With staff defections on the rise, CFOs are paying more attention to new hires.
from CFO Magazine
If ever a move was guaranteed to fan the flames of worker cynicism, this was it. In March, embattled retailer Circuit City announced it was laying off about 3,400 employees. The company's management went on to note that it planned to immediately refill most of the vacancies — at reduced salaries.
No wonder employee loyalty is at an all-time low. Decades of downsizing, offshoring, and outsourcing have plumped up corporate coffers, but the moves have also sapped most of the allegiance employees once felt for their bosses. At the same time, reduced health-care benefits — along with the rise of more-portable pension plans — have left workers with fewer ties binding them to employers.
The result? Many employees now see themselves as free agents. This is especially true of younger workers, many of whom routinely scour the Internet looking for better gigs. They seem to be doing so with remarkable proficiency: the Department of Labor reports that, between the ages of 18 and 35, the average American employee now holds 10 different jobs.
This flitting about is no longer restricted to sales personnel and techies, either. Buoyed by an acute manpower shortage, finance professionals are now changing jobs at a regular clip. This sudden demand may be great news for CPAs, but it's lousy for those who employ them. Indeed, The Hackett Group reckons that, at the average U.S. business, nearly 1 in 10 finance staffers leave their jobs each year.
Not surprisingly, CFOs say they spend a great deal of their time lining up replacements for the departed. But as many finance chiefs have discovered, finding qualified candidates is only half of the equation. CFOs must also bring new hires up to speed in a seamless fashion. "Finance chiefs today are plagued by high turnover," says Jim Bloem, CFO at health insurer Humana. "So you have to do everything you can to make sure you acclimate your new hires appropriately."
Churn, Baby, Churn
That acclimation, referred to as onboarding, usually requires a small dose of training and a fair amount of hand-holding. Ideally, managers should bring new workers onboard without imposing any demands on existing workers. At the same time, they don't want to just parachute new hires into a strange office and let them fend for themselves.
Joyce Bastoli, senior vice president at staffing specialist Ajilon Finance, advises employers to put parameters in place to make the transition as easy as possible. For example, she says it's wise to document each position in terms of processes, responsibilities, even how to use specific software. That way, a recent recruit understands what the job entails even before the boss gets around to introducing him or her to the rest of the staff.
That sort of assistance, while useful, can be pricey. Then again, bringing in a new employee is usually an expensive proposition. Nancy R. Mobley, CEO of Insight Performance, a human-resources consulting firm, estimates that it costs an employer one-and-a-half to two times a former worker's annual salary to recruit, interview, and train a replacement.
To reduce that outlay, some businesses are looking to shorten the onboarding process. Mark Heimbouch, CFO of tax-preparation specialist Jackson Hewitt, says he likes to give new hires responsibility as quickly as possible. Before he does, however, Heimbouch makes sure his employees understand how Jackson Hewitt makes its money. "They learn how to use the products and services that we offer," he notes, "and they spend time in the tax department during our busy season."
It's a smart move. HR consultants say new employees need a clear picture of what their new employer does. It also helps if they grasp what impact their decisions and performance will have on the company's business, says Jonas Akerman, CEO of consulting firm BTS USA. "Once they understand how they fit in," Akerman explains, "they align better with the company's goals."
Several vendors, including BTS, market simulation programs that help new employees see how their decisions will play out in their new jobs. The BTS program creates a scenario at a company — a product launch, for instance — and places the new recruit in charge. The employee must decide how the business will handle the event and then watch as the consequences of that decision ripple through the company.
Humana uses the BTS program not only for new hires but for all of its workers. One of the real virtues of the program, says CFO Bloem, is that it helps staffers better understand the requirements of each of the company's constituencies, including customers and creditors. "Regardless of whether we are hiring inside or outside our industry," he notes, "the simulator helps employees understand that our strategy is different and helps them understand what our company does."
While a fan of the software, Bloem believes the integration of a new worker into a finance department actually begins long before onboarding. "It is important to really evaluate how people will fit in with a team before they're hired," he says. Such forethought during recruitment may spare a CFO from having to repeat the experience a few months down the road. "You spend a lot of time and effort building your team," says Bloem. "It's important to keep it together."
Laura DeMars is a reporter at CFO magazine.
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