Remember when, as a child, you would find something that did not belong to you and to claim ownership of it you would shout out “finders keepers losers weepers”. This saying is truer than ever in the modern business world. The finders are the companies that are attracting the best people, the keepers are those that are managing to hold onto such talent, the losers and weepers are losing competent people on a regular basis.
Companies need people and talented people give almost any organisation a distinctive competitive advantage. In a recent survey of over 100 entrepreneurial business owners in South Africa, the greatest challenge in growing a business was related to people. Forget cashflows, funding, technology, global markets or anything else, more than 80% of those surveyed said that people related issues where their biggest frustration.
Common challenges included: “finding experienced staff”, “holding onto people once you have trained them”, “choosing the right partners”, “affirmative action”, and “creating team cohesion”. Jerome Lucas, managing director of People SA, a recruitment and people development consultancy, says:
“Although many of our regional social and political issues are proudly South African,there are many, including skills shortages and high staff turnover, which are a global phenomenon. Skills are more easily transferable across international boundaries and employees have an abundance of choice in an age where access to information is just a broadband connection away.”
A few years back, McKinsey released the results of a seven year study focused on the war for talent. They contrast the old and new reality for companies as shown in the table below.
Few businesses are finding this new reality easy. Globally, the employee turnover rates are approximately 25% per annum.This means that on average organisations are replacing their entire workforce every four years. It has been estimated that the cost of losing an employee is 150% of the total cost of employing that employee. Therefore if you lose a manager who has been paid R300 000 per annum, the cost of replacing that person and getting the new manager to the same level of productivity will be in the region of R450 000. These horrifying statistics have important implications for customer service, competitiveness, cost control, morale and delivery within organisations.
South African organisations have some unique challenges when it comes to attracting and retaining people. Howard Davey, managing director of OTIS SA says: “The need for effective attraction and retention strategies is not restricted to South Africa; however South Africa does have added complexities, as in addition to technical skills shortages, there is a general shortage of basic managerial and leadership competencies.
“This is the direct result of an education system that has significantly deteriorated in its ability to provide adequate developmental capabilities in the core areas of verbal reasoning and problem solving. A strategic review in 2001 indicated that the engineering industry in South Africa had experienced a massive migration of technical skills – thus affecting engineering and manufacturing firms’ ability to deliver the levels of quality the customer base had been used to in the past. For South African companies the challenge is not just skills retention – skills development is just as critical.”
If you want to be competitive in today’s business environment, you need to attract, retain and invest in people so that you can be the one chanting “finders keepers, losers weepers” not the one listening to your competitors chant it as they steal good, talented people.
The old reality
|People need companies|
|Machines, capital and geography are the competitive advantage|
|Better talent makes some difference|
|Employees are loyal and jobs are secure|
|People accept the standard package they are offered|
|Jobs are scarce|
The new reality
|Companies need people|
|Talented people are the competitive advantage|
|Better talent makes a huge difference|
|People are mobile and their commitment is short-term|
|People demand much more|
|Talented people are scarce|
Finding talented people is a critical business leadership process. In a previous study that we did of highly innovative global organisations we discovered that one of the most critical elements of creating an innovative organisation was recruitment. In order to be innovative, step number one is to get the right people in the door. Getting the right people in the door involves accessing talent, selecting talent,incentivising talent and orientating talent.
Where do you find good, talented people who will fit with your organisation?
- Your personal network. One of the best places to find people with the same values, work ethics and motivation as you is within your personal network of contacts. Your network will know you and your organisation and be able to recommend people that they feel fit well and are likely to succeed.
- Your employees’ network. Everyone within your organisation has a network of contacts. They know the organisation well and if briefed appropriately will be able to target people with the right skills, passion and values.
- Your employer brand. Build a brand as a good employer. Google gets over 5 000 resumés a week because it has developed a reputation as a great employer offering freedom, food, fun and many others great perks to employees. Google makes sure that many outsiders in the IT community and at universities know about the benefits of working there and it becomes a destination employer, which means that people go to it. As long as you have a process for quickly and effectively working through large numbers of resumés, this can be an effective strategy for accessing talent.
- Recruitment consultant relationship. If you are going to work with recruitment consultants, build a relationship with them. Make sure that they really get to know you, your organisation and yourneeds. If they are not paying enough attention to who you are and what youneed, look elsewhere. There are lots of recruitment consultants out there andyou will be able to find one that cares. Recruitment consultants that are justin it for the transactional fee are useless; recruitment consultants that arewilling to build a long term relationship will be able to add value.
How do you select the right people?
- Hire for passion, accountability and cultural fit – train for skill. Passion, accountability and cultural fit a real most impossible to develop. Either the person is passionate about the business or they are not; they either take accountability for their actions or they blame others; and they are either going to fit into the culture or they are not. You can always train for skills but you can seldom change a person’s values, so make sure they fit with what you need.
- Employee interviews. Make employees part of the interview process. Current employees often have a better idea of the job requirements than you do and if they are part of the hiring decision, then they are likely to make a greater effort with the new person as they will have a vested interest in validating their decision. Ricardo Semler of Semco went as far as to involve subordinates in the interview and selection of new managers.
- Presentation and simulation. One of the things that we have found to be powerful in the hiring process is to simulate actual situations that the applicant will face in the job. For instance if they are applying for a training position, make them run a training session; if they are applying for a research position, make them do a mini research assignment and feed the results back to a small group.
- References. References are critical to any selection process, but in collecting references, do the calling yourself,take a bit of time to build a relationship with the referee and ask them to be honest and forthright with you. Many referees just want to get the call out the way (we know because we have been there) but if they sense that you really care and are genuinely interested in the truth, they will give you more time and honesty.
