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Employee Retention of Hot Topic

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Employee Retention of Hot Topic
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Pratik Kukreja
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Employee Retention of Hot Topic - April 12th, 2011

Hot Topic (NASDAQ: HOTT) is an American retail chain specializing in music and pop culture-related clothing and accessories, as well as licensed music on CD. As of April 2008, Hot Topic had 688 locations in the United States, six stores in Puerto Rico, and two in Canada. The majority of the stores are located in regional shopping malls.[3] The first Hot Topic store was opened in 1988 by Orv Madden, who retired as CEO in 2000 and was replaced by Betsy McLaughlin, who helmed the company until 2011. Lisa Harper recently assumed the position of CEO in March, 2011. The company went public and began trading on NASDAQ in 1996. In 2006, Hot Topic was placed 53rd on Fortune 500's Top Companies to Work For list.

The growing labour shortage in Saskatchewan is showing up in a couple of different venues, and with results that are equally dissimilar.

In talking to a number of manufacturers around the province, the labour shortage that has dogged them for much of the last decade has taken on a new complexion. In addition to the challenges in attracting skilled tradespeople to their workplaces, the degree of poaching by other companies, primarily from outside Saskatchewan, has risen to unprecedented levels.

Traditionally, the conversations with manufacturers on this topic focused on employee attraction. The retention issue ranked as more of an afterthought. That batting order has been reversed as shop floors throughout the province have been increasingly targeted. Employee retention is now the hot topic.

It's little wonder when you consider this scenario. A large, Alberta-based company comes knocking on the door, targeting a group of skilled tradespeople, all of whom are in their mid- to late-20s. Not only do they dangle the prospect of moving to one of the world's hottest employment markets, they also start tossing out the idea of six-figure incomes. We can tell these twentysomethings about the incredible cost of living and the challenges in even finding a place to live until we are blue in the face. But that has limited effect. Salary offers that can top the $100,000 mark have a remarkable effect on one's focus.

Given that the ability of a manufacturing business to increase wages is limited by the need of the firm to be competitive, it would seem that the competitive pressures from other firms would also be limited. And that would be true if the raiding manufacturers were from Saskatchewan. But that's not the case. The primary villain in this piece, from the standpoint of manufacturers in the province, is the group of companies operating in the oilsands area in Alberta. Given the rather large margins available with $60 per barrel oil, the issue is not the cost of labour, but the availability of it. This situation isn't about to disappear any time soon.

Gloomy as that may seem, we are sitting at the other end of the spectrum when it comes to attracting people to work at the University of Saskatchewan. In delivering his annual state of the university address to the chamber of commerce this week, president Peter McKinnon noted that in the past three years, the U of S had recruited 164 faculty members.

In the next three years, the number of faculty who will need to be hired will be in the order of 300. Demographic forces including an aging workforce, resulting in a surge of upcoming retirements, means the university will be out in the marketplace with other schools fighting over the limited pool of teaching talent.

But within this environment, Saskatchewan is a highly touted workplace, a picture that differs markedly from our status within the industrial sector. When it comes to being the scene of the action, the U of S has carved out an enviable position. It has become a leader, rather than trailing the pack. The synchrotron and the potential for Intervac, to cite just a couple of examples, offer an effective and sharp-edged message -- this is the place where things are happening. In this regard, scientists are no different than welders. They want to be right in the middle of the action.

So on one front, within the university environment, we are well-positioned. On the other, within the industrial sector, we are under severe pressure. That makes the solution very challenging, as one size does not fit all.

In order to address the pressure to retain skilled tradespeople, we may have to look at tiered corporate income tax rates and perhaps the same for personal income tax rates. If our economy cannot compete with oilsands' salaries, the only solution may be to create the needed room to be increasingly competitive on the net income side.

Although it can be hard to notice sometimes, the economy is getting better. And, as more IT jobs become available (which they are), holding on to key staff is once again becoming a key issue in every CIO's life.
And, according to Robert Half Technology's most recent survey, more than half (58%) are taking the issue seriously enough to put it on their priorities' lists. That's because keeping employees on board needs to start before the economy takes off, said Melissa Maffattone, who runs Robert Half's consulting business in southern Florida.

The national poll included responses from more than 1,400 CIOs from a stratified random sample of U.S. companies with 100 or more employees. It was conducted by an independent research firm and developed by Robert Half.

For CIOs interested in maintaining the quality of their current workforce, the time to start working toward retention is now, she said. CIOs need to start looking at things they haven't had to pay as much attention to over past couple of years; thing like compensation.

Also, if it becomes an employee's market like it was in the dot-com days, CIOs will have get creative again. Right now, most in IT are just happy to have jobs, but modified compensation packages may be on the way again. These may include old standards like stock options and more flexible working schedules, but kudos and other non-tangible benefits such as career-path training programs are also very good ways to keep an employee from jumping ship for just a few dollars more a month, she said.

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"When you look at the entire compensation element, companies need to be re-evaluating their salaries frequently because we're seeing change and certainly month-to-month it can change," said Maffettone. "Companies need to go back to looking at direct compensation but going beyond it."

Of course the job rebound is slow and, depending on what part of the country you are in or in what industry, employment trends may be better or worse. But, overall, things are heating up.

"We're very far from the employee driven market that we saw in the dot-com and the late 90s," she said. "There's still a lot IT professionals unemployed but  [w]e're seeing a lot of highly skilled candidates that are really weighting multiple job opportunities at any given time."

Other ways to keep your employees on board include:

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Making it Personal: Customize training and career planning to each employee's strengths and interests. Does he or she desire a management track or more hands-on work developing applications?

Sending in Reinforcements: Many IT professionals have had to do more with less as a result of leaner workforces and budgets. Bringing in additional support and helping staff prioritize projects during busy times can circumvent stress and burnout.

Empowering Employees: Demonstrate trust in your employees by allowing them to implement their ideas and make strategic decisions.

Offering Praise: Acknowledge your team's contributions. Simple actions such as recognition during a staff meeting or writing a thank-you note can go a long way toward improving morale.

Money: A competitive compensation and benefits package sends the message to employees that you place a fair value on their work.

These are tough times for employers as you are looking constantly at your bottom line, you also need to keep an eye on your best employees. Employee retention is a hot topic and a recent report from Sterling Price (a human resource firm), is all in favor of employers conducting an employee survey. This enables you to find out what their likes and dislikes are in a non-threatening manner, all the while gathering pertinent information and in particular what the deal breakers might be. The upside of this is that you are letting your staff know that their concerns and kudos are being voiced and that ultimately, management cares.

Now that you have that data at your disposal, acting on it in a timely fashion proves to those employees that their comments have been heard. By implementing an employee recognition and/or loyalty program, it only serves to reinforce that management is concerned about the overall well-being of their staff. Without having to constantly deal with employee turnovers, a more synergistic team develops naturally.

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