High Attrition Rate: A Big Challenge

A Big Challenge Defining attrition: "A reduction in the number of employees through retirement, resignation or death"
Defining Attrition rate: "the rate of shrinkage in size or number"
Introduction: In the best of worlds, employees would love their jobs, like their coworkers, work hard for their employers, get paid well for their work, have ample chances for advancement, and flexible schedules so they could attend to personal or family needs when necessary. And never leave.
But then there's the real world. And in the real world, employees, do leave, either because they want more money, hate the working conditions, hate their coworkers, want a change, or because their spouse gets a dream job in another state. So, what does all that turnover cost? And what employees are likely to have the highest turnover? Who is likely to stay the longest?
Background of article
The IT enabled services (BPO) industry is being looked upon as the next big employment generator (Nasscom predicts 1.1 million job requirement by the year 2008). It is however no easy task for an HR manager in this sector to bridge the ever increasing demand and supply gap of professionals. Unlike his software industry counterpart, the BPO HR manager is not only required to fulfill this responsibility, but also find the right kind of people who can keep pace with the unique work patterns in this industry. Adding to this is the issue of maintaining consistency in performance and keeping the motivation levels high, despite the monotonous work. The toughest concern for an HR manager is however the high attrition rate.
In India, the average attrition rate in the BPO sector is approximately 30-35 percent. It is true that this is far less than the prevalent attrition rate in the US market (around 70 percent), but the challenge continues to be greater considering the recent growth of the industry in the country. The US BPO sector is estimated to be somewhere around three decades old. Keeping low attrition levels is a major challenge as the demand outstrips the supply of good agents by a big margin. Further, the salary growth plan for each employee is not well defined. All this only encourages poaching by other companies who can offer a higher salary.
The much hyped "work for fun" tag normally associated with the industry has in fact backfired, as many individuals (mostly fresh graduates), take it as a pas-time job. Once they join the sector and understand its requirements, they are taken aback by the long working hours and later monotony of the job starts setting in. This is the reason for the high attrition rate as many individuals are not able to take the pressures of work.
The toughness of the job and timings is not adequately conveyed. Besides the induction and project training, not much investment has been done to evolve a "continuous training program" for the agents. Motivational training is still to evolve in this industry. But, in all this, it is the HR manager who is expected to straighten things out and help individuals adjust to the real world. I believe that the new entrant needs to be made aware of the realistic situation from day-one itself, with the training session conducted in the nights, so that they get accustomed to things right at the beginning.
The high percentage of females in the workforce (constituting 30-35 percent of the total), adds to the high attrition rate. Most women leave their job either after marriage or because of social pressures caused by irregular working hours in the industry. All this translates into huge losses for the company, which invests a lot of money in training them.
If a person leaves after the training it costs the company about Rs 60,000. For a 300-seater call centre facing the normal 30 percent attrition, this translates into Rs 60 lakh per annum. Many experts are of believe that all these challenges can turn out to be a real dampener in the growth of this industry. This only raises the responsibility of "finding the right candidate" and building a "conducive work environment", which will be beneficial for the organization. The need is for those individuals who can make a career out of this.
All this has induced the companies to take necessary steps, both internally and externally. Internally most HR managers are busy putting in efforts on the development of their employees, building innovative retention and motivational schemes (which was more money oriented so far) and making the environment livelier. Outside, the focus is on creating awareness through seminars and going to campuses for recruitment.
Major Worries for the Industry • Reckless Start-ups- a vast majority of the 310 start-ups are headed for a dead-end (according to Nasscom). Their capacity utilization is less than one of the three shifts. Many of these companies that converted their empty basements and warehouses into BPO units or firms with $10 million-20 million VC funds that ran out of cash without creating anything more than white elephants. They have driven down prices to grab business, but have failed to deliver. They were always clueless about people, processes or technologies- the three key elements of the BPO business. • Poor Infrastructure- the industry has more to worry about than just reckless start-ups. Primary among those is infrastructure. While telecom networks are state of the art, getting a connection still takes up to three months. Unreliable power supply is forcing units to create their own back-ups. Roads are bad and airports are in dire need of repairs and upgrades. • High Attrition-another major problem is the high attrition and growth aspirations of the workforce. At least 60,000 of the 171,000 workforce change jobs every year. About 80% of them look for better leaders. Team leaders want to upgrade to supervisors, quality professionals or operations heads. The HR problem threatens to soon become grave. Good agents are becoming hard to find and with tardy infrastructure, big moves to the much talked about smaller towns will take longer. This means costs will rise making it difficult for small VC-funded companies to survive. Attrition rates
US 42%Australia 29%Europe 24%India 18%Global Average 24% * Source-Times News New YorkPurpose of Writing this Article
Staff attrition (or turnover) and absenteeism represent significant costs to most organizations. It is odd, therefore, that many organizations neither measure such costs nor have targets or plans to reduce them. Many organizations appear to accept them as part of the cost of doing business - a sign of increasing job mobility and decreasing staff loyalty perhaps, a matter to be regretted but just 'one of those things.' They add a sum in their budgets for 'temp staff' and 'recruitment' and forget about it.
However, it seems to be one of the areas in which HR can make a difference - and one that can be measured in quantifiable, financial terms against targets.
An attrition rate in call (or contact) centres has become legendary. Indeed, the attrition rates in some Indian call centers now reach 80%. This is an extreme figure but the average attrition rates in Indian call centers are up around 30-40%.
