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EMPLOYEE TURNOVER COMES AT A HIGH COST. 

Turnover is inevitable in these times. It is not like the 1960’s where someone expected to be at their job until their pension kicks in. Today turnover is the number one cost for organizations and here are a few examples of not only cost, but morale as well. 

• Replacing an employee making $100,000 salary can be more than $213,000; over twice their annual salary! 
• The cost of hiring a new employee including the advertising, interviewing, screening, and hiring.
• Cost of onboarding a new person, including training and management time.
• Lost productivity—it may take a new employee one to two years to reach the productivity of an existing person.
• Lost engagement—other employees who see high turnover tend to disengage and lose productivity.
• Training cost—for example, over two to three years, a business likely invests 10 to 20 percent of an employee’s salary or more in training.
• Cultural impact—whenever someone leaves, others take time to ask why

When using an Executive Search Firm, the first thing you should ask them about is their retention rate on their placements and how long their guarantee period is. If their answer is anywhere from 30-90 days, please just hang up the phone right then and there. Those types of firms are usually contingent and their candidates have a dollar sign on their foreheads. The end goal for these types of firms are a big fat fee, not placing the right person in the right role. 

Another retention strategy is how you interview. What is your process? How many people are involved in interviews? Do you have more than 2 interviews? The suggested amount of interviews for a candidate would be 5-6 before brining them onboard. This shows their commitment to the role and organization prior to them even starting. It will also expose the candidate to more of your team to gain a concensus and it is more of a collabrative hiring strategy. 

When considering a new vendor, there are certain aspects of risk such as:

Execution Risk – The chance the search firm does not perform

Financial Risk – The possibility that your return on investment for will be less than expected or required

Professional Risk – The chance the decision maker’s judgment will be questioned in the future and affect him or her negatively

When we engage with a new client, we assess what your strategies are, how you operate, and what your goals are both short and long term. Our responsibility as recruitment experts is to get as close to that knowledge base as possible to understand your organizations goals and objectives.

Bringing industry and peer knowledge, knowledge of the marketplace, we implement processes and systems into your search assignment that reduce your exposure to risk of hiring the wrong person and having a high turnover rate. To replace an employee making a salary of $100,000 will end up costing $213,000. If the financial implications of hiring the wrong person were not enough, the impact on morale, lost time, culture damage, and missed opportunity can far exceed financial losses.

Hiring a new employee for some is like running with scissors in your hand. The main reasons organizations make hiring mistakes are basing your hire solely on a personal interview, needing to fill a role quickly, or making the decision to hire too soon in the process without multiple interviews.

Hiring high performers requires a shift in thinking. Hiring a strong team does not come from putting ads on the internet. We focus on passive candidates who are heads down generating revenues. With our expansive network in renewables, we can attract the right person to the right position.

There was an article on LinkedIn that came out in early December about how Elon Musk works 100-120 hours a week. The comments on that post were pretty brutal and judgmental on how Musk decides to spend his time. Then another article came out by Geoffrey James that stated, “People who do 40 hours a week change the world all the time.” So, how many hours should you work?

We cannot put all people in the workforce on the same clock. Musk is 47 years old and a Gen X’er. He has not had a vacation since 2001 which was one glorious week off due to malaria. He went to his brother’s wedding and stayed two hours and went right back to the Tesla factory. Here is how much Elon Musk makes an hour according to Entrepreneur.com “Currently, Musk says he’s working 120 hours a week. That translates to just over 17 hours a day, more than 6,240 hours per year and, over the next 10 years, over 62,400 hours of work. If Musk’s total 10-year payout is a theoretical $55.8 billion, that means if he sticks to the same work schedule in delivering Tesla to its goal, every hour of his time could be worth close to $900,000.” No one can compare themselves to Musk. He is an anomaly. And most of us would not trade $900K an hour for 120-hour work week that went on for years. 

What about the CEO’s, Entrepreneurs, and Business Owners? Should they stick to only 40 hours a week or maybe 32? Eventually less hours will shift to be the norm, but not until Millennials are running things in about 15-20 years. And you know, they may be the ones who change it up for other generations to come and ensure the work-life balance is the number one priority for their employees. According to Korn/Ferry, the largest Executive Search firm in the world, states “The average age for a CEO across industries is 58, with the oldest average CEO age 60 in financial services and the youngest 55 in the technology sector.” So now we have heard it from the experts, Gen X are the majority CEO’s right now. Now let’s see how much time they put on the clock. 

