In business most professionals understand that employee turnover is bad while employee retention is good. Perhaps because in the corporate world success is measured in dollars gained vs. dollars lost and most know that employee turnover is a big expense. The cost of replacing entry level employees is 30-50 percent of their annual salary while mid-level employees may cost a company as much as 150 percent of their salary to replace.
Retaining employees for as long as you are able to avoid turnover costs is rational, however turnover can also be beneficial. Years ago my colleague was speaking about turnover with a gentleman who ran a call center. This manager found that turnover, after a period of time had elapsed, was beneficial because he could hire entry level call center agents at a pay rate lower than what the exiting agents had been earning. Periodic turnover allowed the call center manager to reduce costs.
One issue often associated with employee turnover is a decrease in company morale as remaining employees have to shoulder the responsibilities the departing employee left behind until the role is filled. Low employee morale of course can also be created by retaining a disruptive employee who poisons your culture and office atmosphere. The departure of such an employee could produce positive results within days. In a previous post I pointed to a study which revealed that avoiding a toxic worker, even one in the top 1% for productivity, saves a company far more than the cost savings they would receive from employing the superstar.
Turnover also provides the opportunity to inject more energy into your business. Long retained workers may lose passion for what they do. While they leave to seek greater challenges elsewhere with a renewed vigor, your company may provide a similar challenging opportunity to an incoming employee. Though you may have to train them, their energy level and spirit for the new challenges that lie ahead may spark morale and spirit in the workplace.
Turnover, especially in senior positions, may eliminate the tendency for mirror image hiring. Mirror image hiring is a hiring manager’s propensity to hire those with similar backgrounds or behavioral characteristics. According to I/O psychologist Allen Gorman, “The ‘similar-to-me’ bias could also lead to creativity stagnation and lack of innovation in organizations. This happens because as organizations continue to hire employees that have the same backgrounds and experiences as those already in the organization, employees begin to think and behave in the same fashion due to their shared experiences.”
Turnover is uncomfortable not just in terms of revenue lost and the expenses associated with finding/training a new employee but also the concern of how a new employee will fit into one’s corporate culture. Change however brings new life and enthusiasm and so turnover should be viewed as an opportunity to not only improve your company but potentially reduce expenses in the long run.
The U.S. is one of the richest countries in the world per capita, ranking 5th out of 133, yet according to the 2016 Social Progress Index, America ranks only 19th in terms of converting that economic success into improvements for its citizens.
This is similar to a professional sports team possessing a great win/loss record, highly paid executives and great attendance but having disgruntled fans and players. Why are the players and the fans so upset? To better understand this we must fully understand what exactly the Social Progress Index measures.
The Social Progress Index measures progress based on these three categories.
Basic Human Needs:
- Nutrition and basic medical care
- Water and sanitation
- Personal safety
Foundations of Wellbeing:
- Access to basic knowledge
- Access to information and communication
- Health and wellness
- Environmental quality
- Personal rights
- Personal freedom and choice
- Tolerance and inclusion
- Access to advanced education
As far as providing access to advanced education and shelter the U.S. is performing exceptionally well. Unfortunately, it performs poorly in several other categories such as health and wellness, access to basic knowledge, personal safety and nutrition & basic medical care. Additionally, wage growth, a measurement not calculated by the Social Progress Index, has been stagnant. Research by Indeed showed that only fifteen percent of workers were in jobs that see consistent wage growth keeping pace with inflation. Of these jobs, 50% were located in just nine states. Furthermore, training that would allow these growth jobs to be filled by U.S. workers is not readily available. Even worse, the situation isn’t improving. Last year the U.S. ranked 16th in Social Progress, slipping three spots to now sit just ahead of Slovenia.
Here we see that, despite companies getting richer and the economy strengthening, many of the opportunities and benefits Americans expect to enjoy as a result are not trickling down to them. The team is making plenty of money but the fans are overweight, out of breath, are getting mugged in the parking lot, can’t access WiFi on their phones and the players have seen little wage growth despite their exceptional win/loss record.
Honestly, aside from stagnant wage growth and the obesity epidemic, I didn’t feel we Americans were doing so poorly. Now it seems I and everyone else should be up in arms! Especially when considering that countries such as Costa Rica and Nepal over perform on Social Progress despite their low GDPs.
So what can we do about it? Just getting angry and acting out won’t get us anywhere. The first step is to identify our problems and then explore the solutions that are working elsewhere to see which ones might apply here in the USA. Only with focus and positive action can America begin to turn things around and address the issues so incensing us today.
