Applying the 80/20 Rule to Workforce Management  

Successful businesses generally have exceptionally talented workers as part of their winning strategy. For businesses that desire long-term continuity, recruiting talented employees is only the beginning. Hiring managers must to work closely with recruiters and even third parties like a staffing agency, in order to source the talent they need.

There are many other aspects to this, however, such as retention, all of which make workforce success sustainable. You may be able to improve performance in these areas by abiding by the so-called “80/20 Rule.” Read on to find out more.

Workforce management begins with the initial onboarding and continues throughout the lifecycle of the worker-employer relationship. Developing a talent acquisition strategy is critical, but having a talent retention strategy is equally important.

Onboarding new workers is a crucial step in the acquisition and retention process. The early days of a new employer-employee relationship set the tone for what follows. Whether hiring a temp, a permanent worker, or a contract-to-hire employee, your protocol should encompass a strategy for how to retain and keep all workers engaged.

However, businesses also require workers to remain consistently productive. To that end, various workforce management theories have emerged. One of these is the 80/20 Rule. With the following information, you may be able to apply it to your workforce management for better retention and results:

The 80/20 Rule in HR

The Pareto Principle, or the 80/20 Rule, as it is more commonly known, represents an interesting approach to business. The rule states, roughly, that 20% of input delivers 80% of all output. This approach has motivated businesses to follow leaner models and maximize output; but what does this mean in the context of workforce management? The sections below discuss how to leverage the 80/20 Rule for workforce success.

Identify and Reward Hyper Performance

When applied to workforces, the 80/20 Rule implies only 20% of your most productive resources deliver 80% of the productivity in any given period. So out of a team of ten workers, only two perform above par and deliver most of the output. The other eight only deliver around 20% of output in a comparable period. It could also have larger meanings, however. These two highest-performing workers are “hyper” performers, and in order to keep their performance levels high, you need to first identify and reward their performance.

Replace Performance Reviews with Stay Interviews

For the same two highest-performers, a performance review may not be very useful. They are already performing far above 80% of their peers. In these instances, a review can usually only be positive. Instead, for that select 20%, you can replace the performance review with a stay interview. Many management gurus recommend letting the worker set the agenda and directing the discussion. You will still be able to derive useful talent intelligence, information that you could use to further bolster performance among the 20%.

Gain More Context on Your Best Performers

A stay interview can offer similar information relative to a performance appraisal, but you may require more specific context to retain your best workers. Understanding what motivates them and what pushes their buttons can be crucial to encouraging their further development. You might also determine how to provide such workers the support they need to continue delivering above-average performance every day. Empathizing with workers, arranging team-building exercises, even team retreats, are all great teambuilding ideas. You should leverage them to learn more about the workers themselves.

Offer Skill Enrichment and Diversification Opportunities

One way to reward and appreciate the 20% is to offer them opportunities to grow. A worker may be outperforming others even without a formal degree or practical training. Imagine how much you could boost productivity simply by offering opportunities to fill in those gaps. Workers will always be appreciative of your recognition for their work, and an opportunity to learn new skills and acquire more diverse expertise is an excellent way to show your recognition.

Value Productivity Over Tenure

There is no guarantee that the 20% of above-average workers are also your oldest workers. Sadly, most firms still tend to reward loyalty and tenure over productivity. This almost inevitably leads to the loss of your best performers. When your hyper performers realize their output matters far less than a peer’s employment tenure, it could radically marginalize their motivation to deliver quality work. If that happens, the same 20% of workers may start to perform like the other 80%, or worse, move on to an employer they feel values them more.

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