However, it is interesting to note that the attrition rates in India - and the costs associated - are so high that they can override the benefits of lower wage costs. While wages in call centres in Indian are less than one-eighth of those in Northern Europe, it has been reported that Hewlett-Packard have found the cost per 'ticket' (the cost of processing a query) has doubled "due to the inability of the staff to resolve customer queries efficiently because of language barriers and inexperience." It is said that this increased cost has made HP's move from Ireland to India "completely pointless," and that it can never recover the (substantial) costs of the move. It is further reported that GE Capital has moved a call centre back to Australia "after staff attrition rates of 70% wiped away any potential cost savings."
The issue is not with the quality or education of the staff - and still less with the investment in technology. It is simply attrition - people do not stay long enough to be taught or to learn the job. The staff may be cheaper but if they cannot do the job, what's the point? Managing attrition is not just a 'nice thing to do' in Indian call centres. It is the route to their survival.
Far from accepting attrition rates as part of the cost of doing business, it is surely something that all organizations should address, and equally surely it is an area in which HR can take a lead - measure attrition, seek its causes, set out solutions and target performance.
Components to be taken into consideration, while calculating attrition rate
I request HR professionals not to drive their own formulas to calculate attrition rate. In terms of numbers, attrition rate means:
Total Number of Resigns per month (Whether voluntary or forced) divided by (Total Number of employees at the beginning of the month plus total number of new joinees minus total number of resignations) multiplied by 100.
If calculating in monetary terms, it includes the following:
Costs Due to a Person Leaving 1. Calculate the cost of the person(s) who fills in while the position is vacant. Calculate the cost of lost productivity at a minimum of 50% of the person's compensation and benefits cost for each week the position is vacant, even if there are people performing the work. Calculate the lost productivity at 100% if the position is completely vacant for any period of time. 2. Calculate the cost of conducting an exit interview to include the time of the person conducting the interview, the time of the person leaving, the administrative costs of stopping payroll, benefit deductions, benefit enrollments. 3. Calculate the cost of the manager who has to understand what work remains, and how to cover that work until a replacement is found. 4. Calculate the cost of training your company has invested in this employee who is leaving. 5. Calculate the impact on departmental productivity because the person is leaving. Who will pick up the work, whose work will suffer, what departmental deadlines will not be met or delivered late. 6. Calculate the cost of lost knowledge, skills and contacts that the person who is leaving is taking with them out of your door. Use a formula of 50% of the person's annual salary for one year of service, increasing each year of service by 10%. 7. Subtract the cost of the person who is leaving for the amount of time the position is vacant. Recruitment Costs 1. The cost of advertisements; agency costs; employee referral costs; internet posting costs. 2. The cost of the internal recruiter's time to understand the position requirements, develop and implement a sourcing strategy, review candidates backgrounds, prepare for interviews, conduct interviews, prepare candidate assessments, conduct reference checks, make the employment offer and notify unsuccessful candidates. This can range from a minimum of 30 hours to over 100 hours per position. 3. Calculate the cost of the various candidate pre-employment tests to help assess a candidates' skills, abilities, aptitude, attitude, values and behaviors. Training Costs 1. Calculate the cost of orientation in terms of the new person's salary and the cost of the person who conducts the orientation. Also include the cost of orientation materials. 2. Calculate the cost of departmental training as the actual development and delivery cost plus the cost of the salary of the new employee. Note that the cost will be significantly higher for some positions such as sales representatives and call center agents who require 4 - 6 weeks or more of classroom training. 3. Calculate the cost of the person(s) who conduct the training. 4. Calculate the cost of various training materials needed including company or product manuals, computer or other technology equipment used in the delivery of training. Lost Productivity Costs
As the new employee is learning the new job, the company policies and practices, etc. they are not fully productive. Use the following guidelines to calculate the cost of this lost productivity: 1. Upon completion of whatever training is provided, the employee is contributing at a 25% productivity level for the first 2 - 4 weeks. The cost therefore is 75% of the new employees full salary during that timeperiod. 2. During weeks 5 - 12, the employee is contributing at a 50% productivity level. The cost is therefore 50% of full salary during that timeperiod. 3. During weeks 13 - 20, the employee is contributing at a 75% productivity level. The cost is therefore 25% of full salary during that timeperiod. 4. Calculate the cost of mistakes the new employee makes during this elongated indoctrination period. New Hire Costs 1. Calculate the cost of bring the new person on board including the cost to put the person on the payroll, establish computer and security passwords and identification cards, telephone hookups, cost of establishing email accounts, or leasing other equipment such as cell phones, automobiles. 2. Calculate the cost of a manager's time spent developing trust and building confidence in the new employee's work. Lost Sales Costs 1. Calculate the revenue per employee by dividing total company revenue by the average number of employees in a given year. Whether an employee contributes directly or indirectly to the generation of revenue, their purpose is to provide some defined set of responsibilities that are necessary to the generation of revenue. Calculate the lost revenue by multiplying the number of weeks the position is vacant by the average weekly revenue per employee. Conclusion: It is clear that there are massive costs associated with attrition or turnover and, while some of these are not visible to the management reporting or budget system, they are none the less real. The 'rule of thumb' appears to be very inaccurate indeed and, while it depends upon the category of staff, it is probably better to estimate around 80% of salary as a truer rule of thumb - and this will be on the conservative side. What does this mean? Well it means that if a company has 100 people doing a certain job paid 25,000 and that turnover or attrition is running at 10%, the cost of attrition is:
(Total staff x attrition rate %) x (annual salary x 80%) • 100 staff at 10% attrition means 10 people leave and are replaced each year. • A replacement cost of 80% of a salary of 25,000 means the cost of each replacement is 20,000. • The cost of turnover is therefore 10 x 20,000 or 200,000 a year. • The oncost to the overall salary bill is 8%. (Saving 8% of salary costs would make the average HR manager a hero.)