Calling Interview4 video interviewing “a life changer”, a large retailer finds the service not only reduces turnover, but also saves time and money by allowing the screening of more candidates in the same amount of time that used to be devoted to phone screening. Eliminating the agony of the phone interview has resulted in happier teams and a better corporate culture.
The quality of job candidates brought in for live interviews increased markedly. Each candidate who took a video interview could be evaluated easily in just ten to twelve minutes, putting more time into each recruiter’s day.
Before Interview4, picking candidates to be advanced in the hiring process was hotly contested because only one person actually spoke to each candidate via phone. Everyone else just saw the written summaries of the calls.
Now, the recorded video interviews can easily be shared with team leaders, program managers, and other decision makers. They can review, grade and comment on each candidate.Virtual video interviews are also convenient to schedule for both the employer and the candidates.
Finally, the Interview4 team got high marks for their customer focus and willingness to cater to customers’ needs.
In my colleague’s March blog post, “Productivity is on life support: Blame the Millennials and the Baby Boomers,” he pointed out that the annual growth rate of productivity from year to year between 2007 and 2015 was 60% lower than the year to year growth rate between 1947 and 1973. He contended that both the older, less productive baby boomers and the easily distracted millennials were to blame for the decrease in growth rate. Indeed many articles have been written about the Millennial “Me, Me, Me” generation.
Recently the Texas department of labor established an overtime rule that allows overtime pay for more salaried workers. The biggest complaint from business leaders on this ruling is that younger employees, millennials, don’t deserve to be paid overtime for the work they should have accomplished during their regular hours. As one complainant to the department of labor suggested, “The younger workers are often off task, engaged on social media, on the internet, texting on phones and other unproductive activities.”
Here we have further suggestions that Millennials are basically…well…. lazy. Below is an alleged quote from a prominent intellectual on the state of our youth which many would agree succinctly describes today’s young workers.
“The children now love luxury; they have bad manners, contempt for authority; they show disrespect for elders and love chatter in place of exercise. They contradict their parents, chatter before company, gobble up dainties at the table….and tyrannize their teachers.”
Sounds exactly like today’s youth but the quote above is allegedly from a disgruntled Socrates sometime prior to his death in 399 B.C nearly 2,500 years ago. I’m not convinced Socrates did indeed say this but regardless, the quote is old and suggests that Millennials aren’t the first generation to patent laziness and disrespect.
Bruce Pfau, the head of human resources for KPMG, spent years studying the differences between the wants and needs at work of Millennials and employees in other generations. He concluded that Millennials weren’t necessarily lazy or narcissistic but rather those are traits exhibited by young people which are corrected as the individual grows older.
Going back through history we see clearly that Millennials aren’t the first generation to be criticized by the media for their self-absorbed attitude. A 1907 article in the Atlantic Monthly on why marriages are failing declared that the “…cult of individualism…” was to blame. In the 70s, acclaimed author Tom Wolf wrote an article for New York magazine called, “The ME Decade. Reports on America’s New Great Awakening.” In it he said, “…The new alchemical dream is: changing one’s personality-remaking, remodeling, elevating and polishing one’s very self…and observing, studying and doting on it. (Me!)…” The Gen-Xers took a hit from Time magazine in 1990 when they dedicated their cover story to the generation who has “trouble making decisions” and whose attention span is as short as “one zap of a TV dial.”
Truly, younger people on average are more narcissistic, however the younger workers of the ‘oos aren’t necessarily more selfish than were 90s workers, and 90’s workers aren’t more self-absorbed than those in the 70’s and 80s. Sure, the distractions from decade to decade may be different. The generation once entranced by MTV now may look down its nose at the Facebook generation and in ten years the Facebook generation may haughtily judge generation Z for its addiction to virtual reality. Regardless however of what actually distracts them, the young people of every generation had a distraction over which the upper generations judged them for being lazy and self-absorbed.
So relax America. Our Millennials will grow out of it. In fact one day they will be writing articles about how bratty and entitled the young workers at their companies are behaving.
Internapalooza, an event I had not heard of until recently, is as its name suggests, a gathering of interns. More specifically the event hosts interns interested in working for Silicon Valley companies and from what I can tell, this July 11th, Internapalooza’s fifth annual event will take over AT&T Park in San Francisco with over 8,000 interns registered to attend. The event offers interns the chance to mingle with their peers, speak with executives from dozens of top tech companies such as Google, Facebook, Paypal, Dropbox, and Microsoft and even play games. According to the schedule the free event begins at 6:00 and ends at 10:00 but that is when the Intern After Party begins and continues until 1:00 am.
