The long anticipated, talked about, and dreaded shortage of qualified people is here. Ask principals in most firms, and they will tell you that it’s very difficult right now to find staff— particularly engineers, geologists, scientists, architects, and other technical and professional folks who have the interpersonal skills required to work in a consulting environment. There’s also a huge shortage of capable marketing, accounting, and MIS types who can make an impact in our firms’ most critical staff roles.A number of our clients told us that their growth was restricted in 1995 by their inability to recruit fast enough. No doubt about it— recruiting is tough right now, and as an industry, we don’t spend nearly enough time or money on it to do it well. The average A/E or environmental consulting firm treats recruiting as something that is done in its spare time on a very sporadic basis. It’s a crisis-driven activity instead of a planned activity. And this crisis is exacerbated by the record high sales, backlog, and optimism levels many firms are reporting to us in our monthly ZWEIG 100 index.But as important as recruiting new staff is, there may be something even more important— keeping the staff you have. In 1995, we had some clients report staff turnover rates of 35% or more; though more typical was a rate in the 13%-17% range. Even at 15%, a 200-person firm will have to fill 30 jobs, just to stay the same size! And there is a significant cost associated with each one of these hires— in terms of direct recruiting expenses, lost revenues, staff time for interviewing, and so forth.What makes people quit? Our own research of companies in this industry tells us that the most common reason is “a better opportunity.” But that’s a phrase that is subject to a wide range of interpretations, depending on who is saying it and who is receiving it. My own experience and observations tell me that people quit for many different reasons, some of which are not totally rational. Emotional issues can be significant drivers, also. So it only makes sense that a renewed interest in the “human relations” aspects of human resources management may be in order. Here are a few things you may want to think about in light of today’s people environment:Your attitude toward your people. Let’s be honest with ourselves. Some principals of firms in our business have a lousy attitude when it comes to their people. Some of you complain constantly about your staff. And if someone like me talks with you for a while, it will come out loud and clear: “No one here is any good,” “No one else can do the job as well as me,” and “No one else really cares about the company.” Principals who have this attitude think that as long as they don’t say this to people directly, no one will pick up on how they feel. But they’re wrong. People aren’t stupid. The negative attitude will come out in body language, actions, and words— believe me. And the result is, people will decide it’s harmful to their self-esteem to continue to work in that kind of environment. The moral: if this is your attitude, change it. If you don’t, it’s going to cost you money. œYour managers’ attitudes toward their people. There are two types of leaders who tend to accumulate managers with lousy attitudes toward the staff— those who have a negative attitude themselves toward the staff; and those who are completely laissez-faire and who have abdicated their management responsibilities. In either case, you, as the leader, are responsible for changing their attitudes. The answer is simple: don’t be negative yourself, and confront your managers who treat their people in a hostile, sarcastic way and explain the likely result of their behavior— high staff turnover, difficulty recruiting, and inability to deliver the goods to clients who need you. Your policies. Policies that force people to do unnecessary work, or policies that make it difficult for people to accomplish their primary roles are significant demotivators and morale busters. I’m referring to things such as not letting a branch office manager spend $25 on a computer cable she needs. Or forcing everyone to get there promptly at 8:00 a.m., even if it works out better for them to arrive at 8:30 a.m. and work till 7:00 p.m. Or not giving all employees a key to the office. Or doing what we have all heard about happening at one time or another in this business— making the employee turn in their old pencil stub to get a new one! All of these policies have the potential of angering an employee to the point where he may decide it’s not worth it to work for your firm any longer.Your benefits. For years, I’ve advocated not doing any more than your competitors do, or any more than you have to, in the area of employee benefits. And for years, that was probably the best approach to take. You can’t let your costs rise faster than those of your competitors— if you do, eventually you won’t be competitive. But perhaps it’s time to take a different approach. It may be worth it to pick up a little more of the employee’s dependent insurance coverage cost if that helps the employees get a “warm and fuzzy” feeling about the company that they may not have otherwise. Sure it’s a tricky issue and you have to be careful; but because of the labor shortage in our industry, now may be the time to reconsider some hard-line stances you took in the past with respect to benefits cost containment.Whether or not you feel that staff retention is a problem for your firm right now, you’ll probably have to deal with it eventually. If our business environment continues to be as robust as it has been, the other firms (who do have a problem with retention) will get more aggressive with their recruiting efforts and come after your folks with more promises than ever before. And if their appeal is timed just right, when one of your employees is upset about how he has been treated, the internal hoop he just had to jump through, or the latest deduction from his paycheck, watch out!Originally published 1/08/1996
About Zweig Group
Zweig Group, three times on the Inc. 500/5000 list, is the industry leader and premiere authority in AEC firm management and marketing, the go-to source for data and research, and the leading provider of customized learning and training. Zweig Group exists to help AEC firms succeed in a complicated and challenging marketplace through services that include: Mergers & Acquisitions, Strategic Planning, Valuation, Executive Search, Board of Director Services, Ownership Transition, Marketing & Branding, and Business Development Training. The firm has offices in Dallas and Fayetteville, Arkansas.
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