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- 17 May
This is part 6 of 8 in Balance Now’s #turntalk2action series. Each post shares what works in a specific phase of the employee lifecycle. The focus of this post in on retaining top talent.
Over the past two years, we have seen significant investment from our clients in attracting diverse talent – be it through specialist recruiters, job boards, innovative incentives, targets or better interviewing. The good news is, it’s working. We are seeing more and more women appointed into senior leadership roles. The bad news is, in even the most mature organisations, we see plenty of diverse talent leaving too.
So Why are People Leaving?
There are numerous external explanations such as old economy vs. new economy (think Black Cabs vs. Uber), companies losing their brand creditability & trust (think all the banks – we should know!), culture is not positive & progressive (think AMP vs. Atlassian) or that the company does not pay or treat its employees fairly (think 7 Eleven, Dominos and the long list of franchised business models), as well as the majority of Australian corporates who still underpay women.
That’s partly true, however evidence suggests there is much within our control and we aren’t focusing enough effort into retention.
The main reason companies lose talent is the employee’s manager.
“A 2017 Gallup poll of more than one million employed US workers concluded that 75% of workers who voluntarily left their jobs did so because of their manager”
This is supported by an Australian Human Resources Institute (AHRI) research study in 2015 that showed there was a 16% turnover in workplaces, with the majority changing jobs because of matters directly accountable to the manager.
Why Do Talented Employees Leave their Manager?
The same AHRI study showed turnover was predominantly influenced by:
- Better career opportunity
- Lack of career progression
- Better pay
- Poor relationship with manager
All these factors are the responsibility of the manager. Managers need to have the ability to directly change some of these factors and companies need to make it possible for their managers to make these decisions. Managers need to be trained and resourced to have effective employee interactions to prevent the loss of talent.
Acknowledging that, no managers can absolve themselves of the responsibility of openly communicating with, and advocating for, all of their employees.
What About Talented Women?
For women the outcomes are worse, as our workplace systems are already biased against them. We know that men have better career prospects, are paid more, do less of the unpaid work at home and are more likely to form good relationships with their managers (as they are most likely men who are similar to themselves). We’ve written about the importance of men in decision making before in The Tricky Business of Engaging Men.
We’ve also seen in Susan’s most recent blog Will Your Best Talent Return, why many talented women leave an organisation based on the lack of support provided when they decide to have a family.
A Few Retention Stories
In our time as senior executives, and through our work at Balance Now, we’ve seen the good, the bad and the ugly of retaining key talent.
We had a senior IT leader in a focus session last month who, as part of the organisation’s talent mapping process, identified a very high potential (female) line manager in his team. Within a 3-month period he had met with her to discuss professional and personal goals (it turned out she had a passion project on the side to build an app for a charity), challenged her idea that senior leadership was too “stressful”, gave her a stretch project in another business to increase her exposure, connected her with a mentor and helped draw up a path towards fulfilling her real (or true) potential. Needless to say, she was promoted and remains incredibly loyal.
During my time as a banking executive, we were hiring some very talented women from other organisations into our financial markets team. Often, they didn’t have previous experience in the specific market we were in, but they had leadership skills, critical thinking and other skills we lacked. While they could and should have been successful, some of my technical, insecure leaders were threatened and responded with micro management. This created a loss of confidence and we lost some of those talented women before we addressed the leadership problems. To this day, my biggest lesson has been that there is no room for leaders such as these in a top performing team.
A large energy company we were interviewing as part of our first research project explained that they had three senior executive roles become vacant in the preceding year. This had been a great opportunity for them to consider a diverse range of candidates. Despite some intervention from their Chief People Officer and Diversity Manager, all three roles went to men. Subsequently, in the following three months they lost three talented senior women in various divisions to competitors. Seeing is believing.
So, What Should You Do About It?
Lift the Skills of Your People Leaders, Support Them & Hold Them Accountable
Firstly, let’s get rid of the saying that a manager’s role is to ‘hire & fire’. Very few employees are fired, and if they are it’s mostly for doing something silly or behaving badly.
We need to change the mindset, to ‘hire & retain’. The most important role of any manager is to employ the best people and to look after their best interests.
What ‘hire & retain’doesn’t mean:
- Hoarding talent for personal gain
- Making talent work harder than everybody else
- Expecting more of talent but supporting them less
- Being inflexible to reasonable requests on training, career opportunities or flexible working
- Passing talent over for promotions, pay rises, company equity or partnerships if they work flexibly or part time
What ‘hire & retain’does mean. Firstly, the hygiene factors:
- Tell them they are doing good things, frequently
- Pay people fairly, equitably & transparently
- Provide clarity on expectations & good performance
- Ensure they have the necessary tools, training and support to do their jobs
- Be human – talk to them, get to know them, understand them
- Have regular honest, open and supportive performance, career and development conversations
Have Clear “Real” Career Pathways
Your employees need to be able to understand and personally witness the career options available to them. This clarity creates excitement & ambition. It also makes building a training and development program for each employee much simpler. Few companies do this well and those who do enjoy a significant competitive advantage.
Develop Effective Retention Strategies
In our work at Balance Now we’ve found that very few companies have a deliberate process or function for retaining talent. This seems counterintuitive when you consider the costs of losing key employees such as the loss of productivity, re-hiring, training and ongoing development. These costs are estimated to be at least 100% of the lost employee’s salary.
- Have a retention strategy – Usually it’s left to the manager to scramble around at the last minute to find out why talented employees are leaving and offer some ill-advised enticement to stay. When at least 75% of people are leaving because of that manager, this process is doomed. In our ‘Retain’ process we immediately inject independent third parties empowered to make critical decisions such as flexible working, career choices, training support and remuneration changes to ensure the company does not lose talent.
- Understand “at risk” talent – This is an often-overlooked part of the talent management process. It’s either not considered or is reliant on the views of the current manager. These same managers are using their own perceptions, direct conversations with employees and their views are often clouded by hubris. The ability of an independent observer to recognise “at risk” talent by their behaviour, the actions of their managers and broader organisational issues is critical.
- Invest in talent BEFORE they leave – Sounds simple, but it’s not. Investment doesn’t only mean money, but also time, effort and support. Take the time to understand your employee’s perspective, career choices, developmental needs and outside interests. Convert this understanding into support for their goals. Getting experienced employees involved in mentoring, delivering training programs and learning new skills is a great way to entwine them more into your company and retain them forever.
If you are interested in building a strategy to retain your key talented employees, and to understand the impact of inherent bias on women and other employees, please Contact Us at Balance Now.