AHRE - Recruiting & Retention

4/13/08

Slowing down turnover

I would like to get your opinion on how can we lessen the rapid increase of turnover in our organization. The most common reasons why we have so many employees tendered their resignation is "benefits". Our company could offer their employees good benefits, and I had brought up this issue to my manager but get no concrete reply. How can I get senior management buy-in and what besides basic benefits should we be offering?

Rapid turn-over in an organization can be caused by many things. One question is how you determined that benefits were the most common reason for turnover? Was this information collected through exit interviews? Were specific examples given by these exiting employees? Were exit interviews handles internally, or done by survey, or using an outside source where the responses may have been more candid based upon greater confidentiality? Have you asked your current employee population on what they do value and do not value, from your firm and in their job?

Survey's can be a very effective tool in not just assessing employees satisfaction on benefits, but in gauging other areas that they may have concerns about and how that may effect their interest in staying with your firm. For example, a employee climate or engagement survey (as the marketplace commonly refers to them) can ask questions, in addition to employee benefits, around company strategy, vision, leadership, and work environment; if, as an employee, they understand and agree with the direction of the firm; how people are recognized, valued and rewarded; if they believe there are career and professional development opportunities; if they understand the connection of their role and performance to the overall performance and direction of the firm; are people being held accountable to performance consistently across the organization, etc.

What is critical about doing a survey though is then communicating the results of the survey to all employees and informing them on what actions will be taken by the firm to address the results of the survey. I highly recommend making this an annual survey, asking basically the same questions, to ensure your employees are saying things are getting better, staying the same or getting worse. Your employees want to know that their opinions do count and that you not only hear them but are willing to do something about it. This can be a measurable, communicative, and engaging process, but will also have a significant and positive impact on turnover and performance.

Now, back to benefits. What has become more complex over the years is what employees value as a benefit. Depending on your lifestyle, family situation, age, interests, etc., a value of a benefit is widely different. Again, here is where a survey, just on benefits, can be very effective. For some employees, a certain type of medical plan or insurance is high on their list. For others, taking time off for charity work or a receiving a special perk or incentive for a reaching a performance accomplishment is key. You may be able to offer a menu of choices for your employees so they can then customize benefit choices that work for them, with every employee receiving a certain level of dollar value of benefits, depending on level, etc.

In bringing up benefits as an issue to your manager without receiving a concrete reply, and that you are concerned about senior management buy-in, following what I suggested above can be a terrific start. Gathering market data on what your competition provides and is thinking about providing on benefits, careers, recognition, rewards, and compensation, etc., provides you and your company's leadership with an idea of where you fit in the market and how competitive you are and are not.

Using actual, concrete data to state your case is critical in influencing a decision. Building a "business case" is key to convincing most decision makers on how to solve a problem, especially if there is an investment involved.

-- CHUCK MOLLOR

Checking the credit history of job candidates

How much should the credit background check of a candidate factor into whether or not to hire the candidate? We have some highly qualified job candidates but a few have poor credit, how important is good credit in today's workplace?

Unfortunately today, more and more people do have credit issues and have overextended themselves financially. However, there are multiple reasons to why people do have credit issues and some may be legitimate. For example, divorce and medical issues can wreak havoc on a person's credit report. This doesn't mean they won't be fantastic employees or the next stars of your company.

The credit report should not be the "make or break" factor in hiring a potential candidate. Credit reports should be used as a piece of the overall picture of a candidate. Companies should run credit reports for those positions where it relates to the function of the job such as finance, accounting, those who handle money, positions with access to critical infrastructure or highly sensitive information such as IT, etc. For example, if you are in a financial services company, or an industry that deals with financial products or services, and/or the person is involved in dealing with cash as part of their position, you may have concerns on this person's ability to deal with financial matters responsibly as part of their position. On the other hand, if they do not have any financial or money related responsibilities, their poor credit/financial status does not have much bearing in their ability to make decisions in their job.

Some states are passing legislation that require a clear legitimate business argument be made before you can even run a credit report on potential candidates.