A viral story about the After Party is how I first heard of Internapalooza. (I’m a forty-something who lives on the East Coast so cut me some slack.) A Microsoft recruiter sent the following email to an intern which the intern’s roommate posted online.
“HEY BAE INTERN! <3
Hi! I am Kim, a Microsoft University Recruiter. My crew is coming down from our HQ in Seattle to hang with you and the crowd of the bay area interns at Internapalooza on 7/11.
BUT MORE IMPORTANTLY, we’re throwing an exclusive after party the night of the event at our San Francisco office and you’re invited! There will be hella noms, lots of dranks, the best beats and just like last year, we’re breaking out the Yammer beer pong tables!
HELL YES TO GETTING LIT ON A MONDAY NIGHT.”
Okay so several things are wrong with this letter that Microsoft confirmed originated from them. One is the cringe worthy use of slang in an attempt to sound hip! “Hey Bae”? “Hella noms”? “Lots of dranks”? Not only is the jargon embarrassing but evidently it is also misused. “Dranks” which I’m assuming is meant to refer to drinks, is actually slang for codeine cough syrup that some young people ingest to get buzzed. I’m pretty sure Microsoft won’t be passing around Robitussin at their party. Perhaps the worst thing about this letter is the ending reference to getting “Lit” on a Monday night. While looking cool may enable Microsoft to appear more attractive to millennials or the upcoming Generation Z, getting drunk is hardly the vibe they should be promoting. The letter is embarrassingly funny but not catastrophic to Microsoft’s image.
Actually the email does not stray far from the laid back vibe presented for the whole event. Following is some verbiage from Internapalooza’s website, “Here’s to the crazy ones. The misfits. The rebels. The trouble makers. The round pegs in the square holes. The ones who see things differently. They’re not fond of rules and they have no respect for the status-quo.” As I reflect on Microsoft’s email and the statement on Internapalooza’s website, I wonder if the wrong message is being sent to millennials in an attempt to recruit them?
For years news articles and blogs have been written about how to manage (deal with) Millennials in the work place. Millennials have been stereotyped as “entitled, lazy, narcissistic and addicted to social media.” And yet events such as Internapalooza supposedly aren’t looking for the conformist millennial but rather the “crazy misfit” who breaks the rules. Do we want millennials who will show up for work on time, focused and ready to do their jobs, or do we want to stay up late downing brews with them on a Monday night?
Do you think a responsible manager will ever exclaim over a raucous game of late night beer pong with his subordinates, “HELL YES TO SHOWING UP LATE FOR WORK ON A TUESDAY MORNING!”? The answer is “no” and that’s your answer to the type of Millennial we really want.
Men often enjoy higher wages than women for doing the same work but research shows that fathers make more than non-fathers and, no surprise, more than mothers. Here are five reasons why dads are more successful.
1. Research by Cornell found that employers favored fathers over non-fathers and over mothers in the hiring process. Participants in the study considered fathers as more competent than mothers and childless men. Additionally, study participants were more lenient with fathers late to work.
2. Men with children earn six percent more while women earn four percent less for every child.
3. While it may seem logical that men with multiple children are more focused on family and are potentially less productive at work than their peers without children, extensive research shows that fathers of at least two children are more productive than fathers of one child and men without any.
4. Raising a family, according to studies, also prepares you for management. “If You’ve Raised Kids, You Can Manage Anything,” author Ann Crittenden writes. “Anyone who has learned how to comfort a troublesome toddler, soothe the feelings of a sullen teenager, or manage the complex challenges of a fractious household can just as readily smooth the boss’s ruffled feathers, handle crises, juggle several urgent matters at once, motivate the team, and survive the most Byzantine office intrigues.”
5. Fathers with children are more likely to accept promotions.
To summarize, fathers are more desirable to employers, earn more money, they are at least as equally productive as their childless counterparts, they have received management training at home and are more willing to take on promotions and the accompanying added responsibilities.
Mothers on the other hand are significantly disadvantaged when compared to their childless counterparts. While fathers typically make more money than men without children, the reverse is true for women. Mothers make less money than non-mothers. In fact according to research from 2001, the pay gap between mothers and non-mothers for women under 35 was larger than it was between women and men. Today, mothers are paid only 73 cents for every dollar fathers are paid. Also, as stated above, a mother’s salary decreases with each additional child while a man’s increases. Furthermore, managers who were visibly pregnant were viewed as less committed to their jobs, less competent, more irrational and less authoritative.
