In an era of record low unemployment, it is hard to imagine having a serious discussion about building depth of talent at any level, in any organization—especially the direct labor force. The skilled labor pool is shrinking. Economic growth continues. And the demand for employees willing to just show up on time and do their job is escalating at a feverish pace. It would appear that now is NOT the time for employers in service businesses to commit resources to employee programs geared toward professional growth and development.
I would contest and say that now is EXACTLY the time to do such a thing, and the reasoning is simple. First, a lack of positional succession planning and development is one of the reasons why so many businesses are currently in a direct labor bind. Second, the cost of developing and maintaining these programs is far less than the recruiting and turnover costs doled out each day by service companies competing for the same limited supply of labor. And third, many of the tools and strategies used in these programs are nothing more than best practices which have operational benefits that go far beyond finding and retaining skilled labor to perform a job.
To prove my point, let’s hypothetically assume that a restoration contractor enjoys the benefits of having a highly skilled and dedicated technician named Sam. Sam is a veteran of the business and excels at mold remediation projects. He knows the science, the application, and he is great with employees and customers alike. The company relishes in Sam’s ability to pass a clearance test on every project while bringing it in on time and under budget. Every once in a while, Sam asks for a raise and the company complies, knowing that it can’t replace Sam because he is a diamond in the rough. However, to justify his wage, Sam’s productivity expectations also increase. He delivers and the cycle continues until one day Sam calls and says he won’t be coming to work anymore.
Now what? The months or sometimes years that ensue are filled with countless searches to find Sam’s replacement. Meanwhile, what was once a lucrative service for the restoration contractor has become a meaningless service filled with quality issues and customer complaints. Not only will the company expend all its profits in a perpetual search to find Sam #2, but they will have to spend even more to gain back the referral sources who have now taken their business elsewhere.
If this situation sounds familiar, you’re not alone. Today, just about every contractor in the country will openly complain about not being able to find good help. They will blame the economy, the job market, the competition, the government, immigration, unions, and even the millennials! Why not? We blame the millennials for everything else!
Fortunately, the solution to this dilemma is not as daunting as it might seem. Employee succession planning does not require a great deal of capital resources. There is no secret sauce or proprietary algorithm. It only requires a commitment and a whole lot of common sense.
It all starts with standardizing the company’s service delivery process. You can think of this as the company’s recipe for successful projects. We can’t even begin to think about the ingredients (employees) until we know what we are cooking and how we are cooking it! Now, I will admit that there are only so many ways to dry, clean, and deodorize buildings. However, even small degrees of variance in service delivery can have a big impact on the results. If you don’t believe me, try eliminating the baking powder from your pancake batter some Sunday morning.
Process standardization is the key to understanding the employee needs of the organization. The number of employees and skill can only be determined when processes are executed with consistency. I realize this is a departure from the current state of the union where most contractors are just trying to do the most with what they have to work with. However, starting with the end in mind—even with limited resources—still yields greater results than the contrary.
This is where the finer points of employee succession planning come into play. Once processes have been standardized, performance as it relates to the desirable outcomes becomes easy to observe. And, areas for improvement relating to skills by position stick out significantly. Observing this allows management to map out the necessary labor force qualifications that match the functions being performed. It also allows them to identify qualifications that are not necessary to successfully execute the operational activities.
Now, by understanding what is needed and not needed at various stages of production, an inventory of labor positions can be created to fill the needs. This can be accomplished by creating a tiered job description system with a corresponding progressive wage scale. This would include various “levels” of technicians and pay ranges for each. Specific skills are outlined at each level, giving employees the opportunity to advance by strengthening and developing their skills. The graphic below illustrates this model.
Now that the model is set, based on standardized processes, the system can be complemented by the implementation of an apprenticeship program where high-level employees train and coach lower-level employees. Respected author and business advisor Ram Charan makes a compelling case for the effectiveness of apprentice programs in his book, Leaders at All Levels. The most convincing of which is the employee’s ability to take charge of their own professional growth. This creates commitment and depth of skill, while improving employee retention. All of which are important elements to mitigating the risk of the company being dependent upon only a handful of key employees.
Positional succession planning initiatives such as these should become standard practice for any organization that relies on a direct labor force, because the battle for skilled labor is raging and the stakes are high for service businesses like restoration contractors. In an industry that has traditionally been focused on technical performance improvement, the winners are no longer going to be determined by those who can dry faster, clean better, or deodorize more effectively. The winners will be determined by their ability to attract, grow, and retain talent at ALL levels of the organization.
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