Grow your workforce, yes. But be careful that the workforce growth does not outstrip that of customer demand. This is the essence of managed, concerted, strategic growth.
Leaders who participated in the latest Vistage CEO Confidence Index appear to be on the right track, with regard to workforce growth. According to analysis of the Q1 2018 survey, 79 percent of CEOs from small and midsize businesses anticipate revenue growth over the next 12 months, and 64 percent say they plan to increase their headcount. In fact, half of these companies indicate they are hiring this quarter.
To attract and retain top talent, our research shows the most effective strategies go beyond increasing wages or expanding benefit packages and focus on investing in employee development. Employee development has a high impact on employee satisfaction, job performance and employee retention. It is the top area of focus that CEOs use to combat hiring challenges. In addition, retaining existing employees and improving their work performance is a prerequisite to hiring more people.
Here are seven strategies, ranked in order of importance according to our 1,712 survey respondents, for strengthening your employee development:
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1. Job-related skills training (76 percent).
The ability to perform any job is a function of training and experience. Provide your employees with training that’s directly connected to their current roles, and you’ll expand their capabilities while increasing their use of best practices. In addition, consider cross-training your employees for adjacent functions or preparing them for a next-level certification. It’ll send the message that you’re invested in their future and want them to stick around for the long term.
2. Company onboarding (71 percent).
Onboarding new employees helps ensure alignment with your culture, values, and business expectations from day one. If your business is small, this step is even more critical, since cultural fit and acceptance are often as important as job skills and performance.
3. Skills training (45 percent).
Developing your employees’ skills in areas such as communication and collaboration can make your entire business run more smoothly. Consider introducing a methodology for solving problems, running meetings, or having difficult conversations.
4. Mentorship programs (45 percent).
Use mentoring programs to connect senior employees with junior ones. You’d be surprised how much this can help unite employees, build trust on teams, and improve overall job performance. As a bonus, this strategy is inexpensive; it just requires getting your senior leadership team to commit to it.
5. Career development for new roles (43 percent).
When you provide new hires with a clear path for career development, it sets the stage for long-term retention. Pair this plan with training opportunities and you’ll end up with employees who are eager to take on new responsibilities or more senior roles.
6. Tuition reimbursement (38 percent).
Reimbursing tuition costs is an easy way to motivate your employees to keep learning. It also gives them a compelling reason to stay with your company for the long term.
7. Management training (38 percent).
Top management leaders tend to be intellectually curious. Satisfy their urge to learn by continually offering new opportunities for professional development. Your retention rates are almost guaranteed to increase.
The alternative: manage growth.
Not investing in your employees may necessitate staying within the boundaries of your current volume and existing capabilities. Of the CEOs we surveyed that are having challenges expanding their workforce, 13 percent are managing demand — that is, by turning away business. Another strategy, used by 10 percent of our respondents, is to adjust delivery and fulfillment times to compensate for challenges in meeting customer demand.
But setting lower performance expectations is risky. Before you know it, a competitor with better tools and faster capabilities may enter your territory and lure your customers away.
About the author: Joe Galvin
Joe Galvin is the Chief Research Officer for Vistage Worldwide. Vistage members receive the most credible, data-driven and actionable thought leadership on the strategic issues facing CEOs. Through collaboration with the Vistage community of experts and curation of the highest quality content, Vistage members benefit from impactful business research specific to small and midsized business (SMBs). Vistage is the CEO’s most trusted resource for research, data and expert perspectives.