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The human factor

Human Resources:
The human factor

Human resources professionals agree that recruitment and retention of workers, especially of highly skilled or upper-management employees, is the issue facing most businesses today. Companies now must develop marketing plans not only for potential customers but for job prospects as well.
With unemployment near an all-time low locally, employers are taking steps to enhance their benefits programs to aid recruitment and retention efforts. Traditional employee benefits such as 401(k) plans and comprehensive health coverage are being supplemented with flex time, casual dress codes and other perks.
“Overall, this is probably the most difficult time to source good candidates,” says Kathleen Leunig, director of training and development at Personnel Works Inc. “It’s really creating a recruiting and retention nightmare. Applicants are now driving the process and it used to be businesses would drive the process.”
In many cases, candidates now have the upper hand in the interview process,
Leunig notes, often with several job offers to choose from.
High-tech and information-technology firms are perhaps the hardest hit in the competitive job market. With turnover rates at technology firms ranging from 11 percent to 20 percent, according to Meta Group Inc., retention is now the industry’s No. 1 concern.
Just ask Frederick Beer, president and CEO of Auragen Communications Inc., a local Web design firm. He says the company often is in a hiring bind.
“Recruiting has been somewhat difficult,” he says. “Programming positions are the hardest to fill.”
To attract quality candidates for hard-to-fill positions, Beer offers perks not found at many larger corporations, which may have a more rigid structure. Employees at Auragen are entitled to the traditional health and 401(k) benefits, plus they are able to create their own schedules with flex-time options and adopt a casual dress code.
“We have a great corporate attitude,” Beer says. “There are many advantages to being a small company.”
Auragen recruits chiefly through the Internet and by word of mouth, Beer says, noting that newspaper classified ads have not generated desired results for the company.
The shortage is not in the high-tech fields alone, though. Many businesses across industry lines are having trouble finding qualified candidates for key executive positions, according to Development Dimensions International, a Pennsylvania-based consulting firm.
The problem is bound to intensify, the firm says. As the graying of America continues, many larger, older companies will see 40 percent to 50 percent of their top-level managers leave in the next five years. Making matters worse, downsizing efforts in the last decade have eliminated middle-management positions.
In a survey of 200 large firms conducted last year by New York City-based McKinsey & Co., three-fourths said they sometimes or chronically had trouble filling higher-management positions.
With the increase of competition, human resources professionals say in several national surveys, enhanced benefits packages are only enabling companies to stay in the ring, not necessarily win the fight to recruit or retain employees.
That means companies are spending more on recruiting–not only to identify qualified individuals but also to pay for relocation and signing bonuses. They also are having to start thinking about changing benefits packages to encourage people to stay on with a company for more than a few years.
For example, in a Towers Perrin study on the changing role of employee benefits, 37 percent of managers polled said benefits are a key reason why people join their company while 38 percent of employees polled said benefits are a main reason to stay with the company.
Two-thirds of managers surveyed for the same study do not believe that compensation and benefits packages should be above market, just competitive with others in the industry.
Yet benefits packages crafted the right way can retain employees in industries that traditionally have high turnover. Manor Care Inc.–a Maryland-based company that runs thousands of hotels, nursing homes and assisted-living facilities–revamped its benefits packages to help its lower-paid workers such as aides and housekeepers. The company contributes more to those workers’ health premiums and 401(k) plans. And those contributions increase with an employee’s length of tenure.
Many companies are offering enhanced financial benefits in light of the tight labor market. Often, however, employees and job applicants seek less tangible rewards, such as flexible hours or a positive work atmosphere.
Optimation Technology Inc. president William Pollock thinks it is his company’s work environment that attracts and retains staffers, despite the competitive nature of his field. No time clocks can be found at the engineering firm. All employees make up their own schedules. As long as their work is completed, they can come and go as they please.
The company also offers employees an on-site day-care center and a gym complete with a sauna. To enhance employee productivity, Pollock’s firm offers a 100 percent tuition reimbursement program as well as an employee ownership program.
His company also is more successful at recruiting. Pollock receives an average of eight to 10 resumes a week. Despite growing at the rate of 40 percent a year and hiring one person a week, Pollock says he still has a large pool of candidates to choose from.
Pollock still faces some of the same issues that hinder other Rochester-area companies, especially those in the high-tech sector. Although retention is extremely high at the company, some employees may relocate for family reasons. Pollock also has had to fire a handful of employees when productivity fell below expectations because their work habits did not fit in with the company’s culture.
As difficult as it may be in today’s marketplace to recruit personnel, finding a candidate who will embrace company values is crucial when making long-term hiring decisions, says Jody Johnston, corporate sales administrator at Extra Help Employment Services.
“Company culture is so important,” she maintains.
The current job market has placed many companies in a catch-22 situation, Johnston says, explaining some firms will settle for less in new hires only to have to fire them a short time later. With training costs rising, Johnston suggests abiding by a set list of qualities when making a decision on a new hire. It may take some time to find the right person, but it is better to make the right hire than having to let someone go, she says.
More employers are promoting from within to meet the labor crunch, Johnston says. Many companies are investing more money in training to take their employees to the next level. Distance learning–allowing employees to take courses on the Internet–is a popular tool for training, Johnston says.
As a human resources specialist, Johnston says this is the tightest job market she has seen in some time. All companies are struggling to recruit and retain quality staffers, not just the high-tech firms, she says.
Even in glamour fields such as advertising, where traditionally candidates line up for positions, good help is hard to find. At Saatchi & Saatchi Business Communications, human resources manager Tammy Wilkes says job applicants now have the upper hand.
Only five years ago, Wilkes says, it seemed many ad professionals were willing to do anything to get a foot in the door at Saatchi & Saatchi because of its reputation in the industry. Now the advertising agency is competing for job prospects with rivals locally and nationally.
With a short supply of job candidates, especially on the creative side, Wilkes hopes the firm’s new office space will give Saatchi & Saatchi an edge.
The agency’s new headquarters in Fairport was designed to promote creativity, she says. The open-space architectural plan will house several neighborhoods with varying themes, ranging from beach to the outdoors to high-tech.
“Hopefully, it’ll attract great creative people,” she says.
Whether it is a glamour profession such as advertising or media, or a highly technical field, managers agree attracting quality employees is one of the greatest challenges companies face today.
More than ever, companies small and large are using different recruitment methods instead of merely placing the traditional classified ad or using a headhunter.
At Xerox Corp., human resources professionals are using the Internet as a recruitment tool as well as offering employees referral incentives, says Gail Murray, Xerox manager of staffing.
In terms of recruiting, Murray says, this is the toughest year in her 20 years as a human resources professional. But she adds that Xerox has had a good track record of recruiting and retaining employees, despite the tight labor market. Certain specialized positions, such as those requiring Ph.D.s, are hardest to fill.
As well as keeping many benefits–such as tuition reimbursement–that other firms have cut, a large corporation can offer career-advancement opportunities not found in smaller firms, she says.
“If you don’t like the job you’re in today, you can always move to another position,” Murray says.
For its efforts, Xerox ranked No. 1 among information technology firms on Computerworld magazine’s 1998 list of the 100 best places to work.
The company does not intend to rest on its laurels, though.
Xerox continually measures its performance in recruiting and retaining employees. Surveys are regularly distributed to staffers to get feedback on the work atmosphere within various departments, and, like at many large companies, all employees leaving the company meet with a manager for an exit interview. Often, an employee who left the company will receive a call or survey asking about his or her decision to leave.
“(Companies) are readjusting their expectations,” observes Leunig of Personnel Works. “They find that they have to work harder and longer to find good candidates.”

3/19/99

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