Ag 1 source - EMC presentation

Recruitment, Retention and Succession
Strategies for Employers
Mike Smith - President – Ag 1 Source
Presented November 9, 2013 to:

Equipment Manufacturer’s Conference

The most trusted and reliable recruiting firm in the agriculture industry

© 2013 Ag 1 Source

Succession Planning
can happen once…
• Hiring, Retention, and Onboarding program is solid
• CORE mission of the company is clear and communicated
• The employee Bench Strength is strong – are a Destination
Employer
• Created clear objectives for each position – gates of success
• Brand image not only attracts but retains the right employees
• Internal and External communications (Marketing) is effective
and 360 degrees

The most trusted and reliable recruiting firm in the agriculture industry © 2013 Ag 1 Source

What has changed in Agriculture?
• The consolidation in Ag Business and farm level
economics from 1986-2005 pushed many people out
of Ag—We probably won’t get them back
• Very limited supply in rural areas
• The graduation rate of Ag degrees for Ag jobs has
been decreasing at 3% per year
• 50% of the agriculture employee base will retire in
the next 10 years--Baby Boomers

© 2013 Ag 1 Source

Unemployment
Distribution

Source—Bureau of Labor Statistics, Local Area Unemployment Statistics - http://www.bls.gov/lau/maps/twmcort.pdf


Changes in Overall Employment
In 5 years, the
overall U.S.
employment is
expected to
increase by about
12 million.
•

Source – Georgetown Univ.


The Education Component
• The U.S. Demand for college educated is outpacing
supply at a rate of 300,000 per year.
• By 2018, the postsecondary system will have
produced 3 million fewer college graduates than
demanded by the labor market –
–

Source – Georgetown University Projections of Jobs and Education Requirements

• From 2010 to 2015 - Agriculture needs 54,400 new
college graduates each year / Supply – 53,500
–

Source - Purdue/USDA publication Employment Opportunities for College Graduates – Goecker, Smith, Goetz 2010


U.S. Employment Trend - 10 Yrs.

© 2013 Ag 1 Source

Labor Force Statistics from the Current Population Survey –
Employment Level- 25yrs and older www.bls.gov

The Education Component
Question – Do we have an unemployment problem…
or, do we have an education problem in the U.S.?

Reference – Bureau of Labor Statistics


Changes in Overall Employment
In 5 years, the
U.S. demand for
some level of
college educated
will exceed 2/3 of
overall
employment.
•

Source – Georgetown Univ.


U.S. Employment age groups
Workers Aged 55 To 64 will nearly double as a
percent of the work force from 2000 To 2020.
(According to BLS)


Today’s Younger Employees
•

Fewer Have Direct Agricultural
Backgrounds.
(UC Davis Claims Less Than 5% In The College Of Ag Have Ag Backgrounds.)

•

•

•

•

Since 2005, more Ag Background
Students Are Returning Back To
Their “Baby Boomer” Parents’ or
Grandparents’ Operations.
Student Population Is Now Almost
60% Female - 40% Male: Complete
Reversal From 5 Years Ago.
Gap in mid-career employees –
about 35-50 in age
Fewer are married – commitments?


The Current Ag Talent Perfect Storm
Ag Background
Applicants

Total Labor
Supply

Aggressive
Competitors

Retirements

Turnover


Compensation Trends
$110,000.00

Midpoint Salaries by Year

$100,000.00

Midpoint of Seed DSM
Positions
Midpoint of Agronomy
Retail Positions

$90,000.00
Midpoint for Seed Retail
$80,000.00
Midpoint for
Bioscience, Nutrition &
Chemical

$70,000.00

$60,000.00
$50,000.00
$40,000.00
2005 2006 2007 2008 2009 2010 2011 2012

Notes
**393 pieces of data were used for Seed
DSM
**624 pieces of data were used for
Agronomy Retail
**31 pieces of data were used for Seed
Retail
**177 pieces of data were used for


© 2013 Ag 1 Source

Compensation Trends
$160,000.00
$140,000.00
$120,000.00
$100,000.00

Midpoint of GM/ Sales
Mgr Positions

$80,000.00
$60,000.00

Midpoint of
Parts/Service Positions

$40,000.00

Midpoint of Sales
Positions

$20,000.00
$0.00
2008

2009

2010

2011

2012

2013


© 2013 Ag 1 Source

Situation Summary
Employers – If you are looking for a mid-career – B.S.
degree of higher, experienced, and located in the
Heartland of the country – You may already have a
problem!

If you thought you were dealing from a surplus
situation – think again.
Decision time – Where to start…


Retention is Key to Succession – First…
Build your Bench Strength - Steps:
1.
2.
3.
4.
5.
6.
7.
8.

Solid Definition of your target
Reducing Current Turnover
Internal Communication
Define your company’s Employee Value Proposition
Look at Performance & Behavioral vs. Skills
Streamline the hiring process
Find Flexibility
“Destination Employer” characteristics

Your Talent Pool
• Where are you going to find your replacements?
• Don’t use a Talent Surplus process (weeding out the
weak) in the midst of a Talent Scarcity.

