Longevity and Loyalty Programs are key decisions companies make to create an onboarding process which promotes the culture and values of the company. It is, unfortunately, a revolutionary approach to the hiring (and firing) process of businesses. In order to address the increase in turnover facing every industry, we decided to attack the problem from a different angle –retention.
When it comes to designing the future of work, one size fits none. Discovering success isn’t about a hybrid model or offering remote work options. Individuals and organizations are looking for more freedom. The freedom to choose the work model that makes the most sense. The freedom to choose their own values. And the freedom to pursue what matters most. We reached out to successful leaders and thought leaders across all industries to glean their insights and predictions about how to create a future that works.
As a part of our interview series called “How Employers and Employees are Reworking Work Together,” we had the pleasure to interview Ben Stewart.
Ben Stewart has more than 30 years of experience in executive roles and coaching. At Pinnacle Business Guides, Ben uses his real-world, hands-on experience running businesses to help other entrepreneurs build the right people, process and profits to create a business of legacy.
Thank you for making time to visit with us about the topic of our time. Our readers would like to get to know you a bit better. Can you please tell us about one or two life experiences that most shaped who you are today.
Growing up as a military son, I was able to see so much of the world and get a better world-view of how life, struggles and opportunities can shape a person. My parents were certainly not rich, but the life we were able to live in Europe and the U.S. was monumental to the hope I bring to the business world. I also saw how no matter the community, my family was involved in faith and fellowship with everyone around us. They engaged in life in such a way that it set me up for always placing faith and family first and business second. In fact, my dad is the one who physically defined through example the idea that success is built around who, not what.
After seeing my father serve for 26 years, I realized I wanted to do my part and serve our country. I think this is what shaped my approach to problems, my passion for discipline and my acceptance of situations that are out of my control. The truth is that we often cannot choose what comes our way, but we can choose how to react to the outcome. The people I served with all had their unique traits — some more difficult to work with than others, but it was about how we worked with one another. As I approach teams in the business world, I am not looking for how to fix a problem, rather searching for the opportunity for how to improve a team.
Let’s zoom out. What do you predict will be the same about work, the workforce and the workplace 10–15 years from now? What do you predict will be different?
The current hybrid work model of in-person and remote will remain the same. The expectation of having options to work from home or offsite is going to be with us for at least two generations. We don’t have the data yet for Generation Alpha, the generation following Gen Z, concerning their work habits, but we do know the dependency, familiarity and security that online connection has for the two generations making up the next workforce. We are seeing companies being forced to make creative changes in order to stay profitable in this current economy, and I believe it is a good exercise in adaptability. The speed of change over the past four decades has a significant half-life cycle, meaning that having a system and team that can adapt is advantageous and may be the difference between thriving or no longer being in business.
What I predict will be different is the employee-controlled market will eventually come to an end. With geographical limitations almost becoming obsolete, some of the pain associated with changing jobs is removed, creating a crunch on employers to solve the labor shortage. In the next 10–15 years we will see the pendulum swing back into an employer-controlled market which could potentially negatively affect business cultures. While many employers are trending towards signing bonuses and incentive and perk programs, the long-term play in the hiring space will hurt the onboarding experience as the market changes.
What advice would you offer to employers who want to future-proof their organizations?
Hire, fire and promote off of core values. The quicker companies go to a Business Operating System, the better their employee engagement, longevity and satisfaction will become. Getting the right people on the team who know what their strengths are is the center of every successful business. The further we get down the path of a hybrid work model and economic slowdown, the greater the impact of having a team that is centered around the company’s core values. Jim Collins made this mentality a popular discussion with business owners, but it is now time to invest in people — invest in their growth, clarity of role, the company’s culture and protect it like your life depends on it.
In the music industry, we call this decreasing the distance between the stage and the audience. What are the decisions we can make to close the gap between employers and employees? With studies revealing a deficit in conversation between management and the managed, a system of consistent and open relationships will close the gap. That means having frequent discussions with employees about their performance and their cultural fit. It means creating opportunities to coach employees towards their growth and their success in the company. It also means investing in hearing what they have to say.
