Recruiting and Retention Strategies for Businesses of Every Size
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1 Recruiting and Retention Strategies for Businesses of Every Size Mike Smith - President Ag 1 Source Presented January 7, 2014 to: FWAA Conference Twin Falls
2 What has changed in Agriculture? The consolidation in Ag Business and farm level economics from pushed many people out of Ag We probably won t get them back Very limited supply in rural areas The graduation rate of Ag degrees for Ag jobs has been decreasing at 3% per year 50% of the agriculture employee base will retire in the next 10 years--baby Boomers
3 Unemployment Distribution Source Bureau of Labor Statistics, Local Area Unemployment Statistics -
4 Changes in Overall Employment In 5 years, the overall U.S. employment is expected to increase by about 12 million. Source Georgetown Univ.
5 The Education Component The U.S. Demand for college educated is outpacing supply at a rate of 300,000 per year. By 2018, the postsecondary system will have produced 3 million fewer college graduates than demanded by the labor market Source Georgetown University Projections of Jobs and Education Requirements From 2010 to Agriculture needs 54,400 new college graduates each year / Supply 53,500 Source - Purdue/USDA publication Employment Opportunities for College Graduates Goecker, Smith, Goetz 2010
6 The most trusted and reliable recruiting firm in the agriculture industry
7 The Education Component Question Do we have an unemployment problem or, do we have an education problem in the U.S.? Reference Bureau of Labor Statistics
8 Changes in Overall Employment In 5 years, the U.S. demand for some level of college educated will exceed 2/3 of overall employment. Source Georgetown Univ.
9 U.S. Employment age groups Workers Aged 55 To 64 will nearly double as a percent of the work force from 2000 To (According to BLS)
10 Today s Younger Employees Fewer Have Direct Agricultural Backgrounds. (UC Davis Claims Less Than 5% In The College Of Ag Have Ag Backgrounds.) Since 2005, more Ag Background Students Are Returning Back To Their Baby Boomer Parents or Grandparents Operations. Student Population Is Now Almost 60% Female - 40% Male: Complete Reversal From 5 Years Ago. Gap in mid-career employees about in age Fewer are married commitments?
11 The Current Ag Talent Perfect Storm Ag Background Applicants Total Labor Supply Aggressive Competitors Retirements Turnover
12 Compensation Trends - Agronomy/Seed $110, Midpoint Salaries by Year Midpoint of Seed DSM Positions $100, $90, $80, $70, $60, $50, $40, Midpoint of Agronomy Retail Positions Midpoint for Seed Retail Midpoint for Bioscience, Nutrition & Chemical Notes **393 pieces of data were used for Seed DSM **624 pieces of data were used for Agronomy Retail **31 pieces of data were used for Seed Retail **177 pieces of data were used for
13 Compensation Trends - Equipment $160, $140, $120, $100, $80, $60, $40, $20, Midpoint of GM/ Sales Mgr Positions Midpoint of Parts/Service Positions Midpoint of Sales Positions $
14 Situation Summary Employers If you are looking for a mid-career B.S. degree of higher, experienced, and located close by You may already have a problem! If you thought you were dealing from a surplus situation think again. Decision time Where to start
15 Retention is Key to Succession First Build your Bench Strength - Steps: 1. Solid Definition of your target 2. Reducing Current Turnover 3. Internal Communication 4. Define your company s Employee Value Proposition 5. Look at Performance & Behavioral vs. Skills 6. Streamline the hiring process 7. Find Flexibility 8. Destination Employer characteristics
16 Your Talent Pool Where are you going to find your replacements? Don t use a Talent Surplus process (weeding out the weak) in the midst of a Talent Scarcity. Yes or No? Is there a shortage of top talent for your critical positions? Are you still positioning traditional job descriptions that emphasize skills and experience? Would you like to see more top performers for these positions (pool is too small)?