SIX STEPS TO A BLOCKBUSTER RESUME

A resume has one purpose – to market your skills, achievements, professional background, academic history, and future potential to a prospective employer. Much like a 30-second commercial, today’s resume must provide maximum data as quickly as possible, differentiate you from all other candidates, and be attractively packaged. Impossible, you think? Not at all. Writing a winning resume simply takes thought and planning. After all, you wouldn’t drive from Los Angeles to Manhattan without mapping the surest route. The same goes for your resume. By using the ResumeEdge© six-step process, you’ll gain perspective on your career target and the audience you need to reach, learn how to showcase your strengths, minimize your weaknesses, and produce a document with maximum punch. Of course, if you do need professional assistance, our certified resume writers are on hand 24/7 to provide expert, personalized guidance.

The ResumeEdge© Process

• Step One: Targeting Your Career and Audience

• Step Two: Formatting for Maximum Impact

• Step Three: Skill Set and Qualifications Summary

• Step Four: Accomplishments and Special Skills

• Step Five: Professional Experience

• Step Six: Education and Training
STEP ONE: Targeting Your Career and Audience You must have a clear idea of what you want to accomplish in your professional life in order to maximize the impact of your resume for your targeted audience -- the hiring manager or graduate school admissions director. Before you begin, ask yourself these questions. Are you: Making a lateral move? Seeking a promotion? Career transitioning? Pursuing admission into a graduate program?* For numbers 1-3 above, the most effective way to begin targeting your resume is to search openings that appeal to you on job boards (i.e. Monster, Hot Jobs. CareerJournal), internal company postings, or newspaper classifieds. With these in hand, you can highlight the qualifications you will need to be considered and the duties you would be expected to assume. Every match in terms of qualifications and experience will serve as key words** in your resume, as well as provide focus so that the resume can be tailored for your targeted audience. The more closely the content of your resume matches the content of these postings, the more likely you will be asked to interview. * Resumes provided for graduate school admission showcase your skills, professional experience, accomplishments, and academic history in much the same way as “job” resumes. The difference is that an admissions resume will focus on what transitions well to the classroom, not to the workplace. ** Key words include industry-specific jargon or acronyms (i.e. "generally accepted accounting principles" (GAAP) for accountants; "Certified Professional Resume Writer" (CPRW) for resume writers; "Series 7 licensing" for brokers; "initial public offering" (IPO) for investment bankers; "at-risk child" for social workers; "Level 2 Training" for physicians; "intellectual property law" for attorneys; "triage" for nurses; and nouns or noun phrases indicating qualifications or required tasks (i.e. general ledger, word processing, contract negotiations, benefits, payroll, closing (for sales people); catering services, new menu items, capacity planning (for chefs); logistics, quality assurance, advertising campaigns, product launches, staffing, training, orientations. Companies that employ scanners require a set number of hits on key words before the hiring manager will personally review the applicant’s resume. It is always wise to incorporate as many key words as possible into your resume.

