What’s the actual cost of replacing top performers at work?

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As a CFO or finance professional, to help determine what’s the actual cost of replacing top performers at work, what if I asked you to rank your team members from top to lower performers?

Your estimate will likely come up with numbers (give or take) that are approximately:

  • 25% of your team are high performers,
  • 50% are average performers, and
  • 25% are below par.

What distinguishes top performers at work?

According to a McKinsey study, high performers are 400% more productive than average performers. And the productivity difference might reach 800% in sophisticated professions such as management or software development. These outstanding performers have distinct cognitive, behavioural, and personality traits.

Identifying these traits and hiring outstanding individuals is likely to result in considerable financial rewards for your company.

These employees not only boost productivity and income production, but they can also improve:

  • staff turnover,
  • management workload, and
  • investor and consumer confidence.

A terrible hire could result in hidden costs, such as

  • lost corporate credibility,
  • greater stress, and
  • worse employee morale.

What’s the bottom line or actual cost of replacing your top performers at work?

The bottom line is that hiring the wrong person can have long-term implications for your organisation. So, getting it right the first time is essential. And it’s scary these costs are not captured in the P&L and that actual costs can show as staggeringly high.

Making another smart investment for your organisation

As a senior finance professional, you recognise the critical nature of making wise investments that yield a good return. However, in my experience, one area in which many firms frequently struggle is how they hire their people. That is, having a consistent replicable process across the organisation that results in the right outcome- a top performer.

Hiring the incorrect individual might cost you far more than you think, with estimates ranging from 30% to 250% of the employee’s compensation.

To solve these recruitment problems and significantly increase the hiring of top performers at work, our award-winning GR8PI assessments can help. The platform provides an easy approach to measuring and qualifying the attributes of high performers. Advanced analytics are employed for a thorough insight into a person’s cognitive ability, behavioural patterns, and professional interests and motivations.

As a result, making it simple to discover outstanding performers and avoid undesirable recruits and costs.

Investing in a recruitment strategy that easily and reliably identifies high performers is critical to the success of any firm. Senior executives we work with improved their ability to identify top performers by 300%.

Renatus Capital Partners, a private equity firm, says it best:

“We use GPI assessments for our own company and all our portfolio companies. Not only do they have tools they can customise for practically every HR situation but the diagnosis around same, advice on which tools to use and the outcomes are priceless.”

Mark Flood , Director – https://renatus.ie/

So, why not contact us today to learn more about how we can assist your company in identifying and hiring top performers?

How to measure values alignment to strengthen your organisation

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It doesn’t matter whether you’re a small family business or a large multinational; values alignment is at the heart of an organisation’s culture. A strong set of values can help build a positive work environment and foster:

  • trust,
  • integrity, and
  • accountability.

Values provide a sense of purpose and direction to clients, stakeholders and employees. Both are vital to you as a business, identifying business identity and as an individual. Values represent your inner voice reflecting your morals, scruples, and integrity. They are what you stand for. They are the personality of your business, which in turn affects your decisions. So, what you do and how you do it; your culture.

Importance of values alignment

Most business owners and leaders proudly feature the organisational values:

  • on their websites,
  • in job advertisements, and
  • during company presentations to stakeholders.

While your company’s values define your culture, how can you be sure that everyone in your team is on the same page? Think back to when you experienced a situation where you were required to compromise your values. How did you feel about it?

For most people, it makes them uncomfortable, and they struggle to reconcile the differences.

But why should we be bothered if not all employees align with corporate values?

Aren’t values just a guide?

After all, it’s not like they are a government regulation!

Values and company culture are important because they significantly impact the success and longevity of a corporation.

Leaders should be concerned. Your culture, the heart of your business, can quickly become a liability if the core organisational values are not accepted, embraced, and practised by every team member in your company. A lack of alignment by team members with your values can interfere with the ability of your business to deliver its strategic goals. As a result, this position can negatively impact the overall productivity and success of the organisation.

Team members must align with organisation values to avoid misunderstandings, miscommunication, and a lack of trust among team members. Without solid values, alignment can lead to:

  • reduced morale,
  • decreased motivation, and
  • lower levels of job satisfaction.