Inc. online asked some of the top CEO’s about their workhours and here is a short summary;

Apple CEO Tim Cook begins emailing employees at 4:30am, is the first one in the office and the last to leave. He also holds staff meetings on Sunday evenings to prepare for the week.

Amazon CEO Jeff Bezos in his earlier days was working 12-hour days 7 days a week and started at 3am. He has significantly toned that down after his company has joined the $1 trillion dollar club. 

The former CEO of General Electric Jeff Immelt spent 24 years putting in 100-hour work weeks.

Mark Cuban, billionaire investor and owner of the Dallas Mavericks quoted “Work like there is someone working 24 hours a day to take it all away from you.” Before Cuban had kids, he was working non-stop and would wake up in the middle of the night with an idea and would start working on it staying up until the next night. He also went 7 years without taking one vacation. 

Pepsi CEO Indra Nooyi put herself through Yale earning her master’s degree while working a graveyard shift as a receptionist. Her work schedule now starts at 4am and it is not out of the ordinary that she stops working at midnight. 

After reading about the CEO’s above, you may be thinking that these CEO’s probably never see their kids, are divorced, are in poor health, will not be wishing they worked more on their deathbed, should delegate more, etc., etc. We all can speculate on how people should spend their time and what is best for them. Most of us are not a CEO of a Fortune 500 company, nor can we relate to Musk or any of the CEO’s above and their work habits. We are equipped and trained to endure the complexities of our own role and not accountable for 100,000 employees and reporting to a board of directors. 

There is a Janitor named Liang in San Francisco who makes $276,000 a year. He immigrated to America and works for BART cleaning the station, sweeping and gathering garbage, cleaning the bathrooms, picking up various lost items from the tracks and bringing them to lost and found, mopping the floors, etc. If there are any overtime slots available, he is the first to sign up. With significant overtime he has a similar income to some of the Silicon Valley VP’s. The local news station tried to get him to interview on their channel, but he declined stating he is too busy working. 

Here in the Bay Area it is not uncommon for a commute of one hour each way. So, breaking that down, you have two hours of commute time, 9 hours in the work place (one-hour lunch) so that equals 11-hour days times 5 days a week you are looking at 55 hours for the average office worker. That is well over the 40-hour mark for many of us who work in an office environment. 

To get ahead, there is nothing wrong with working extra hours. Some of you can get ahead working less than 40 hours. Some people work zero hours and don’t want to get ahead, much less have a job in the first place. Who are we to judge who works what hours? In the end each of us are the leader of our own lives shaping our own dreams and destinies, which at times require more than a 40-hour work week.

Renewable Energy, Sustainable Executives
Interview with Carina Whitham- By Travis Taylor

Renewable energy is a multi-billion dollar industry. Investment in technologies such as solar power, wind power and hydroelectricity, reached $257 billion in 2011 alone. Rapid growth like that creates a need among companies for top-notch executives focused on renewable energy. This is where Carina Whitham and the Whitham Group come into play. Whitham, founder and President, brought the company together in 2010 after spending over 10 years in recruiting and staffing. Whitham and her associates found a niche in renewable energy recruiting and brought both their talent and passion to bear on that industry. “The one thing we noticed was that the people within the renewable energy industry, they take their talent and direct it toward the bettering of the environment,” Whitham said. “And they’re just good people to work with.”In less than two years, the Whitham Group has already found success. “In 2012 our revenues skyrocketed. This year – 2013, we are slated to double last year’s revenues,” noted Whitham. “And we are now expanding our offices globally.”Already Whitham Group has concentrations in solar power, with expansion into the biofuel, geothermal and wind industries. Part of the reason for the scope of this achievement is the way Whitham and her associates go about finding talent for companies, saving them money in the process. Before taking on any new client, for instance, Whitham Group goes through an assessment process. First, they only consider companies that are in the renewable energy industry. Secondly, each potential client’s revenue and capitalization is taken into consideration and thirdly, Whitham Group uses their vast connections to feel out the company, look into their corporate culture and interview people who work for that potential client. “We don’t want to place a candidate anywhere that’s not a viable position in a viable company with a good reputation,” Whitham said.Whitham Group’s candidates positively impact their Clients’ organizations in less than 90 days. Whitham’s network alone is a huge competitive advantage for her Clients. With so much success already, Whitham Group is poised to continued their significant growth and influence in the renewable energy industry. “In 2014 our plan is to align ourselves with some of the top energy companies and diversify by expanding our client portfolio,” said Whitham.This combination of passion, talent and even a sense of fun has driven Whitham Group to the top of renewable energy executive search firms. “We love what we do,” said Whitham, “so it doesn’t really seem like work.”