Western wisdom

by 25 Nov 2008

Unwanted staff departures can dampen the spirit of the festive season. But thats not the case for some smart West Australian business leaders despite operating in Australias tightest labour market

This month I want to look at how staff attrition can be anticipated and avoided after the seasonal incentives have been handed out. Of course, staff attrition is not just an end-of-year problem but many CEO Institute members do report spikes at this time.

I turned to our members in Western Australia for advice on reducing staff attrition. Who better than those working in Australia’s tightest labour market?

John Miniello is managing director of the Perth-based engineering business Centrix Group, which competes for blue-collar workers such as welders and fitters. He believes that reducing staff turnover starts with recruitment procedures. Miniello’s rules of hiring include:

• Scrutinise the prospective employee’s employment record. If they have a history of rapidly changing jobs, they will probably do the same to you. And that will cost you thousands of dollars in orientation, training and administrative costs.

• Don’t be tempted to go soft on those with bad employment records because you think you can fix them. Miniello’s experience is that patterns of unreliability or attitude problems eventually re-emerge.

• Don’t choose people who live too far from the workplace. As soon as they find a similar job nearer to home, you will be spending on employment ads again.

• Some demographic profiles are better than others. A 40-year-old welder with a family is much more likely to stay than a 20-to-25-year-old with no qualifications.

Miniello’s hard-nosed approach to hiring is purely pragmatic – as is his management of the workplace environment. Once you have good people, you need to keep them happy and focused. He speaks with great wisdom about what keeps workers with you and not the competition. His key tenets are:

• Create a genuine team spirit by treating people like equals (“You can’t fake treating people as equals. If you are an autocratic leader, it will eventually show.”)

• Money speaks louder than words. Miniello divides 10 per cent of company profit evenly between all staff, including the CEO.

• Relax. On one Friday each month work ends early and Centrix throws a barbecue for the workers. Small gestures can build great loyalty.

You might think that rural WA would be an even harder place than Perth to attract and keep the right staff. But that’s not the case for CEO Institute member Paul O’Meehan. He runs a seriously big agricultural enterprise near Borden, 100kms north of Albany, raising 8,000 to 10,000 beef cattle and farming 8000 acres of wheat, lupins and canola on his property. But O’Meehan has not had to seek staff for the past three years. How does he do it?

He has a clever strategy of psychographically matching people with his workplace before he hires them. For example, he seeks out those who actively want a rural lifestyle. He then applies some gum-leaf financial handcuffs that include accommodation, utilities, use of a beach house at Bremer and a generous contribution to boarding school fees for the secondary school children of permanent staff. (People with secondary school kids want them exposed to the broader world.)

O’Meehan knows that in remote areas family and social connections are essential for long-term employment stability. He encourages staff members to get involved in clubs and groups in the local Borden community – even if it takes some time away from work. Children are welcome to come and visit their parents when they return home from school in the afternoon. Monthly barbecues also keep staff, their families and management in close contact.

Steve Stanley is a WA-based consultant and CEO Institute Syndicate Chairman who runs the Centre for Professional Excellence. He neatly summarises the need to align organisational goals with staff members’ personal goals. “I haven’t seen a blanket reward system that works. There is no substitute for managers at the supervisor level knowing and understanding each employee’s personal vision for their life. When company vision and employee vision are in sync, you have a powerful synergy.”

Wise words from the West.

From all of us at the CEO Institute … have a safe, happy festive season.

By Ken Gunn, Chairman and CEO, The CEO Institute. Email: institute@ceo.com.au. Web: www.ceo.com.au.