We hear so much about the challenges facing businesses in the 21st century – about globalisation, resource shortages, and threats to security and privacy. Amid all the alarms being raised, we hear only rarely about what may be the most fundamental crisis facing most businesses today – talent. How to get the best. What to do with it. And how to keep it. It is an issue of immense importance and yet it is something that has only recently begun to be a serious concern of top executives.
How bad is the situation? While I was writing The Talent Mandate, I undertook a survey of senior business leaders in a variety of industries. Only half were generally satisfied with the level of candidates available to them and nearly two-thirds were sufficiently concerned about the situation to be making significant changes in the way they manage talent.
The talent crisis hasn’t erupted because of a shortage of workers. There are plenty of people out there looking for jobs. The problem is that we don’t simply need people with specific sets of skills, workers we can slot into place as others retire. Our new, vastly more complicated organisations require high achievers with vision and drive; people who can create positions within the company that we didn’t even realise we needed.
It’s a huge issue for virtually every industry, but most especially for those that, like my own, rely on creativity and curiosity, and an ability to adapt and learn without pause.
There are amazingly talented people out there. I know because I’ve hired a bunch of them. But as difficult as they are to find, they’re even harder to manage and retain. The time a person spends with any one company is being compressed by the disintegration of our old “jobs for life” ethos, and the shifts toward “myself as a brand” and experience-collecting. The problem is not so much losing people to retirement as to entrepreneurial endeavours and entirely different industries. I hasten to assure you that I have no interest in zero turnover. No future-focused business should. But there are very real costs to losing talent you would prefer to retain.
The most valued talent are looking for a broader sense of purpose that makes what they do meaningful
At the operations level, the talent drain represents a loss of smooth processes and workflow, more often than not resulting in an immediate reduction in efficiency. Employee engagement may be negatively affected as team cohesion is disrupted and the responsibilities of the departed employee are distributed among the remaining talent. Morale can take a hit. Strategically, there is a loss of intellectual capital. When a key player leaves, the intimate business knowledge and relationships that were gained may go out the door too.
And then there are the financial costs. This can be as simple as the cost of a replacement hire, which on the low side might be 150 per cent of the person’s salary, including recruitment fees, training, and so on. Far more significant is the loss of a person whose talents, reputation and relationships are at such a level that his or her departure has a negative impact on the company’s ability to win new business or even retain current accounts. This problem is magnified, obviously, in industries based heavily on personal relationships. And it’s not uncommon for the departure of one employee to result in the loss of additional valued talent, either directly or because of dissatisfactions caused by that person’s absence.
So, what do you have to do to keep top talent? There is no single policy that will guarantee your company is a place where people want to work. You have to start by putting talent front and centre, by making it a top concern of the entire C-suite, starting with the chief executive. You need to create an ecosystem that simultaneously supports and challenges – a culture centred on high expectations, mutual respect and constant renewal.
Far too many businesses make the mistake of thinking they can solve the talent crisis by throwing money at people. A big pay cheque may get certain people in the door, but it will hardly ever be enough to retain them, nor is it necessarily going to motivate them to earn it. For today’s leading talent, an attractive compensation package goes beyond salary and stock options to encompass a range of intangibles that are vital to both engagement and retention.
They include the opportunity to learn and grow; to try new things; a boss who is engaged in helping them succeed; a culture that motivates them, and recognises and rewards their contributions; the flexibility to work in a way that makes sense to them and supports other aspects of their lives; the certainty that what they are doing is important to the business and to the people with whom they work.
And, more and more, the most valued talent are looking for a broader sense of purpose that makes what they do on the job meaningful and infinitely more satisfying than simply helping a company reach its numbers or expand its operations.
Happily, we are seeing the beginnings of a shift towards this more people-centric way of doing business. Companies, such as Netflix and Valve, trust their employees to behave as adults and make decisions based on what they know to be right, rather than on what a bulky employee manual dictates. Businesses from Green Mountain Coffee Roasters to PepsiCo are instilling in their talent a sense of purpose that extends well beyond the narrowly defined financial interests of the company.
The top echelons of companies as diverse as Whole Foods, Intuit and Google have come to understand that how a company treats its people, not just executives, but across the board, is now the most critical differentiating factor in business success.
Andrew Benett is global chief executive of Havas Worldwide and author of The Talent Mandate.