Keep focused on your best people

Management consulting can be likened to a ‘fashion business’, in the sense that new ideas fall in and out of vogue all the time. At the height of the Celtic Tiger,labour retention was definitely ‘in’.  Trying to keep up, I wrote a book called ‘Keeping Your Best Staff’.  The book attempted to distil the methods deployed by the best-managed companies to create what’s sometimes referred to as stickytalent.  In the years of austerity that followed the fall of the Celtic Tiger, Labour retention disappeared off the radar.  Companies were happy to let people move on, sometimes to avoid the dreaded conversation (“Tony, I have some bad news…”)and to save the associated redundancy costs. But, with the economy now back in ‘re-heat’ mode, it’s time to drag that book back off the shelf. It’s a complex topic to capture in a few paragraphs, but here’s a couple of points to kick-start your thinking…

Intervention #1: Hold Onto Your Leaders:  At a time when leadership talent is again at a premium, organizations face several contradictory trends:

• Lowered Loyalty:Executives now typically see themselves committed to a career — rather than an individual organization i.e. they have to be given a ‘reason to stay’. In the banking sector in Ireland – historically – it was tantamount to treasonto work for a competitor. Now staying with the same bank for a lifetime is the exception rather than the rule.
• Talent Wars: As the ‘war for talent’ increases, there’s emerging evidence of systematic poaching, in some cases encouraged by headhunters who make a living from ‘executive churn’.Don’t take talent for granted.
• Leadership Development:Organizations often don’t have the skills internally to make a real difference around leadership development. You get hired. You get ignored. Then you leave. Generic ‘sheep dip’ management development programmes (labelled ‘cheque book development’– because they require zero involvement by the employer) don’t cut the mustard.
• 100% Capacity:Many senior executives report being underutilized(not underworked). Example: Executives are not engaged in the succession planning process (it’s done tothem not withthem). Suggest: Throw away that ‘black box’ and make this process transparent.

• Intervention#2: Be Alert to Early Warnings: Early warning signals often indicate that employee’s concerns are changing.  Option A: Completely ignore this. Option B:  Make an intervention to prevent concerns degenerating into defection. What should you look out for?
• A noticeable change in behaviour patterns or attitude e.g. loss of enthusiasm.
• A non-complainer expressing discontent (ignore lifelong ‘complainers’ who can’t be cured – they won’t be happy in Heaven).
• Discussing salary surveys and benchmarking, particularly regarding key competitors (or referring to former staff and how great their ‘new job’ is).
• A noticeable drop in productivity or a change in work habits e.g. reduced hours.
• Not wanting to meet socially and generally withdrawing from others.

Executive Response:If you detect early warning signals, arrange to meet privately with the employee to discuss your observations.  Follow these guidelines…

• Explain the purpose of the meeting and thank the person for their time.
• Refer to the ‘early warning signal’ you’ve detected. Probe: does it represent a deeper concern?
• Summarize the response from the employee’s perspective.
• Ask for the person’s ideas to help address the concerns expressed.
• Decide the actions each of you will take and set a follow-up date.
• Thank the person for being candid. Reinforce the mutual value of the relationship.

Intervention #3: Start Measuring Labour Turnover: How much is labour turnover costing you? Perhaps you don’t know because no one is measuring this. Well, I measured it in 2 organizations. Before we completed the analysis, the ‘guesstimates’ were all low-balled – usually only taking account of the direct ‘replacement costs’ e.g. the cost of advertising and hiring. In one manufacturing company – where we completed a comprehensive measurement – the cost of replacing a single Technician was an eye-watering €230,000. I found it hard to believe myself – until we factored in the ‘waste’ of very high raw cost materials (silicon) that a new employee destroyed during a 9-month training period. OK, I’m using a ‘high cost’ example to make the point. But, many organizations would be surprised at how much Labour Turnover actually costs.  Change the conversation from: “Labour turnover is a pain in the ass”to “Labour turnover is costing us €1.3 million a quarter”and watch the lights go on. A ‘stitch in time’ and all that good stuff…

Managing Labour retention is hardly rocket science. But then again, not too many things in management are particularly complex. Don’t confuse simple with simplistic. This stuff works in the real world. If you are asleep at the switch, the next labour turnover statistic may be your own!

Paul

PS Lighter Notes: A couple of jokes to get the week off to a good start…

The Raise: Sam walks into his boss’s office and says:

“Sir, I’ll be straight with you, I know the economy isn’t great, but I have over three companies after me, and I would like to respectfully ask for a raise.” 

After a few minutes of haggling the boss finally agrees to a 5% raise, and Sam happily gets up to leave:

“By the way,”asks the boss, “Which three companies are after you?”

“The electric company, water company, and phone company!”

Day Off: An employee goes to see his supervisor in the front office.

“Boss,”he says, “we’re doing some heavy house-cleaning at home tomorrow, and my wife needs me to help with the attic and the garage, moving and hauling stuff.”

“We’re short-handed,”the boss replies. “I can’t give you the day off.”

“Thanks, boss,”says the employee “I knew I could count on you!”

Salary Expectation: Reaching the end of a job interview, a Human Resources Manager asks a young engineer fresh out of College about his salary expectation. The engineer replies:

 “In the region of $125,000 a year, depending on the benefits package.”

The interviewer inquires: “Well, what would you say to a package of five weeks vacation, 14 paid public holidays, full medical and dental, company matching retirement fund which is 30% of salary, and a company car leased every two years, say, a red Corvette?”

The engineer sits up straight and says: “Wow! Are you kidding?”

The interviewer replies, “Yeah, but you started it.”

The Holiday: I met a French guy on holiday and he forced me to start drinking and smoking. Bloody Pierre Pressure.

Text Message:  My wife texted me after an argument to say that I was very condescending. To be honest, I was surprised that she could spell it!

 Check our website http://www.tandemconsulting.ie or call 087 2439019 for an informal discussion about executive or organization development.