17 Do you source Active or Passive? -- Target (Active Seekers) a.k.a. Job Changers They will keep the job if the future aligns with their future aspirations From Career Builder 2013 Hiring Survey Nearly 35% of people begin preparing for their next job within weeks of starting a new one (Passive Seekers) a.k.a. Career Changers The key is in the value of the Future - It aligns and they joined for the right reasons
18 The Job Description- Gone -days of lines of people applying Millennial Candidates do not like Minimum Job Requirements - Limit requirements to 7 Turn job descriptions into Career Statements Explain your Company Value Proposition Display your excitement about your company s future Work and Life Balance Show your technology Be clear about the job s objectives quantitatively Show their potential path
19 Growth & Impact An Employee s Contribution Early-birds Over Time, an employee s contribution begins to peak and then falls off Somewhere before the Peak, a Candidate Turns from being Passive to 15% 9% 8% an Active Job Seeker This curve starts over with increased responsibility; i.e. a promotion Passive Candidate Active Candidate 28% Source: 2011 LinkedIn Survey of 4,550 fully-employed professionals Time
20 Candidate Decision Process 28% 40% 15% 9% 8% Super Passive Explorers Tiptoers Searchers Networkers Hunters & Posters Major Life Change Career Move Better Job Good Job Lateral Any Job Passive Active High Job Value Proposition Low Urgency Job Value Proposition Urgency Low Job Value Proposition High Urgency 2011 LinkedIn Survey of 4,550 fully-employed professionals
21 The Passive vs. Active Difference Most candidates that apply to jobs on their own are Active applicants 17% on average of the work force Active Passive - 83% Active - 17% Explorers - 40% Tiptoers - 15% Active Explorers Passive Super Passive - 28% Active - 17% Super Passive Tiptoers Explorers and Tip-toer s - (55%) of potential candidates that will listen to a compelling opportunity, one that could substantially improve their career. Source: 2011 Linkedin Survey of 4550 fully employed professionals
22 Performance vs. Skills----Talent Scarcity vs. Surplus Talent Surplus vs. Talent Scarcity 83% Passive and Best Actives Assumption: excess supply of talent (employer brand?) To Attract & Hire the Best Convert job descriptions into careers-future Focus on impact, opportunity & challenge Conduct exploratory conversations Full engagement of hiring managers Integrated with performance-management Close on career move, not compensation To Attract the 17% Needy Active Candidates Advertise job descriptions Target those looking for lateral transfers Find as many as possible Weed out the weak Screen on skills, $$ Overvalue 1 st Impressions Random, biased and/or narrow interviewing Close on compensation It s about the Job It s all about the Future
23 2. To Reduce Turnover Look at Why Employees Leave a Company It s not about the money!
24 Perception vs. Reality 89% of managers believe employees leave for more money 11% believe they leave for other reasons 12% of employees leave for more money 88% of employees leave for reasons other than money Saratoga Institute 2003 Ag 1 Source
25 The Cost Of Turnover Average US cost of losing an employee is equal to their annual salary A company with 20% turnover, 100 employees, and an average salary of $40,000 has an annual loss of $800,000 due to just employee turnover Ag 1 Source
26 Take Your Cues From Why Employees Say They Leave Numbers taken from research provided by the Saratoga Institute research from Supervisor - 33% { Lack of Respect } Lack of leadership Favoritism Poor employee relations Incompetence Lack of Technical Skills Limited Growth - 17% Compensation - 13% Unchallenged - 10% Work hours - 6% Unavoidable reasons - 5% Lack of recognition - 4% Poor conditions - 3% Training - 3% Poor Senior Leadership - 2% Discrimination - 1% Harassment - 1% Benefits - 1% Coworkers attitude - 1%
27 3. Communications The common denominators to turnover 1. The need for TRUST. Expecting the company to deliver on it s promises, be honest in communications, and compensate fairly 2. The need to have HOPE. Believing that you will grow, develop skills, and have opportunity of increased responsibility or career progress leading to higher pay 3. The need to feel sense of WORTH. If you do your best, work hard, you will be recognized for you contributions 4. The need to feel COMPETENT. You will be matched to your job, use your talents, be challenged, receive training, see the results of your work, and obtain regular feedback on your performance
28 Communication is Key to Retention 100% Is your employer providing you with enough resources to learn the business? { Lack of Respect Lack of leadership Favoritism Poor employee relations Incompetence Lack of Technical Skills 100% Does your Employer share enough info so you understand the direction? 100% Job Satisfaction 80% 72% 80% 71% 80% 60% 60% 60% 40% 28% 40% 29% 40% 35% 20% 20% 20% 0% Yes No 0% Yes No 0% Negative Ag 1 Source
29 Solution: Employees Need Answers Employees constantly evaluate their status as it relates to their long term goals their FUTURE How am I doing? Where are we going as a company? How are we getting there? How do you expect me to contribute? What is my career path? How will I get the skills necessary to keep on path? If internal communication is strong-these are answered Ag 1 Source
30 4. Interview to Win The EVP Remember Top candidates don t need your job Create a culture where interviews are treated as recruitment opportunities Management team is fully engaged Job descriptions are Career Opportunities vs. a boring list of what you have to do Focus on Impact, Opportunity, and Challenge Communicate, communicate, communicate Improve your recruiting and you will increase your retention
31 I wonder if this company can provide me the growth opportunities I seek? I wonder if this candidate will give me the Return on Investment I seek?
