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Changing the Rules on Employee Retention

I recently read a report from the Bureau of Labor and Statistics called Number of Jobs Held, Labor Market Activity, and Earning Growth Among the Youngest Baby Boomers: Results from a Longitudinal Survey. (Am I as nerdy as this makes me sound?)

The employment history for almost 10,000 men and women was tracked for over 25 years. The data is sliced and diced a fair amount, but I zeroed in on their “job hopping.”

Those with a college degree or higher held an average of 10.7 jobs between the ages of 18 and 40. They made the most changes when they were young, but from the age of 26 to 30 they held an average of 2.9 jobs. This means they changed jobs almost two full times in those five years. From 31 to 35 they held 2.2 jobs meaning they changed jobs on average more than once. From 36 to 40 they held 2.0 jobs meaning they changed jobs an average of one time at this age. I suspect that the changes may be more extreme for post baby boom generations.

No wonder that at the Insurance Executive Forum sponsored by Illinois State University’s Katie School of Insurance held in Chicago a few weeks ago, the war for talent was one of the biggest concerns discussed. (www.katieschool.org)

So here is my thought to handle this concern. Leverage whatever it is that causes people to job hop. Look at it like a professional football team. With the exception of a few key players, they strategically hire individual players to get them to the next competitive level knowing that that person will be gone in about three to five years. However, that person has raised the bar at their position and for the overall performance of the team. This strategy of engaging the best talent that they can buy for three to five years combined with great leadership and good systems has created winning cultures that are almost self-perpetuating. In sports, they are called “Dynasties.”

In the world of insurance, I am suggesting an approach to hiring that anticipates three year “engagements” with employees. Hiring should not be done based upon how a person fits the standard job description that has not changed much in several years and probably will not change much. Rather, the short term objectives of the department should be the biggest consideration. Isolate what a person needs to bring to the table in terms of talent and experience to help your department achieve those objectives.

The fact is, you are going to lose the most talented people anyway to a promotion or to another company within three to five years, so why hire with a longer term view. Better short term performance for your department may even offset much of the cost of the turnover.

Let me know in what circumstances you thing this idea has merit and in what circumstances you think it would be a poor strategy.

Troy Spoonemore:

I love the concept, however, it really depends on the company size and model. Smaller to mid-size companies find it difficult to provide regular training for new employees. Additionally, many companies moving to a model of resident (work from home) adjusters, might be looking for longer term employees.

Now, for companies ranging from mid to large with many "average" type adjusters - this concept is conceievable if not brillant.

Jeff Garrison:

Troy, you have inspired my next blog which I will call D.I.R.T.Y. Claims Adjusting. Until then, what I have suggested above is a solution to many of the training and, let's face it, supervisory challenges that you face. Would you be willing to trade the time that you spend trying to "motivate" average employees to continue to do average work and the time you spend "backing them up" for the time it takes to recruit someone every three years who is already an extraordinary performer? Someone who is internally motivated like yourself to always do more than what is expected and faster than required. Someone who actually gives you time back so that you can be more of a leader and innovator and less of a manger.

By the way, when you find these people and understand what makes each one of them tick as an individual, you may very well be able to feed their needs and keep them for a very long time.

Jim Jones:

Just in time hiring sounds good, but unlike an inventory of auto parts, not all employees are the same. Going to the "spot market" for people when you are in a pinch is like waiting to buy a car when yours breaks down. A better approach is to hire for the future. It's funny because I almost never get disagreement on this, but I almost never see it done. The ones that do are kicking butt in terms of employee hires. Better hires for less money. One company who regularly hires our students offers 5 internships for every 2 anticipated job openings. If the interns have agreat experience, then that company becomes the incumbent and it takes something special to blast them out. The few companies that do this hire our best students, and often at a lower salary than competitors.

Idetrorce:

very interesting, but I don't agree with you
Idetrorce