Mind Reading for Managers
Mind Reading for Managers
The Employee Engagement Crisis
This is just a job.... If this were my career, I'd have to throw myself in front of a train .
Jim Halpert, The Office television show
The war for talent is over, and talent has won.
Yes, today the number of workers required to run a business is smaller than ever, but the available pool of workers is shrinking. As Baby Boomers retire, there are fewer Gen X and Gen Y (also known as Millennial) workers to take their place. According to the U.S. Bureau of Labor Statistics, by the year 2020 only 16.2 percent of the population will be between the prime working ages of 35 to 45 years old. 
And it's not just demographics driving the talent war: there is a growing skills shortage as well. We are now automating and/or outsourcing the most mundane, repetitive tasks, freeing our staff to do more innovative, strategic or solutions-oriented work. But it's getting harder to find and retain workers with the skills, abilities and attitudes needed for those more complex jobs. Indeed, a 2007 survey by the McKinsey Global Research Institute discovered that 47 percent of executives surveyed believed that, of all global trends, the intensifying competition for talent would have the most significant impact on their companies in the future. 
"Talent has become more important than capital, strategy, or R&D," stated Ed Michaels, a director of McKinsey Company and co-author of The War For Talent . "People are the prime source of competitive advantage."  Organizations that don't recognize talent's victory and significantly change the way they hire and manage staff will lose the very talent they need to not only survive, but to thrive in today's economic landscape. Market share, corporate status, reputation and organizational sustainability are all in danger.
Today's leaders must become experts in managing human capital . As someone who helps companies build healthy work environments by using innovative approaches to hire and manage staff, I have worked closely with managers and HR professionals for over 20 years. Based on my research and experience, I devised a five-step system for companies to be able to (1) hire correctly, (2) classify and manage appropriately, (3) compensate fairly, (4) motivate, recognize, and reward effectively, and (5) communicate clearly with both current and future employees.
The Cost of Hiring and Retention
People are not your most important asset. The right people are .
As every corporate executive knows, hiring an employee is just the first step. Even when you do everything right during the hiring process, you may still be surprised once the employee comes on board. The superstar you hired may end up "flaming out," or worse, being a drag on the rest of your staff. Team dynamics or changing personal circumstances can affect individual behavior and performance.
Unfortunately, replacing an employee can be difficult and expensive. Turnover costs - to "off-board" a current employee and hire a replacement - can range between 90 and 200 percent of the employee's annual salary, depending on the position.  For example, a 500-person organization with an average salary of $80,000 and just 10 percent annual turnover will spend approximately $3 million per year in replacement costs - a significant amount of money off the bottom line. And that cost doesn't factor in "lost time" as the employee mentally "checks out" before leaving. Nor does it include the "opportunity cost" of the one to two years it can take for a new hire to get up to speed.
And it's not just tangible value lost when staff depart. According to economists Kevin A. Hassett and Robert J. Shapiro in their study of intellectual capital in the U.S., the total value of "intangible assets" (including