Ed Offterdinger gets together with a handful of middle-market CEOs once a month, and these days they often talk—and wring their hands—about one thing: the unprecedented disruption in their businesses from the Great Resignation.
“It’s kind of a perfect storm of a challenge for them, because demand for services and products is way up, and yet people are checking out from their companies for a variety of reasons,” Offterdinger, former executive managing partner of the Baker Tilly consulting firm and co-founder of executive coach firm AO People Partners, told StrategicCHRO360.com. “They are getting desperate.”
Yet, Offterdinger said, chiefs of mid-market, closely held firms—like the ones in his klatsch—“typically have the luxury to think long-term.” And as they cope with the crisis du jour of jangling instability in the ranks of their employees, he said, such CEOs and their CHROs should consider seven things:
Invest in your people: “If you really invest in their development,” Offterdinger said, “and think about them and their career, and you’ve got time to do it, and communicate well with them that ‘we’re in this together,’ that works well with people. At the end of the day, people need to work and want to work, and if they perceive the place is about them and not just the owners, that helps.”
Display flexibility: “If ever there was a time to exercise your flexibility gene, that’s what smart CEOs are doing now. They’re thinking, ‘Don’t be arbitrary.’ Don’t practice one-size-fits-all thinking. Really try to listen to your people as if they’re your customers. If you had a client problem like what they’re talking with you about, what would you do?”
Open your ears: “Listen and talk with people,” Offterdinger said. “Many people just want to be heard. You don’t need to have the exact right answer for them right away, but smart CEOs right now are getting out among their people and understanding with them that you’re going through rough times. That shows empathy, which is one of the great leadership capabilities.”
Get out the checkbook: Practically speaking, Offterdinger said, companies are going to have to dole out more in compensation as a starting point for keeping people. And it makes great sense to keep people rather than believe you can get replacements, he explained, because “turnover—on the low end—costs a company 100% of a person’s annual compensation, and on the high end it can be 200%.”
“Demand is up and there are shortages of people and there is crazy money being thrown around,” he said. “Companies are poaching people with big raises, and you have to respond to that. If you know that’s coming, and that it might cause a problem with internal equity, you should pre-emptively adjust compensation and benefits now. Don’t wait for the next compensation cycle.”
Put out the honey: Leverage sign-on bonuses, especially if the competition is doing it. “That works,” Offterdinger said. “And it doesn’t necessarily screw up your internal equity because it’s a one-time thing. If instead you jack up salaries to get new people, your [existing staffers] will say that’s not fair.”
Harness referrals: Offering employees bonuses for bringing in new hires “isn’t very sexy or new, but it actually works,” Offterdinger said. “People won’t recommend [candidates] they don’t trust or who are going to leave. Your people will be some of your best recruiters.”
Set up new incentives: Now also is a good time to establish new long-term incentive programs. “People are throwing short-term dollars and opportunities around,” Offterdinger said. “But people will be attracted to, say, a bonus program for over the next five years that is tied to growth—stock programs and long-term bonuses. It’s a way to get people to think about their own development, and they’ll see that you’re investing in them for the long term.”
