4 Reasons Your Top People Will Leave this Year… and What You Can Do About It
Today’s Presenter: Ken Gibson Senior Vice President (949) 265-5703 kgibson@vladvisors.com 7700 Irvine Center Drive, Suite 930 ⬧ Irvine, CA 92618 ⬧ 949-852-2288 www.VLadvisors.com ⬧ www.PhantomStockOnline.com 2
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Post Webinar Intro 5 Minutes: Who We Are What We Do How We Do It 5
Headquartered in Irvine, CA Founded in 1996 Over 450 Clients throughout North America 7700 Irvine Center Dr., Ste. 930 Irvine, CA 92618 (888) 703 0080 www.vladvisors.com www.phantomstockonline.com www.bonusright.com 6
VisionLink’s Focus: Help Business Leaders Build and Sustain a High Performance Culture Accelerate performance through pay strategies that transform employees into growth partners.
If you do that… • Quality of talent will improve. • Employee engagement will expand. • Performance will be magnified. • Business growth will be accelerated. • Shareholder value will increase.
Do You Really Need to Worry? “A January 2018 survey of 1,000 -plus C-suite executives found that attracting and retaining talent is their number-one concern, outranking anxiety over the threat of a global recession, trade war, and even competitive disruption.” (Moneyball for Business, Fast Company, September 2018, Austin Carr) 9
Do You Really Need to Worry? “The US broke many long -standing employment and labor records in 2018, with the effects rippling through all business verticals nationwide. With the 2008 recession now 10 years behind us, the 2018 economy showed strong jobs growth and shrinking unemployment. This is good news for job candidates who are looking to upgrade their jobs. For businesses, however, last decade’s hiring strategies won’t work anymore. The talent pool is shrinking, and updated strategies are a must. “In a talent shortage, candidates (not employers) have the power to dictate wages, benefits, and job content. “Despite high demand, only 50% of employees feel like their wages are competitive with market rates .” (Don’t Panic, but the Talent Pool is Shrinking,” Blue Signal, September 25, 2018) 10 10
Do You Really Need to Worry? “Nearly 70% of business leaders participating in a new global survey said the current talent pool is shrinking. As a result, the competition for talent has increased, forcing employers to change their recruiting strategies.” (“Study: Shrinking Talent Pool Has Recruiters shifting Strategies,” HR Dive, October 5, 2018, Valerie Bolden -Barrett) 11 11
Why You Are Vulnerable In a talent market that has a shrinking pool of skilled labor, where will employers look for new talent? No one can afford to passively wait until the right talent appears. They have to proactively pursue the people they need. 12 12
Why Do People Leave? Ceridian Report: 2018-19 Pulse of Talent “Not surprisingly, financial compensation is the leading reason cited by all age segments for leaving their last job…However, it’s not all about the paycheck.” 28%-- I didn’t make a good salary/good pay 14%-- My work was not interesting/I didn’t like it 13%--I was not respected 12%--I had no opportunities to take on additional responsibilities/tasks 12%--I had a poor relationship with my manager 13 13
Conclusions The talent market is highly competitive. Companies are at risk if they ignore current realities. Skilled workers are in the driver’s seat. Former employee value propositions are ineffective. Pay is not sole factor in retention, but it is a critical one. 14 14
Starting Point: Know Your Talent Strengths & Vulnerabilities 15 15
Talent Assessment Define skill “categories” needed to drive business model Identify gaps Form recruiting & retention strategy 16 16
Talent Alignment Align People, Roles & Business Model Have top performers working in roles that maximize their unique abilities Avoid placement in roles that don’t have a strategic impact 17 17
Recruit to a Role (Not a Position) Position: characterized by specific duties you need someone to carry out. Role: defined by outcomes and stewardship. Positions are filled. Roles are ful filled. 18 18
Millennial Career Segments Launchers Accelerators Catalysts 19 19
Launchers Many just left the university 1st or 2 nd career job Most are single 20 20
Accelerators Experience with more than one company Desire to rise in ability, recognition, contribution and influence. Many single but a growing number are married and are starting families 21 21
Catalysts Mid-30s Meaningful experience Unique abilities Able to affect significant (positive) change Companies are competing for their talents Have leverage Many married and have children 22 22
4 Reasons People Join…or Leave Positive Work Compelling Future Environment Opportunities for Personal and Financial Rewards Professional Growth 23 23
4 Parts of a Total Rewards Approach Positive Work Compelling Future Environment Opportunities for Personal and Financial Rewards Professional Growth 24 24
Compelling Future I like the The company’s direction the purpose and company is mine are headed. aligned. I embrace the I see myself in company’s the company’s values. future. I believe the I have a “seat at company can the table” in achieve its determining growth goals. the direction of the company. 25 25
Positive Work Environment I like the nature of the work I’m doing. I am working within my unique ability. My responsibilities have strategic purpose. I work in a team of individuals with complementary skills. There are channels and processes for solving problems and decision making. 26 26
Personal and Professional Development As a result of my immersion in the culture and resources of this organization, my unique abilities will improve — and I will experience personal and professional fulfillment. 27 27
Financial Rewards There is a philosophy I have some control over that guides pay decisions how much I can earn if I and I relate to it. produce. There is a mechanism for I feel a sense of sharing value with those partnership with who help produce it. ownership. 28 28
Understand the Employees ’ View of Pay How do employees look at compensation and what matters to them? 29 29
6 Reasons Employees Care About Pay Personal Lifestyle & Wealth 1. Accumulation Career Measurement 2. Contribution Ambitions 3. Business Roles, Expectations & 4. Priorities Partnership 5. Continuity & Fairness 6. 30 30
Reason # 1 Lifestyle & Wealth Accumulaton 31 31
Reason # 2 Career Measurement The pay level and programs in which an employee participates become a means of measuring where that person is in their career and where they need to go next. 32 32
A Comparative Exercise “Is my pay offering equal to or better than my peers?” If not, the employee will do one of two things: ▪ 1) Determine has not yet developed the skills needed to attain the career level of peers ▪ 2) Determine you do not fully recognize what a person of that talent and ability should be paid at this stage of professional development. 33 33
Reason # 3 Contribution Ambitions Personal Vision Most growth-oriented people aspire to make certain contributions in their personal and professional lives. The ability to achieve their contribution goals is the source of their motivation. 34 34
Contribution Ambitions Different for Every Individual Causes and Charities Children’s Education Family Well-Being Freedom to Build Something Control Over Time & Commitments Vary by generation. Vary by career stage. 35 35
Reason # 4 Roles, Expectations & Priorities Rewards What’s in it for Line of Sight me? Roles and Expectations My Contribution? Model & Strategy How ? Vision Where? 36 36
Reason # 5 Partnership 37 37
Market a Future that’s Relevant Here’s our future. Here’s how we’re going to get there. Here’s the role we picture for you. Here’s how we encourage our people to grow and contribute. Here’s our philosophy about pay and rewards. Here are our specific pay programs. Here’s how our pay programs will work for you if we achieve our plan. 38 38
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