Tuesday, December 4, 2007

Save your business - The time to act is now

A friend of mine works for a large computer hardware manufacturer in Pittsburgh, Pennsylvania. He is tasked with overseeing the regional sales and is responsible for a team of high performing young sales associates. He called me the other day, exasperated, ‘Do you know what happened today?’ without waiting for me to ask the ‘what!?’ question. He shot through, ‘Cindy, quit! She was my highest grossing salesperson, she just got a raise and was even up for promotion’ he said. When I asked my friend why Cindy had left, he said that the company had denied her a flexible work arrangement, even though she had made plan (met her sales target) consistently over the past two years. ‘I argued as much as I could with the Directors’, he said ‘but they simply won’t budge with the rules are rules speech, we can’t allow people to leave a 3:00 PM 3 times a week and work from home, it just won’t work here, they had said’ he explained. ‘So today she resigned, just like that! I have lost 4 of my top people this year, 3 of them were women’, he continued ‘if we continue like this, I assure you, we will be in the red and stay there too’.

This was not the first time I had heard a story like this. Over the years, many of my clients have shared similar experiences about loosing their ‘key people’ often women, and sadly for ‘fixable’ situations. I noted that this trend is not industry specific as well. Large private equity firms in Manhattan’s financial district, health sciences companies in Pennsylvania, aerospace manufacturers in California, and insurance powerhouses in Connecticut are some of the first hand accounts of this much larger ‘think small, get smaller’ management dilemma which I heard first-hand, often from mid to top tier management.

I had known the questions, but most of the answers came from within the industry as well, much of the information included below is thanks to Cathy Benko’s work in her book ‘Mass Career Customization’.

Cathy Benko is the National Managing Director of the Initiative for the Retention and Advancement of Women. She joined Deloitte Consulting as a consultant in 1989. She is currently the lead Deloitte Consulting client service partner for Sun Microsystems.

For today's visionary business leaders, Cathy Benko's ground breaking research in her book 'Mass Career Customization' is a must read. I thought it would be useful to share the details of her research with you, if in case you were wondering what should be the next steps for you to save and grow your business. In 1950, 63 percent of U.S households had a husband in the workforce and a wife who was not. Fast forward to 2006, now only 17 percent of U.S households have a husband in the workforce and a wife who is not. Imagine that! 83 percent of U.S households are now considered 'non traditional' work arrangements. Based on recent and projected birthrates, including anticipated rates of immigration, the U.S economy is projected to grow only 4 percent between 2010 and 2020 and a meager 3 percent between 2020 to 2030, compared with 12 percent in this decade.

These statistics equate to an anemic annual growth rate of 0.3 percent, compared to more than 1 percent today. So, women have come a long way since the 1950's, and hopefully businesses soon will too. If you are wondering that women are the only ones driving this change, consider this. Recent studies involving men of generation X and Y suggest that men have had enough. More men are whining now, they complain that their highly demanding careers are not so fruitful after all; they want a life for themselves outside of work too. Success in workplace is not always reflected in their personal lives and they are increasingly dissatisfied and unwilling to make substantial sacrifices on the home front and rightly so.

Employee turnover is about 15 percent in many industries and about 30 percent in the consulting industry. These turnovers are a huge over head for the employers, because such staggering costs are diluting the employer’s bottom line.

Over the past twenty five years women have composed more than 50 percent of college graduates in United States. Of course there are age old beliefs of women being inapt for science disciplines, but numbers suggest otherwise. In 2006, 16.1 percent of degrees awarded to women were in the science disciplines, compared to 15.7 percent of science and engineering degrees awarded to men. Today, more than 60 percent of all U.S college graduates are women.

Women are also out performing men in college, graduating with better grades and more honors. Women now represent over 50 percent of those receiving master’s degrees. With respect to professional degrees, women now compose half of all law students, close to half of medical students and over 40 percent of MBA’s. Women are projected to account for 51 percent of the increase in total labor force growth between, 2004 and 2014.
So, I’d imagine that it would be better for all businesses to adapt to this changing workforce as quickly as possible. Businesses must take a second look at their work force; ask them what they need to be happy. The results maybe surprising as most of the commitment survey’s indicate that its often not just money, it’s the conditions under which people work which makes them love or hate their jobs, the precise distinction between keeping or changing their employer.

If businesses want higher retention rates, lower turnovers, lower overheads and continued growth, they need to keep their people happy. Work out arrangements and take time to plan programs which help their people and the business succeed together. Businesses everywhere need to learn to collaborate with their employees faster, for without their core employees business would have fewer customers and fewer means to stay in business. Remember, no one wants to leave a good job unless it becomes increasingly incompatible with the life they want to live.

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Stuff I have to say: The views expressed here are solely my own. My employer, clients, colleagues, neighbors, family, have got nothing to do with this….although I am thankful to them for putting up with me!