Rethinking Talent Retention Strategies: Have You Fully Considered All the Alternative Solutions?
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It's now becoming a familiar story: Highly trained and knowledgeable employees suddenly, and without warning, resign.
Many companies attempt to convince the employee to withdraw their resignation by offering significantly higher base salaries coupled with higher rates of performance-based compensation.
In many instances, "special perks" are also offered – especially to an employee contributing significant profitability and deemed irreplaceable in the short run.
This sometimes works. But – based on many business news stories – increasingly such offers are rejected.
Indeed, it seems (from dozens of informal conversations with HR executives in organizations of all kinds and sizes) the rejection rate of these generous offers far exceeds the acceptance rate.
Going From 'Nice To Tough' – Expect Resistance
The talent retention problem is worsening. This has caused some organizations to take a "get tougher" approach.
Translated, the employee is sometimes told: "If you leave and in any way violate your non-compete contract, we will sue both you and your new employer."
This rarely works. It certainly is not an effective approach to maintaining or creating a high-energy workplace – characterized by having a larger percentage of "engaged/highly productive employees” than competitors.
Ken Blanchard and Spencer Johnson, long ago, warned in their all-time best-selling book, The One-Minute Manager, "going from tough to nice" is easy and usually well-received.
But – and this is a big "but" – going from " nice to tough" is fraught with the risk of employee resistance and hostility to the abrupt change in attitude and flexibility.
Engaged Employees Create, Keep and Grow Customers
We'll discuss in Part II of this article, the importance of "engaged employees" versus "not engaged" and "actively disengaged" employees.
The name of the game is to shift "not engaged employees" into the "engaged employees" grouping.
Let it suffice for now to say: engaged employees are employees properly motivated to spur entrepreneurship… practice continuous productivity improvement in all areas within their domain… and are capable to set into motion innovation activities/projects aimed at creating and keeping customers.
The Gallup organization among others have statistically shown companies with a higher than average percentage of "engaged employees" are highly associated/correlated with superior customer engagement… lower absenteeism… higher worker productivity… successful innovations… and ultimately stronger market standings coupled with steadily increasing profitability.
Let's Reiterate This Last Point
According to Jim Clifton, Chairman and CEO of Gallup, "Customer engagement drives sales growth and stock price increases…[but] employee engagement drives customer engagement…"
On the other hand, warns Clifton: "Miserable employees create miserable customers."
And we all know the result of unhappy customers.
In no uncertain terms, the pathbreaking work of Clifton and Gallup distills years of observation, study and practice of what is required to create and maintain a high-energy workplace characterized by entrepreneurship, innovation and other core competencies required for winning and keeping customers.
Indeed, from our perspective, Gallup and specifically Clifton's work in the area of employee engagement is accepted worldwide as the seminal work in explaining the relationship between employee engagement and customer engagement.
Interestingly enough, there are must-do management practices that can be employed to create the required attitudinal changes for moving "the not engaged" to the “highly engaged" column.
A Glimpse at a Simple Management Practice
What follows is just one of many management practices (we estimate at least 15) that go a long way in creating higher/more employee engagement.
One of these practices, for lack of a better name, could be called the power of thank you.
Gallop and many other research organizations have shown again and again when employees receive recognition or praise for doing good work, they are more likely to become more highly engaged workers.
A Quick Lesson About the Power of Thank You
There is an age-old story about an 11-year-old boy who launched a business to sell Christmas trees.
He knocked on many doors and used all available contacts with the expressed purpose of selling his Christmas trees.
As part of his unique selling proposition (USP), the young man told each and every potential customer that he would be using the money earned to go to summer camp – which was his lifelong dream.
People were impressed, and many purchased their Christmas tree from the boy.
The story does not stop here. The youngster earned enough to pay for two months of summer camp.
After a few weeks, the boy wrote a personal note to each and every customer thanking them for buying his Christmas trees.
Further, he enclosed pictures of himself swimming, canoeing, making lanyards in arts and craft class, and engaging in many other camp activities.
At the bottom of each personal note, he thanked the purchaser for making the summer of his dreams a reality.
He concluded each note with: "Your kindness and help made my dream come true."
As winter approached, he once again sold Christmas trees… and he called each and every past customer.
They were delighted to hear from him. Many said they told all their friends about his thank you note and pasted the note and summer camp photos on their refrigerator.
In many instances, they gave the boy the names of their friends who would likely be good customer prospects which, indeed, they turned out to be.
Business quadrupled and enabled the young man to not only enjoy another year of summer camp but also start a college tuition fund.