STEP TWO: Formatting for Maximum Impact The moment your resume is opened by a hiring manager or admissions director, it must appeal to him or her on an aesthetic level, while accurately reflecting your industry or career goal. To do anything else is to relegate your resume -- no matter how brilliantly it is written -- to the rejection stack. In order to ensure that your resume receives the initial attention it deserves, it’s important to adhere to certain formatting guidelines, which include: Template and Font Choice Effective Use of White Space Prioritization of Data Template and Font Choice In all cases, templates and font choice should: Be easy to follow. There is no greater irritation to a busy hiring manager or admissions director than to receive a resume where data is presented in a haphazard or inconsistent manner. That’s why templates are used. An effective template will present company names, dates, job titles, academic information, and all other pertinent data in a clear manner, so that a quick glance will tell the contact person what they need to know.
But consistency in format isn’t the only point to consider. Templates should be chosen because they accurately reflect a candidate’s career or goal. In other words, a banker, accountant, or administrative assistant would choose a more conservative format than a graphic artist or interior designer. Nothing is more jarring -- or disastrous -- than to receive a financial professional’s resume written in italics or script with accompanying graphics. Be easy to read. Resumes written in bold text or italics are extremely difficult to read and project a lack of professionalism. The same goes for artistic fonts that resemble handwriting. It’s a common misconception that jazzing up a resume with these stylistic tricks will get the document read. On the contrary, the resume will get noticed -- and discarded -- within seconds. It’s not the font you use that attracts attention, but rather the resume’s initial appearance and the words crafted within it.
When in doubt about font choice, always err on the conservative side. Two good choices are Times New Roman or Arial in 11 points -- no smaller, or the text will be difficult to read. Effective Use of White Space There is no quicker way to get your resume ignored than to create a document with (narrow or nonexistent) margins, and block after block of uninterrupted text. No one wants to read a text-heavy document with sentences that run on for four or five lines. In today’s fast-paced world, you must get your point across quickly, with a minimum of words presented as bulleted sentences within special sections (i.e. Professional Experience, Education, Qualifications Summary), separated by well-placed white space. Think of white spaces as necessary pauses -- a chance for the hiring manager or admissions director to catch her breath, collect her thoughts, and digest (and appreciate) the data you’ve presented. Prioritization of Data Imagine you’re a hiring manager. It’s 7:30 on a Monday morning, and an important position needs to be filled in your company’s legal department. Over the weekend, 200 resumes came in from eager applicants all wanting to fill this one job. Most of the resumes are attractively formatted and use the appropriate font type. So far so good. But on closer inspection, most of the candidates have relegated their willingness to relocate for the position -- a core qualification -- to the very end of their two-page resumes. More than a few have buried accomplishments within the text, figuring this will force the hiring manager to search for that data, which means the entire resume will have to be read. Some have placed bar admission, another important qualification, dead last on the resume, believing that where they can practice law certainly isn’t as important as the fact that they are attorneys. And a few misguided souls simply list company names and dates of employment, assuming that the hiring manager should know without asking what legal duties they performed at these firms. It’s enough to drive a hiring manager to distraction -- or another career. But then, at last, there are those few resumes that list the important data at the top of the first page. In less than five seconds the hiring manager knows that the first candidate is willing to relocate and assume the cost of those expenses, if required. This candidate also provides a special section beneath the Qualifications Summary that indicates where she is licensed to practice law. The second candidate does the same, while also pulling out Career Accomplishments and placing them at the top of the first page. After all, why keep a 100% win rate at trial a secret, or the fact that one can practice before the state’s Supreme Court? Given the above scenario, it’s clear which applicants will be called in for an interview. No hiring manager will read every single resume that comes across his desk. Nor will a hiring manager search for data. In today’s tight job market it’s up to the candidate to prioritize data so that a hiring manager knows at a glance what the job seeker has to offer the company in terms of achievement, work experience, education, licensing, certifications, and special concessions, such as relocation.

STEP THREE: Qualification Summary & Skill Set Picture yourself at the market after a long day at the office. You’re in a rush, of course, and want only to purchase those items on your list, if they’re on sale. Hurrying into the store, you glance around for the weekly advertising piece that indicates which items will be offered at a discount. Trouble is, there’s no advertising piece this week, and no one to answer your questions. If you want to purchase the items you most need at a discount, you’re forced to walk up and down each and every aisle until you find what’s available. Doesn’t sound like much fun or an effective use of time, does it? And yet this is the same type of frustration hiring managers are exposed to every time an applicant sends in a resume that fails to open with a well-written Qualifications Summary and/or Skill Set. What is a Qualifications Summary? It’s a brief paragraph that showcases your most effective skills and experience as they pertain to your job search. More importantly, it’s your chance to convince a hiring manager of the skills you can bring to the position. This is essential, given that hiring managers generally afford no more than 10 seconds to an applicant’s resume, unless they’re compelled to read further. So, how do you compel them to keep reading? Let’s use this example: You’re an accountant who has worked at XYZ Company for nine years and been promoted every time you’ve come up for review. Because of your organizational efforts, the company is saving $2500 monthly. You’ve passed the CPA exam. You’re skilled in Profit & Loss (P&L), audits, taxation matters, and internal controls. Now, you want a Controller position. Rather than including all of the aforementioned data in the body of the resume, where the hiring manager would be forced to look for it, but won’t (remember, you’ll be given 10 seconds before the hiring manager moves on), the wise candidate would write something like this: Results-oriented, detailed professional with comprehensive accounting experience. Background includes consistent promotions to positions of increased responsibility. Skilled in P&L, audits, taxation, internal controls, and streamlining procedures, effecting a monthly savings of $2500 at XYZ Company. Recently passed the CPA exam; currently seeking a Controller position. In five lines and a mere 45 words, you’ve given specific examples of what you can do (P&L, audits, taxation, internal controls), quantified an accomplishment (streamlining procedures, effecting a monthly savings of $2500 at XYZ Company), indicated past performance (consistent promotions to positions of increased responsibility), provided data on certification (recently passed the CPA exam), and provided your career path (currently seeking a Controller position). And you’ve done all of that in a well-written paragraph that’s interesting and easy to read. (Note that personal pronouns are not used here. In business writing, which includes resumes, personal pronouns such as I, me, or my are never used). Three examples of outstanding Opening Summaries: IT Professional, Webmaster Government Consultant Foreman Fine, you say, but what about an Objective? Where does that go? In the modern resume, an objective statement is no longer used. The reason for this follows. Qualifications Summary vs. the Objective In the outmoded Objective, the candidate told the hiring manager what he wanted, whether that was a job at the company, room for advancement, a chance to use a new college degree, or any other reason an applicant could think of and the hiring manager could dismiss as self-serving. On the other hand, the Qualifications Summary proactively declares what the candidate can do for the targeted company, which places the hiring manager’s needs first. A wise applicant always uses a Qualifications Summary, either by itself or combined with a Skill Set. What is a Skill Set? Generally speaking, it's a list of your core competencies as they relate to your targeted career goal. Again, let’s take the example of the accountant who has just passed the CPA exam and now wants to be a controller. Rather than presenting all of that data in the qualifications summary, a portion of it would be showcased as a tag line (professional title or title of job you’re targeting) and skill set, and might look something like this (followed by a reworked qualifications summary paragraph):
Results-oriented, detailed professional with comprehensive accounting experience. Background includes consistent promotions to positions of increased responsibility for notable achievements, including $2500 in monthly savings at XYZ Company by streamlining procedures. This time, the first two lines, which contain just 15 words, present core strengths quickly and effortlessly.

