The Role of Training and Development in Talent Retention

Friday, July, 27 2012

It is not unusual for employers to hire employees with the thought in mind that they are fully trained. Unfortunately, as new technologies, products, and services are deployed by businesses in every sector on a daily basis, it is common for service, support, sales, and marketing staffs to fall out of touch with new developments. Top performers are going to look for opportunities to grow their knowledge of new tools, products, and services. An organization is at potential risk of losing those top performers to a competitor simply on the basis of the availability of training and development opportunities.

In a 2011 whitepaper by Hays Recruiting Experts Worldwide, a leading global talent acquisition organization, titled “Bridging the Skills Gap - Research and insights that can impact on your world of work 2011”, Hays identified six (6) areas of concern.

1. Flexibility

2. Planning

3. Employment Branding

4. Multi Directional Sourcing

5. Train and Develop

6. Focus on Retention

Hays found “that 67 per cent of businesses are currently dealing with the skills shortage by training existing staff. Furthermore, 52 per cent believed the training of existing staff is the best way to combat the skills shortage moving forward.” To facilitate training and development, Hays found that organizations should maintain open employee communications, train current employees, use training that works for your organization, develop a mentorship program, and rethink the perception of training older workers.

To overcome any perception that employees are being trained as a disciplinary action, organization must be upfront and open in the purposes of training and development. Training of existing employees should mainly be focused on “up-skilling” based on the skills employees currently have in place. Training that works does not have to be limited to classrooms; on-the-job training, apprenticeships, and mentorship programs are highly effectively means of training. Mentorship programs provide both job and skills training as well as dissemination of organizational knowledge, culture, and values. Lastly, in order to optimize the organizations current workforce, organizations must rethink myths around the training of older workers.

Many organizations would be amazed at the training and development needs of their employees. While there are exceptions in everything, employees want skills that make their jobs easier, allow them to move into more responsible and better paying roles, and reach some level of satisfaction in their work. A November 2010 survey by the Association for Financial Professionals (AFP), “2010 AFP Treasury Benchmarking Survey” showed that “… education and training of key finance personnel, have a significant impact on the efficiency of treasury operations”, including the morale of workers.

Training and development is an investment in the organization's workforce in the same manner that upgrading equipment is an investment in the organization's production capacity.  Training and development provides a means of getting employees engaged and keeping them engaged. Thus training and development, employee retention and employee engagement go hand and hand with the organization's ability to compete in the marketplace.

Pay for Performance vs. Variable Pay

Friday, July, 20 2012

At the recent 64th SHRM Annual Conference and Exhibition in Atlanta, John Rubino, founder and President of Rubino Consulting Services (RCS), a global human resources consulting company, suggested that traditional “Pay for Performance” or so called “merit” based pay practices are detrimental. Rubino went so far as to say that such practices might even be “demotivational” to the employee and their cohorts. Furthermore, he invoked the name of Einstein in support of his allegations that annual percentage increases to an employee’s base pay year over year was not necessarily a good idea.

So what is the basis of most traditional Pay for Performance systems? Simply, if an employee meets or exceeds their management’s expectations, they are rewarded, usually by increasing their base pay rate by “X” percent. In today’s business and economic environment, that percent is often in the range of 2% to 3%. The issues with that practice are several. A 2% to 3% increase spread over a year is a meager amount at best. In most cases, the increase is further reduced by significant taxation. Traditional merit matrices often accelerate pay movement for those lower in the range and decelerate pay movement for those higher in the range. For those who have reached the range’s top, generally there is no increase. Since merit budgets must be allocated across ALL employees, traditional Pay for Performance systems compel employees to compete rather than cooperate with each other. So it is conceivable that an “outstanding” performer could receive 2% while a meets employee could receive 3%. Lastly, someone within the organization MUST receive zero for the traditional merit matrix to work for a few to get even 2% to 3%.

Rubino quotes Einstein in saying that compound interest is a powerful tool. Building on an employee’s base pay year after year is, in fact, an example of compound interest building up over the employee’s working life time. And yes, 2% to 3% does seem like a harmless amount until you think in terms of the 30-40 years of a typical working career. Combine that with the multiplier and ripple effects on life insurance, 401(k) match, pension, disability, and paid time off plans and you can begin to understand why Rubino might perceive traditional Pay for Performance systems in less than a positive light.

What alternatives does Rubio offer up as available? The most common are flat dollar lump sum payments which do not add to base and generally do not have the same multiplier and ripple effects on other benefit plans as adding to base pay. From a motivational impact, a $1,000 check carries more value than $38.46 every other week. Properly designed profit sharing plans have the potential to also provide an incentive for employees, although they must be aligned with the organization’s culture and values and communicated well. These variable pay concepts are not new and have been successfully used by many employers. But they do require time to work. And in an environment where organizations are sometimes bidding for the very top most talent, time can work against an employer.

