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Driver turnover in the trucking industry has been a problem for years. During the first quarter of this year, the driver turnover rate at large truckload carriers rose to an annual rate of 92 percent.

In the years prior to the “Great Recession,” it rose as high as 135 percent—and probably is now working its way back to that level as the freight hauling business improves. I have heard many commercial tire dealers complain about turnover within their companies as well.

I remember that when, years ago, the Tire Industry Association (TIA) first came out with its Commercial Tire Service (CTS) training program, numerous dealers stated they did not want to spend the money on training their technicians.

That's because, they said, the techs would just leave when a better offer came along and take the company's investment in training with them. While I do not have numbers on how serious a problem employee turnover is in the tire industry, it appears to me that it is one that tire dealers struggle with, too. Towers Watson & Co. is a global professional services consulting firm that specializes in the areas of human resources and risk management.

It conducts many massive surveys to discover trends in these areas so that its clients can improve their bottom lines by creating a business environment that maximizes employee productivity and performance. This past year it surveyed 1,637 companies globally, including 337 from the U.S., and produced its Global Talent Management and Rewards Survey.

This research shows that as employers are once again expanding their workforces, recruiting and retaining employees with desired skill sets is becoming harder than ever. More than one-third (35 percent) indicated that turnover was rising and more than half reported difficulty retaining high-potential employees (56 percent) and top performers (54 percent).

I was discussing this problem recently over a glass of wine with my next door neighbor, Phil McClurg, who is a senior talent management consultant with Towers Watson. He made a very interesting observation: “Employees are quickly becoming 'consumers' of employment opportunity.

The 'employment deal' has been changing for some time now, for all levels of employees. “And critical-skill employees are perceived as becoming comfortable with their increased marketability.”

Of course, he was right. No longer are employers offering the complete benefits packages of health insurance, pension plans, profit sharing, stock bonuses, etc. that kept employees locked in to a company. Instead, paternalistic managements that looked out for the well-being of their employees have been made obsolete as a result of stockholders' performance expectations in the tough business climate over the past decade. Nowadays, when the going gets tough, employees are let go.

Since employers have no more loyalty to their employees, workers don't have loyalty to their companies. That statement is a broad generality and I'm sure it's not true in all cases, but it definitely is a trend that should be analyzed further.

One of the factors to look at in regard to the “employment deal” is the changing employee work expectations that are characteristics of the last three or four generations. Baby Boomers are those people born between 1946 and 1963 and are currently 51 to 68 years old. This generation was the largest in U.S. history, which is why it was dubbed 'Boomers” and boasted between 76 million to 79 million people.

The Boomer generation grew up in a time of great social change—the Vietnam War, Civil Rights Movement and the Feminist Movement—and they believed they could change the world. They questioned established authority systems and challenged the status quo. As a result, Baby Boomers are very independent, self-reliant, confident, loyal and career-focused. They are extremely hardworking and motivated by position, perks and prestige.

This generation enjoys long work weeks and defines itself by its professional accomplishments. Boomers welcome exciting, challenging projects and strive to make a difference but still believe in an organization structure with ranks and may have a hard time adjusting to workplace flexibility trends.

Labor statistics indicate that nearly 80 million Boomers will exit the workplace in the next decade. These employees are retiring at the rate of 8,000 per day and are creating a labor pool vacuum for which the population of the next generation cannot fill.

Generation X includes 34 million to 40 million of the U.S. population between the ages of 35 to 50. This generation marks the period of birth decline after the baby boom and is significantly smaller than previous and succeeding generations.

Generation X grew up in an era of two-income families, “latch-key” children, rising divorce rates and a faltering economy. As a result, Gen X'ers are independent, resourceful and self-sufficient.

At work they value freedom and responsibility, and many prefer unstructured work hours, dislike being micro-managed and in general are very entrepreneurial, self-reliant and globally minded.

They're also highly educated—more than 60 percent attended college—active and family oriented, and the first generation to grow up with computers in their homes. Many Gen X'ers lived through tough economic times in the 1980s and saw their workaholic parents lose hard-earned positions.

So they are less committed to one employer and more willing to change jobs to get ahead. People born in 1980-1995 and are now 19-34 years old are termed Generation Y—also known as Millennials—and account for 80 million to 90 million U.S. citizens. In general, they are ambitious and eager to learn new skills but want to accomplish things on their own terms.

Unlike Boomers, Gen Y'ers work to live rather than live to work. They appreciate fun in the workplace and have a “work hard/play hard” mentality. They're also extremely group-oriented, idealistic and socially conscious and possess a sense of entitlement and narcissism compared with previous generations. But they're optimistic, engaged and team players. Gen Y'ers also are tech-savvy, having grown up with technology, and rely on it to perform their jobs better.

Armed with smartphones, tablets, laptops and other gadgets, Millennials are plugged in 24/7 and are indeed the “face” of Facebook. They prefer to communicate through email and text messaging rather than face-to-face contact and prefer webinars and online technology to traditional lecture-based presentations. They have high expectations of their employers for advancement, salary and for a coaching relationship with their manager.

They look for more feedback, responsibility, involvement in decision making, and are not afraid to question authority. Generation Y'ers may prefer to work in teams because they feel less individual pressure. They will switch jobs frequently, holding many more jobs than previous generations due to their great expectations.

