In The Battle To Keep Their Best Employees Leaders Need To Know What Really Matters

Roger Trapp, 

 

It might seem odd at a time when middle-class parents across the industrialised world are almost united in a fear that their children will never gain jobs to match their expensively-acquired educations. But one of the biggest issues confronting corporate leaders is how to hang on to valued employees. Far from being grateful for any job, employees in the early stages of their careers are moving around at an unprecedented rate. And the fear is that as the economic picture improves the trend will intensify.

 

Some of this is self-inflicted on the part of employers. If you keep talking about a “war for talent”, then the “talent” will start behaving like talent and begin to demand the sorts of things that previous generations would never have contemplated. But once companies start providing gyms, deluxe cafeterias, dry cleaning and the like there is no end – for the simple reason that rivals will do it, too. Nor is there much real evidence that employees really value these things.

Another part of the problem is a result of changing times, though. Just as technology has opened workers up to the possibilities of different ways of working (i.e. not always in an office within certain hours), so it has also made it much easier for them to look for other jobs, or at least keep abreast of the market.

But a significant element also seems to be down to that old enemy, lack of communication. In particular, there is often a gap between how a new recruit thinks a job has been presented and what it is like in reality. A reluctance to stick with such a situation has given rise to what has been termed the “quick quits” – those who leave jobs soon after arriving.

The problem for companies is that this group includes many of those they are keenest to keep. A 2012 Harvard Business Review article (“Why Top Young Managers Are in a Nonstop Job Hunt” by Monika Hamori, Jie Cao and Burak Koyuncu) described research showing that 95 per cent of the best educated and qualified young employees regularly engaged in such activities as updating their resumes and seeking information on prospective employers in their first jobs. They left, on average, after 28 months. The article added that this was entirely rational behaviour since each change of employer produced a significant improvement in pay. This is a dramatic change from the past, when the idea that job hopping was both a short cut to the top and lucrative was something of a myth since practitioners paid for it in terms of missed promotions and, often, lower salaries over the longer run.

So, what is to be done? The HBR article authors believe that the solution may lie in a well-balanced approach to development. They say that, while young workers value the on-the-job learning opportunities and chances to take responsibility, they are unhappy with the amount of formal training and development they receive. This is believed to stem from the fact that it is costly and takes employees away from the job. And so begins a vicious cycle because employers are “understandably reluctant to make big investments in workers who might not stay long” – and so create the conditions that encourage them to leave.

But the truth may be more complex. Researchers such as Professor Lynda Gratton of London Business School (see my earlier post) have warned of the dangers of treating all employees of a single generation as “one cohort” with uniform interests. While some may well be concerned about the level of training, others may be just as interested in being able to work flexibly, a factor increasingly cited in worker happiness surveys. Increasingly, technology can provide answers.

Beth Carvin is chief executive of Nobscot, a Hawaii-based company that has pioneered the use of software in managing exit interviews and other HR situations. This enables companies to see patterns, so that they can spot, for example, factors leading to people leaving one part of the organization rather than another or why long servers are starting to leave.

Carvin also sees companies using new hire surveys to ensure they are “hiring the right people and getting the training right”. They can then work on approaches to “acclimatising” them to the organization and helping them feel part of it. Then they can carry out surveys to audit this activity.

Concentrating on getting the “right” people in the first place is particularly important for some employers. An example is Brad Peters, chief executive and co-founder of Birst, a business analytics company based in San Francisco that has grown to 160 employees in seven years. Despite the business’s proximity to Silicon Valley, Peters is keen to distance himself from the “hype” often associated with that region.

Dividing would-be employees into “mercenaries” and “long-term hires”, he says that the company tries to stay away from people who have had lots of jobs and instead focuses on “folks that have a considerable history and are not right out of college”. He explains: “They have more perspective.” Hitherto, the policy has led to a much lower turnover rate than the average for the industry or the area. “We usually only lose people through a family event or the commute,” adds Peters.

He believes that the job-hopping mentality stems from the education system, where young people are graded and move on every two years. He tries to create a long-term approach based around giving people interesting and challenging work and encouraging them to believe that “the company is trying to do right by them”.

Even with her focus on technology, Carvin acknowledges that persuading the right people to work for the business is in the end a leadership challenge. Managers need to understand what employees want and value, and act accordingly. They also need to distinguish perks that are “nice to have” from those that really matter. As Carvin says, allowing workers to dress casually is not necessarily going to cancel out other problems. “There’s no point being casual if you are still being berated by the boss.”