STEP FOUR: Accomplishments and Special Skills Accomplishments There is no data on your resume more important than your accomplishments. Why? Think of it this way: you’re a hiring manager with one position to fill and 10 qualified candidates clamoring for the position. Each candidate has the same basic educational and professional background. So, who gets the job? The candidate who contributed the most at past positions. Accomplishments are all that separate you from other equally qualified candidates, with one caveat. Your accomplishments must be quantified. What is an Accomplishment? Increasing the company’s bottom line (i.e. facilitating its growth) Streamlining procedures Promotions Special projects successfully completed Decreasing costs Company- or industry-sponsored awards Certifications and licensure What is not an Accomplishment? Daily responsibilities that are included in your job description Regular attendance at work Getting along with co-workers Working full-time while going to college at night Volunteer or community service unless it has a direct bearing on your job search In other words, an accomplishment is service that goes beyond your usual job description. But for an accomplishment to have the most effect, it must be quantified. What is a Quantified Accomplishment? One that includes dollar figures, percentages, and time periods. For example: Our accountant has streamlined procedures, realizing a $2500 monthly savings for his company. The dollar figure quantifies the accomplishment, while the “streamlined procedures” explains how he did it. Now, if he achieved those savings within three months of hire, that would further strengthen his accomplishments, and it might be written thusly: Achieved a $2500 monthly savings for XYZ Company within three months of hire by streamlining procedures. Imagine the hiring manager’s reaction to the above as opposed to this entry: Streamlined procedures for XYZ Company. Doesn’t say much, does it? Special Skills Special Skills should always be presented up-front so that a hiring manager knows what you can do. In some instances, a special section (i.e. Computer Skills, Languages, Office Procedures, etc.) should be created to showcase these special skills. Special skills will include: Computer proficiencies Office procedures (i.e. answering multi-lined phone systems, taking dictation (include speed), transcription, typing (include speed), 10-key, etc.) Linguistic capabilities (i.e. fluency in a foreign language, ability to translate, etc.) Any skill that’s industry-specific for the job you’re seeking Here are a few examples of resumes with outstanding accomplishments and skills showcased effectively for hiring managers: IT Professionals – Project Manager Chief Marketing Officer Executives – Supply Chain Director

STEP FIVE: Professional Experience In the Professional Experience section you will list your employers, job titles, and dates of employment in a reverse-chronological order; that is, your most recent job comes first, followed by your next most recent job, and so on. This format is standard and is expected by all hiring managers and admissions directors. With regard to employment dates: Generally speaking, hiring managers prefer years of employment, rather than months and years (i.e. 1999 - 2003 as opposed to May 1999 - April 2003). However, some college admissions programs want specifics when it comes to dates, so it’s best to use precise dates when applying to graduate school. In the Professional Experience section you will also include daily tasks and responsibilities beneath the appropriate employer listing. If you’ve included a Career Accomplishments section in your resume, you should not repeat that data here. Once data is presented in a resume, it must not be repeated. To ensure that your daily tasks are presented in an interesting and easy-to-read manner, you should do the following: Use a bulleted format. This breaks up large blocks of text that could prove daunting to a hiring manager. Delete unnecessary articles and adjectives. Your sentences should be short and snappy. Begin each sentence with an action verb. This quickens the pace of your writing and makes the text more enjoyable to read. For a comprehensive choice of action verbs, please use this link: Power Verb List. An example of a bulleted format, pared down writing, and sentences beginning with power verbs follows: (Again, we use our accountant)
Verb tense: For those jobs where you are still currently employed, write your job duties in the present tense. For those jobs in the past, write the responsibilities you held in the past tense. Additionally, Professional Experience can be captured and showcased in three formats: Functional Chronological Combination In the functional format, you are stressing what you know over where you gained your experience. This works for those who have strong skills, but a weak employment record. In the chronological format, you are providing a work history dating back from the present. This is the most common format and is generally preferred by hiring managers. In the combination format, you are stressing what you know in one section, while also providing work history dating back from the present in another. This is a highly popular modern format.

