The Hackett Group Associate Principal Franco Girimonte talks with Senior HR Research Director Tony DiRomualdo and HR Advisor Dave Polacheck about the current crisis in retaining and finding talent, and how companies can more effectively address these issues.
Welcome to the Hackett Group’s Business Excelleration Podcast, where – week after week – we hear from experts on how to avoid obstacles, manage detours, and celebrate milestones on the journey to world-class performance. This episode of the podcast is hosted by Franco Girimonte and dives into learning and development and covers the latest trends and practices emerging in real time. We’re joined by Tony DiRomualdo, Senior HR Research Director for the Hackett Group and David Polacheck, Advisor in HR Advisory Practice at Hackett.
Employee turnover is a hot topic among many of the Hackett Group’s clients today. Anthony Klotz, a Professor at Texas A&M University, coined the term “The great resignation.” The difficulty finding and retaining talent has hindered many companies’ ability to bounce back after the pandemic and supply chain disturbances.
Tony DiRomualdo is the author of a blog post which argues that the great resignation calls for a major reset. Even though the resignation was triggered by the pandemic, Tony states that it is rooted in four deeper trends. First, many employees have experienced burnout due to being overworked. This is rooted in corporate culture, C-Suite and companies putting profit and productivity above employee happiness. Productivity is often used as a major reason to bring people back into the office. A large problem with this mindset is the overemphasis on individual productivity, however the most efficient way to look at productivity is process productivity. Improving an individual’s productivity may not really improve the overall productivity of an organization.
Additionally, many companies are over reliant on recruiting while underinvesting in training. However, it is much more expensive to have high turnover and have to replace employees than it is to invest in the people you already have. Based on Hackett’s own HR benchmarking database, organizations who depend heavily on external recruiting end up spending 44% more to fill positions than organizations who emphasize internal placement of their people. During crisis times such as these, relying on recruitment is a slippery slope, especially when there are many companies in the same boat. Companies should look hard at creating these circumstances rather than complaining about the situation. Talent acquisition is a solution to the bigger problem of retention.
Those in the job market are paying more attention to the high expectations of many employers. There is a certain segment of the job market which relies on finding the perfect person for a job, which may be scarce. Entry-level jobs are struggling to find people who are willing to accept difficult and unappealing job conditions. It is necessary to add benefits and increase pay in order to find people who are willing to do them. Additionally, job requirements are often seen as a barrier for diverse talent. Thus, many employers are rethinking these requirements when it comes to experience, degrees, connections and more.
While there are solutions for these problems, it’s not going to be a quick overnight fix. In his blog post, Tony highlights four things that can be done and have a huge impact. First is to do away with the burn and churn mindset and begin to invest in your employees to ensure they can move around in your organization. Another idea, which has been successful with companies like Walmart and Amazon, is to offer free college or tuition to technical schools or 4-year degrees. David shares that there should be a continual emphasis on manager skills training, where performance and employee retention is rooted. Also, an investment in strategic workforce planning. It’s important for organizations to hold managers accountable, because they have the most impact on employee retention.
- 0:52 – Welcome to this episode, hosted by Franco Girimonte and featuring Tony DiRomualdo and David Polacheck.
- 2:00 – The corporate push for productivity.
- 5:40 – The benefit in investing in current employees vs. reliance on recruitment.
- 9:28 – The shift in retention rates.
- 11:38 – The effects of unrealistic requirements and underwhelming pay in the job market.
- 15:30 – How can companies help overcome this issue?
- 19:15 – Focusing on manager training.
- 23:04 – Closing words.