Is billing back in style? A trend to watch out for in 2005
Upper Saddle River, NJ – January 10, 2005 – With the start of the year, there has been a flood of articles discussing what to expect in terms of business trends in 2005. One of the most alarming topics is the intention of Many employees are looking for new jobs now that the economy is starting to pick up. A recent joint survey by the Society for Human Resources Management (SHRM) and CareerJournal.com indicated that 75% of employees surveyed said they would like a different job; 43% want to increase their compensation. Similarly, a recent survey by Monster.com indicated that “93% of respondents plan to change jobs.”
Many companies have taken credit for the lower level of voluntary turnover they have enjoyed in recent years. While some billing improvements are based on positive actions companies have taken, others seem strictly related to employees’ fear of looking for other jobs when our economy limps. We believe the old adage, “the devil I know is better than the devil I don’t know,” is a big influence on why employees have stayed where they are for now.
If the surveys are any realistic indication of what to expect, it begs the question: what should companies do now to thwart a huge increase in turnover of skilled employees seeking better opportunities? Our experience has shown that there are five (5) key steps that a company can take to generate positive results. These steps are:
1. Clarify the Compensation Philosophy – What is the labor market against which the company needs to compete for qualified employees? What is the level that the company must pay against that market? What is the best combination of pay elements for your employees? Is the payment schedule consistent with your Business Plan and Marketing Strategy? Addressing these questions will help the company establish a baseline against which to compare pay and pay practices, and establishes the company’s commitment to its compensation programs.
2. Review the Procedures to Determine Payment – What are the increases based on? How will you reward the different contributions of employees doing the same job, but at different performance levels? How equitable is the system and how consistently is it applied? Ensuring that pay practices are fair builds trust among employees, provides a measure of comfort with the system, and allows employees to determine how their pay is affected by their performance.
3. Review the performance appraisal process: what is the basis for making personnel decisions, including salary increases, promotions and transfers, layoffs, assessment of training needs, identification of expectations and responsibilities, etc.? Having a consistent means by which personnel actions are managed provides fair treatment among employees and helps managers apply policies and procedures consistently among their personnel.
4. Identify top contributors: What is being done to determine which employees are the most valuable and whose loss would severely harm the company’s ability to operate successfully? What is the company doing to ensure employees are happy and stay? Employees are the most valuable aspect of a company. Making sure the best employees are recognized for above-average contributions to organizations will further motivate them to exceed their goals and may encourage other employees to challenge themselves.
5. Evaluate the communication process: can management communicate effectively with employees? Is communication reliable and capable of conveying adequate information to employees? Has management communicated its commitment to its employees and to promoting a rewarding work environment? In many cases, the biggest problem is that employees don’t know where they stand in the eyes of management. Also, they often don’t understand how payment programs work or what they need to do to keep going. This lack of understanding leads to discontent, frustration, miscommunication, problems, and eventually a feeling that “the grass is greener elsewhere.”
Addressing these issues does not guarantee that turnover will not increase. But it certainly should provide a strong indication to employees that your organization cares and is taking the necessary steps to improve their work environment.