Why investing in employees matters more than ever

In late 2020, Robert Half’s Paul McDonald delved into the hiring outlook for 2021. The second part of that conversation addresses the ways organizations can keep those already on staff during COVID-19. McDonald, Robert Half’s senior executive director, says the businesses that already had strong culture in place were better equipped to adapt to COVID-19. He offers advice for managers, details on their retention concerns, and insight into what employees are looking for beyond flexible work arrangements.

What you’ll learn from this episode:

• The reasons nearly 90% of senior managers are worried about losing talent.
• The steps companies and managers can take to show that they value employees.
• Why McDonald says company culture is more like an ocean liner than a speedboat.
• The types of nonfinancial benefits workers are seeking in the absence of raises.
• The steps employees can take to make themselves more marketable.
• McDonald’s thoughts on what office work might look like in 2022.

Play the episode below or read the edited transcript:

To comment on this episode or to suggest an idea for another episode, contact Neil Amato, a Journal of Accountancy senior editor, at Neil.Amato@aicpa-cima.com.

Visit the Global Career Hub from AICPA & CIMA for help with finding a job or recruiting.

Transcript:

Neil Amato: In late 2020, Paul McDonald of Robert Half joined me, Journal of Accountancy senior editor Neil Amato, to talk about the 2021 hiring trends and salary negotiation advice on the JofA podcast. This podcast episode is the second half of the conversation with McDonald, on the role of organizational culture, the top worries of senior managers, and what office work might look like in the future. Here’s the conversation.

Why are senior managers — I guess you have a survey on this, some data on it — worried about losing employees? And what are they doing about that?

Paul McDonald: Yeah, we put together the salary guide based upon our placements. We are in touch with clients that we service, and we’ve been doing this since 1950. But when we put together the data, we realized that we were bridging pre-pandemic with pandemic data. So, we went out and we wanted to talk to senior managers with a survey about what’s on their mind. And what came back was, 88% of the senior managers are worried about losing top talent; 47% said the reason for their concern is employees are managing heavy workloads and on the brink of burnout. When you think about what these existing and remaining employees have seen and been through, in the past number of months — and this survey was done June and July, so we were a few months into the pandemic — you look at these employees and they’ve seen people be furloughed, they’ve seen colleagues be let go.

They’ve have been working from home, they’ve been given new challenges; they’re trying to meet the demands of work/life balance. They’re not used to working at home, with all the responsibilities, but also working through a video chat with colleagues. The well-being is always a factor that all employers are concerned about, but, in this instance, seemed like everybody’s well-being was being challenged. So, they were worried about these people making choices that “Maybe I am going to leave and sit out for a few months. Maybe I will collect unemployment,” or, “I don’t need to work, because my spouse is working. Maybe there’s just too many things that are being thrust upon me at the same time.”

So, I think that’s where, overwhelming, almost nine out of 10 of the senior managers were saying they were worried for their employee and their top talent. So, that’s how we looked at it, and I can understand that, and we’ve seen it. And we’ve seen the pivot from management, and of all areas, really pay close attention to the well-being of their employees, encouraging them to take time off. Even though you can’t go many places, take the time off, refresh yourself. What are you doing to take care of yourself? I’ve seen that tremendously with the clients and the companies that I’m speaking with.

Amato: Yeah, and I think that stressing, “You should be taking care of yourself,” and making sure that managers are checking in, regularly, with their direct reports, and not just saying, “How are you?” and moving on, I guess that’s kind of a company culture. The ones that are realizing that’s important are the ones that have good culture. And where I’m going with that is, if you didn’t have that culture before, can you start it now?

McDonald: Most definitely. It’s never too late. Culture doesn’t move like a speedboat; it’s more of a cruise ship. It’s more of an ocean liner. However, you have to start. And the leaders are the ones that — senior-most management — are the ones that set the pace. We’ve seen companies that were thrust in the pandemic and it was a hard-work, hard-charging environment, where those astute leaders, those astute CEOs and COOs and leaders were immediately thrust back into, “OK, what are we going to do to take care of our employee base, the ones that are here, the ones that are remaining?” They opened up with strong communication on a regular basis, town halls, through video.

They opened up with strong written communication. They talk the talk and walk the walk, meaning, they took care of themselves. They were encouraging individuals to get out from behind the computer, outside, if they could, exercise program, walks — obviously maintaining social distancing and face masks where required and encouraged, but they were really setting the example, in every aspect. They were delivering good news as well as bad news, frankly. This all — again, back to your question is — this sets the pace for what the culture is. Culture is moving all the time. And if it’s consistent with the communication, consistent with leading by example, delivering good news, bad news, then you can maintain morale, you can maintain best you can with individuals.

And also, one-on-one check-ins have been more frequent. I mean if you haven’t had that in the past, and all of a sudden you have a supervisor that’s checking in [with] “How is it going?” conversations, it can be a little off-putting at first. But it becomes more real after a while. And we’re finding that the employers that are leading with empathy, strong communication, flexibility, to make sure that the employee knows that, “OK, we understand that you’ve been facing new challenges at home. As long as the work gets done” — this is an example of a conversation — “As long as the work gets done, it’s on time, and it’s complete, please take a break when you need it.” Another thing that we’ve seen that’s been happening with the culture, that leads to good culture, is encouraging windowed working.