STEP SIX: Education and Training Education:
Data provided in this section should be prioritized (and included) according to: Your current career level (entry-level as opposed to professional) The purpose of your resume The country in which your resume will be distributed Your current career level: If you’re an entry-level candidate with little or no professional experience, your education should be presented immediately after the Qualifications Summary and/or skills area. The reasoning for this is that education is currently your most marketable asset. Here, you would include: GPA (if 3.5 or above) Awards/scholarships Dean’s list Coursework relevant to job search If you’re a professional with five or more years of experience, Education should be listed last on your resume. GPAs, awards or scholarships, and mention of dean’s lists are not generally provided in a professional or executive resume, except for those used for entrance into graduate school programs. The purpose of your resume: Resumes sent to admissions directors for graduate school can list Education before Professional Experience or after, depending upon these factors: If the applicant has just recently completed his bachelor’s degree, it should be listed before Professional Experience. If the applicant has real-world experience related to the graduate degree she is seeking, the Professional Experience should be listed first. The country in which your resume will be distributed: If you are distributing your resume within the US, high school education is not included. The only exception to this rule would be if you’re applying for a job with the federal government. In that case, you would include high school data. When distributing a resume outside the US, then high school education is included. Training: Include all specialized training that is transferable to your new job target. If you have not attended college, include all specialized training in your target field. Hiring managers generally prefer to see some post-secondary education.

Compensation: Outline and Definitions

Compensation is a systematic approach to providing monetary value to employees in exchange for work performed. Compensation may achieve several purposes assisting in recruitment, job performance, and job satisfaction. Highlights
1. How is compensation used?

2. What are the components of a compensation system?

3. What are different types of compensation?

How is compensation used?

Compensation is a tool used by management for a variety of purposes to further the existance of the company. Compensation may be adjusted according the the business needs, goals, and available resources. Compensation may be used to:

• recruit and retain qualified employees.

• increase or maintain morale/satisfaction.

• reward and encourage peak performance.

• achieve internal and external equity.

• reduce turnover and encourage company loyalty.

• modify (through negotiations) practices of unions.

Recruitment and retention of qualified employees is a common goal shared by many employers. To some extent, the availability and cost of qualified applicants for open positions is determined by market factors beyond the control of the employer. While an employer may set compensation levels for new hires and advertize those salary ranges, it does so in the context of other employers seeking to hire from the same applicant pool.

Morale and job satisfaction are affected by compensation. Often there is a balance (equity) that must be reached between the monetary value the employer is willing to pay and the sentiments of worth felt be the employee. In an attempt to save money, employers may opt to freeze salaries or salary levels at the expence of satisfaction and morale. Conversely, an employer wishing to reduce employee turnover may seek to increase salaries and salary levels. Compensation may also be used as a reward for exceptional job performance. Examples of such plans include: bonuses, commissions, stock, profit sharing, gain sharing.

What are the components of a compensation system?

Compensation will be perceived by employees as fair if based on systematic components. Various compensation systems have developed to determine the value of positions. These systems utilize many similar components including job descriptions, salary ranges/structures, and written procedures. The components of a compensation system include:

• Job Descriptions A critical component of both compensation and selection systems, job descriptions define in writing the responsibilities, requirements, functions, duties, location, environment, conditions, and other aspects of jobs. Descriptions may be developed for jobs individually or for entire job families.

• Job Analysis The process of analyzing jobs from which job descriptions are developed. Job analysis techniques include the use of interviews, questionnaires, and observation.

• Job Evaluation A system for comparing jobs for the purpose of determining appropriate compensation levels for individual jobs or job elements. There are four main techniques: Ranking, Classification, Factor Comparison, and Point Method.

• Pay Structures Useful for standardizing compensation practices. Most pay structures include several grades with each grade containing a minimum salary/wage and either step increments or grade range. Step increments are common with union positions where the pay for each job is pre-determined through collective bargaining.

• Salary Surveys Collections of salary and market data. May include average salaries, inflation indicators, cost of living indicators, salary budget averages. Companies may purchase results of surveys conducted by survey vendors or may conduct their own salary surveys. When purchasing the results of salary surveys conducted by other vendors, note that surveys may be conducted within a specific industry or across industries as well as within one geographical region or across different geographical regions. Know which industry or geographic location the salary results pertain to before comparing the results to your company. • Policies and Regulations

What are different types of compensation?

Different types of compensation include:

• Base Pay

• Commissions

• Overtime Pay

• Bonuses, Profit Sharing, Merit Pay

• Stock Options

• Travel/Meal/Housing Allowance

• Benefits including: dental, insurance, medical, vacation, leaves, retirement, taxes...

What are regulations affecting compensation?

• FLSA

Compensation Plans

Develop a program outline.

• Set an objective for the program.

• Establish target dates for implementation and completion.

• Determine a budget.

Designate an individual to oversee designing the compensation program.

• Determine whether this position will be permanent or temporary.

• Determine who will oversee the program once it is established.

• Determine the cost of going outside versus looking inside.

• Determine the cost of a consultant's review.

Develop a compensation philosophy.

• Form a compensation committee (presumably consisting of officers or at least including one officer of the company).

• Decide what, if any, differences should exist in pay structures for executives, professional employees, sales employees, and so on (e.g., hourly versus salaried rates, incentive-based versus noncontingent pay).

• Determine whether the company should set salaries at, above, or below market. • Decide the extent to which employee benefits should replace or supplement cash compensation.
Conduct a job analysis of all positions.
• Conduct a general task analysis by major departments. What tasks must be accomplished by whom?

