a raise or promotion alone. Peer recognition is also beneficial because employees recognize each other’s efforts, thus building positive team morale.
In terms of leadership, you’d also be surprised how much weight a simple thank you or compliment on a job well done can carry. A handwritten note of congratulations is a truly meaningful tool, yet the cost is negligible.
While opportunities for advancement are important, they’re not always a front-line tactic.
Sometimes it’s actually more beneficial to ensure the employee is thriving to the fullest extent possible in their current role. Start with the tools they need to thrive right now and progress will come over time.
One thing is certain – employee engagement has to be ingrained into the DNA of the organization. It must be evergreen, not temporary. It must involve all levels of the organization, across all departments.
That means it cannot be just a human-resources function. Empowering all employees breaks down functional silos and creates a stronger sense of collective ownership. I think our commitment to engagement is a profound contributor to helping our company reach the milestone of celebrating its 150th anniversary in 2019.
An engaged organization shares much more than the collective pride toward a company’s outputs. Engaged employees are proud when they feel empowered by a workplace that promotes dialogue, continuous feedback and recognition. When employees are driven to make meaningful contributions, they make more confident decisions, give better front-line service and, ultimately, drive your bottom line.
Improving your company’s talent recruitment and retention methods is an evolutionary process. Leaders cannot afford to overlook it at a time when factors in the operational environment place greater pressure on cost structures. We need to recognize the monetary and emotional value in fostering a workplace culture that engages employees in the process of co-creating a successful, future-driven business. The time is now.
Craig Richardson is the CEO of Canadian General-Tower (CGT), a leading global provider of coated fabric and film products.