Another big piece of advice I offer is to automate. With labor shortages, the same technology that makes working from home a possibility will end up replacing entry-level positions. In my coaching, we are finding most of our companies exploring and investing in automation that in some cases replaces 15 jobs across three shifts of a manufacturing plant. In times of job shortages, this would be immediately devastating to our economy. However, in a labor shortage, we are setting our economy up for one of the biggest recessions and highest unemployment in our nation’s history. It is easier to automate roles that you cannot hire for than to release an employee because of automation.
What do you predict will be the biggest gaps between what employers are willing to offer and what employees expect as we move forward? And what strategies would you offer about how to reconcile those gaps?
Flexibility and finances. Too many businesses are holding onto the “standard” of wages. This will continue to widen the gap between the expectation of a potential employee and the employer. However, companies willing to take a deeper look into what the labor shortage and employee turnover is costing them, and make a difference, will be in a great position. At Pinnacle Business Guides, we helped a company tackle its employee turnover rate with simple math.
The company has a 32% turnover rate at an annual cost of $875,000.
The goal is to reduce the 32% turnover rate by 65% to 11% through financial decisions that include:
- Raising the hiring wage by 30% (20/hr to 30/hr).
- Adding a signing bonus (5% of pay).
- Adding a larger loyalty bonus (15% of pay) at 18 months.
- Investing in culture with a CPO hire (Chief People Officer or HR director).
The total estimated cost of the plan ends up being $405,000 with expected savings of $260,000.
The actual savings ended up totaling $350,000 with the actual reduction of turnover to 8%.
This strategy is multifaceted:
- Get on an operating system to run your business instead of it running you.
- Solve the people part of your business.
- Stay centered on the purpose of why you exist and don’t back off.
- Create the playbook that gives you the systems and goals to execute.
- Evaluate the performance and adjust accordingly.
We simultaneously joined a global experiment together last year called “Working From Home.” How will this experience influence the future of work?
Working from home has allowed companies to attract the largest generation of the current workforce. It has also created opportunities for greater dialogue, caused an inclusive dependence on a multi-generational team and allowed for some business costs to be decreased.
While there were many positives, we have yet to see the effects of working from home on mental health and company culture. We have seen suicide rates increase and the dependence on mental health care is becoming more prevalent in the workplace. We are also seeing a greater blurring of the lines between work and home-life balance.
We’ve all read the headlines about how the pandemic reshaped the workforce. What societal changes do you foresee as necessary to support a future of work that works for everyone?
Mental health resources will need to be prioritized now more than ever to ensure employees are provided with the help they need to be successful in their roles. The pandemic has affected people in different ways, and it’s important to invest time to check in with employees and have the necessary resources in place.
What is your greatest source of optimism about the future of work?
Culture still wins. No matter what changes happen in technology, working from home, economic changes or benefits, it all still hinges around culture. Everyone wants to feel like they matter and belong to something significant. As companies invest in creating a culture that supports growth, gives clarity of roles and allows for feedback and input, they will experience an unstoppable work environment.
Our collective mental health and wellbeing are now considered collateral as we consider the future of work. What innovative strategies do you see employers offering to help improve and optimize their employee’s mental health and wellbeing?
Coaching strategies for departmental levels. We are seeing a trend in bringing a business coach for operating systems, as well as employee and departmental development. Employers will need to start seeing the Return on Investment for investing in their people beyond pay raises and flexibility.
Moreover, closing the gap between employers and employees will require frequent, accountable, and relational components of how managers are running their departments.
It seems like there’s a new headline every day. ‘The Great Resignation’. ‘The Great Reconfiguration’. And now the ‘Great Reevaluation’. What are the most important messages leaders need to hear from these headlines? How do company cultures need to evolve?
The most important messages leaders need to hear regarding the Great Resignation are to address culture by hiring the right people according to a company’s core values. Putting people in the right seats according to their unique abilities and giving them a clear understanding of their objectives is key. It’s also important to hold employees accountable to their goals and give them opportunities to share their ideas. This is the true holistic approach to developing a resignation-proof culture.
