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A troubling new report from ExecuNet says executive longevity continues to decline at just the time companies most need an engaged, knowledgeable C-suite at the helm.

The survey of some 5,000 executives, search consultants, and corporate HR professionals says the average tenure of a business executive declined 15 percent between 2005 and 2008 to an average of 2.3 years. Meanwhile, only 29 percent of the HR professionals surveyed say their company has knowledge management and succession plans to address the loss of management skill.

“It takes roughly three years of deep entrenchment in a job to reach peak performance. With executives spending less time in organizations and often being judged on short-term stock price performance, they stop short of reaching their full potential,” says ExecuNet Vice President and Executive Editor Lauryn Franzoni.

While the economy may have tamped down the voluntary turnover rate for 2009 — executive recruiters expect their searches to be down 14 percent for the first half of the year –  it has also increased the length of time executives spend searching for a job. The report says executives now expect to spend an average of 10.1 months looking before landing. keep reading…

It’s hard to find a more misunderstood and mismanaged human resource area than employee turnover. Executives are constantly sounding off about how “bad” employee turnover is, but in some cases, employee turnover is actually a positive thing.

Imagine, for example, that you had a poor-performing worker like Homer Simpson. If Homer walked in late one day as usual and announced that he was leaving, would you consider that a bad thing, or would you secretly celebrate his departure?

Even better, what if he left your firm and immediately went to work for one of your direct competitors; wouldn’t that be additional cause for celebration?

On the flip side, what if you ran a golf team and one of your star performers left, would that not be real cause for frustration?

The purpose of this article is to open your mind about the silliness of measuring only aggregate turnover. I can think of no better indication of a so-called expert’s lack of true understanding of employee turnover than when I read an article or a book on retention and the author invariably expounds on the need to keep everyone.

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Yesterday, I read one of those “10 Tips for…” type of articles on how to manage the Millennial or Gen Y employee. They included recommendations such as:

• Provide leadership and guidance.
• Listen to the Millennial employee.
• Provide challenge and change.
• Provide structure (i.e. clear expectations, goals, assessment of progress, etc).

One of the website’s readers posted a point-by-point criticism of the article, concluding with: “The advice given is good for employees of all ages. Contending that it is uniquely applicable to a new generation is nonsense.”

While I agree with the rather prickly poster’s perspective that the author’s advice applies to all employees, I do think he missed the nuances the author was trying to convey.

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What’s hot in talent management changes quite often. Right now, there’s no hotter topic within the talent management community than workforce planning.

The reasons are simple: with the current economy driving revenues down dramatically, many senior executives are examining how to plan ahead in order to increase their firms’ capabilities, reduce costs, and survive the economic chaos likely to continue for some time.

Organizations need an effective talent management plan that will allow them to “explode out of the box” at the first sight of economic recovery, yet one that doesn’t threaten economic sustainability in the short term.

While most in talent management are continuing to react with stale cost containment approaches developed decades ago, strategic talent managers are stepping forward with robust workforce planning solutions and new work models that account for the significant changes in both how people work and live that have occurred in the last 20 years.

If you are interested in doing more than talking about being strategic, here are some recommended action steps to help improve your organization’s workforce planning.

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Any manager who takes an honest look at individual performance knows all employees are not created equally. About 20% of employees rise to the top of the heap; 20% drop to the bottom; and the rest hang around in the middle doing only enough to attract attention.

Employee-productivity differences have attracted their share of researchers. Most agree that folks in the top half of workers out-produce the bottom half by about 2:1 (i.e., it makes no difference if people are shuffling papers or making widgets). And, when managers and knowledge workers are examined separately, the productivity ratio rises to 3:1, 4:1, or higher (i.e., responsible jobs have bigger ratios).

Productivity is more than a mental exercise. It shows up as absenteeism, errors, reduced throughput, turnover, low morale, rework, an excess number of employees, and so forth. Productivity losses are also sneaky because they are not easily seen; yet, they translate into hard cash: between 20% of base annual payroll leaked for unskilled workers to 50% for skilled and managerial employees — enough to separate a successful organization from a flop.

Converting payroll leakage into gross sales can be an even bigger eye-opener. Twenty percent leakage, for an organization that pays out 1/5 of its gross sales in salaries and benefits, would require a 500% sales increase to balance the books. Want to do more scary math? Calculate the incremental sales necessary to offset a 50% leak in managers and professional salaries!

Enter Financial Chaos and Uncertainty

We are in serious financial times. Opinions vary, but experts estimate our financial stress will last throughout 2009 and perhaps into 2010. The prosperity party is over. Like the dot-com bust, the world changed virtually overnight.

We cannot do much about external economic factors except dig in and wait. But, we can do something about employee productivity, especially when it comes to intelligent downsizing.

