Interview with Mike Kahrer
Interviewer: Andrew Zezas, SIOR
Following is the transcript of a CFO Studio video between Andrew Zezas, CEO of New Jersey based Real Estate Strategies Corporation and Human Resources Executive, Mike Kahrer.
Visit www.CFOstudio.com to read about this interview and to watch the entire video interview.
Zezas: Hi, this is Andrew Zezas, your host at CFO Studio. I have the pleasure of sitting here today with Mike Kahrer, Human Resources Executive. Mike has some very interesting news to share with us about hiring and the jobs market for both executives down to middle market employees as well as new employees. Mike, it’s really nice to have you here at CFO Studio.
Kahrer: Thank you Andy. I’m glad to be here.
Zezas: Mike, before we started the interview, you shared some very interesting thoughts with me about challenges that are on the horizon, not the far horizon, but the immediate horizon relative to the old jobs market. Share with me again your thoughts.
Kahrer: That’s right Andy. You’re not going to believe this, but 60% of employees want to leave their jobs.
Zezas: Alright, you’ve got to give me more. Elaborate.
Kahrer: Well, we’ve had two difficult years. We’ve gone through the great recession. The stock market crashed. People lost 50% of their 401K balance. They lost money in their homes. There have been layoffs to the employees sitting next to them. Retirements have been postponed and promotions have been held back.
Zezas: But, you said there was a challenge coming. Everything we read, the recovery is kicking in. The recovery is finally starting to take hold. So, what’s really going on?
Kahrer: Well, optimism is up. You know, confidence is up- consumer confidence. But, the bottom line is that employees are still unhappy.
Zezas: They’re still unhappy. So, you and I know each other for a long time. You’ve been an HR executive for many years. Is this your opinion or is there hard data to back it up?
Kahrer: No, no, no. There’s a lot of survey data out there from Harvard Business Review, the Conference Board, the Society for Human Resource Management. One in three high potential employees, that’s employees that have the possibility to move up two or three levels or more within the organization, are saying that they’re not putting in their best effort.
Zezas: They’re not putting in their best effort.
Kahrer: They’re not putting in their best effort. They’re showing up for work, but they’re doing just what they need to do to get by.
Kahrer: Well, there’s some other data, too. Let me share before we go into why. 54% of companies in 2010 report that they’ve lost high performing workers.
Zezas: They’ve already lost.
Kahrer: Yes. As I said earlier, up to 60% of workers want to leave their company as soon as the economy improves.
Zezas: Alright, so now tell me why.
Kahrer: Well, during the recession, people were doing more with less. The less resources companies were fighting for survival. So, they lost their coworkers due to layoffs and that work, then they went on to them. Their managers were stressed. They were asked to do more and they didn’t have the resources.
Zezas: Managers were asked to do more with less. Employees were asked to do more with less. Everybody was doing more with less and productivity went through the roof.
Kahrer: Productivity went through the roof. Profits started to go up. You saw that. But, the bottom line is, the rewards and recognition that the employees expected weren’t there. And, 72% of employees leave their companies for not getting respected or rewarded.
Zezas: Respected or rewarded. And, rewards could be a pat on the back or it could be monetary reward as well.
Kahrer: It could be a pat on the back- monetary. When you’re not getting a raise for two years and your salary is frozen, they’re looking for the monetary rewards, especially when they see the company is doing better.
Zezas: Especially when the company is doing better, record profits, and when they’ve been putting in the time. Alright, so I get the picture. So, what we’re saying is a lot of companies are in danger. Go ahead.
Kahrer: They’re in danger of losing their talent.
Zezas: And we’ve got CFOs who are our audience here who are eager to find out what they should do. So, in the context of the role of the CFO, how do they extend the tide? How do they protect their assets?
Kahrer: Well, I’ve seen the CFO as becoming a strong partner with HR. In fact, I’ve always worked that way in the jobs that I’ve had. Finance and HR work as partners, ensuring that the assets of the company- the human assets of the company are protected. So, we’ve worked on things like reward systems and we’ve worked on things like talent management programs.
Zezas: Talent management. Okay. So, give me an explanation, talent management, because I’m not familiar with that term.
Kahrer: Talent management program is: you put together a program for an employee or a group of employees that lays out what their career potential is and what steps they need to take to move forward in their career. So, you can sit down with an employee and say, “Okay, you’re an entry level accountant, here’s what you want to be. You want to be CFO some day, here’s the things that you need to do, here’s the experience you need to get and additional training you need to take. Maybe you need to take operations to come back and become that CFO.”