For companies to evolve, they need to address, invest and get creative with their hiring practices. They should eliminate turnover by developing a hiring system that breeds loyalty through signing bonuses, time-based benefits, anniversary bonuses and trade-off benefits.
Let’s get more specific. What are your “Top 5 Trends To Track In the Future of Work?”
1. The Labor-Force-Swing Pendulum
As we watch the business hiring market suffer with a talent pool, we have to realize that this is not because we have fewer people, rather the hesitation of the entry workforce to commit to loyalty. We see that hesitation because of the “church-hopping” mentality — in other words, going from company to company until an employee’s needs are met. For the first time in five decades, the employee has the upper hand on where they want to work, how much they want to get paid, what the workplace environment looks like, culture, benefits and a slew of options. This has created a great awareness in traditional business practices and challenged the “old” way of thinking towards employees.
However, with any extreme swing in business, we may see the pendulum swing just as hard in the opposite direction, giving too much power to the employer. My caution is to both the employer and the employee: focus on retention and loyalty. The longevity game, if won, is the equalizer of the labor shortage. Purpose-driven companies with good culture, executable plans and high levels of performance and rewards are not feeling the labor crunch. High-culture loyalty companies are poised to take on the market as leaders.
One example of this is seen in a company that I work with in Arkansas. They have created such depth in the rollout of their strategic vision and plan that they are trend-breaking their employee turnover rate at less than 4%. The atmosphere of their company is one of empowerment, teamwork, growth-minded strategies and open communication. Backed by systems that keep them on track, this company is seeing a waiting list on their job postings.
2. Longevity and Loyalty Programs
Longevity and Loyalty Programs are key decisions companies make to create an onboarding process which promotes the culture and values of the company. It is, unfortunately, a revolutionary approach to the hiring (and firing) process of businesses. In order to address the increase in turnover facing every industry, we decided to attack the problem from a different angle –retention.
What if we hired at a higher rate, higher benefits, higher accountability and higher standards of right people, right seats? Instead of lowering our entry-level requirements, revise them and raise them to pick future employees who reflect our core values but also make it inviting to stay, making “church-hopping” obsolete in our companies
How did we do that? We addressed loyalty and longevity on a mountain-valley principle with the following categories: bonuses, benefits, compensation, perks and investment. An example of that is when we looked at bringing in welders. What is the average tenure of a welder in the past 2–3 years? Our research showed it was 9.5 months! What would be our goal of recouping all our investment? 18 months. What are the welders looking for in pay and benefits in our area? A standard of $19.50 per hour with 1% signing bonuses and no benefits.
We then addressed the areas one by one with the goal of extending to 19 months (twice the time average):
- Bonuses — total bonus of 15% or 6K in bonuses broken down over milestones of time in job:
- 3% signing bonus, then a 6-month 3% bonus based off “minimum standards” to be ahead of the 9.5 month average.
- 12-month 3% anniversary bonus.
- 18-month performance bonus up to 6% or double their previous bonuses.
2. Benefits — most company benefits at entry-level positions are ignored because of the short-term mentality of those entering the position. What is the best benefits package and when to introduce it:
- Health — how much will be pay towards health (or a HSA).
- Retirement — we decided to throw away the idea that entry-level positions don’t value retirement and made it part of the Longevity and Loyalty program starting at 6 months, with yearly increments of matching investment.
- Other creative benefits to bring in at key times for the role tenure.
3. Compensation — what if we took the loss of turnover and invested 50% of it into employee pay and benefits?
- Instead of $19.50 per hour, we bumped it to $21.50 starting pay.
- Pay increases based on Longevity and Loyalty — 6-month increase to $22.50 per hour, 1-year increase to $24 per hour.
- Look at the market average and be at the top of that to be competitive.
4. Perks — what can we bring in that gives the “extra” incentive for Longevity and Loyalty?
- In our case, it was a 6-month “extra” week off with $500 towards a vacation.
- Get creative with perks that can include time off, company swag, reimbursements, even electronics (iPad, TV, etc.).
5. Investment — when the company culture views people as an asset, we want to invest in their growth. We looked at professional development as part of the investment we wanted to give.
- Professional development Lunch and Learns — bringing every department in for a bi-monthly leadership event with lunch provided.