In Part II of this article, we will elaborate on more of these practices that go a long way in doubling employee engagement.
If most of the practices are put into practice, it's almost near-certain the results will be astounding.
To Summarize
We strongly believe L&D organizations would be wise to learn exactly what these practices are and design relevant training programs for managers/executives to put these practices into practice.
If these practices are carried out systematically, purposely, and with understanding, they will result in reducing talent turnover, and absenteeism while simultaneously creating a high-energy workforce dedicated to continuously getting better and better and doing new and different things to create and keep customers
The "Get Tough" approach: it's more likely to create a low-energy (if not worse) work environment.
That's not to say that in certain situations it's not the right approach.
Are You Dealing With the 'Symptoms' of the Talent Retention Problem or the ‘Assignable Cause' Responsible for the Symptoms?
It's true: Many organizations are using symptomatic diagnosis (a big no-no) in dealing with the talent retention problem.
In making decisions, perhaps the most important step is to make sure you've defined the right problem.
Practically no problem in business - or for that fact life – ever presents itself as a case in which a decision can be immediately taken.
What appears at first sight to be the obvious problem rarely turns out to be the problem.
Typically, what is initially seen are the symptoms of the problem, not the problem itself.
You may see a clash of personalities as the cause for a given resignation and introduce sensitivity training as the remedy; though the real problem may well be a poor/inappropriate organizational structure.
You may see the reason for a given resignation as an employee being offered a much higher salary and other benefits; the real reason may well be the employee feels he or she was not appreciated and/or lack of growth opportunities (i.e., the opposite of growth is not no growth, but rather decay).
Perhaps the right questions should be focused on "why people stay?"
Organizational Inertia – Is it Time to Pilot New Kinds of Organizational Designs?
Many organizations have outgrown their philosophy, policies, habits and past practices or rules of behavior.
Unless the people in charge can change their vision and habits and do what needs to be done to encourage high employee engagement and, in turn, high customer engagement, the organization could soon deteriorate due to a brain drain.
If the organization continues with its existing organizational structure, talent acquisition and retention becomes exceedingly more difficult.
Command-and-control structures are not ideally suited to a talent-based workforce. And, yet, many organizations still cling to organizational designs that no longer work and do not provide what is needed to retain talent.
There are several Drucker - inspired structures including one called "The Responsibility Based Organization (RBO)” which has proven itself successful in many knowledge-worker-based organizations.
Improving the productivity of knowledge workers and service workers, as validated by many thought leaders and evidence-based results, demands fundamental changes in the structure of organizations.
In the simplest of terms, a responsibility-based organizational design starts with the development of an explicit, thoughtful, and thorough strategic plan detailing what must be done to achieve results.
Said Drucker: "… Our aim should be to make people more responsible… What we ought to be asking is not, "What should you be entitled to?" But, "What should you be responsible for?…
… The task of management in the knowledge-based organization is not to make everybody a boss… It is to make everybody a contributor…"
Stated differently, to turn the strategic plan into performance requires a tactical work plan (the how-to-do-it) that spells out work assignments, measurable goals and targets, deadlines for performance and accountability for results.
The purpose of doing this is that every employee associated with a given business unit knows exactly what they are responsible for… and what their expected contribution to results must be if goals/objectives are to be achieved.
Take-Home Message
According to Drucker, the aim of an RBO is to make people more responsible by asking them what should you be responsible for?
The focus must be on making everyone a contributor. And providing meaningful rewards related to actual performance.
The emphasis today on making every employee a manager has not really worked. Making everyone a contributor in many organizations has worked like a wonder drug with respect to achieving desired performance.
Get Ready. Get Smart. Grow.
In larger organizations, the decentralization of decision-making is becoming a new reality.
Creating the entrepreneurial equivalent of smallness within the larger organization is rapidly growing in popularity.
Semi-autonomous business units are being formed, with the possibility of equity in the unit being awarded. This creates many opportunities for career growth as well as, once again, a higher ratio of employee engagement.
Recently, Alibaba announced a major restructuring of its organization to empower business units to be more agile as business challenges mount.
In essence, separate units will be formed to decentralize decision-making and encourage each unit to lead (not just manage) change.
The hoped-for result will be more aggressive abandonment of marginal mediocrities… a new emphasis on continuous productivity improvement in the domains for which managers are responsible… exploitation of existing successes (i.e., using money and people saved by sloughing off but no longer works)… and creating the appropriate structures and practices for purposeful innovation.
This concludes Part I. Part II will dig deeper into how to convert "not engaged" employees into "highly engaged" employees capable of making a major contribution to the organization's future growth and prosperity.
