That an employer should be a commendable or even sought after “brand” in the labor market becomes ever more important with a global economy in the background. However the fundamental problem is not new. It was always of great interest for a company to recruit excellent co-workers. This is especially true for highly specialized businesses with a high degree of “intellectual added value”.
From the ideal co-worker one expect to achieve faster and greater success for the company and, at the same time, fewer costs on the job-training and education, and an effective knowledge transfer.
A further factor, especially in Western Europe, is the demographic development which has been anticipated for quite some time. More and more experienced valuable workers leave the work force and are replaced by younger ones who have, at the start, only theoretical knowledge. Until recently this process was even encouraged for reasons of profitability.
Especially pronounced was this practice at international oriented capital corporations. These big companies were considered role models by smaller and intermediate-size companies as far as the policy for recruitment and personnel-development is concerned. No consideration was given to the nature of the business, e.g., production, trade or service companies and whether these businesses had local, national or even international significance.
Not even the public sector has avoided this practice. On the contrary it has supported this practice with their policies for pensions and the labor market.
Examples are benefits for early retirement or additional qualification offers for redundant workers. In the meantime one realized that these practices only supported short term profitability and did not help improving a long term personnel as well as business-development, let alone a good reputation in the labor market.
The personnel planning and personnel development were aimed at satisfying short term demands and quick gains in the market for the company and less or not at all aimed at the interests and needs of employees being recruited.
The negative influences on the business resulting from it like, for example loss of knowledge, decline of company know-how, rising training costs, lack of company identity and image damage cannot be dismissed. If Experience and job knowledge are not transferred on this must be acquired from scratch.
To name a few additional factors for this development:
Lack of qualified personnel due to a shift of the educational focus within the society
Unrealistic demands and expectations of the co-worker profile by the company and
Change of the company culture and the company structure.
Already in the past significant amounts had to be spent on newly-hired employees to bring them up to speed and for them to become useful performers. In the future, one will not be able to pre-determine and afford the time it takes for a new employee not only to become productive but also, after which time, the training costs will be amortized.
In the future, every business confronted with the decreasing personnel resources, has to abandon this short-term profit maximizing human resources policy. It has to be replaced by a long-term quality-oriented policy which should result in a company and leadership culture that is also accommodating to the employee’s interests.
The ranking of the 100 best employers of Europe shows the following1:
About 65% of the top-ranking in the SME (small and medium enterprises)-sector go to IT and consulting service providers. For big companies and corporations, this percentage goes down to approx. 50%. Considering that companies outside these branches achieve approx. 80% of added value, it is evident that a considerable demand for catching up exists especially in this economically relevant sector.2
The causes are the different qualification levels of the employees and their activity areas, together with the structures of the employers.
What comes to mind when you hear the expression working conditions in e.g. a consulting company?
One thinks of dedicated, content and committed employees who work project oriented in small teams. Companies in this sector have achieved the creation of positions that are attractive not only for monetary reasons and established thereby a very positive image for the whole branch. Working conditions are also adapted to the needs and wishes of the new, young employees of today, not to forget the aging workforce that also requires special attention. Beyond that, these employers address personal problems which, e.g., emerge from working on a successful career while planning a family.
Many of today’s students would like to work one day in a creative way and, at the same time, in a relatively independent and free atmosphere. Enjoying one’s work is one of the basic requirements to be successful. The creation of flat hierarchies, together with a sound leadership, motivation by objectives and financial bonuses as well as personal acknowledgments for their achievements result in a positive cooperate culture and a great place to work.
The companies that provide that working environment also succeeded in integrating a bigger share of well-qualified women.
Progressive perks, like child-care at or near the job and work-place design with a focus on health aspects to the extent of providing health and sport facilities on the premises, will be provided and offered in a pioneering way.
It is, however, of fundamental significance to commit or tie these employees better to the company on a long-term basis. A high employee fluctuation is damaging to a company in several ways, e.g., at the level of frequent customer contacts, the trust between customer and company suffers the same as the trust between employees and the company does.
However, loyalty and trust are important pre-requisites for good co-operation. Money alone does not make anybody happy and, for small companies, the means for monetary incentives are more limited than for big concerns. Each company can motivate its co-workers with praise, thanks and acknowledgement independently from its size or financial means. Entrepreneurs of the old school tell us that they visited their co-workers at the workplace regularly, inquired about their well-being and praised them. In this way the workers were given the feeling of belonging and that they were important for the welfare of the company.
This attitude creates thankful, diligent and loyal employees full of awe and respect. Such companies are often already in the second and third generation. Today, attitudes towards employees, as described above, are often considered oldfashioned, unnecessary and simply exaggerated by today’s management.
Managers still show up in the workshops infrequently, however with a certain distance towards the workers. This happens usually when there is a specific business reason. Personal contact is often restricted to the middle management and sometimes takes place only in meetings.
Should it be impossible for a company to follow the old school due to sheer size, then these tasks need to be delegated appropriately.
Courtesy and being on familiar terms are insufficient to tie high performers of different firm levels. In addition to the usual base pay companies could offer performance oriented wages. The presetting of objectives creates potentials to encourage the employees according to the expectations of the corporate development. Thus opens space for creativity, autonomy and personal responsibility.
Of course, the respective peculiarities of each company have to be taken into consideration. Not everything can be realized everywhere in the same way and manner. As every human, every company has its individual needs and pre-requisites. In the future, it will not be sufficient to use co-worker benefits like child-care, company pensions, suggestion for improvements, etc., as a “fig-leaf” in the labor market. These employee-oriented measures, all the way to the qualitatively-appealing canteen meals, optically and climatically optimized working conditions, together with the appropriate delegation of tasks and responsibilities, in accordance with the growing ability of the worker, must be genuinely lived up to.
Necessary are flat hierarchies with a free and organized flow of information at all levels about the current company developments, planning, goals, costs and profit. The participation of the employees in these various processes facilitates entrepreneurial activities, avoids the sudden loss of company know-how and the emigration of key employees. However it is also important to establish and develop a professional management that can manage, motivate, control and lead their employers to excellence in their job.
These measures also serve to better overcome temporary problems in sales and requisitions due to market conditions, and are better than the “hire and fire” policy of the past.
Should companies in the future follow my suggested measure in a genuine way, as far as employee recruitment and employee development is concerned, then it will be also of significance to the national economy, especially for a country that lacks natural resources.
These cost-intensive measures need to be supported by the government through a proper framework in order to give some relief to entrepreneurs and investors. This government financial support, spent in a forward-looking way, is in any case more meaningful than using the money for additional unemployment programs for the workers “sitting idle at home”.
Forming partnerships between universities and companies does not suffice. The binding of the successful employee to the native corporation, in the sense of an Austrian corporate identity, is required in order to guarantee catching up with the international development.
The country as the protagonist of the national economy, is not only affected but required to secure its future and, with it, the future of the country itself.
1 www.greatplacetowork.com
2 www.statistik.at