“Generation Flux” is a term used to describe American employees in both Generations X and Y who need to make several changes in their careers throughout their lives due to the chaotic nature of the job market following the 2008-2012 financial crisis.

While most Boomers will change employers only between one and four times in their careers, Gen X'ers will probably experience three to 11 career changes and Gen Y'ers will move eight to 16 times. Generation Z are our children of today, born between 1996 and 2014. They're realistic, aware and really plugged into technology, are great multi-taskers and are deeply immersed in the web of technology and inter-connectivity.

They'll likely have characteristics that are different from preceding generations, too. So how does your firm deal with all of these different generations? My friend Phil says that “to attract and retain critical-skill talent, organizations reporting success in this area take a different approach. “They understand how different employee segments contribute to business success and, in response, develop human capital programs to meet those needs and a clear message around the options.”

In other words, employers have to understand what employees value to succeed in attracting and retaining them. Unfortunately, Towers Watson surveys reveal a disconnect between what employers are providing and what employees want.

A Towers Watson Global Work-force Study that included 6,014 employees in the U.S. and 32,000 worldwide found that job security is the second most important reason workers join a company and the fourth most important reason they stay. Workers also ranked trust and confidence in senior leadership as the third most important reason they stay with a firm.

But Towers Watson found employers did not rank any of these factors as key attraction and retention conditions.

So it's not surprising only half of employees think their company does a good job attracting and retaining the right workers. While employers see the importance of pay and career advancement as key reasons employees choose to join and stay with a company, they don't place the same importance on job security or trust and confidence in senior leadership.

Many employees feel blocked in their current position. Forty-one percent said they would need to leave their organization to advance their careers. Even employers admit to lacking in this area, as only 49 percent believe they're effective at providing career advancement opportunities.

This should be a big red flag to employers since employees will have more opportunities to find jobs elsewhere as hiring activity increases. So what should employers do?

According to Towers Watson, employers need to effectively design and execute reward and talent management strategies that provide what top talent and critical-skill workers are actually looking for from their organization. (These things are different for each generation as noted above.) They have to start by creating an Employee Value Proposition (EVP)—which is the balance of the rewards and benefits that are received by employees in return for their performance at the workplace. If your firm has one, is it really appropriate and working?

Phil told me that Towers Watson's research indicates organizations that progress their EVP and total rewards strategy “realize better financial and employee engagement outcomes.” Is your company failing to reach its financial goals with its current EVP? Are you having trouble hiring and/or retaining employees? If the answer is “Yes” to these questions, then apparently it is not. So consider the following Towers Watson recommendations:

1. Offer what key employee groups are seeking by exploring the potential of a reinvigorated career management strategy.

  • Differentiate programs to re-allocate base pay, merit increases, incentives or non-financial resources. These resources should be targeted to the talent segments with the highest impact on business outcomes: top-performing, high-potential and critical-skill employees.
  • Ensure that your organization's architecture reflects not only business strategies but also provides a framework managers can use to communicate to employees possible vertical and lateral career paths that is essential to recruiting and retention.
  • Effective career management encompasses an overall strategy, career architecture, visible and viable career path alternatives, a competency framework aligned with organizational goals and an integrated development-planning process.
  • Address the manager's role in helping employees advance and develop their careers by providing them with the training and tools they need to identify and communicate career opportunities tailored to each employee's skills and experience.

2. Equip managers to keep employees engaged. Managers with effective skills can have a dramatic effect on the intensity of employees' connection to their organization, which encompasses the effort they use to achieve work goals, an environment that supports productivity in multiple ways, and a work experience that promotes well-being.

  • Managers influence how employees feel about their work environment, the value they create for the organization and their pay and growth opportunities. They also build trust and are integral to the retention of key talent.
  • Managerial training can help supervisors energize, change and develop their people—connecting them with learning opportunities and providing coaching and frequent feedback to support career development.

3. Target critical-skill, high-potential and top-performing employee groups with customized employee deals to improve the attraction, retention, engagement and productivity of these workforce segments.

  • Most firms offer employees incentive programs as a way of recognizing and rewarding work performance. These programs should always reward employees who make a greater-than-average contribution—but not all employees if they are sub-par performers.
  • Differentiate pay for high performers, make pay decisions consistent with your pay philosophy and effectively communicate the pay plan to managers and employees.

By consistently applying pay for performance, offering differentiated deals and work experiences to critical employee segments, as well as improving manager performance and career management strategies, you'll increase employee productivity and your company's performance. However, even after doing all of this, you will find that some employees will still leave to find greener pastures.

After all, Millennials will move eight to 16 times in their careers and will use your company to obtain additional skills that they can use to get a better paying, higher responsibility job somewhere else. Accept this, but change your company's policy of not taking back former employees, because if you have the right EVP in place, they will return.

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TB Reader Poll

Previous | Published March 18, 2019

Where can you expect to see the most growth in 2019?

Tire sales
45% (34 votes)
General automotive service
15% (11 votes)
Brakes, shocks and other undercar services
7% (5 votes)
Add-on business
15% (11 votes)
Anywhere we can get it.
19% (14 votes)
Total votes: 75
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