It can negatively impact the overall performance of the team and the organisation as a whole.

Current methods used to measure alignment at interview

Discussions about values often come up during the interview process. And most hiring managers have their own approach to checking alignment. This approach may include:

  • articulating the organisation’s values and their link to operations,
  • asking the candidate about their decision-making process, or
  • inviting them to state their interpretation of the organisation’s values.

No matter what questions you ask, it’s not an objective measure. Especially given that research for SEEK shows that almost half the candidates say they haven’t been sincere in their interview.

You could flip a coin as you have a 50/50 chance of getting it right. If you fail to verify alignment, the issues arise months after the employee joins the team when it’s too late.

Therefore, it is critical to understand which values align with your vision of the company.

Values alignment and cultural measuring tools are essential for organisations to assess the potential candidates’ values and cultural fit. By using these tools, organisations can identify candidates who share the same values and beliefs as the company, leading to:

  • increased job satisfaction,
  • higher levels of employee engagement, and
  • better overall performance.

Additionally, values alignment and cultural measuring tools can help to reduce turnover and increase the likelihood of a successful long-term employment relationship.

Objective information will inform your decision

Our flexible values alignment assessment solution scientifically measures more than 13 different values, so you can choose which ones to include for your organisation. We start by benchmarking values alignment in your business. Then you compare potential candidates to determine a “fit” for your company.

Typically feedback we receive from our clients says:

“The flexibility of the tool is impressive. It has helped us hire people who fit as we can develop custom benchmarks and assessments that measure our precise role requirements and ensure alignment with our values.”

 

“GR8PI has improved our hiring success and reduced employee turnover by 76%.”

When values align, employees are motivated, engaged, and committed to the company’s success.

To learn more about our values assessments, email with “values” as the subject, and we will be in touch shortly.

 

 

The need to hire smarter with a novel approach in talent acquisition

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Impacting talent acquisition, the October NAB Forward View report cheerily tells us that:

“The labour market is expected to stay exceptionally tight in the near term, with unemployment bottoming out at 3.5% before drifting up to 4.3% over the next two years.”

It looks like spotting superstars for job vacancies will continue to be tough. That is assuming you continue approaching your talent acquisition the same way as you always did!

Rejecting applications

According to Indeed, “when hiring managers review resumes, they often skim to find the most relevant information.” In Australia, the result of this approach is that only 16% of resumes get an interview. Most would agree that statistically, among the 84% discarded, there must be the talent that can do the job. But they are rejected because of various issues with their application. The reasons for rejection range from:

  • unsuitable qualifications
  • not enough experience
  • too much experience
  • a poor cover letter
  • spelling mistakes.

Bias in talent acquisition

Unfortunately, how we humans make decisions to move people forward in the hiring process is also flawed. Science tells us that unconscious bias plays a key role in all our decisions. Our minds make decisions intuitively, even before we are aware of them. In his book “Hire with your Head” Lou Adler puts it quite bluntly:

“Intuition and gut feel don’t predict on-the-job success. All they predict is the likelihood the company will make a wrong decision.”

Another roadblock to successful hiring is that a staggering 5 in 6 applicants – or about 83% – report inflating their resume in some way.

Let’s reflect on this for a moment:

  1. When we review resumes, we are reading a document that is not accurate.
  2. As we read it, we are making decisions based on how we “feel” about what we have read.
  3. The result is three out of four people we hire do not fit.

Imagine a process in your business that delivered the right result – in this case, a top performer – only 25% of the time. Without a doubt, the process would be thrown out and a new one introduced.

Predicting success in a role in recruitment

Recruitment is all about trying to predict if a person you do not know will be a top performer in the job in your organisation. It doesn’t matter whether you work in a trade, as a teacher, salesperson, or CEO. Many psychologists agree that the biggest predictor of job success is cognitive ability. In recent years “soft skills” are also considered significant predictors of top performance in a job.