• Get input from senior vice presidents of marketing, finance, sales, administration, production, and other appropriate departments to determine the organizational structure and primary functions of each.

• Interview department managers and key employees, as necessary, to determine their specific job functions.

• Decide which job classifications should be exempt and which should be nonexempt. • Develop model job descriptions for exempt and nonexempt positions and distribute the models to incumbents for review and comment; adjust job descriptions if necessary. • Develop a final draft of job descriptions.

• Meet with department managers, as necessary, to review job descriptions. • Finalize and document all job descriptions.

Evaluate jobs.

• Rank the jobs within each senior vice president's and manager's department, and then rank jobs between and among departments.

• Verify ranking by comparing it to industry market data concerning the ranking, and adjust if necessary.

• Prepare a matrix organizational review.

• On the basis of required tasks and forecasted business plans, develop a matrix of jobs crossing lines and departments.

• Compare the matrix with data from both the company structure and the industrywide market. • Prepare flow charts of all ranks for each department for ease of interpretation and assessment. • Present data and charts to the compensation committee for review and adjustment.

Determine grades.

• Establish the number of levels - senior, junior, intermediate, and beginner - for each job family and assign a grade to each level.

• Determine the number of pay grades, or monetary range of a position at a particular level, within each department.

Establish grade pricing and salary range.

• Establish benchmark (key) jobs.

• Review the market price of benchmark jobs within the industry.

• Establish a trend line in accordance with company philosophy (i.e., where the company wants to be in relation to salary ranges in the industry).

Determine an appropriate salary structure.

• Determine the difference between each salary step.

• Determine a minimum and a maximum percent spread.

• Slot the remaining jobs.

• Review job descriptions.

• Verify the purpose, necessity, or other reasons for maintaining a position.

• Meet with the compensation committee for review, adjustments, and approval.

Develop a salary administration policy.

• Develop and document the general company policy.

• Develop and document specific policies for selected groups.

• Develop and document a strategy for merit raises and other pay increases, such as cost-of-living adjustments, bonuses, annual reviews, and promotions.

• Develop and document procedures to justify the policy (e.g., performance appraisal forms, a merit raise schedule).

• Meet with the compensation committee for review, adjustments, and approval.

Obtain top executives' approval of the basic salary program.

• Develop and present cost impact studies that project the expense of bringing the present staff up to the proposed levels.

• Present data to the compensation committee for review, adjustment, and approval.

• Present data to the executive operating committee (senior managers and officers) for review and approval.

Communicate the final program to employees and managers.

• Present the plan to the compensation committee for feedback, adjustments, review, and approval.

• Make a presentation to executive staff managers for approval or change, and incorporate necessary changes.

• Develop a plan for communicating the new program to employees, using slide shows or movies, literature, handouts, etc.

• Make presentations to managers and employees. Implement the program.

• Design and develop detailed systems, procedures, and forms.

• Work with HR information systems staff to establish effective implementation procedures, to develop appropriate data input forms, and to create effective monitoring reports for senior managers.

• Have the necessary forms printed.

• Develop and determine format specifications for all reports.

• Execute test runs on the human resources information system.

• Execute the program.

Monitor the program.

• Monitor feedback from managers.

• Make changes where necessary.

• Find flaws or problems in the program and adjust or modify where necessary.

Job Analysis: Overview

Job Analysis is a process to identify and determine in detail the particular job duties and requirements and the relative importance of these duties for a given job. Job Analysis is a process where judgements are made about data collected on a job. The Job; not the person An important concept of Job Analysis is that the analysis is conducted of the Job, not the person. While Job Analysis data may be collected from incumbents through interviews or questionnaires, the product of the analysis is a description or specifications of the job, not a description of the person.

Purpose of Job AnalysisThe purpose of Job Analysis is to establish and document the 'job relatedness' of employment procedures such as training, selection, compensation, and performance appraisal.

Determining Training Needs Job Analysis can be used in training/"needs assessment" to identify or develop:

• training content

• assessment tests to measure effectiveness of training

• equipment to be used in delivering the training

• methods of training (i.e., small group, computer-based, video, classroom...)

Compensation Job Analysis can be used in compensation to identify or determine:

• skill levels

• compensable job factors

• work environment (e.g., hazards; attention; physical effort)

• responsibilities (e.g., fiscal; supervisory)

• required level of education (indirectly related to salary level)

Selection Procedures Job Analysis can be used in selection procedures to identify or develop: • job duties that should be included in advertisements of vacant positions;

• appropriate salary level for the position to help determine what salary should be offered to a candidate;

• minimum requirements (education and/or experience) for screening applicants;

• interview questions;

• selection tests/instruments (e.g., written tests; oral tests; job simulations);

• applicant appraisal/evaluation forms;

• orientation materials for applicants/new hires

Performance Review Job Analysis can be used in performance review to identify or develop: • goals and objectives

• performance standards

• evaluation criteria

• length of probationary periods

• duties to be evaluated

Methods of Job Analysis

Several methods exist that may be used individually or in combination.