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Even though there are layoffs announced every day, organizations I am speaking with still need to keep the people who generate sales, create new products, or have the intellectual capital the organization needs to continue functioning. Good people know that even in these difficult economic times, they can find another position. They are most likely being actively recruited without your knowledge.

I had lunch a few days ago with a recruiting leader who expressed his concern over the spike in turnover among the most critical segment of his company’s workforce. After we chatted for a while it became clear to me that this organization was not doing very much to encourage these people to stay. According to him, even though the company was doing well financially and expected to meet its sales goals for at least the first quarter, many employees were just waiting to be laid off. No information was being shared, and executives huddled in their offices all day.

Employment is about relationships, and the strongest relationships are built on trust, respect, and open communication. When things are difficult, it is more important than ever to make sure your management team is present, is as upbeat as it can be, and that every member of the executive staff is visible and concerned about every employee.

To maintain the employment relationship, employers have a huge responsibility. First of all they need to clearly know who their best employees are, keep them informed, help them maintain and develop skills, and encourage them to build networks and internal relationships.

None of these things costs much when compared to the cost of recruiting and developing new employees, and none of them are really very hard to do. But, to put them into place does require a change of mindset and a willingness to break (or at least stretch) the usual policies and rules that exist in many organizations. Good HR and good recruiting is all about treating people fairly — not necessarily the same.

Here are four ways to build and maintain loyalty and a strong employee-employer relationship.

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UK employees were asked why they feel disloyal to their employers — a disloyalty that results in lower productivity and turnover. Harris Interactive did the survey for CareerBuilder among 656 UK employees (employed full-time; not self-employed) ages 18 and over.

Everywhere you look today, you see the elements of another “perfect storm” for recruiters. The economy is in a free fall. Companies are looking at ways to reduce headcount. Recruiting budgets are frozen. Those sought-after “passive candidates” are hunkering down to try to weather the storm, so they’re not taking your calls, if you’re even making them.

What’s a recruiter to do?

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Whenever there is a downturn in economic conditions, one of the first knee-jerk reactions that many CFOs and senior managers take is placing a freeze on all hiring, pay raises, budgets, and promotions.

The effect of long-term hiring freezes is particularly damaging to the recruiting function, because “no hiring” generally means that a majority of recruiters will be laid off. Historically, budgets for recruiting have been cut so low that the function is literally decimated, making it rather difficult for companies to resurrect a decent function when the economy swings up.

Many executives think that the decision to institute some sort of resource freeze is one that helps the organization because it contains costs; however, the opposite is more often the case.

Poorly thought-out freezes that impact talent acquisition and other talent-management activities may actually harm the organization by:

• Driving increases or vacancies in revenue producing/impacting roles that decrease revenues beyond any cost savings.
• Driving increases in employee burnout/turnover.
• Missing out on new talent opportunities (i.e., not be able to hire a superstar that becomes available).
• Decreasing an organization’s capability/capacity to innovate.
• Damaging the employer brand making hiring more difficult when the economy returns.

Rather than waiting for the inevitable announcement of a freeze, recruiters need to be proactive and preempt any such silliness long before it occurs by making the business case for leveraging this time to re-architect the talent acquisition function, upgrade its strategic programs, and trade up the talent population while salaries and vendor costs can be negotiated down significantly.

(Incidentally, you can tell when a hiring freeze is imminent because they are almost always preceded by the infamous “paper clip memo” from the CFO, which limits the purchase of office supplies, magazine subscriptions, and travel).

Because every organization is unique, there is no one magic way to structure the business case, but I have put together a list of arguments that you can select from:

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WorldatWork surveyed more than 2,700 organizations; members are employed in the HR, compensation, and benefits departments of mostly large North American companies.

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With the Carl Icahn proxy fight averted and the Microsoft buyout dead (today, but check back tomorrow), Yahoo! can resume the reorganization it announced last month. It should be easier than most of the previous reorganizations the company went through as this time several top corporate positions are vacant.

(Watch out, though, for the fireworks expected at Friday’s shareholder meeting when almost anything may happen.)

For the past several months, senior managers and top-level executives have been leaving the company in numbers large enough to attract attention from bloggers and tech writers. In June TechCrunch published a list of 114 director and VP level personnel who left Yahoo!, many in 2008. Not long after the site published another story saying Yahoo! could see another 100 senior people leave in three weeks, after options vest worth tens or even hundreds of thousands of dollars.

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For as long as HR has been a separate function from the business, there has always existed a certain tension when it comes to who is primarily responsible for influencing employee retention.

Business management often argues that recruiters are not presenting the right candidates, and in perfect “hiring hindsight” find fault on the basis of candidate education level, character attributes, work experience, technical skills, compensation, etc.

Recruiters are quick to remind management that they present, but do not select, candidates for hire, and that most employees who leave a position do so because of other issues such as training, keep reading…

Ask HR professionals to identify the core of a company’s success and chances are, most will point to the recruiting and selection process. Performed effectively, these two distinct but inseparably connected activities can result in sustainable profit and growth for the organization and all its employees.