Soft skills used to be a “nice to have,” but today, emotional intelligence- “the ability to identify and manage your own emotions and the emotions of others”- is recognised as a better predictor of success than exam grades or certifications. Both studies by Accenture and Virginia Commonwealth University support this claim.

Use science to screen applicants as part of talent acquisition

NAB tells us spotting superstars for job vacancies will continue to be tough. On top of this, the current approach to screening applicants may get hijacked by our bias and dodgy resumes. What other approach might be useful to add to our talent acquisition armour? The answer is objective data.

With most significant personal investment decisions, such as buying a car or new HD TV, we support our human decision-making process with data. We research the specs for options to understand the performance of new investments to best meet our criteria.

Unfortunately, human beings do not come with a specifications list. To replicate our investment decision-making process when screening job applications, we need a simple economic tool that will provide us with objective data before we reach the stage of rejecting applications. Traditional fixed validated assessments just don’t offer the flexibility that is needed for this task.

The advancements made by the award-winning Great People Inside (GR8PI) platform allow companies of all sizes from all sectors to screen applicants cost-effectively.

In one short, inexpensive psychometric assessment, you can assess candidates as part of your application process for Emotional Intelligence and Cognitive Ability. And the output is a ranking of applicants matched to your specific criteria, which guides you as to which candidates you need to talk to. Speed is of the essence in a tight market, and using this approach gives you objective insights that you can act upon quickly.

If you’d like to learn more, reach out to us.

 

Five ways of reducing the risk of dropping employee retention

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Rate of Employee Retention

Employee retention is no doubt a key challenge. A recent study by Gartner states that the rate of employee turnover is likely to be up to 75% higher. And in addition, it takes 18% longer to fill any available jobs than pre-pandemic. Not to mention the annoying “quiet quitting” phenomenon, which is white-anting businesses too!

And the reasons why staff retention is affected?

The main reasons employees are leaving and affecting employee retention are:

  • inadequate salary,
  • deficient perks and benefits,
  • overworked,
  • lack of support,
  • career progression,
  • better work-life balance,
  • absence of recognition, and
  • unhappiness with management.

What can you do?

Whether we are trying to shift a few covid kilos or improve our qualifications doesn’t matter. There is never a single magic bullet. It’s usually a series of conscious actions and the discipline to implement them that results in the outcome we seek.

 

If you do not change direction, you may end up where you are heading.

– Lao Tzu

 

Let’s start from the very beginning

Getting back to the basics by reviewing your people processes is a perfect place to begin to improve staff retention in your organisation. Here are a few thought starters.

#1 Realistic Position previews

The talent competition is fierce and at an all-time high, so your recruitment process needs to be engaging, timely and professional. How you or your team handle the recruitment process can strongly influence the desire for a new player to choose to join your company or not.

Research shows that providing applicants with a realistic job preview during the recruitment process positively affects the retention of those new hires. Selling the job or the business as Utopia is not a good idea.

#2 Professional interviews to increase employee retention

When it comes to interview questions, “where do you see yourself in 5 years?” or “sell me that pen” are way past their use-by date. The objective of the initial interview is to confirm that skills and abilities align.

The goal of the second or final interview is to confirm fit. Is the applicant a good fit for the job? Equally important is for the candidate to verify if the job is a good fit for them.

It’s a lot less costly to retain people than hire new staff, and with retention as key focus, you need objective information to de-risk the selection process. Tools like our customisable psychometric GR8PI assessments will give you these critical candidate insights— insights that are impossible to glean at an interview.

#3 Socialise and onboard for retention

Early failure is often high among new employees, and hybrid work has added further complexity.

Onboarding aims to help your new team member understand how to be successful in their new job. First impressions count: you have one chance to make a great first impression when an employee starts with your company.

So, it’s best to ensure you have strategic onboarding and assimilation processes that can quickly help new people become embedded in your business and the role. And therefore, more likely to stay. Possible approaches here include:

  • shared and individualised learning experiences,
  • formal and informal activities that help people get to know one another, and
  • assigning experienced employees as role models or mentors for new staff.