These include:

• review of job classification systems

• incumbent interviews

• supervisor interviews

• expert panels

• structured questionnaires

• task inventories

• check lists

• open-ended questionnaires

• observation

• incumbent work logs

A typical method of Job Analysis would be to give the incumbent a simple questionnaire to identify job duties, responsibilities, equipment used, work relationships, and work environment.

The completed questionnaire would then be used to assist the Job Analyst who would then conduct an interview of the incumbent(s).

A draft of the identified job duties, responsibilities, equipment, relationships, and work environment would be reviewed with the supervisor for accuracy. The Job Analyst would then prepare a job description and/or job specifications. The method that you may use in Job Analysis will depend on practical concerns such as type of job, number of jobs, number of incumbents, and location of jobs.

What Aspects of a Job Are Analyzed?

Job Analysis should collect information on the following areas:

• Duties and Tasks The basic unit of a job is the performance of specific tasks and duties. Information to be collected about these items may include: frequency, duration, effort, skill, complexity, equipment, standards, etc.

• Environment This may have a significant impact on the physical requirements to be able to perform a job. The work environment may include unpleasant conditions such as offensive odors and temperature extremes. There may also be definite risks to the incumbent such as noxious fumes, radioactive substances, hostile and aggressive people, and dangerous explosives.

Tools and Equipment Some duties and tasks are performed using specific equipment and tools. Equipment may include protective clothing. These items need to be specified in a Job Analysis. • Relationships Supervision given and received. Relationships with internal or external people. • Requirements The knowledges, skills, and abilities (KSA's) required to perform the job. While an incumbent may have higher KSA's than those required for the job, a Job Analysis typically only states the minimum requirements to perform the job.

Ten Common Mistakes in Resumes and Cover Letters

Steps in getting a new job, get an employer's attention, make sure that your cover letter stands out. Top Ten mistakes that job seekers often make when writing their cover letter, and how to avoid them. Though the cover letter should be an exercise in attention to detail, there are far too many blunders that happen all too often in the job marketplace. The following are the top ten cover letter blunders that you should always make sure to avoid. Committing one of these all too common career crimes is the equivalent of telling the interviewer that you definitely don’t want the job.

Unattractive Layout
One of the first ways to get your resume noticed – for the wrong reasons – is to have a layout that is unattractive or inconsistent. For example, changing the spacing throughout the resume would be one way to achieve this; alternating between capital letters and boldface type to separate sections would be another way. Be sure that your resume is set up to look neat and sharp, and that you follow a consistent design scheme the whole way through.

Inappropriate Stationery
One of the great thing about having a great supply of stationery and writing paper is that it can really say something about who you are as a person. Though this is a great way to express yourself to friends and family, it doesn’t work as well with a potential employer. Save the cutesy flowers and animals for friendly correspondence; write all professional papers on a heavier stock of professional paper.

Too Fancy Fonts
Just like the elaborate stationery that can work against you in business correspondence, employing the use of too decorative fonts can also damage your reputation as a professional and business savvy job seeker. The best font to use is a Times or Arial font. Something basic, and that can be found on almost any word processing program.

Making Corrections
Perhaps it’s the fact that businesses themselves have been becoming more and more relaxed these days, but job seekers seem to take this philosophy to an extreme. Time and time again, candidates seeking employment think it’s okay to make a correction on their resume with white out or – even worse – a pen or pencil. Other candidates have opted for a quick Post-It note explaining the slip-up. If you make a mistake on your resume, go back and make the change directly to the document, and reprint it. There is no excuse for any resume to be less than perfect.

Incorrect Information
When sending out a cover letter, you should always have a specific name of the person to whom it is being sent. One common mistake – and it’s a mistake that can really bother a sensitive interviewer – is finding incorrect information on the cover letter. For example, if the cover letter send to “Chris Jones” reads “Dear Mr. Jones” when Chris is actually Christine. The same goes for incorrect information as it relates to the company name and address. The easiest way to avoid this mistake? Take a moment to give the company a call and double check the mailing address and name and spelling of the person’s name to whom you are sending the resume.

Typos
A major problem that is often encountered when an interview is reading one’s resume is a whole slew of typos. More and more, this type of error (even if the typo is one small one) is becoming enough a reason for interviewers to exclude someone from the running altogether. A quick spell check and a careful edit are two ways in which you can prevent this from happening to you.

Inappropriate Tones
In any sort of business correspondence, job seekers need to walk a distinct line between familiarity and professionalism. The tone of any cover letter should be polite without being obsequious, and professional without being too stiff. Don’t be afraid to show a little bit of your personality, just don’t show it all up front.

Comparisons and Clichés
In everyday language, it is likely that you will hear at least one overused cliché or obvious comparison come out of the mouth of someone you know. As is the nature of such phrases, they only serve to make you sound unoriginal. Avoid using clichés and obvious comparisons when writing a cover letter, as it’s likely that someone else is writing the exact same thing.

No Signature
One of the most important things employers are looking for nowadays is an employee with a great attention to detail. Sending off your cover letter without having signed it is one sure way to assure the interviewer that your attention-to-detail skills are certainly lacking.

Missing Resume
Another sign that a candidate is lacking in the attention-to-detail department: sending a cover letter without a resume. Though it seems like a ridiculous mistake to make, there are far too many people that send out a cover letter and forget to include what is really important here, their credentials.