Back in March I wrote this post, which expanded on a point made by Marisa Keegan at Fistful of Talent to argue that employers should draw a line in the sand and hire for attitude and fit over skills.  The justification for doing so is a greater tendency for your employees and teams to create customer evangelists who can increase your repeat business and referrals.

This reasoning was reiterated in an unlikely place: a guitar magazine.  Last week I picked up the September issue of Guitar Player at my local grocery store, and in it I found the following poll and results:

In the ranking of the best qualities for fellow band members, GP readers – whom you can think of as entrepreneurs (bandleaders) and independent contractors (musicians seeking live gigs and session work) – rate team building capacity above skills by more than 5 to 1.

Does this shift your thinking when it comes to recruiting to cultivate highly engaged employees, especially when industry is the variable?

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Earlier this month I shared data from our 2010 Top Small Company Workplaces employee engagement research which showed that the 20 winners of our award this year had better (which is to say, lower) average 2009 turnover than the 20 finalists.  But how do the winners compare to their industry?

From the preliminary research we’ve done into this, they have better turnover than their industries – in some cases dramatically lower.  Here’s a table that shows how this breaks down among seven of our 2010 winners, based on the latest (2009) industry benchmarking data:

What’s our takeaway from this in terms of cost savings?  Well, given that…

• These two sources say that the average cost to replace a U.S. worker is $17,000 (this obviously includes the whole spectrum from entry-level staff through managers and executives),
• The seven firms above had average 2009 turnover of 11%, 6% of which was voluntary,
• Average turnover for the industries of these seven companies is 23%, and
• The seven companies had an average of 188 employees in 2009

…if these organizations had double the turnover they actually had to match their industries, you could expect that their voluntary turnover should have been double as well – 12% instead of 6%.  This share of their average workforce works out to slightly over 11 full-time employees.  If you accept the average, per-employee replacement cost of $17,000, that works out to an average annual savings, based on better-than-average turnover, of $187,000.

That’s a significant payoff of employee engagement in my book.  It’s one of the reasons these firms are so intentional about their people practices.

Related: This Ask An Expert column on our website, which discusses in more detail the costs of turnover, contains a retention quiz to help you see if your finger is on the pulse of your organization.

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Despite this disadvantage, however, on Small Business Trends today, Case Western Reserve University Entrepreneurial Studies Professor Scott Shane shares research from ADP which finds that while the number of people employed in organizations with 50 or more employees has fallen compared to the percentage in December 2000, that percentage is over 100% for firms with 1-49 employees.  In other words, as Shane writes, the jobs trend is better at very small establishments.

This is why groups such as the Ewing Marion Kauffman Foundation have been urging policymakers to put more support mechanisms in place for very young businesses.  Based on past recessions, it’s a fact that many people who have been laid off, and/or who elect to leave their employers in a "Who’s next?" workplace culture, will form new businesses to strike out on their own.  Right now we’re also in a climate in which, spurred by parental support and advances in technology translating to low overhead, an unprecedented number of young people are forming small ventures.

When you combine ADP’s research with the SBA’s findings that over the last 15 years, small businesses have generated almost two-thirds of the net new jobs, it seems imperative to support the formation of startups, as well as their growth.  Winning Workplaces is focused on the latter as it pertains to activities for employee engagement and employee retention tips for leaders and managers.

Related: In February, when the economy was looking a lot more sluggish on the jobs front, I reported that over 50% of our Top Small Workplaces were hiring. See which ones here.

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In Winning Workplaces’ latest IDEAS newsletter on employee engagement and team building strategies in small firms, we wrote a feature on the "Move Your Money" movement after we sent a survey on it to registered users of our website and others in our network.

We listed selected qualitative feedback of our 172 respondents to the question, What do you think of this movement’s potential to help small businesses grow, and the impact it will have on the U.S. economy?  Based on the feedback, we then assigned an "impact level" rating of Low, Moderate, and High.

In our survey we also asked respondents to list their state.  This enables us to sort responses to the above question by region, maintaining the impact level rating of each piece of feedback.  The visualized data on this was something outside the scope of our original article, due to length, so I present the data here, as shown on the U.S. map below that’s been segmented into regions:

Note: The majority of responses are from folks based in Illinois, as that’s where we’re located and do most of our on-site organizational work.

Even though for balance we included an equal share of "Low" impact level responses in our original article, compared to "Moderate"- and "High"-level responses, when we review all responses by geographic region, we see that the West just barely registered into the "High" level area.  The rest of the country – again, based on our survey sample – is squarely in the "Moderate" zone.

The takeaway here is that while we noted in our newsletter article that less than a fifth of respondents have moved their business accounts from larger to smaller banks, or know another business leader who has, all of them believe the movement has the potential to make at least a moderate impact on small business, and economic, growth.  Those in the West believe it will have a greater impact.

Related: Two of the small firms we recognized for seeing a payoff of employee engagement are on the Move Your Money list.  See which two here.

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Read more on PR Newswire via Yahoo! Finance

Incoming search terms for the article:

• comcast cares
• Comcast Cares Day

I don’t know if I agree with this assessment.  While it’s certainly important to watch what the closest competitors in your space are doing, after taking in marketing lessons from the likes of Seth Godin I liken business much more to sports like golf, where ultimately you’re competing with yourself, than to football or basketball.

Whether managers are assessing their supervisees’ performance relative to their goals, or everyone comes together in a regular meeting to open up the books to see how the company is doing on expenses and revenue compared to the benchmarks leadership has set for the company, competing with yourself can be just as good a motivator.

Employee engagement and workplace team building certainly factor into this question.  For one thing, competing against yourself in the ways I mentioned above can prevent the business from having to deal with possible litigation that might arise from brand vs. brand sniping via advertising, or even from employees dropping unfounded, negative comments about their rivals on review websites like Yelp.

Next Step: Read the full BNET article on Steve Jobs’ leadership style where competitors are concerned, and then drop me a comment below with your thoughts.  I’m very interested to see what you think here.

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