If credit is going to be a factor in your decision of employment, you may want to consider providing the candidate you are considering to hire the opportunity to explain their credit situation so as to further determine their judgment/ability in making financially related decisions. One factor you need to address is how consistent you are in checking a candidate's credit when hiring for a specific job. You want to ensure that there is no potential discriminatory issue in doing a background check for one or some candidates you are willing to hire, but not for all candidates you are planning on hiring. I would seek legal counsel on this, if you have not done so already.

-- CHUCK MOLLOR

Conducting background checks

As an HR Director, I am interested in choosing a company to conduct background checks (credit, criminal, driving records, education verification, etc.) on our job applicants. What are the most reliable and cost effective products on the market? My concerns are ease of use, the ability to submit materials and forms online and cost effectiveness.

There are many products, approaches and vendors for background checks. What I recommend you look for is a vendor that has the expertise and resources to obtain results in a timely manner, demonstrate understanding of and compliance with legal requirements, and be familiar with issues specific to your industry. Mostly, they should be flexible in meeting your needs. In assessing a vendor, they should be able to address their:

• Licensing, bonding and insurance coverage
• Legal status and control
• Length of time in business
• Location and territory covered
• Services provided
• Pricing structure
• Reporting methods
• Information safeguards
• Screening, training and supervision of screening investigators
• Vetting and credentialing of third-party service providers
• Membership in professional associations
• Client references

Compliance is also a key element in selecting a background checking firm. You want to ensure that your program is conducted fairly for all candidates and meets local, state and federal regulations. Many people relate pre-employment background investigations to the criminal justice shows on television. The truth is, there is no central database that companies or screeners can turn to for accurate, comprehensive, up-to-date information. The recommended industry standard criminal search is a seven-year search at the county and/or statewide level as well as federal level. This search is typically conducted in conjunction with a Social Security Trace which offers previous addresses and/or names associated with an applicant's social security number. The truth is, there is no single, comprehensive source for accurate and up-to-date criminal information. A thorough criminal record check might potentially encompass searches from federal, state, county and municipal courts, each possessing distinct procurement and reporting guidelines, turnaround times and associated costs. Often additional inquiries are necessary to obtain updated disposition information and confirm an applicant's identity.

In this area, the old adage applies--if it seems too good to be true, it probably is. This is the hard lesson companies are learning about so-called national criminal record checks. Just ask any of the companies that are being sued for negligent hiring or libel and slander because the background check process was flawed. The highest percentage of errors in screening is found in the criminal record check component. The Bureau of Labor Statistics reported that employers lose 79% of negligent hiring lawsuits and the average jury award in employment-related lawsuits exceeds $1.6 million

In asking a colleague, Kellie O'Shea, PHR, from Creative Services, on her industry viewpoint, she stated, "Be careful of 'full' background checks that are advertised at $49.99. A comprehensive background check including a 7-year criminal history search, social security trace, employment verification (of the last 3 employers), education verification will run approximately $100.00 - $150.00. Also be aware of fine print. Some background screening vendors do not include verification fees, court fees, state fees and document fees in package or a-la-cart pricing. In small print in the proposal indicates 'Any fees incurred to conduct a background investigation will be passed on to the End-User.' These are fees that are reflected in the invoice that can account for almost 50% of the total cost."

Most companies will offer online request and delivery of completed reports, however be careful that ease of use does not mean gaps in the background check. Many employers as well as schools at all levels will not release information about a consumer without written consent from that consumer. If a background check company does not require you to forward a signed release from the applicant, how do they intend on gathering information from these employers/schools? Don't let the vendor glaze over important employment and education information because they don't require a release form to be sent.

A good screening company understands and balances ease of use with mitigating risk. As you can see, this is not a simple question or evaluation, but do try and compare apples to apples when selecting a vendor and be prepared to ask what is critical for you and your firm in the type of background checks you need to perform.

-- CHUCK MOLLOR

Tools for updating job descriptions

Our job descriptions are out of date and will require significant revisions. Is there a commercial software package that you could recommend? I am looking for canned job descriptions with some ability to edit and customize them.

