No Layoffs ... Ever!

15 of the 100 Top Companies to work for according to Fortune Magazine have never had a layoff. Never! How do they do it? How can they possibly stay in business?

You can read the whole article here: http://money.cnn.com/galleries/2011/pf/jobs/1101/gallery.no_layoffs.fortune/index.html , but if you'd rather get just some tidbits and commentary, read on.

• SAS instituted hiring freezes in all but growth positions to save money. Hmm! Lots of other companies instituted hiring freezes, period.
• Wegman's Foods has never had a layoff even when they have closed a store. Instead, it has kept the employees and retrained them for other positions. Management says that they would rather retain trained staff than have to invest in new hires later.
• Nugget Market offered more hours rather than hiring additional associates during the recession. They promote from within. Now, there's a concept.
• At Scottrade, the CEO says, "Scottrade is committed to sharing its profits with associates and, of course, keeping them employed and providing opportunities for advancement.
• Stew Leonard's finds work internally for employees who are no longer needed, even if it is as offbeat as painting old machinery so that it will look better. Management cites the workforce as having come up with many of the ideas for cost containment.
• The Container Store faced a difficult business decision where the solution for most companies would have been layoffs. According to CEO Kip Tindell: "While conventional wisdom may tell us downsizing automatically drives a company's stock price higher and increases productivity, it actually doesn't. Layoffs take a huge lasting toll on morale and productivity in the workplace. Laying off people is not the best way, it's the easy [emphasis added] way."

There are almost ten more stories about these companies. All are successful. All keep their employees happy. And, none have done layoffs. EVER!

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Best Companies to Work For

Fortune just named its Top 100 companies to work for. You can see the list here: http://money.cnn.com/magazines/fortune/bestcompanies/2011/full_list/

Nothing is more indicative of what makes a great company to work for than this quote from an SAS (#1 on the list) manager:  "People stay at SAS in large part because they are happy, but to dig a little deeper, I would argue that people don’t leave SAS because they feel regarded -- seen, attended to and cared for. I have stayed for that reason, and love what I do for that reason."


As I look down the list, I do see some companies that are attractive to their employees because of pay, but it's not all about pay. It's about engagement. It's about providing benefits that appeal to THEIR employees, not the ones that appeal to other company's employees.


So, business leaders and heads of HR, you're smart people. THINK! That's part of what you get paid for. 


Again, when I look at the list, I don't only see happy companies, in general, I see very successful companies. These are organizations who have discovered that by spending money to engage their employees, their employees are happier and necessarily more productive and serve their clients/customers better. 


Consider this scenario. A consultant or salesperson is visiting your company. Their first stop is with the receptionist. As they arrive a bit early, they spend some time talking to the receptionist. Would your receptionist sell her company, or would she say it's ok or not bad?


Large law firms certainly have a reputation as sweat shops. Alston & Bird has its own private day care a block away from its facility. It subsidizes rates for its lower-salaried employees.


The list goes on, but certainly near the top of the list, you can find unique benefits that fit the company at each of the Top 100. So, think about it -- what do your employees want? Whatever it is, it may not cost much, and even if it does, it may not cost as much as either the savings you will generate or the productivity you will get.

Incompetent Managers

Here is a link to an article that I found on incompetent managers: http://www.stumbleupon.com/su/3iwq5H/www.fastcompany.com/resources/talent/heffernan/10-signs-incompetent-managers-102307.html%253Fpage%253D0%252C0

You may want to read the 10 habits, but in case you don't, I'll summarize here. Let it be said that we will all recognize at least some of these traits in managers that we have had ... and perhaps managers that we have been.

1. Inaction: the status quo is easier than change
2. Secrecy: we can't tell the staff
3. Over-sensitivity: it's easier to avoid a problem than to address it
4. Love of procedure: following rules to the exclusion of good business practice
5. Preference for weak candidates (I have to admit I've never seen this one): fear of hiring someone better than you
6. Focus on small tasks: covering up one's inability to do anything truly useful
7. Allergy to deadlines: Nuf Sed
8. Inability to hire former employees: none would want to work for that manager
9. Addiction to consultants: or inability to get things done by themselves
10. Working extra long hours: might this mean an inability to utilize staff?

Enjoy!

Not Just Bad Hires Are Costly

Just a few minutes ago, I reported on a CareerBuilder survey noting that bad hires are costly: http://johnhlowell.blogspot.com/2010/12/bad-hires-are-costly.html

I've recently done an informal survey of some corporate executives (generally CFO and top HR officer). Their opinion (more than two-thirds of a relatively small sample) is that poor talent management is a bigger problem. Here are some things that they cited:

• Senior people often have significant customer/client contact. Often, losing those people through reductions-in-force or unwanted termination costs customer relationships.
• Goals that are too objective cause undesirable behaviors, most frequently a lack of teamwork
• Goals that are too subjective often result in low morale as too many people think that their incentive payments do not properly reflect their contributions
• Continuity is undervalued
• Replacing senior people who leave (unwanted) often costs more than 150% of their annual compensation
• The half-life of sometimes full-life of bad will (both on remaining employees and former employees) created through involuntary termination is immeasurable

I have no particular expertise in this area, but the people that I surveyed do. Caveat employer.

Bad Hires Are Costly

According to their press release, 67% of companies responding to a CareerBuilder survey reported that a bad hire in the last year was costly. That's pretty dramatic, huh? Not really. Among employers with more than, say 250 employees, my guess would be that most did some hiring (even if only to replace natural attrition in key positions) in the past year. In fact, I find it miraculous that one-third did not make a bad hire that cost them money. Perhaps they are not looking hard enough.

If we look at some of the other data, 24% said that a bad hire cost them at least $50,000 and 40% said that a bad hire cost them at least $25,000.Among the reasons that they gave were these (in order by prevalence):

• Lost time to recruit and train another worker
• Less productivity
• Lost money to recruit and train another worker
• Negative effect on employee morale
• Negative effect on client relations
• Fewer sales
• Legal issues

Again, none of this is particularly surprising to me. In fact, the biggest surprise to me is the lack of problem hires.

Talent Management

Here's a great article on the 7 Tall Tales of Talent Management written by a former colleague, and more importantly, a friend.

http://www.aon.com/attachments/seven_tall_tales.pdf