• Yes or No?
– Is there a shortage of top talent for your critical positions?
– Are you still positioning traditional job descriptions that
emphasize skills and experience?
– Would you like to see more top performers for these
positions (pool is too small)?

Do you source Active or Passive? -- Target
• (Active Seekers) a.k.a. “Job Changers”
– They will keep the job if the future aligns with their future aspirations
– From Career Builder 2013 Hiring Survey – “Nearly 35% of people

begin preparing for their next job within weeks of
starting a new one”

• (Passive Seekers) a.k.a. “Career Changers”
– The key is in the value of the Future - It aligns and they joined for
the right reasons


The Job DescriptionGone -days of lines of people applying
• Millennial Candidates do not like –
– Minimum Job Requirements - Limit requirements to 7
• Turn job descriptions into Career Statements
– Explain your Company Value Proposition
– Display your excitement about your company’s future

•
•
•
•

Work and Life Balance
Show your technology
Be clear about the job’s objectives – quantitatively
Show their potential path

An Employee’s Contribution

Growth & Impact

Early-birds
• Over Time, an employee’s contribution begins to peak and then falls off
• Somewhere before the Peak, a Candidate Turns from being Passive to
15%
9%
8%
an Active Job Seeker
• This curve starts over with increased responsibility; i.e. a promotion
Passive Candidate

Active Candidate

28%

Source: 2011 LinkedIn Survey of
4,550 fully-employed professionals

Time

© 2013 Ag 1 Source

Candidate Decision Process

28%

Super Passive
Major Life Change

40%

15%

9%

8%

Explorers

Tiptoers

Searchers

Networkers

Hunters &
Posters

Career Move

Better Job

Good Job

Lateral

Any Job

Passive

Active

High Job Value Proposition

Low Job Value Proposition

Job Value Proposition
Low Urgency

High Urgency

Urgency
2011 LinkedIn Survey of 4,550 fully-employed professionals


The Passive vs. Active Difference
Most candidates that
apply to jobs on their own
are “Active” applicants –
17% on average of the
work force

Passive - 83%

Active
Active - 17%

Explorers - 40%
Active
Tiptoers - 15%
Super Passive 28%
Active - 17%

Passive
Explorers

Super
Passive
Tiptoers

“Explorers” and “Tip-toer’s”
- (55%) of potential
candidates that will listen
to a compelling
opportunity, one that could
substantially improve their
career.
Source: 2011 Linkedin Survey of 4550 fully employed professionals


© 2013 Ag 1 Source

Performance vs. Skills----Talent Scarcity vs. Surplus
Talent Surplus
vs.

Talent Scarcity

Assumption: excess
supply of talent
(employer brand?)

83% Passive and
Best Actives

To Attract & Hire the Best
•
•
•
•
•
•

Convert job descriptions into careers-Future
Focus on impact, opportunity & challenge
Conduct exploratory conversations
Full engagement of hiring managers
Integrated with performance-management
Close on career move, not compensation

To Attract the 17% Needy Active
Candidates
• Advertise job descriptions
• Target those looking for lateral
transfers
• Find as many as possible
• Weed out the weak
• Screen on skills, $$
• Overvalue 1st Impressions
• Random, biased and/or narrow
interviewing
• Close on compensation

It’s about the Job
It’s all about the Future


2. To Reduce Turnover
Look at Why Employees
Leave a Company
It’s not about the money!


Perception vs. Reality
• 89% of managers believe employees leave for more
money
• 11% believe they leave for other reasons
• 12% of employees leave for more money
• 88% of employees leave for reasons other than
money
Saratoga Institute 2003


© Ag 1 Source

The Cost Of Turnover
• Average US cost of losing an employee is equal to
their annual salary
• A company with 20% turnover, 100 employees, and
an average salary of $40,000 has an annual loss of
$800,000 due to just employee turnover


© Ag 1 Source

Take Your Cues From Why Employees Say They Leave
Numbers taken from research provided by the Saratoga Institute – research from 1996-2004

Supervisor - 33%
Limited Growth - 17%

{

Lack of Respect
Lack of leadership
Favoritism
Poor employee relations
Incompetence
Lack of Technical Skills

}

Compensation - 13%

Unchallenged - 10%
Work hours - 6%
Unavoidable reasons - 5%
Lack of recognition - 4%
Poor conditions - 3%
Training - 3%
Poor Senior Leadership - 2%
Discrimination - 1%
Harassment - 1%
Benefits - 1%
Coworkers attitude - 1%


3. Communications–
The common denominators to turnover
1.

The need for TRUST.

2.

The need to have HOPE.

3.

The need to feel sense of WORTH. If you do your best, work hard, you

Expecting the company to deliver on it’s promises, be
honest in communications, and compensate fairly
Believing that you will grow, develop skills, and
have opportunity of increased responsibility or career progress leading to higher pay
will be recognized for you contributions

4.

The need to feel COMPETENT.

You will be matched to your job, use your
talents, be challenged, receive training, see the results of your work, and obtain
regular feedback on your performance


Communication is Key to Retention
Is your employer
providing you with
enough resources to
learn the business?