Zezas: So, it’s a plan on a per employee basis. You might take into account education, on the job training, diverse experiences. Is the employee involved in creating the plan as well?
Kahrer: Oh yeah. It’s a collaborative effort. Once you design the program overall, then you bring in the employee, a collaborative effort, you map out for them…this is where you go with our organization.
Zezas: And what does this do? Obviously, I know what this does for the employee. It eventually makes the employee a better employee. But, what does this do for the company?
Kahrer: Well, for the company, you’re getting a better trained employee. You’re getting a more dedicated employee. You’re building loyalty and you’re retaining them.
Zezas: Do employees feel loyalty from the company now?
Kahrer: No. I think they’re losing loyalty because they’ve been worked hard and they’re not getting rewards or recognition.
Zezas: So, they don’t feel loyalty from the company, therefore, they probably don’t feel loyalty for the company.
Zezas: And, the kind of program you’re talking about, you called it a-
Kahrer: Talent management.
Zezas: Talent management program. It starts to mend that, I guess, and it starts to bring that loyalty back in full circle.
Kahrer: Sitting down and having a discussion with the employee, showing them that they’re valued, showing them they’re appreciated for all the things that they’ve done in the past and here’s where we can go in the future. Are businesses getting better? Here’s how you can become part of it.
Zezas: And, is the CFO the one who leads the charge with the program? Or is something they do in conjunction with HR?
Kahrer: Oh, it’s certainly something to do with HR. The CFO is going to lead it, but the HR is going to help do the pull through.
Zezas: And, this is an HR expertise that needs to be done in conjunction with the CFO.
Kahrer: That’s right because HR is the knowledge of learning the development programs that are out there. They can do the legwork when getting set up.
Zezas: Okay, talent management. I got it. It builds loyalty. I got it. So, what’s ahead?
Kahrer: Well, before we go to what’s ahead. Let’s talk about what else the CFO can do. We want to see employee engagement on a broad spectrum, throughout the organization. A CFO can do that through communication of where the company is, where the company is going, to the employees. Working with the CEO and working with other members of the management team to get that message out there, “Hey, we’ve gone through some tough times. Our business is getting better. Stick with us and it’s going to get rosier, it’s going to get better.”
Zezas: So, in terms of engagement, you call it employee engagement program, you’re really talking about communication.
Zezas: You’re talking about being transparent. You’re talking about good, bad, and ugly. And, communicating to your employees, here’s where we are, here’s where we think we’re going, here’s what it’s going to take. Some of you can be with us, some of you might not be, but here are the facts.
Kahrer: Right. If you don’t tell the employees what’s happening, they’re going to make it up themselves. And, when they make it up, it’s not going to be positive.
Zezas: And it’s wrong, it’s rumor. I got it. The best thing you can do is control the conversation, make it open, make it honest, and keep everybody together.
Zezas: Okay, I got it. So, now can I ask you what’s next?
Kahrer: Absolutely. Believe it or not, in a very short period of time, the war for talent will resume.
Zezas: War for talent! CFOs come on CFO Studio and tell us that there are no jobs, there are hundreds of CFOs looking for jobs. They can’t find positions and they used to find long-term positions. Now they find short-term positions. You’re telling me there’s going to be a war for talent?
Kahrer: Yes I am. Think back just a few years Andy. We’ve had conversations between us in which you couldn’t find talent for you organization. There was nobody out there. I couldn’t find talent in my organization. It just didn’t exist. Business was so good. Well, think about it. We’re going to have new technologies, we’re going to have new businesses popping up, and we’ve got the baby boomers now turning 65. They put off their retirements, their 401Ks are back, they’re getting social security, they’re getting Medicare, they’re getting more security. They’re going to start to leave so people will start to move up within the organization. They need to be replaced.
Zezas: There’s going to be a war for talent. Mike, I’m going to cut you off right there. We’re about out of time. I have a feeling we could talk for hours about this. I want thank you very much for being on CFO Studio. We’re going to invite you back to have another discussion with us.
Kahrer: Thank you Andy, it’s my pleasure.
Zezas: It’s a pleasure being here with you. This is Andrew Zezas, saying thank you for watching us here at CFO Studio.
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