#4 Managers are key to minimise staff turnover

Those first few weeks and months in a new employee’s job are critical, especially in the new hybrid world. A first-rate manager-employee relationship is vital in delivering the employee experience and connection to the business for retention.

Compounding the challenge, many managers have never received any formal people management training. Frequently, a person has made it to manager due to tenure, success in their previous role, or the desire to retain a person.

While these may be valid, today, managers need access to new tools to lead and manage their employees. Such tools help them foster career aspirations, well-being, and connection to the organisational culture.

#5 Training and development to improve employee retention

CFO to CEO: “What will we do if we train them and they leave?”

CEO to CFO: “What if we don’t and they stay?”

This conversation rings true today more than ever.

But not just any old training works. Sending your people to a one size fits all training course is just wasting money. Everyone learns differently, and unless you fully understand what training is appropriate for each employee, you will not achieve the outcomes.

A gap analysis can clearly highlight the specific deficiencies. Our customisable GR8PI suite of dimensions helps you identify gaps. By enabling you to benchmark and compare your staff at a glance, you can customise the thorough training needed across the various groups.

 

Elon Musk says, “Some people don’t like change, but you need to embrace change if the alternative is disaster”.

 

If you’d like some help in this area, please reach out or book a call to learn more.

How an HR management tool can predict sales people performance

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Better sales staff equals more sales revenue. It sounds simple. However, an HR management tool can help significantly to increase your salespeople’s productivity.  A complex task fraught with misunderstanding.

Finding high-performing staff involves a specific hiring approach that targets those with precisely the right attributes for the job at hand.

Once you have the right players, it doesn’t stop there. It’s a question of matching them to the right sales roles, managing them and developing the sales team in an ongoing way to ensure maximum efficiency and results.

Remember the old maxim ‘If you can sell, you can sell anything’?

Well, times have changed. Not all sales positions – or reps – are created equal.

According to studies by Herb Greenberg, Harold Weinstein and Patrick Sweeney in their book How to Hire and Develop Your Next Top Performer:

around 50% of sales employees lack the fundamental traits necessary for effective salespeople, and

a further 25% are selling the wrong thing, for the wrong managers, in the wrong place.

That leaves just 25% of salespeople operating to total capacity and producing great results.

So one size doesn’t fit all when finding the right salesperson to sell your product or services.

Financial benefits of hiring the best salespeople

Having a sales team composed of star performers can make a significant difference to your bottom line.

In a study of 100 businesses, Sales Force of Top Producers – A Manager’s (and Owner’s) Dream, reported in Employer’s Advantage, the company’s top performer outsold the bottom performer by a whopping average of 5.7 to 1 – with a range of 3:1 to 9:1.

Just imagine what kind of results you’d get if your entire team worked at the lower margin of 3:1, not to mention 5:1 or higher.

Salesforce Work.com and the TAS Group drew some more shocking statistics from their research. These include:

  • Two-thirds of salespeople miss their sales target.
  • More than half of all salespeople close less than 40% of potential deals.
  • Top-performing sales reps are 250% better at qualifying leads.
  • High performers are 2.5 times more likely to be effective qualifiers than the general population.
  • Revenue can be up to 25% greater at companies where sales and marketing integrate well.

Talent Management – how do you measure an individual salesperson’s productivity?

All this begs the question, just how productive is your own sales team? Can you measure individual productivity? And once you’ve measured it, how do you replace or improve average or poor performers?

The answer is using the advanced science from the next generation of smart psychometric assessment tools. Our award-winning Great People Inside psychometric testing platform will help you identify those essential success attributes for each sales role. As a result, you can match each position with the right employee.

Great People Inside’s psychometric analysis will tell you:

  • what makes your top performers so great
  • why your average performers are less effective
  • how to improve your least successful performers

How to hire the best people with an hr management tool

The right psychometric assessment tools can help you find the right people for your sales roles.

Applied correctly, the Great People Inside HR management tool can make your recruitment of future high performers up to three times more successful and also significantly reduce sales team turnover. When considering the statistics, these results should be music to any employer’s ear.

