By Mike Duke, President of Professional Search at Career Development Partners
Professionals who are involved in recruiting have been trained for years that it is better to find a passive candidate who is happily employed and not looking for a job than it is to find a candidate actively searching for a new career opportunity. The passive candidate is the prized catch of a good recruiter.
My question is, do passive candidates really exist?
In the 1980’s the average tenure of an American on their job was 18 years. According to the Bureau of Labor Statics in 2014 the average tenure of an American on their job is 4.6 years and for those individuals ages 25 to 34 the average tenure is 3 years. What is going on? Have Americans lost their loyalty to their employers, or is it the other way around? Have American companies lost their loyalty to their employees?
I think it is a little of both.
Companies use to say… “Our most valuable asset is our employees.” Now things are different with buy outs, acquisitions, and CEO’s making large bonuses for this quarter’s profits. Companies are treating employees like an asset. If you have too much inventory get rid of it. Companies seem to lay people off with a lot more ease than in the past. My wife has worked for the same company for over 20 years and can remember during a bad economic year the owner took funds out of his personal bank account to make payroll. His principle for making this decision was the economy works in cycles the economy is down now, but we are going to need these people we have trained when the economy rebounds.
With the many layoffs that have happen in recent years I think most people instinctively know if they start a new job tomorrow they will have the next 3 to 4 years to find a new job. This corporate attitude of ease to lay off has people looking for their next career move all the time. I work in the executive search industry and rarely call someone who would not consider another opportunity.
Here are seven key areas to examine to make sure that your employees remain passive (not actively seeking new employment).
Do your employees have an opportunity to learn new things?
Do your employees wake up in the morning excited about their work?
Do your set your employees up for success? Do they feel the emotion of success?
Do your employees have an opportunity to grow and advance?
Do they have a clearly defined career path?
Are you proficient at showing them the steps to get to the next level?
Do your employees feel appreciated, and have status, or will they be a number?
Do your employees feel recognized for a job well done?
Do your employees have an opportunity to make a difference?
Enjoyment is usually tied to the people you work with. If the Mafia paid you $300K a year the money would be great, but could you stand the people? (Look for common values and motivations in your hiring process.)
Most companies don’t know how to sell their opportunity they usually focus on the base pay …but what will their income look like in five years? Don’t just look at the base pay look at what they will W-2 with the bonus opportunity. What will their 401K look like in five years?
(Consider this only if relocation is involved.) What about the location? Will your new employee feel at home or will it be just a step? Will the new location provide a life-style that will benefit their family? What about the “cost of living”? Some cities like New York or states like California require more income to support the cost of living. Have you done a salary comparison to see if the new location is a step up or a step back in income?
Every company has a benefit package. Will your package help your people achieve their goals to secure their family? Can you show them how to retire with dignity?
I hoped you noticed the seven steps to improve employee tenure spells the word CAREERS. According to the Society of Human Resources the average turnover in a year is 15% with 9% of people voluntarily leaving and 6% involuntary leaving.
How does your organization stack up?
Calculate your turnover rate for the last 12-month period,
Take the number of resignations in the last 12-months and divide by the total number of employees at the end of the same 12 month period.
• Resignations = ________
• Number of Employees = ________
• Your turnover rate = ________% (divide resignations by number of employees)