To summarize, mothers are less desirable to employers, more often viewed as incompetent and must work five extra months to be paid what working fathers are paid in one year.
Father’s day has just passed but for most working dads, every day is a father’s day!
Every organization wants superstar employees and some will even delay the hiring process weeks or even months until that perfect candidate blips on the radar. What happens though if once you find your purple squirrel, they have mange or rabies? Do you cut them lose or keep them around for their quota busting, nut gathering ability?
Economist Dylan Minor and Cornerstone OnDemand’s chief analytics officer, Michael Housman, examined nearly 60,000 workers to determine the cost of retaining toxic workers. In their study, they define “toxic” as conduct harmful to an organization’s people or property. They found that retaining toxic workers, even those residing in the top 1% for productivity, cost far more than the rewards reaped from a toxic employee’s high production.
Their study revealed that a top one percent worker could produce over $5,000 in annual cost savings however a company could avoid $12,000 in costs by not hiring a toxic worker. In short a toxic worker, even if they are super productive, is far more costly to an organization than an average, non-toxic worker. Take a look at the chart below provided in their study!
Even though a worker in only the top 25% of productivity saves a company far less than one in the top 1%, the study shows that replacing a superstar toxic worker with a less than stellar non-toxic worker, to still be the more cost effective choice.
Why are toxic workers so much more expensive? The most apparent answer is turnover. Toxic workers drive other employees away and the cost of replacing those employees is high not to mention that morale and productivity often drop until a replacement is found. Additionally toxic workers produce other toxic workers. Negativity spreads like wildfire.
Interestingly enough, toxic workers are more productive in terms of their output and one 2013 study found that unethical workers remain longer at organizations. This explains why toxic workers are so often selected and even retained for long timespans.
In summary, avoid hiring a toxic worker if you can but should you find yourself burdened with one or many, remove them despite their high production. As former GE CEO Jack Welch put it, “People are removed for having the wrong values…we don’t even talk about the numbers.”
How much work is too much work? Do workers reach a point when an excessive amount of work so fatigues them mentally and physically that their productivity takes a hit and their health declines?
The Draugiem Group conducted a study which tracked employees’ work habits. They discovered that employees that took short breaks of around fifteen minutes every hour were much more productive than those who tried to power through without stopping.
The brain operates in a high energy mode for about an hour and then in a low energy mode for fifteen to twenty minutes. For most, during these low energy periods, they are distracted and their productivity dips. By powering through this distracted period rather than taking a break and refueling, a lack of focus may continue even during the high energy period. The study found that those who took a break for fifteen minutes, and completely disengaged from work, could recommit 100% of their focus on their task once they re-engaged.
We see from a daily perspective how our minds and productivity are affected by too much continuous work but how about on a weekly basis? The Department of Health and Human Services, the Centers for Disease Control and Prevention, and the National Institute for Occupational Safety and Health, have researched the mental and physical effects of a forty plus hour work week. Below is a collection of their findings.
- Working more than 10 hours a day is associated with a 60 percent jump in risk of cardiovascular issues.
- Working more than 40 hours a week is associated with increased alcohol and tobacco consumption, as well as unhealthy weight gain in men and depression in women.
- Little productive work occurs after 50 hours per week.
- In companies with normal overtime, only 23 percent had absentee rates above 9 percent. In companies with high overtime, 54 percent had absentee rates above 9 percent.
- Individuals working 11 hours or more of overtime have an increased depression risk.
- Injury rates increase as work hours increase. Those who work 60 hours per week have a 23 percent higher injury hazard rate.
- In manufacturing industries, a 10 percent increase in overtime yields a 2.4 percent decrease in productivity.
- In white collar jobs, productivity declines by as much as 25 percent when workers put in 60 hours or more.
Working too much in one day and in one week can produce detrimental side effects to an individual’s productivity and physical well-being, but how about in a year?
The Bureau of Labor Statistics indicated that in 1976 more than 9 million Americans took vacation while in 2014 that number was down to only 7 million. According to research by the NY Times, taking a vacation every two years significantly reduces the risk of coronary heart disease as compared to taking a vacation once every six years. In addition the research suggests that workers are more productive after returning from vacation. Ernst & Young conducted a study of its employees and discovered their employees’ year-end performance ratings improved eight percent for each additional 10 hours of vacation they took and in addition those who took frequent vacations were less likely to leave the firm. Additional studies also suggest that frequent vacationers suffer less from depression and possess higher emotional levels.