Figures reported in Employer’s Advantage show that three out of four new sales employees don’t last the distance. They have, in fact, only a 25% chance of staying with the company for an entire year.

Of those that do stick, only one in 10 go on to become a genuine top performer within three years.

So what is the essential DNA of these star performers?

Many have fundamental traits and attributes that help drive their peak performance for the longer term. Using our validated and reliable customised sales assessments, we work with you and scientifically study your current top-performing salespeople.

These measures enable us to create a customised job profile benchmark specific to your company based on your company’s top performers, not a random benchmark based on a collection of external organisations. A company customised standard means you can clearly see what sets your top performers apart from the rest.

This benchmark can also be used to significant effect when recruiting new sales staff, ensuring that candidates fit these rigorous criteria and carry the ‘work genes’ critical to success in their roles. You don’t take risks when buying a personal asset such as a car, so why risk it when hiring your most crucial business asset.

Try us! Just click HERE and we will be in touch.

Looking to hire? First build a positive Workplace Culture

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As workplace culture continues to evolve while we slowly resurface, it’s easy to blame the pandemic for this disruption. Add the “great resignation” or whatever it’s called now, and we have plenty of excuses.

If you’re a business that has tried to recruit someone over the past several months, you are undoubtedly familiar with how difficult it is to find top talent.

According to the ABS, in May 2020, 6.5% of businesses reported at least one vacancy. By February 2022, this was the case for 23.5% of businesses. Unemployment is at 4%, the lowest rate since 2008. So it’s a challenge to find top talent in a tightly competitive market.

A survey by Glassdoor tells us that 77% of respondents said they would consider an organisation’s culture before applying for a job, and 70% said they wouldn’t bother applying for a position if they felt the company’s values didn’t align with their own.

Given this, perhaps it’s a good time for organisations to critically look at their workplace culture and make sure their house is in order first. And ensure company culture is not contributing to their hiring and retention woes and costs.

So, what is the culture in a workplace? 

Great question. There are many definitions varying from the look and feel of the work environment to whether the business provides ping pong tables and fresh fruit for staff every day.

Workplace culture examples in action might be, should we speak up and tell the boss that the latest sales strategy will result in a train wreck. Or should we keep our mouths shut in fear of being “decapitated” for suggesting such a thing? If we make a mistake, is it considered the “end of the world” or a learning opportunity?

A fish rots from the head down, and so it is with workplace culture. When your workplace culture isn’t prioritised by leadership, it’s reflected in each employee’s:

  • performance,
  • productivity, and
  • retention.

 Are you playing to win or playing not to lose?

Many businesses tend to look only at the monthly profit and loss as indicators of success. But it’s equally important to focus on your employees and how they experience working in your company.

Caring about your customers and their experience with your business is a waste of time if you don’t care about your employee’s experience. Employee experience is directly linked to customer experience.

A well-designed employee journey allows your people to understand their value to your organisation. Your employees feel cared for and are set up for success during their employment.

If your company hasn’t conducted a culture audit in the last two years, it’s a good exercise to undertake. Culture audits can vary, although they can be as simple as asking employees what’s going well and what’s not. An audit can involve using some of the great software tools in the market that help analyse this.

Sounds expensive! How much does organisation culture change ‘cost’?

Organisation culture doesn’t usually have a line item in the P&L, so it’s not tracked or measured. Any activities that lead to a positive workplace culture tend to pay for themselves.

The benefits of a workplace culture that supports its employees can mean:

  • a higher rate of retention,
  • lower recruitment and re-recruitment costs,
  • diversity happens more organically, and
  • productivity goes up.

Any increase in productivity goes straight to your bottom line.

No time like the present

A business is more likely to benefit when its culture focuses on the way employees view the company. And with significant change more recently in employee views and preferences, workplace culture may need to change.

There isn’t any “one-size-fits-all” culture that makes every employee happy and productive. But paying attention to what is achievable will pay off “bigly” for your employees and business.

Risky recruitment

Attracting the right talent, the best fit for the job and your organisation’s unique culture can be very risky. There’s lots to consider. For example, you need to determine whether your potential new hires, managers, and team can work together. And work together from various locations.

