by Shane Barber, Director of Organizational Excellence
As we all know, housing in the Denver area is a booming sellers’ market. The current market is generally characterized by the simple concept of supply-and-demand due to the vast number of people moving into the area coupled with a shortage of available homes. Similarly, the talent acquisition market is in virtually the same position. Stated simply, we are experiencing a shortage of technical skills in the hiring pool. Colorado has one of the lowest unemployment rates in the nation, currently sitting at or below 3% compared to the national average around 4%.
Just 4 years ago, there were 750,000 skilled labor jobs that we could not fill in the U.S. Today, that gap continues to expand as skilled labor Baby Boomers retire in large numbers. Just like the sellers in the housing market, employees who possess technical skills are at a distinct advantage. The employee is actively shopping for a position at or above market because of demand. It is no longer a hiring market where the employer can set the salary “price” and have a slew of qualified applicants lined up out the door. It is even harder to retain the current employee base if your organization is not able to maintain a competitive salary market rate or create an environment where people want to stay. At Manufacturer’s Edge, we have seen clients experience employee turnover rates as high at 42%. That means that they are losing 42% of their workforce every year. There is a war on talent and the best “package” just might make the difference between winning and losing.
The key to retaining employees is no longer exclusively salary based, however. Employee attraction and retention is also driven by keeping employees engaged in their jobs, having a strong and clear mission or strategy that the employees stand behind, offering ongoing training for developing new skills, giving frequent feedback on performance, setting specific short-term goals and future growth opportunities, and having a positive company culture. It is a lot to think about when, as a society, we are accustomed to an “if you build it they will come” mentality. Simply posting a position no longer guarantees that position will be filled. So, what can employers do?
The good news is that Manufacturer’s Edge can help. Seeing this need, we have developed a comprehensive program to help manage a company’s greatest asset – their human capital. The Organizational Excellence Program – aka Org-X – revolves around a specific model called the “Star Model” that was developed by Jay Galbbraith in 1976 and outlined in the book “Organizational Design.” Today, his methodology and practices, have been used to design and redesign Fortune 500 companies around the world.
The center of the Org-X program revolves around having a clear and defined strategy. Once that strategy is established, we look at whether or not your organization has the organizational design – the capability – to accomplish that strategy. Does your organization have the right structure? Are the roles in your organization developed with clear and explicit expectations and performance metrics? Are there mutual goal-setting practices for department alignment to foster collaboration? Do the managers and leaders have the training to effectively lead a team? Do the employees have the technical skills to do the job? And is there a system in place to evaluate and improve performance that isn’t coupled with annual reviews and raises?
Org-X will help create the system, tools, and training to build a company’s human capital management system. When combined with industry salary market data, we ensure that roles are defined accurately and align with comparable roles at other organizations in order to perform an accurate one-to-one comparison.
With the clarity, we help you develop implement aligned hiring practices to find the talent you need, implement the on-boarding practices and training, and set up the evaluation process to ensure that the candidate is meeting the expectations before the probationary period expires. We can also help define the critical skills needed for each role and document each individual’s tasks and responsibilities to capture what each role entails, so if you do have someone retire or leave, you know what they did and what you need in order to replace them. We can also help with documenting those processes using standard work concepts. Our human capital management system identifies the talent, assists in the hiring, onboarding, performance management, and acts as a primary process to develop the employee throughout their career. In essence, Manufacturer’s Edge provides an employee retention system that reduces your turnover rate before the employee is even hired!
So, if you are hiring and struggling to find the talent you need, make Manufacturer’s Edge your first call to help develop your Org-X human capital management system and to become an optimal employer.