I have found that HR.BLR.Com has the most comprehensive set of job descriptions that can be customized to your organization and to your state(s). The website provides instructions on how to locate a job based upon your specific industry. Additionally, you can use the Job Description Manager to customize your descriptions and save them in a job description library. As you begin rewriting your job descriptions, here are some things to consider:

• Include a general statement such as "This job description is meant to describe the general nature and level of work being performed; it is not intended to be construed as a complete list of all responsibilities, duties and skills required for the position and/or include a line stating "other responsibilities as assigned".
• Ensure you have the appropriate ADA and EOO statement relative to your specific industry. Something to the effect "job requirements are subject to possible/reasonable modification to accommodate individuals with disabilities.
• Clarify how the job requirements will be applied, using language such as "Requirements are representative of minimum levels of knowledge, skills and/or abilities. To perform this job successfully, the employee must possess the abilities or aptitudes to perform each duty proficiently.
• It is a good idea to clarify that the job description in no way implies a contract. If you are an at will employer, you should state that on the job description.

-- TRACY BURNS-MARTIN

Analyzing turnover numbers

We're being asked to analyze and report on our company's turnover numbers so we can compare ourselves to other retail companies within the United States. Is there a standard industry formula that would be used to get these numbers? If so, what is the standard formula for turnover analysis is? If not, how would you suggest I proceed to meet the request!

In its simplest terms, turnover percentages are calculated by taking the number of people who left in any given period and dividing it by the number of employees who were there are the beginning of the same period. For example, if you have 1,250 employees at the beginning of the year and you lost 125 of them during the year annual turnover would be 10%. Some organizations break it down between voluntary and involuntary turnover, so as to distinguish what turnover is really impacting their business (all turnover hurts, but one could argue that voluntary turnover of high performers is the most detrimental).

With the exception of a few industries, turnover in the retail environment has historically been high, with annual rates exceeding 50%. If you need specific data related to the area of retail you work in (i.e. discount department store, grocery, automotive, etc) I suggest you purchase the information from a survey organization that collects and reports on such data annually. Most organizations don't publish their turnover data - for good reason - and the data found on websites may be misleading and/or not reflect the same data set that you're comparing it with (i.e. voluntary vs. non-voluntary, seasonal vs. non-seasonal, etc).

-- TRACY BURNS-MARTIN

Setting up on online application

I would like to place employment applications on my website for my staffing agency. Can you suggest any online resources I should turn to or give any suggestions? Some specific questions I have - Am I allowed to ask the same questions online as I would on a paper application? Also, my paper application has a signature line where they sign that the information they have provided is true. Can a check-box on an online application be used in lieu of a real signature (i.e. they check a box saying that all info is true)? Are there any legality issues surrounding online applications I should look out for as well?

I am assuming you are referring to an application for employees to apply to work at your staffing agency vs. an application that would then be shared with your client/employing company, as most employers would have their own application for a candidate to complete. If so, you may want to create a survey style template with drop down and radio button options for ease of use. Refer to SurveyGizmo (www.surveygizmo.com) for some basic templates. I suggest you ask all of the basic questions in as many yes/no and/or drop down options as possible and then allow for uploading a resume. This will allow you to sort and screen candidates based upon the questions they answer (of course make sure they are all legal questions!!) and it will give you a formal resume to work from.

To satisfy the signature requirement you have a couple of options. First, you can require that a candidate prints and signs a form that he/she downloads from your website. The signed document can then be faxed, scanned or mailed to you. Secondly, you can set up a statement that asks the candidate to verify that all of the questions and information provided are "true to the best of their knowledge" (similar to the "accept or deny" buttons that you hit once you've read the licensing agreement on software). By hitting "yes or accept", they have essentially entered into an agreement with you that they have represented the truth in the application, therefore if you later find that any part of the application process was false, including information contained in the resume, you have grounds for dismissal (as long as it is clear in your statement).

P. S. If by chance your question was directed as an attempt to have a candidate complete an application on your website to be shared with a potential employer, I would avoid that prospect altogether. If the employee is paid by you, you have the responsibility to gather the appropriate information as the "agent". If the employer is paying the person directly (i.e. after you "place" them there), they are responsible for ensuring the employee has provided accurate and relevant information. As always, it is good to check with an employment attorney as some of these issues differ from state to state.

-- TRACY BURNS-MARTIN

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