32 Examples of Pros The Employee Value Proposition Career movers will join a company when the value of the overall opportunity outweighs the cost of staying with their current career position as much as 30% value total -Better Supervisor -Strong Growth potential -Compensation up by 15% -More Challenging opportunity -High number of senior mgrs. -Better Incentives or Benefits -Succession Plans $ $ $ $ $ $ $ Examples of Cons -Relocation cost -Averse to change -Family / community -Intra company dynamics -Unknowns cause concern -COL differences $ $ $ $ $ $
33 Anticipate Their Thoughts The Value of a new position must hold some level of Improvement in standard of living AND an Advancement of their Career See the position through the candidate s eyes there is safety (lower risk premium) in no change Limit the impact of the Cons where possible Help your candidate see the total Value You ll pay more where the risk premium must be higher Show the Path
34 5. Hire by Performance vs. Skills Performance question Imagine 1-3 years from now and you are happy with your new employee What did your new employee accomplish (quantifiably) during this time that made you happy? becomes the Performance Profile It s more about Attitude vs. Altitude - Behavioral characteristics: initiative-drive-dedication-conformity A resume tells what a person has done in their career, but performance based recruiting tells us how they did their what The Proof is in the numbers
35 6. Streamlining your Process Recruiting Process 1. Know who you are looking for 2. Focus on performance 3. Agree on must haves vs nice to haves 4. Resume describes the what and where, so focus on the how 5. Define the expectations (Performance Profile) of the role (1 month, 3 months, 1 year, 5 years) what is considered success? Interview Process 1. Define your process before you start the search 2. Who will be involved 3. Defined timeline 4. Set candidate expectations 5. Ready to go office setup (spatial visualization) 6. Know and demonstrate your company s EVP (noncompensation factors) 47% of all offers lost to competitors
36 7. Find Flexibility Consider less Education or less Experience required and: Add a Trainer or Mentor Partner with Educational institutions Reconsider your Relocation program Risk vs. rewards 55+ age group The only demographic group that is growing Very important part of succession planning Possible seasonal employment group
37 8. Becoming a Destination Employer The Whole Is Greater Than The Sum Of Its Parts Onboarding + Recruiting = Hiring Communication + Recruiting = Engagement Onboarding + Communication = Retention Ag 1 Source
38 Destination Employer Retailer examples Example of an existing business - Reduced Turnover Low turnover is much more attractive to candidates-9% Brand Building - Utilize colleges, trade schools, and the community to find wellqualified candidates & build brand reputation Internships Challenging internships with the hope of bringing them on as FT employees Recruiting Services Make sure the recruiters they use focus on screening candidates against both position description and company culture Company Culture create culture where everyone is bringing in talent to fuel the organization Of most importance Led by a leader who embraces constant internal recruiting. Tuition Assistance Program Targeting students 2 or more years prior to hiring
39 Summary the winners 1. Focus on your brand it carries the image of your EVP and your ability to attract talent 2. Treat hiring as a business practice 3. Create a rewards strategy that attracts and retains 4. Make onboarding a personal process 5. Communication is the key to retention People are your most important asset Ultimately your customer will figure out where the best people are working
40 Questions?
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