- Investing in their personal life, finances, best business practices.
- Purposeful recognition — bring in rewards and peer recognition awards for those demonstrating core values.
- Adding educational benefits or reimbursement or certifications covered by the company.
- Encourage employee-growth opportunities for advancement; have a working accountability chart that allows them to see where they can grow with the company.
3. Customer Service Deficit
There are three major factors coming to customer service that will reduce its effectiveness:
- Decreased experience. As the workplace continues to transition to the next generations, we are seeing a higher than usual retirement of previous generations in the workplace. Thus, there are more entry-level positions in customer service now than ever. This deficit in experience will find its way in the reviews and ratings of companies.
- Lack of face-to-face interactions. With the increase of online interactions, companies are having to train simple behaviors like etiquette, opening and closing statements and customer-first principles. Some of these skills are being lost in a culture built around faceless responses and typed opinions.
- Labor shortage. We are facing the decision to bring in low-tech, non-skilled candidates into roles that require less schooling and experience. This is commonly the role that requires the ability to solve minor problems and answer support requests.
4. Automation Limiting Job Availability
The workplace is quickly changing with businesses having to solve the labor shortage with either slowing down production and execution, or creating solutions for unfillable roles. I am dealing with more companies with empty “seats” in their organization, not because of a lack of finances, but because of a lack of talent pool to choose from.
Companies are turning to automation to remove the dependency on entry level jobs and lower wage positions. What was previously not available because of a lack of technology is now available and affordable.
In one such case, we did the math around a hard-to-fill position on the production team. This seat was five roles in different parts of the production line. As we did the math for purchasing, installing and training on the equipment, we came up with a factor of 92 days of cost per role. That means that when we pull the trigger to bring in the automation, it will only be 92 days until the company has recouped their investment, giving them 270 days of free labor just in the first year of use.
We then looked at being able to move from two shifts to three shifts because of the efficiency, and lowered the cost of automation to 60 days and the increase of production by 30%.
What does this mean? It means that companies that are going to survive, are going to continue to be creative in solving the labor shortage and the Great Resignation. I believe this will push the pendulum faster to becoming an employer-market as well.
5. Culture Emphasis
The more we invest in culture and closing the gap between employers and employees, the better our retention, hiring and reputation will grow. Companies will need to keep up with the current conversations and culture trends. New generations will bring in a new set of needs and values — ones that may be more focused on employees feeling fulfilled by what they do.
I keep quotes on my desk and on scraps of paper to stay inspired. What’s your favorite “Life Lesson Quote”? And how has this quote shaped your perspective?
It’s a combination of two quotes:
The first quote is by Ronald Reagan: “There is no limit to what a man can do or where he can go if he doesn’t mind who gets the credit.”
The second quote is by Simon Sinek: “If we were good at everything we would have no need for each other.”
As a strategy coach, I get to see a lot of good, bad and ugly in business, but I have yet to see a company too far down a path that they can’t overcome if they are honest with themselves. This has motivated me to be the kind of coach who pours everything into a company and gains satisfaction in their success. My personal goal is to be the most influential person on the planet without anyone knowing my name. This ties back to the Simon Sinek quote, further proving our greatest investment of influence happens with people. I get to coach different sessions full of every emotion possible, but at the end of the day it feels rewarding to know we leave with a great plan, action points, unity and excitement every time!
We are very blessed that some of the biggest names in Business, VC funding, Sports, and Entertainment read this column. Is there a person in the world, or in the US, with whom you would love to have a private breakfast or lunch, and why? He, she, or they might just see this if we tag them.
Patrick Lencioni. I cannot say how many times I get to share the wisdom that I have gained from reading, watching and gleaning from Patrick. His wisdom is at the level where businesses, employees and their families will be impacted for generations to come. His willingness to be transparent, challenge others and still live a life of faith has inspired me to become the man I am today.
Our readers often like to continue the conversation with our featured interviewees. How can they best connect with you and stay current on what you’re discovering?
Email: [email protected]
LinkedIn: BenjaminStewart
Thank you for sharing your insights and predictions. We appreciate the gift of your time and wish you continued success and good health.