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One of the biggest challenges facing organizations over the next few years will be the increasing shortage of talent. Between 1976 and 1986, nearly 25 million people entered the workforce. Between 1986 and 1996, about 19.5 million people entered the workforce. The biggest tightening is yet to come. Between 1997 and the year 2006, only 14.5 million people entered the workforce, creating a critical need for healthy organizational cultures that can attract and retain talented employees. But we’re not only talking numbers. People leaving college today are demanding better benefits, salaries, stock options and bonuses. And they are less loyal, making retention one of the greatest pressures on business today. In a phrase, it’s getting harder to attract and keep high-caliber employees. Making matters worse, when an organization loses a valued associate, it can mean lost productivity as well as the added costs of finding and training a replacement. In the pharmaceutical industry, we estimated that it cost $200,000 to find and train a new sales representative to replace one who quit. A good deal of this cost is due to lost sales while you wait for the new representative to get hired, trained and up to speed. There’s also the gamble whether the new person will fit into your culture. Some organizations are so hard pressed that they hire people with fewer skills, lowering the overall skill level of their workforce. The result is that we begin to lower our standards, not only for whom we hire but also for what we’ll let people get away with once they are hired. Thus we sabotage the potential of our organization to achieve greatness. To avoid falling prey to these trends, I maintain that if we focus on building strong, adaptive cultures, we will attract high-quality talent. Our cultures will be such great places to work that people will do almost anything to be a part of them -- and stay a part of them. The point is, if you build it, they will come. Ask yourself, where are the truly great places to work? I’ll bet you conclude there aren’t that many. And since the shortage of talented workers is only going to get worse in the coming years, a strong organizational culture is now more critical than ever. When Harley Davidson opened a motorcycle plant in Kansas City, it had trouble finding skilled workers who could also adapt to the plant’s flattened management culture in which executives and labor leaders work side by side. The company formed partnerships with community colleges to train hundreds of new workers, not only how to build a motorcycle, but also how to solve complex problems and read technical manuals. The costs were initially high. But the commitment paid off. Now, a job at Harley-Davidson is highly sought after. Many organizations face another challenge: When you provide someone with new skills, that person has a better chance to leave for a higher paying job. If you haven’t built a highly effective workplace culture, you’ll just keep churning workers and jeopardize efforts to maximize the potential of your enterprise or the subculture for which you are responsible. You’ll find yourself becoming a training ground for workers and a source of skilled talent for your competitors. That’s no way to get ahead. Having worked in a number of high-performance cultures, I can tell you that they had a line of quality candidates waiting at the door to be interviewed. The more desirable your workplace culture, the more dramatic your chances to attract and keep the best people. That’s my argument for a strong, adaptive culture. If you build it, they will come -- and they will stay and perform.
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Jerry's Blog