The retention of human capital is one of the biggest priorities for boards this coming year. Leadership is laser focused on this issue and it has been a hot topic in the press with headline grabbing statements such as “the great resignation”.
Perhaps boards should reframe the narrative and look at the shift in the workforce not as the “great resignation” but rather as the “great reassessment”.
Employees are deeply reassessing their values, priorities and more than ever before want to work for a company that aligns with their values and gives them a sense of purpose.
As the war for talent rages on, boards and leadership teams must be ready with a plan.
I was recently part of a great discussion group with brilliant colleagues, and I share my learnings from this insightful conversation.
Here are some actionable “tactical” topics for boards and leadership teams to discuss and consider implementing.
One of the ways that we can reweave our connectivity to our employees is to try and engage them with the opportunity to build their skills and career paths and come up with some continuous learning opportunities by creating an online syllabus and most importantly by recognizing and rewarding the continuous learners. The learning opportunities should be related to the company’s industry business objective i.e., things like digital transformation where employees learn skills that are valuable for the next gen of business.
Another big opportunity to consider is the fact that as your workforce reflects on their work from home experience as they begin the transition back to in person work either full time or in a hybrid environment, your workforce is thinking about how they really want to spend their time; and what are their skills and talents and what they want the next phase of their career to look like. Many people have felt a sense of frustration at things they can’t control ranging from inability to travel, wanting to work at home or return to the office when that’s not available. This feeling of lack of control in certain facets of people’s lives has culminated in a need for change in other areas. This I believe has been a contributor to the massive shift in the workforce. One way to acknowledge the need some employees feel for a change (without losing your most talented employees) is to make hiring internally a priority before looking for external candidates. Urge your managers to encourage their teams to look at internal mobility. Make it simple and accessible for your employees to apply to new openings within the company. Taking on different roles and learning new skills can fulfil your employees need for change and help them weave a deeper connection to the company.
Many companies are now starting to think about how to get their workforce to return to the office. Some interesting ideas being used is to have “carrots” to return to the office such as small incentives like meal cards that employees receive when they badge in. This not only is an incentive and perk for employees, but it can also help local restaurants keep their doors open and make the office feel like more of a lively central hub. Employees will not be motivated to return to work if they feel trapped in a cubicle all day because local businesses are not open, and the business district feels dead. It is important to make the workplace feel like a central hub to exchange ideas, work collaboratively and have social connectivity instead of “just work”.
At a high-level, boards may want to have the conversation to actively evaluate / rethink: What is the company’s overarching value proposition to recruit and retain talent? What are the company’s specific plans to encourage retention?
Rather than be reactive to a disgruntled employee base, is there a way to understand your employee base in a more refined / segmented way? Don’t look at your total employee base holistically. Consider using a traditional consumer technique of micro-segmenting your employees into different buckets or teams. For example, perhaps certain geographies or functional groups are more vulnerable and need earlier attention on career pathing. Some employees are in your organization because they want career paths whereas others only want a part time job. Look at it and assess it in different segments perhaps by interests, motivations, demographics, generations, etc. All these different groups will react to and value different incentives.
Do not underestimate the value and importance of employee surveys. Look at your employee survey data and look for future leading indicators on where you may have a problem down the road. Typical questions that are strong indictors of employee morale are their willingness to recommend the company to a friend as well as their likeliness to still be at the company in 18 months. I’ve heard anecdotal statistics that as much as 75% of your employee base might be receptive to a job offer at any time. This is why weaving a strong connection between employees and company values and culture is so critical and can prophylactically immunize your organization from experiencing high turnover.
Another component for boards and leadership teams to evaluate is compensation structures. Everybody has understood that tech companies are experiencing especially high turnover and massive burnout. Different compensation structures are already being employed for critical tech teams.
Boards ought to look at key jobs they “must have” if the company is going to remain competitive….in other words, if the company cannot recruit and retain this set of talent, the company will not win. Understand what your highest value areas are. Think about them differently. Identify which jobs you must really overpay for and offer outsized packages.
In this critical time the board and management should discuss how much time is being spent on the top 100 employees just below the CEO reports. Challenge your leadership team to explain how they are developing career paths and communicating to this critical group how leadership sees their contributions going forward.
Do not underestimate the critical importance of your front-line workers as well as middle management layers. Each layer of an organization has employees that are internal influencers who have an outsized impact on their fellow employees. These are typically your employees who are the most enthusiastic and dedicated; when you lose these people there is typically a disproportionate domino effect fall out.
Suggest that your leadership team specifically engage with their managers cascading down, to understand who the most influential people are who could trigger a mass exodus.
Be sure employees at every level of the organization fully understand their compensation packages and the full range of benefits being offered.
Employees very often as you go deeper into the organization don’t understand all the upsides of their packages. You should assume your employees are potentially being recruited and contacted regularly and being presented competitors compensation packages that at first glance may seem appealing. Be sure you re-communicate all the value of their current full compensation and benefits package.
In such a critical time of talent retention look at empowering your leadership at the lowers level where frontline and second line managers have some small pool of capital they can use to reward, recognize, and retain people. Empower your mangers at the lowest possible level with flexibility to spot and reward high performers. Empowering your management team will also retain and motivate your management team. Driving your decision making down by allowing flexibility within pre-agreed upon parameters has been increasingly effective in driving up employee morale.
Consider how an unexpected bonus is typically more exciting and immediately can improve an employee’s current circumstances vs a small increase in pay that is quickly forgotten. It is important employees feel management recognizes and appreciates their critical contributions and great work.
Boards should discuss with management human capital retention strategies and find creative and innovative solutions to attract and retain the best talent. You do not want to risk finding yourself short-staffed during a critical time of rapid growth or increased demand from customers.