Employer Sponsored Onsite Medical Clinics

Friday, July, 13 2012

Is the “company doctor” making a comeback? At one time in our history, the company doctor was a standard fixture along with the company store and company housing. In mill, mine, and factory towns all over 19th century American, employers provided workers with a doctor who was paid by the company to deliver medical care to its employees and their families. Sometimes the care was free to employees, at other times the employees paid a modest fee for medical services. Increasingly today, employers are rolling out job site medical clinics for employees as another tool in their battle over high health care costs. In some cases clinics are located on the employer’s property, at other times they are mobile facilities in the form of vans. Onsite clinics and mobile facilities are intended to provide a primary level of care and not to replace specialty or hospital care.

The advantage of an onsite clinic for employers and employees are several: Less down time away from the workplace for employees, ability to deal with medical issues on the spot, a degree of control over the care delivered, and the costs of that care. Onsite Clinics, a website focused on the topic of workplace medical care, reported in May, on a study conducted by Price Waterhouse Coopers (PWC) on trends in mobile health care. In the PWC report, “Healthcare unwired: New business models delivering care anywhere”, PWC explores emerging trends in how, when, and where health care is being delivered. The premise is simple: The technology that gave us the Internet and cell phones has the ability to deliver medical care in a similar manner. The how, when, and where of health care delivery could mean the workplace or the home or somewhere in between. Physicians often draw conclusions based on diagnostic tests which are performed in their offices. Onsite clinics and remote monitoring devices allow physicians to monitor medical parameters throughout the day under varying conditions of physical and mental stress.

In a March report on Bizjournals.com, Hospital Corporate of American (HCA) and Gaylord Entertainment, operators of Nashville’s Opryland and hotels in Florida, Texas and Washington, D.C., announced an agreement for HCA’s Health to You (H2U) subsidiary to provide onsite medical services to Opryland’s 4,500 employees their families and Opryland guests. H2U’s COE Yonnie Chesley, was quoted as noting both “convenience and productivity” as big incentives for Gaylord’s decision along with an expected ROI of $3-$2 to $1 projected by HCA. Along with “wellness, primary and urgent care”, the clinic is expected to deliver “occupational health, chronic disease management, labs, screenings, physicals and a pharmacy.”

Isleta Pueblo’s Hard Rock Hotel and Casino provides an onsite clinic to some 1,200 employees at its facilities located south of Albuquerque, New Mexico, which is operated by ABQ Health Partners. Without an onsite clinic, employees who became ill at work would face travel time to an urgent care facility or several hours waiting at an emergency room. The employee could face the loss of pay and the employer could face potential premium time pay for a replacement worker.

The level of care provided by onsite and mobile clinics is primary and urgent care; life threatening emergencies are referred to the appropriate facilities. InHouse Physicians, which manages various workplace clinics worldwide, provides services for worksite health centers, flu and adult vaccinations, medical support for meetings, biometric screenings, workplace wellness programs, certified health coaches, and employee wellness education.

As with any situation, all service providers must be fully vetted. While other employers may recognize significant costs savings with onsite and/or mobile facilities, each employer is different and should evaluate their economics on their own merits. Internet and cell phone technology has changed the way many everyday activities are conducted in today’s business. That same technology has the potential to make radical changes in the delivery of health care, for better or for worst.

Workplace Obesity: A question of Responsibilities

Friday, July, 06 2012

Hardly a day goes by when we are not reminded by health, government, and business leaders that Americans have become overweight and in many cases obese. The problem is not that many workers are just overweight and obese, they are also unhealthily and at risk for several diseases including Type 2 Diabetes, heart disease, high blood pressure, musculoskeletal, and other weight related disorders. Workplace obesity is a concern for employers, since overweight and obese employees have higher rates of absenteeism, lower productivity, and higher medical costs than their normal weight counterparts.

Due to the issues mentioned, employers certainly have a stake in promoting healthily weight management through educational wellness programs. Some employers have gone so far to introduce walking programs; others have begun to offer discounted fitness program memberships as a means of maintaining and improving worker health. Of course none of this works unless the individual employee is engaged enough to participant in the programs. With the passage of the Patient Protection and Affordable Care Act (PPACA), employers are permitted to provide a financial incentive to workers who participant in workplace wellness programs. Currently, that incentive is capped at 20% (30% in 2014) of the cost of employee health care, but can increase to as much as 50% with the discretionary approval of the Secretary of Health and Human Services in 2014 and beyond.

Aside from any financial incentives, workers have a self-interest in improving their own health and well being. Unfortunately, there are many perceived barriers to maintaining a healthy lifestyle, however, simple changes in what we eat (more fruit/vegetables), when we eat (no mid-night meals), and getting more exercise, can make meaningful changes in our health and well being. Even when at work, we can make small changes by walking the stairs rather than taking the elevator, avoiding the vending machine treats by selecting healthier alternatives, and foregoing that double cheeseburger and fries at lunch.

Clearly the responsibility to manage our health and lifestyle is in the best interest of health, government, and business leaders and employees themselves. With health care costs taking a larger portion of employer revenues and employee paychecks; money spent on health care related to poor health and lifestyle habits could find its way to both the employer’s bottom line as well as employee’s take-home pay.