Where it could be 8 to 10:30, take a break for an hour and a half or two, come back — as long as you get your eight hours in, if that’s what’s required, or 10 hours in, if that’s what’s expected. Make sure you take consistent breaks and take care of yourself. Those are really things that are leading to great culture and some of the best practices that I’ve seen that were developed on-the-fly, in many instances, that this was new for companies, or it was just being reinforced in a different method, for companies that did have these best practices prior to the pandemic.

Amato: You mentioned communicating bad news, and obviously it’s going to be tough for any company to go through 2020 and not have to pass on bad news. Some of that is, “Hey, we’re not giving raises,” or, “We’re cutting expenses. You’re not traveling to this conference,” or whatever. What are the employees looking for, in the absence of raises?

McDonald: Employees are looking, in the absence of compensation increases or even maintaining — because some of have had to take reductions in compensation — they’re looking for nonmonetary benefits. One, besides culture, besides frank and honest communication, good news and bad news, they’re looking for opportunities to upskill themselves. So, are there training programs that are being offered by the organization that will help that individual with their current job, or even future jobs? So, if they’re not being offered by the organization, and paid for by the organization, are the human resources and learning and development individuals within the organization showing them a path to other outlets to get that training?

Because there’s a lot of training, out there, that is free and available, that is truly encouraging for organizations to encourage their employees to go and get. Is there a policy in place to reimburse? If it does cost money to take a course, is there a reimbursement policy? So, employees are looking for that, to help them with the upskilling aspect. And then the support that comes from learning and development individuals, internally, human resource individuals, training individuals to help them find the path to these areas.

Amato: How important is it, when companies are cutting expenses, to make sure they are setting aside funding for career development?

McDonald: Yeah, I think that one of the main reasons individuals do look for new jobs — this is pre-pandemic over my career in the recruitment and staffing industry — one of the main things is that they’re looking, “Where is my career going? What is the path? What’s my map look like, my career map?” And if there’s a lack of advancement, skill enhancement, learning new technologies, learning new skills, if that’s lacking, then that’s leading them to look for this new job. So, carry that forward to where we are today: Morale is, potentially, low; managers are worried about losing top talent. It’s incumbent upon organizations to make those investments, to help those existing employees upskill themselves, learn new things, if they want to retain them.

So, I’ve often been faced with the question, “Well, why would I as a CFO, why would I as a controller, want to invest, if I just know those people are going to leave anyway?” Well, maybe hold onto them and retain them a little longer, if you’re giving them the skills. You know, besides investing in the culture, investing your time in employee development from a hard skill standpoint, the soft skills and hard skills are so important. So, go ahead and make the investment, and you’ll probably retain people a lot longer. Because it is one of those areas — oh, and by the way, you’ll grow a great allegiance to your organizations, instead of not doing it.

So, I would highly recommend investing in the employees — they want it, they deserve it, and you’ll retain individuals longer. It’s very costly to replace, even in a pandemic it’s very costly, there’s a lot of time and effort to recruit individuals and train them. Keeping your existing staff is a lot easier, and making that investment will help you retain them longer.

Amato: What I’ve heard some CFOs say, it seems like it’s one of those jokes that makes the rounds at conferences, is, “What’s going to happen if I develop the employees and then they leave?” And then they say, “Well, the alternative is, what if you don’t develop ’em and they stay?”

McDonald: You have to measure the ROI, and the ROI that I’ve been able to measure is that investing in existing employees — either the ones that are remaining, not only the high-potential individuals; these are the existing employees — and giving them opportunity to prove themselves on projects and in new areas, usually creates a great morale within the employee base, and you hang on to them longer. And we have an old adage in many organizations, and this one included at Robert Half is morale is where it’s at. Morale creates culture, and culture retains employees.

Amato: Paul, thank you. This has been an excellent conversation. I’m going to close with this question. We’re recording, by the way, on Oct. 28, and maybe there’s too much uncertainty about what office work will look like in January or February. But I want you to look ahead just a little bit farther: What do you think the office looks like in 2022?

McDonald: Mm, 2022 — yeah, I don’t have a crystal ball today, but I do know that employees are still going to be in demand in finance and accounting. They’re going to need great IT skills. They’re going to need great soft skills. Technology is doing more earlier in everybody’s careers, so, therefore, students coming right out of campus need to have great soft skills, to be able to not only interpret the data but also present the data. They’re being challenged, too, because they’re doing it through the computer. Yes, there may be office work by 2022. What does that look like? I can’t tell. I can tell you that those that are reinventing themselves continually will have the best prospects for employment in the future.

And those companies that are investing in their employees, creating great culture from the top down, organizations that are doing reimbursement for coursework or upskilling are going to find that they’re going to retain their employees longer. I can’t tell you what compensation trends are going to look like, because I’m not an economist, but I do know that, usually, the individuals that we’ve seen that have invested in themselves, for instance, with a CPA, a CGMA, or some sort of certification, as well as volunteered for new projects within organizations, those are the individuals that are most marketable, internally as well as externally.

So, maybe not a crystal ball of 2022 that you wanted, Neil, but I think the new normal is going to be a combination of in-person working, as well as remote working. It’s an unprecedented time, and you’ve heard that many times. We’ve pivoted, you’ve heard that many times, but I do know that the organizations that really take a hard look at themselves — repeatedly, not just we’re setting sail in one direction — this is changing sometimes weekly. You know, we’ve had to really make adjustments, and it’s interesting, it’s challenging, but we’re starting to see some organizations really thrive in this new environment, and I think that that’s the new normal.

Amato: Paul, thank you very much.

McDonald: Thank you, Neil.