I believe a company’s organizational values, its core values, culture, and mutual expectations, are a company’s best recruiting and retention tool.

Mutual Expectations

In relationships of every nature, including partnerships, joint ventures, service contracts and yes, marriage, the incidence of association failure can be traced in large part to the failure of the two parties to clearly understand, appreciate, and agree to mutual expectations upfront.

The employer/employee relationship unquestionably falls into this category. In fact, outside of a family, work relationships represent the greatest number of people involved. Yet few businesses formally establish clearly stated employer/employee mutual expectations!

The key to a company’s success is a reciprocal, balanced level of expectations between the organization and each of its employees.

Time was when the primary social and work contract in this country could be characterized as “show up, be reliable, do your job, and it’s yours until you retire. When that happens, we’ll continue to take care of you.”

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Will flexible employers be the ultimate winners in the war for talent now that gas prices are in the stratosphere? Employers offering transportation subsidies, telecommuting options, and virtual office arrangements may be wooing the best and the brightest candidates right now, even without the highest salaries and biggest relocation budgets in the marketplace.

“It isn’t unusual to find employees driving 50, 75, even 100 miles each way to work and that can cost them $5,000 a year just in gas,” says Chuck Wilsker, president and CEO of the Telework Coalition, a Washington DC-based organization that supports telework options.

“When telecommuting is an option, it eliminates the geographic recruiting boundaries and increases the pool of prospective candidates. I have heard of specific situations where employers have been able to offer 15% less salary, simply because the employee will no longer need to absorb the daily commute cost.”

Employees who commute 30 miles or more to work are likely to turn-over at higher rates now that gas prices have sky-rocketed, according to Wilsker, and it will only get worse when the job market and the economy rebound. If more firms begin offering telecommuting options to appease employees, the competition for top talent will literally have no boundaries, since proximity to the office will no longer be a major recruiting criterion.

In addition, with no ceiling on gas prices projected anytime soon, Wilsker says that commute costs are starting to concern highly skilled employees, not just hourly workers. In the past, employees making $150,000 to $250,000 might not have considered long commutes when weighing an offer, now they are now thinking about it long and hard before accepting.

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Over the past few years, the term “recruiting” has increasingly become almost automatically appended with “and retention.”

The titles of VP, Director, or Manager of Recruiting & Retention have become pretty common, and many industry commentators clump the two together, almost perfunctorily.

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My friend was released after just 20 days on the job.

She was given work assignments to complete that had never been discussed in the interview. At her exit interview, her manager admitted he had overestimated her technical skills in the interview. She had not professed extensive technical skills in the interview. She was given no notice that she was to be terminated, just asked to come to the conference room at 3 pm on what turned out to be her last day.

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At Herman Miller, 1,300 of the company’s 6,000 employees are water carriers. The designation comes from American Indian tribal life, where the role of the water carrier was vital because carrying water to fellow tribe members sustained life. Water carriers are invited to join an elite group of employees when they reach their 20-year anniversary with the company.

“Water carriers play an important role at Herman Miller,” says Deb Exo, director of talent management. “They carry forward the context of the past that supports the future of the company and they provide insight about the company and mentoring to new employees.”

While having a stable of tenured employees might be newsworthy enough in 2008 employment lore, it’s the furniture pioneer’s ability to sustain those employee retention levels that might be its most notable accomplishment. The company averages 3 percent voluntary turnover per year and reported 9,600 applicants for 738 new positions, according to Fortune’s “Best Places to Work” list for 2008.

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In most organizations the recruiting function is entirely separate from the retention effort, yet the design of the hiring process has a dramatic and direct impact on future turnover. I estimate more than one-third of the factors that drive future turnover have their roots in the recruiting, hiring, and on-boarding process.

Unfortunately, most managers and many recruiters are unaware of this direct relationship and as a result, organizations suffer from unnecessary turnover. If you are a hiring manager, a recruiter, or a retention specialist, it’s important that you understand how the hiring process impacts the likelihood that someone will depart early.

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Decreasing turnover and increasing productivity can be a natty problem. Solutions usually come in one strength: weak. That is, incentive programs, public awards, and social get-togethers generally fail to make a long-term financial impression.

I won’t claim that employee appreciation programs aren’t a nice touch; after all, everyone wants to feel appreciated. But such recognition does not solve the real problem.

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Turnover at one mature organization I have spoken with recently has reached close to 100% for its key engineering talent. This is not because the company is a poor performer or because it doesn’t pay well. In fact, it is doing very well and pays above the average.

The reason they are losing people is because they are well-paid, have made significant income, and have built up large 401(k) accounts. They are leaving because they are successful and able to pursue other interests.

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