For many taking a break whether it is every hour, every day, week or year, probably feels very counter- productive, but as you can see from the research above, taking one step back on the beach in your flip flops might enable you to take two steps forward in the office.
I won’t cop out and say that you need a little bit of both. Certainly you require talent to achieve success, and few people succeed long term without hard work, but which contributes the most?
A recent study published in the Personality and Social Psychology Bulletin showed that when rated by a group of 383 participants, entrepreneurs who demonstrated greater talent were more favored over those perceived as hard working but with less talent. A follow-up study showed that in order to be as appealing as those with natural talent, the hard workers would require 28 more IQ points and an additional four and one-half years of leadership experience.
People appear to value talent far more than hard work. This idea could not be more obvious in the sports world. Every year the NBA and NFL drafts are broadcast so fans can see if their team will land the most coveted talent which will turn around the ailing fortunes of their franchise. More often than not however, the talented young athlete which so dominated in college, flames out in the pros. ESPN recently released a list called “The Could Have Beens” in which sixty of their experts chose the top 25 athletes who failed to live up to their potential. Ever heard of Sam Bowie? He has the dubious misfortune of being the guy selected number two in the 1984 NBA draft ahead of Michael Jordan. Few remember him. Though many athletes on the ESPN list succumbed to career shortening injuries, many simply did not put in the hard work and effort. Despite this, year after year franchises gamble large paychecks on top talent for a quick fix, not realizing that players willing to put in the hard work are every bit as rewarding and often last longer.
“Grit” a book by Angela Duckworth, a professor of psychology at the University of Pennsylvania, suggests that a combination of passion and perseverance (grit) contributes more to success than intelligence or inherent talent. She provides a number of examples such as “gritty” children who studied and competed more in spelling bees, performed better in the Scripps National Spelling Bee. She also showed that West Point cadets who scored high on the grit scale were more able to endure the intensive seven week training program, Beast Barracks, through which they were put. Grit, in this instance, was a better predictor than SAT scores or athletic ability.
There are of course other contributors to success like a great coach or teacher Duckworth points out but effort is the key. She writes, “Our potential is one thing. What we do with it is quite another.”
Michael Phelps is the most decorated athlete in Olympic history. He is 6’4” with a 6’7” reach. His knees are double-jointed and his feet can rotate 15 degrees more than average which allow his feet to act more like flippers. His body is built for speed in the water! However his success is obtained through effort. In peak training mode Phelps swims 50 miles a week. He trains 5-6 hours a day, six days a week!
If you focus 30-35 hours a week on improving any skill whether it is writing, playing the piano, or giving presentations, your chances of succeeding improve exponentially.
Undoubtedly you recall the show, “Who Wants To Be A Millionaire?” but in our society or really any, the more appropriate question might be, “Who Doesn’t Want to Be a Millionaire?” Below are several facts and insights gathered together by individuals who have studied and found commonalities among the rich.
Thomas Corley spent five years studying the rich and in his book, “Rich Habits: The Daily Success Habits of Wealthy Individuals” points out eight daily rituals the rich share:
- They have a daily must-do list
- They don’t watch TV
- They read the financial times
- They are healthy eaters
- They never stop learning
- They rise early
- They prioritize self-improvement
- They exercise
Steve Siebold interviewed over 1,200 of the world’s wealthiest people and in his book, “How Rich People Think” he details seven truths that millionaires hold about money.
- Money can solve most problems
- Your level of education is not the key to getting rich
- Do what you love and the money tends to follow
- You don’t need money to make money
- If you want money, you have to go after it
- Self-employed people determine the size of their own paycheck
- They start thinking like a rich person
In his book, “Change Your Habits, Change Your Life”, Thomas Corley points out that rich people make a daily choice not to follow the herd. Corley suggests, “failure to separate yourself from the herd is why most people never achieve success. You want to separate yourself from the herd, create your own herd and then get others to join it.”
Steve Siebold seems to echo this belief by suggesting the average person has trouble breaking free from their comfort zone. “Physical, psychological and emotional comfort is the primary goal of the middle class mindset,” but he says that world class thinkers, “…learn to be comfortable while operating in a state of ongoing uncertainty.”
Perhaps the most significant trait that the wealthy share in common according to Corley is positivity. “Long term success is only possible when you have a positive mental outlook.” The majority of the people in Corley’s study limited their contact with pessimistic individuals while eighty-six percent regularly associated with success-minded individuals.
As journalist Napoleon Hill put it, “There is no hope of success for the person who repels people through a negative personality.”
So, who wants to be a millionaire? Everyone? Who really has the will and discipline to become rich? Very few!