Are employees your greatest asset or biggest risk?

2011

In business, we often say that employees are a firm's greatest asset. Or are they? For sure, employees are the cornerstone of innovation, service, and quality. Without the rank-and-file employee, our organizations come to a grinding halt. Without good leadership and sound supervision, we have the potential to do more harm than good.

Most companies claim that "Employees are our most valued asset". But few seem to believe it and even fewer act on it.

Ponder this: When the last supervisor or manager was promoted or hired in your organization, how much training did they receive?

According to the Corporate Learning Factbook (2008), companies spend around $1,200 per employee for training but only around 20 percent of this is spent on supervisory / management training. Of course, some organizations spend more than others, but the proof is in the pudding.

The Equal Employment Opportunity Commission (EEOC) reported that 99,922 charges were filed in 2010 – the most in EEOC history. According to the EEOC, the breakdown of charges is as follows: Retaliation (36 percent), race (36 percent), sex/gender (29 percent), age (23 percent), and disability (25 percent). The sum is more than 100 percent as a charge may address more than one allegation. These charges cost employers more than $400 million dollars.

To add fuel to the fire, consider the cost of turnover. Being a bad supervisor may not be illegal, but of the leading reasons employees leave, many of them have a common point of origin – the supervisor. Among the expected cost of recruitment, screening, and initial training, we need to factor in inefficiency costs. According to J. Douglas Phillips, inefficiency of incoming employees, departing employees and vacancy may cause employers tens of thousands of dollars per employee.

Jim Collins, author of "Good to Great" reinforced the importance of "getting the right people on the bus," but what do you do with them once you have them? With poor supervisor, they may not be there long, be very inefficient, or worst-case, it may end in litigation.

Even in this rough economic period, Deloitte reports that 65 percent of employees are currently looking for work. According to a Gallup poll, 65 percent of employees leave because of their managers. "I didn't quit my job. I quit my boss" seems to be a recurring theme.

Invest in Training
Advancement, recognition, and many other systems can greatly help, but effective management and leadership skills are a requirement. While some firms see training as an expense, others see it as an investment.

Dan Carrison and Rod Walsh, authors of Semper Fi: Business Leadership the Marine Corps Way nailed it when they stated, "It's the training, not the screening, that creates Marine Corps leaders of all ranks." Carrison and Walsh state, training is how they can take a teenager who's never been behind the wheel of a car and put them behind the wheel of a $50 million tank.

Human resource professionals and hiring managers may see previous supervisor experience on a resume and some incorrectly assume that the candidate received training and possesses the required knowledge. This is a huge assumption.

Providing supervisors and managers with basic training can go a long way. My short list of hot topics that ought to be covered includes:

  • Coaching
  • Communication
  • Conflict Management
  • Counseling
  • Decision Making
  • Diversity
  • Employment Law
  • Leadership Fundamentals
  • Motivation
  • Performance Evaluations
  • Problem Solving
  • Time Management

Of course many systems are needed to support outstanding supervisor development, but isn't it worth the investment?

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About The Author

Mark A Smith
Mark A Smith

Mark Smith is a management consultant and business professor for Corinthian Colleges, Inc. in Largo, FL.

Older Comments

The difference between companies in consultancy or 'bill per hour' environments makes it obvious.

Imagine 2 companies saying 'You need to be 88% billable' - where this % comes from is a sure indicator as to whether or not the company REALLY invests in training.

eg

In Company A an employee is paid for 40hours a week. Taking off sickness and holiday we have 'potentially-billable-to-the-client time'. Out of this time, 88% must be billed to the client, meaning 12% is available for admin, meetings, personal development (training)...

In Company B another employee is also paid for 40hours a week. But his 'potentially-billable-to-the-client time' is 40hours minus sickness, holiday AND personal development (training). This means that the training is already accounted for BEFORE he needs to get 88% billed to the client. Meaning admin and meetings etc do not encroach on his ability to get trained whilst remaining billable...

I know where I would rather work!

How does Company B justify this approach? How does it actually make it happen? 1 - It has a truly pro-development culture 2 - It charges more to the client to account for the need to INVEST in development

Of course, many people will say 'Ah, but in a financial crisis, we can't charge people more'. Well, if you can stay competitive in a crisis environment without investing in your people competences, good luck to you...

@dan_steer

@dan_steer Belgium