100%
80%

{

Does your Employer
share enough info so
Lack of Respect
Lack of leadership
you understand the
Favoritism
direction?
Poor employee relations
Incompetence
Lack of Technical Skills

100%

80%

72%

60%

100%
80%

71%

60%

40%

28%

Job Satisfaction

60%

40%

29%

40%

20%

20%

20%

0%

0%

35%

0%

Yes

No

Yes

No


Negative
© Ag 1 Source

Solution: Employees Need Answers
Employees constantly evaluate their status as it relates
to their long term goals – their FUTURE
• How am I doing?
• Where are we going as a company?
• How are we getting there?
• How do you expect me to contribute?
• What is my career path?
• How will I get the skills necessary to keep on path?
If internal communication is strong-these are answered

© Ag 1 Source

4. Interview to Win – The EVP
• Remember – Top candidates don’t need your job
• Create a culture where interviews are treated as recruitment
opportunities
• Management team is fully engaged
• Job descriptions are Career Opportunities vs. a boring list of
what you “have” to do
• Focus on Impact, Opportunity, and Challenge
• Communicate, communicate, communicate
• Improve your recruiting and you will increase your retention

© 2013 Ag 1 Source

I wonder if this
company can provide
me the growth
opportunities
I seek?

I wonder if this
candidate will give me
the Return on
Investment I seek?


The Employee Value Proposition
Career movers will join a company when – the value of
the overall opportunity outweighs the cost of staying with
their current career position – as much as 30% value total
Examples of Pros
-Better Supervisor

Examples of Cons
$____

-Strong Growth potential
-Compensation up by 15%
-More Challenging opportunity
-High number of senior mgrs.
-Better Incentives or Benefits
-Succession Plans

$____
$____

$____
$____
$____

-Relocation cost
-Averse to change
-Family / community
-Intra company dynamics
-Unknowns cause concern
-COL differences

$____
$____

$____
$____
$____
$____

$____


Anticipate Their Thoughts
• The Value of a new position must hold some level of
Improvement in standard of living AND an Advancement
of their Career

• See the position through the “candidate’s eyes” –
– there is safety (lower risk premium) in no change

• Limit the impact of the Cons where possible
• Help your candidate see the total Value
– You’ll pay more where the risk premium must be higher

• Show the Path

© 2013 Ag 1 Source

5. Hire by Performance vs. Skills
• Performance question – “Imagine 1-3 years from now and
you are happy with your new employee – What did your new
employee accomplish (quantifiably) during this time that
made you happy?” – becomes the Performance Profile
• It’s more about “Attitude” vs. “Altitude”- Behavioral
characteristics: initiative-drive-dedication-conformity
• A resume tells what a person has done in their career, but
performance based recruiting tells us how they did their
“what”
• The Proof is in the numbers

6. Streamlining your Process
Recruiting Process

Interview Process

1. Know who you are looking for
2. Focus on performance
3. Agree on “must haves” vs
“nice to haves”
4. Resume describes the “what”
and where, so focus on the
“how”
5. Define the expectations
(Performance Profile) of the
role (1 month, 3 months, 1
year, 5 years) – what is
considered success?

1. Define your process before
you start the search
2. Who will be involved
3. Defined timeline
4. Set candidate expectations
5. Ready to go office setup
(spatial visualization)
6. Know and demonstrate your
company’s EVP (noncompensation factors)
• 47% of all offers lost to
competitors


© 2013 Ag 1 Source

7. Find Flexibility
Consider less Education or less Experience required and:
• Add a Trainer or Mentor
• Partner with Educational institutions
Reconsider your Relocation program
• Risk vs. rewards
55+ age group
• The only demographic group that is growing
• Very important part of succession planning
• Possible seasonal employment group

8. Become a Destination Employer
IA Retailer example
Example of an existing business • Reduced Turnover – Low turnover is much more attractive to candidates9%
• Brand Building - Utilize colleges, trade schools, and the community to find
well-qualified candidates & build brand reputation
• Internships – Challenging internships with the hope of bringing them on
as FT employees
• Recruiting Services – Make sure the recruiters they use focus on screening
candidates against both position description and company culture
• Company Culture – create culture where everyone is bringing in talent to
fuel the organization
• Of most importance – Led by a leader who embraces constant internal
recruiting.

Destination Employer - Example
Tuition Assistance Program

• Tuition, books, fees, room and board and curriculum
• Subject to :
1. Approval by Company Management
2. Acceptance to the college.
3. maintain a cumulative GPA of 3.0 or higher.
4. Work experience at one of the Company dealership locations competitive wage
5. Company provides uniforms for the college program.
6. Upon successful graduation, student agrees to accept an offer of
employment from Company on an “at will” basis.
Company is a multi-store John Deere Dealership with 11 locations


Summary – the winners
1. Focus on your brand – it carries the image of your EVP and
your ability to attract talent
2. Treat hiring as a business practice
3. Create a rewards strategy that attracts and retains
4. Make onboarding a personal process
5. Communication is the key to retention
“People are your most important asset – Ultimately your customer
will figure out where the best people are working…”


Questions?

www.ag1source.com/emc


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