To do this requires deep knowledge of their personalities, strengths, weaknesses, interests, work styles, competencies, and abilities. Our next-gen technology and solutions will do this work for you.

Why not make contact and learn more about our psychometric assessments so you can make an informed decision?

Motivation – how to measure this attribute in a reliable way

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Motivation is the key to performance and success. The past two years have caused many workers around the globe to re-evaluate what’s really important to them. 

Maintaining productivity while working flexibly from home has prompted a massive shift in employees’ thinking. The Great Resignation is evidence of this reset.

Organisations have quickly adapted to the increased complexity of almost half of all workers now working remotely in some capacity. Employees have reported challenges with not being able to “unplug”, communicate, and generally stay motivated.

While organisations have implemented guidelines to manage boundaries and new apps to address communication, motivating employees from a distance is a different kettle of fish!

Motivation, engagement, or drive?

Ask anyone who set and achieved a personal goal what helped them achieve it, and they will usually say something such as I just “wanted” it. This situation describes motivation.

It doesn’t matter what you call it – engagement, drive, motivation, dedication or enthusiasm. The challenge for businesses has always been maintaining motivation in their team.

Studies tell us that motivated and engaged employees are more productive, innovative and creative than disengaged team members.

One Emerald Group study concluded that “motivation is the main force through which individuals allocate effort to generate and implement innovative ideas”.  

Two main types of Motivation

Intrinsic and extrinsic (think internal and external) are the two main types of motivation. Rochester University describes them as follows:

 

Intrinsic motivation involves performing a task because it’s personally rewarding to you.

Extrinsic motivation involves completing a task or exhibiting a behaviour because of external causes such as avoiding punishment or receiving a reward.

 

 

Examples of extrinsic motivation are increased salary, a bonus, a company car, or a promotion. These rewards are external and separate from the job itself.

On the other hand, intrinsic motivation refers to factors that come from within a person. Intrinsic motivation is about behaviours driven by sheer enjoyment and wanting to do well at your job. 

Of course, sometimes intrinsic and extrinsic motivation go hand in hand to help you complete a project or task.

Intrinsic and Extrinsic Motivation at work

Giving positive feedback at work is highly motivational. We all like to know we are doing well. And that our contribution is appreciated by others. However, it’s vital that your positive feedback should be specific. And in addition, it helps your team members understand your standards and expectations.

You may also wish to use extrinsic motivation as a manager or leader. In this case, it’s important to offer rewards strategically. For example, giving a reward to your sales team to increase the ranging of a product with their clients may focus your team’s efforts solely on ranging. Perhaps with a result to the detriment of sales.

Business benefits

The 2021 Employee Experience Survey, conducted by Willis Towers Watson, discovered that 92% of employers worldwide said the employee experience would be a priority over the next three years.

Gallup researchers studied the differences in performance between engaged and actively disengaged work units. They found that those scoring in the top half on employee engagement nearly doubled their odds of success compared with those in the bottom half.

In fact, across a range of areas, work units in the top quartile in employee engagement outperformed bottom-quartile work units by:

  • 10% on customer ratings,
  • 22% in profitability,
  • 21% in productivity.

How do you quantify Motivation?

These numbers speak for themselves- and most CEOs and CPOs would be delighted to achieve these levels in their business. But given the complexity that HR teams and leaders are navigating, how can they quantify and qualify a diverse group of employees to understand their motivational drivers truly?

Quantifying and qualifying motivational drivers is where we come in. Great People Inside has released six new dimensions in its psychometric assessments, two of which are:

  • Internal Motivation
  • External motivation

You can easily make sense of the data, and benchmarking key motivational drivers for your business can also be performed.  

This scientific information helps organisations pinpoint the relevant motivational approaches in their psychometric testing across the board – for Individuals, business units, and teams in any department anywhere in the world.

Like some more information?

We’d be happy to help your organisation better understand its employees through internal and external motivation evaluations. Reach out by email or phone on +61 2 8850 6520 to find out more.