Thursday October 12 2017
“Brains, like hearts, go where they are appreciated.”
Robert McNamara, former president Ford Motor Company
This blog is a result of some thoughts I shared at an HR Conference in Bucharest recently. I had structured the conversation in 3 distinct parts:
Who should you retain and how?
As we all know, the most obvious way to retain employees is by giving them more money. This is something that is adopted by almost every company I have come across and the better your performance and/or the more senior you are, the more rewarded you get. Money could be in the form immediate cash (increments, bonuses), long term incentives (stock incentives, deferred earn outs) or anything similar. However, there are equally obvious limitations with money – both from an employee as well as a company perspective.
From an employee perspective, money tends to lose its glitter beyond a point. Very few C-suite managers are in it for the money. Maslow’s classic hierarchy of needs kicks in and other factors such as power, the ability to make a difference, leaving a legacy etc attain a much greater degree of importance to the executive than material wealth alone. Similarly, for the young star performer, while money is clearly more important, they are mainly driven by their career objectives. From the company perspective, throwing money at the problem is both expensive and unsustainable – but, crucially, it does not address the population who are neither very senior nor star performers, but still critical to the organization’s future. These are the “hidden gems” who need to be uncovered and found – for which it there needs to be a system in place to do so.
In my previous company, the term “high value” employee included not only “high potential” employees (the equivalent of star performers) but also employees who were good mentors and who were technically excellent (as a technical service company, this was recognized as a key differentiator). Equally, other companies have adopted different methods to unearth their hidden gems or unsung heroes. Below is an example of a Risk Heat Map which was constructed when a European industrial company was going through a reorganization effort. They mapped the likelihood of a person leaving against the difficulty in replacing the person’s position and came up with surprising results identifying that close to 10% of their employees were high risk – and they were not necessarily the senior executives or the star performers.
Now that we have a more robust approach for identifying who we should retain, let us take a few minutes to work out how (beyond the money solution!). And key to this is to identify what drives the employee – especially when there is change involved. Most employees, when asked why they work in organizations, come up with 3 reasons –
However, crucially, the order of these reasons changes with different people and it is critical for the HR community to identify what their primary drivers are, and in which order, for them to continue to work in the organization. In a changing situation (let’s say in a reorganization which involves a move to another country), the employee with “career” as a primary driver will need a different retention strategy to one with “family”. For example, the “career” driven individual will need to know what their new responsibilities are, how this could benefit their career and growth prospects and also where this move will place them within the organization’s hierarchy. On the other hand, the “family” driven individual will need to understand the assistance provided for schooling for their children, potential career counselling for their spouse, the availability of language courses, flexible work arrangements (in case the family decides not to move) etc. Clearly each group will need reassurance on all these fronts, but from a retention perspective, it is important to understand what would win them over.
Who is the typical employee in today’s corporate environment?
This is, actually, the easiest question to answer but raises with it many challenges in looking for a solution. The answer is that there is no typical employee anymore! I have had a 29-year corporate career, of which the last 22 were spent with a single organization. This may seem long, but was not unusual for my generation. However, most of today’s young employees would consider me nuts! Companies cannot (and should not) expect loyalty from employees – on the contrary, today’s employees demand loyalty from the companies in which they work. Employees no longer look for compelling reasons to leave – they look for compelling reasons to stay! Flexible working hours, single parent employees, teleworking, more women in the workforce, older employees – these are additional challenges that the HR community needs to face when coming up with a retention plan. There is a complex matrix of employee needs that requires to be met and the traditional “one size fits all” package is simply not good enough….employees are changing too.
How do you handle change?
On top of all of this is a world which faces rapid change. There are several change management tools available and I have spoken about this in an earlier blog. Scott and Jaffe’s Change Curve, modelled on Kubler-Ross’s studies around the various stages of change faced by chronically ill patients, provides a somewhat simplistic but easy to understand tool that examines the various emotions that people go through when faced with change. For the sake of brevity, I will not repeat these thoughts.
Today’s reality is that with increasing job fluidity (the ability of employees not limited by a job description, but able to flow between initiatives to maximize their contribution) job tenures have shrunk and this makes retaining talent an even more critical role for leadership to ensure that their organizations prosper. I hope that by using some of the tools and approaches described above, the task becomes a little easier.
“Today’s marketplace is incredibly competitive in every industry around the globe. The difference between success and failure is talent, period.”
Indra Nooyi, CEO Pepsico