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Category: Business & Career
The people in your organization are your most important resource. It is not only essential to hire the very best employees; it is paramount that a company retains those employees.
It is difficult to recruit accountants with the qualifications and knowledge necessary to address the financial accounting issues common to the current financial environment. Key accounting disciplines, such as cost accounting, internal controls and auditing are mandatory to performing many of today's accounting tasks. In addition, accountants must be able to function in a broad interdisciplinary management function. This often means having experience in capital planning and information technology
In this buoyant job market skilled staff need to be retained and there are several ways of ensuring this. Salary, bonuses and perks although significant are not the overriding factors that keep employees from scouring the job ads. It is much better to create an environment in which people are happy to stay.
To achieve this, understanding what motivates staff is the key. This can be accomplished in both a formal (regular appraisals) and informal way. Balances should be reached between the goals of the individual and the needs of the business. For example staff should be given a mix of interesting work alongside the dull.
Training and re-skilling inspire loyalty, but for many companies this is a huge bone of contention. Training is seen as expensive and a way of making their employees attractive to others. The risks involved, when weighed against the benefits, often mean that retraining is overlooked in favor of recruiting externally. However, the recruitment costs of staff time before and after the hire and direct expenses compare favorably against staff development costs.
A mixed approach of valuing staff by developing skills, providing interesting/motivating work while recognizing their individual contribution, along side benefits and perks, will mean that you are an employer that employees don't want to leave.
Retention bonuses - do they work?
Increasing numbers of organizations are considering retention bonuses to head off potential resignations or to encourage people to delay their decision to leave, said a study by the Institute for Employment Studies. Bonus retention schemes are normally based on an increasing percentage of the basic salary. An example of a bonus scheme is listed below.
1st year 10% of salary
2nd year 30% of salary
3rd year 60% of salary
Keep in mind that bonus schemes don't always defer resignation, as predatory employers can still buy staff. In addition, there is a chance that resentment will surface among those employees who are ineligible for the bonus scheme, as they will assume that they are not as important as the employee who is eligible for the bonus scheme.
Organizations are beginning to realize that tailored measures not dominated by loyalty bonuses, is key to having a sustained impact on staff erosion. To retain employees, a package that satisfies financial, intellectual and the career aspirations of individuals is required.
Retention checklist
Ensure managers have the skills and tools to manage effectively
Focus training & development to individual and company needs
Don't inflate staff expectations
Survey and interview people who leave to identify trends
Consider staff resignation potential and consequences
Value each individuals worth
Accurate Job Descriptions Are A Must
If you can't write an accurate job description, either get someone in your organization that can or hire an outside writer. Accurate and precise job descriptions are key to hiring qualified employees. The person who is writing the job description must not only explicitly define the specific job tasks, they must also be able to convey the knowledge, skills and abilities required to perform those tasks. Careful deliberation and precision at the front end will ensure that people with skills most pertinent to the position will apply for the job. A good reference to use for hiring financial personnel is the Framework for Core Competencies for Financial Management Personnel in the Federal Government. This is the first in a series of Acore competency documents published by the Joint Financial Management Improvement Program (JFMIP) in conjunction with the CFO Council, that defines the knowledge, skills and abilities required for financial personnel.
The Survey Says
Although several studies have been done which examined various general factors that are important to employees in deciding which organizations to join including salary, stock options, flex time, training and development, little research has been dome to identify specific factors that are important to employees.
In 1998, KPMG along with CARA (Conference of the Canadian Advanced Technology Alliance) conducted a survey, which included several thousand high-tech organizations in the USA and Canada. In job selection, the most influential factors were:
Challenging Job (81 percent)
Exposure to New Technology (78 percent)
Career Opportunities (76 percent)
Work Environment (74 percent)
Training and Development (71 percent)
In terms of job satisfaction and the decision to stay with their current employer, the following were the areas employees were most dissatisfied with:
Stock options (81 percent)
Training and development (77 percent)
Effective Management (77 percent)
In other words, one of the most important factors in selecting a company to work for (Training and Development) is also one of the factors employees were least satisfied with. Another major cause of dissatisfaction, effective management, is entirely preventable. The survey also showed that there was not a high degree of loyalty felt by employees. Approximately 27 percent said they were satisfied with their jobs, while 57 percent were indifferent and 16 percent very dissatisfied.
In other survey conducted by Ceridian Employee Services for senior executives and Human Resources (HR) managers, the boundary less workforce was an important consideration. Respondents said that boundary less work arrangements were highly successful in attracting qualified employees. The breakdown is as follows:
Virtual Teams (50 percent)
Flexible Work Plan s (52 percent)
Telecommuting (52 percent)
Temporary Professionals (46 percent)
Over 60 percent of those surveyed said that the boundary less workforce was also very important for retaining employees. The breakdown is as follows:
Virtual teams (66 percent)
Flexible Work Plans (64 percent)
Telecommuting (60 percent)
Temporary Professionals (43 percent)
It is important to note here that approximately half of all the senior executives and HR managers surveyed cited the following three reasons for incorporating boundary less work arrangements:
· Solving business problems
· Lack of qualified workers
· Competitive pressures
How some companies are retaining employees
The NewEdge Corporation in Peoria, IL offers a variety of incentives to retain its employees including pay bonuses up to 33 percent of base salary, referral fees, stock options, cooks on the premises preparing made-to-order breakfasts and lunches, personal fitness trainers, telecommuting options, casual dress days, on-site child care, dry cleaning pick up and delivery and automobile maintenance. This may sound a bit over the edge, but the decision was based on sound logic. In some select locations employers can rely more on climate and living standards to attract employees. Peoria, IL may be pleasant but it isn't San Francisco, CA or Denver, CO. The interior of the company is decorated with plush carpeting, antiques and faux marble.
PNC Bank uses strategy-based succession planning for development of its next generation of leaders. American express Financial Advisors builds leadership plans and rewards its future leaders. Hewlett-Packard maximizes accelerated development programs to focus on the development and retention of its high potential leaders. The result of these programs? The ability to develop fast-track leaders who enjoy greater job satisfaction and contribute to organizational performance on the highest possible level.
The bottom line is this: to successfully recruit and retain skilled labor, companies must understand what factors are important to workers and implement corresponding policies.
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