Earning your EOC

Most distributors say their employees are their biggest asset. Here's how to become their employer of choice.

Two years ago I put a large client into intellectual vapor lock. It was easy. I simply suggested that the company's problems with staffing and retention were not due to bad hires or a poor job market, but to a failure to recognize its employees as a core competency in its business strategy. Adam Fein, president of Pembroke Consulting (Philadelphia), often says that "to survive in the distribution industry you must, 'Get big, get focused or get out.'" However, it is a fundamental truth that, no matter how big or how focused your firm may be, if you ignore the human element of the workplace, you will not achieve positive business results in the long run.

Once companies have decided what they want to be in the marketplace, they immediately are faced with a much bigger problem: finding the appropriate talent in a tight labor market. Don't count on any easing of that market any time soon, either. The issues of recruitment and retention are especially critical today due to projections that the number of employees between the ages of 25 and 44, traditionally the bulk of the workforce, will continue to decline in the United States at least until the year 2006.

Therefore, every company, regardless of size, should be asking, "How are we going to recruit, select, organize, compensate and retain talent so that we can attract candidates who can help us to be what we want to be when we grow up?" By finding the answer that is appropriate and specific to your company, you are well on your way to becoming an employer of choice (EOC).

Penny wise, pound foolish

In the rush to carve out a niche for the company, its management often overlooks the need for a human resources strategy. As a result, attempts at recruiting and retention are disorganized and unsuccessful. Consider the following potential scenarios:

A dedicated human resources employee is perceived as too expensive, so instead, highly compensated sales managers get the basics of the job done by placing newspaper ads and screening resumes. However, the annual costs associated with those activities, as well as with position vacancies, can be equal to or greater than the salary of a dedicated human resources professional.
Much effort is made during the process of recruiting, hiring and training valuable new employees. But it is often true that the same employees will be gone within 18 months if they sense that the company has not prepared for their arrival, if there is no orientation, or if the training that does exist is haphazard. After all your hard work, your new hires are off to work for your competitor, and you're back at square one.

Who's in charge?

Unfortunately, because of the many "benevolent monarchies" that still exist in distribution, there is an indifference to the human element of the workforce. It's almost as though admitting that personnel are the most important factor in achieving the business objectives of the organization will lead to an anarchy in which owners and managers will be at the mercy of the workforce.

News flash: You are at the mercy of your workforce - and have been! The rules have changed, and if you are not willing to admit to that fact and adjust to it, youare not ready to be a player in the next millenium.

The good news is that many distributors are beginning to recognize that they need to be smarter about their people. These forward-thinking companies are now considered the EOCs of their respective markets; they have found solutions to their talent dilemmas.

Following in these companies' footsteps means honestly asking yourself how your employees would answer some very important questions. Examples of such questions are listed in the box below. Accurate answers can be discovered through a human resources best practices audit.

Core competencies

It is essential to identify and understand the core competencies in human resources. The critical core competencies are defined as:

1. Staffing: recruiting, hiring, transfering, replacing and retiring employees.

2. Learning: training and developing employees.

3. Performing: business and individual performance management processes.

4. Rewarding: all compensation and recognition systems.

5. Organizing: work structures, assignments and communications.

Although these core competencies are universal among EOCs, the actual practices vary widely from company to company, depending on the specific business strategy of each. It is counter-productive to prescribe the same action plan for a $10 million, privately held distributor with no dedicated human resource personnel as you would a $1.6 billion international distributor with a large and differentiated administrative staff.

Once human-resource practices have been analyzed and rated in each competency, you're ready to develop a strategy and action plan, complete with deliverables, due dates and the names of responsible persons. This audit and the subsequent action plan will lead you to become an employer of choice - the only proven way to compete for resources in today's labor market.

Sidebar: The Tough Questions

We have found that the most proven method in becoming an employer of choice is to have an independent third party conduct a human resources best practices audit. Using an auditor - preferably at the level of an outside board member or HR professional - ensures the level of objectivity necessary for the audit to be useful.

It takes guts to ask the tough questions and listen to the answers, but EOCs do it every day. How would your employees answer the following sample questions?