ag 1 source - emc presentation

Recruitment, Retention and Succession Strategies for Employers

Mike Smith - President – Ag 1 SourcePresented November 9, 2013 to:

Equipment Manufacturer’s Conference

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

Succession Planningcan happen once…

The most trusted and reliable recruiting firm in the agriculture industry

• 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

© 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



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

UnemploymentDistribution

© 2013 Ag 1 Source

http://www.bls.gov/lau/maps/twmcort.pdf

http://www.bls.gov/lau/maps/twmcort.pdf

Changes in Overall EmploymentIn 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.

Labor Force Statistics from the Current Population Survey – Employment Level- 25yrs and older www.bls.gov© 2013 Ag 1 Source


Reference – Bureau of Labor Statistics

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

The Education Component

© 2013 Ag 1 Source

Changes in Overall EmploymentIn 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 groupsWorkers 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


© 2013 Ag 1 Source

2005 2006 2007 2008 2009 2010 2011 2012 2013$40,000.00

$50,000.00

$60,000.00

$70,000.00

$80,000.00

$90,000.00

$100,000.00

$110,000.00 Midpoint Salaries by Year Midpoint of Seed DSM Positions

Midpoint of Agronomy Retail Positions

Midpoint for Seed Retail

Midpoint for Bio-science, Nutrition & Chemical

Notes**393 pieces of data were used for Seed DSM **624 pieces of data were used for Agron-omy Retail**31 pieces of data were used for Seed Re-tail**177 pieces of data were used for Bio-science & Nutrition

Compensation Trends


© 2013 Ag 1 Source

2008 2009 2010 2011 2012 2013$0.00

$20,000.00

$40,000.00

$60,000.00

$80,000.00

$100,000.00

$120,000.00

$140,000.00

$160,000.00

Midpoint of GM/ Sales Mgr Positions

Midpoint of Parts/Service Posi-tions

Midpoint of Sales Positions

Situation SummaryEmployers – 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. Solid Definition of your target2. Reducing Current Turnover3. Internal Communication4. Define your company’s Employee Value Proposition5. Look at Performance & Behavioral vs. Skills6. Streamline the hiring process7. Find Flexibility 8. “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 Description-Gone -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



Gro

wth

& Im

pact

Time

28%

• Over Time, an employee’s contribution begins to peak and then falls off• Somewhere before the Peak, a Candidate Turns from being Passive to

an Active Job Seeker• This curve starts over with increased responsibility; i.e. a promotion

15% 9% 8%

Early-birds

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

An Employee’s Contribution

Passive Candidate Active Candidate

© 2013 Ag 1 Source

Candidate Decision Process


Urgency

Explorers Tiptoers Searchers Networkers Hunters & Posters

Super Passive

28% 40% 15% 9% 8%

Career Move Better Job Good Job Lateral Any Job

2011 LinkedIn Survey of 4,550 fully-employed professionals

Major Life Change

Low Urgency High Urgency

Job Value PropositionLow Job Value PropositionHigh Job Value Proposition

Passive Active


Passive - 83%

Active - 17%

Passive

Active

Explorers - 40%

Tiptoers - 15%

Super Passive - 28%

Active - 17%

Explor-ers

Tiptoers

Super Passive

Active

Source: 2011 Linkedin Survey of 4550 fully employed professionals

The Passive vs. Active Difference

© 2013 Ag 1 Source

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

“Explorers” and “Tip-toer’s” - (55%) of potential candidates that will listen to a compelling opportunity, one that could substantially improve their career.


Talent Surplusvs.

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

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

It’s all about the FutureIt’s about the Job

© 2013 Ag 1 Source

It’s not about the money!

2. To Reduce Turnover Look at Why Employees Leave a

Company


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

The most trusted and reliable recruiting firm in the agriculture industry© 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


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

Supervisor - 33%

Limited Growth - 17%

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%

}


Lack of RespectLack of leadershipFavoritismPoor employee relationsIncompetenceLack of Technical Skills

{

© 2013 Ag 1 Source

3. Communications– The common denominators to turnover

1. The need for TRUST. Expecting the company to deliver on it’s promises, be honest in communications, and compensate fairly

2. The need to have HOPE. Believing that you will grow, develop skills, and have opportunity of increased responsibility or career progress leading to higher pay

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



Lack of RespectLack of leadershipFavoritismPoor employee relationsIncompetenceLack of Technical Skills

{

© Ag 1 Source

Yes No0%

10%20%30%40%50%60%70%80%90%

100%

72%

28%

Is your employer pro-viding you with enough resources to learn the

business?

Yes No0%

10%20%30%40%50%60%70%80%90%

100%

71%

29%

Does your Employer share enough info so you understand the

direction?

Negative0%

20%

40%

60%

80%

100%

35%

Job Satisfaction

Communication is Key to Retention

Solution: Employees Need AnswersEmployees 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


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



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 Examples of Cons-Better Supervisor -Relocation cost-Strong Growth potential -Averse to change-Compensation up by 15% -Family / community-More Challenging opportunity -Intra company dynamics-High number of senior mgrs. -Unknowns cause concern-Better Incentives or Benefits -COL differences-Succession Plans

$____

$____

$____

$____

$____

$____

$____

$____

$____

$____

$____

$____

$____

© 2013 Ag 1 Source

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

6. Streamlining your ProcessRecruiting Process1. Know who you are looking for2. Focus on performance3. 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?

Interview Process1. Define your process before you

start the search2. Who will be involved3. Defined timeline4. Set candidate expectations5. Ready to go office setup (spatial

visualization)6. Know and demonstrate your

company’s EVP (non-compensation factors)

• 47% of all offers lost to competitors


7. Find FlexibilityConsider less Education or less Experience required and:• Add a Trainer or Mentor• Partner with Educational institutionsReconsider your Relocation program• Risk vs. rewards55+ age group• The only demographic group that is growing• Very important part of succession planning• Possible seasonal employment group


8. Become a Destination EmployerIA Retailer exampleExample of an existing business -• Reduced Turnover – Low turnover is much more attractive to candidates-9%• 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.The most trusted and reliable recruiting firm in the agriculture industry© 2013 Ag 1 Source

Destination Employer - ExampleTuition Assistance Program

• Tuition, books, fees, room and board and curriculum • Subject to :

1. Approval by Company Management2. 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 locationsThe most trusted and reliable recruiting firm in the agriculture industry

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 practice3. Create a rewards strategy that attracts and retains4. Make onboarding a personal process5. Communication is the key to retention

“People are your most important asset – Ultimately your customer will figure out where the best people are working…”

© 2013 Ag 1 Source

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