How do you orientate people in a new job so that they can be as effective as possible in the long-term?
- Peer mentor. Provide a new employee with a peer mentor who serves the purpose of drawing close to the new person and showing them the ropes. Such a person should not in any way be responsible for the new person’s performance evaluation.
- Spend time. Adrian Gore, founder and CEOo f Discovery spends a morning with all new employees introducing them to the company and challenging them to “be great”. Ronnie Apteker, founder of InternetSolutions does the same for new IS employees, even though he is no longer part of executive management. Interaction with a high level founder or leader has a profound impact on new employees and causes them to catch the essence of the organisation faster.
- Feedback. New employees yearn to knowhow they are doing. Give them constructive feedback, positive and negative, if you want them to acclimatise faster.
How do you incentivise people to join your organisation once you have decided that they are right for the job?
- Passion and purpose. People are attracted to passion and want to work on something that is meaningful.Demonstrate your passion for what you are doing in interactions with applicants and highlight the bigger purpose of the organisation (over and above just making money) as you tell them what you do.
- Development opportunities. New economy employees place a great deal of emphasis on their development and will therefore factor training, coaching and challenging tasks that foster development into their decision about where to work.
- Appeal to a value system. Every person has a unique set of values that they look to satisfy through work activities.These values usually supercede money in a decision about where to work. If you believe that an applicant’s values link with the organisational values and your personal values, highlight this and try to demonstrate it in the selection process.
- Payment range. Although it has been proved on a number of occasions that salary is not the number one factor influencing a person’s decision to take a job, if the payment you are offering is not within an acceptable range then you won’t even be considered. Make sure you are higher than the bare minimum if you want to have a chance of engaging that person.
Keeping talented people.
Finding talented individuals is one thing,but keeping them is a completely new challenge. Trained talent is worth so much to an organisation’s productivity, customer service and ability to seize new opportunities that talent retention cannot be seen as a random ad hoc process.
If you want to be wise in managing your business, then you need to be strategic and clever about retaining your good people. Some 70% of managers think employees leave organisations for more money but in truth 88% of employees say they leave for much more than just money.Good, talented people don’t actually leave an organisation; they leave a manager or supervisor in that organisation. Therefore, organisations that become magnets for strong talented people have good leadership at all levels of the organisation. How effective are you as a leader and is your leadership style a strength or a weakness in your talent
What do talented employees want?
In trying to understand what influences talented individuals to stay with or leave an organisation, we asked over 30skilled, educated people working for small and medium sized entities what attracts or repels them in a job. In summarising these findings we came up with a list of demands of talented employees.
If you want to hold onto your talented staff, consider whether you are providing them with what they want. If they are not getting what they want they may decide to look elsewhere.
At a recent seminar, Ricardo Semler, CEO of Semco, said: “I haven’t made a business decision in 13 years. I don’t need to!”All his employees are empowered to make these decisions and they do. Perhaps that is why in 25 years, Semco has an average employee turnover rate of 1% per annum compared to the global average of 25% per annum.
Wells vs. Fences
Dr Graeme Codrington, head of intellectual capital at TomorrowToday.biz, a strategy consultancy focused on helping companies get the most out of their talented staff, tells the story of a SouthAfrican sheep farmer who goes to Australia to visit his brother. In South Africa, a lot of his time as a Karoo sheep farmer is spent on maintaining the fences at the edges of his farm.
The Government even knows how important fences are, and provides many incentives to help farmers keep them perfectly in tact. Of course, the sheep often move to these fences and graze at the edges of the farm– sometimes even putting their heads through the fence to taste the sweet,green grass on the other side. But on his brother’s farm in Australia, the focus is not on building fences. In fact, many outback sheep stations don’t even have fences.
Their focus is on building wells at the centre of their farms. They know that the best way to keep sheep on their stations is to dig deep, clear, cool wells of water at the centre, and to draw the sheep in and keep them close. Codrington says:
“The same applies in our businesses. Too often, we spend our time building fences (contracts) to protect the edges, and don’t take the time to focus on making the centre attractive. We focus on stopping people leaving, rather than giving them a reason to stay.”
All the trends suggest that the skills shortage is not going to go away anytime soon. When it comes to talent, the concept of “finders keepers, losers weepers” will remain a reality for years to come. If you wish to be competitive in the future, you need to be strategic and deliberate about attracting and retaining the best talent. If you don’t, then you may just find yourself surrounded by “bozos”, unable to compete and getting beaten in every aspect by those who have been effective in this regard. The choice is yours.
What Talented Employees Want:
- An organisation with a strongly communicated and lived vision. They want to be strongly connected to an organisational purpose.
- Strong, visible leadership.
- An opportunity to gain work and life experience.
- A fun, stimulating environment.
- To be challenged intellectually and emotionally. In fact some effective employees refer to work as a spiritual experience when fully engaged.
- To feel like they are adding value to the organisation. They want to contribute to colleagues and clients daily. They don’t want to feel like a number regardless of their position in the company.
- Ongoing learning, both formal and informal.
- Strong mentoring and coaching processes.They want ongoing feedback from leaders.
- The opportunity to be connected to other people and teams. They thrive in a positive collaborative working environment.
- To be given the resources to do their jobs with excellence.
- To be fairly remunerated.
- Recognition for their work.
- The opportunity to gain a broad range of skills.
- No bureaucracy, red tape and meaningless procedural activities.
- To know that their organisation has big ambitions and that they are included.
- An end to micro management.
- To be trusted and held accountable for their actions.
- To be in an organisation that is innovative and value adding.
- Work-life balance.
- An organisation that assists them in becoming the best they can be.
|Develop and communicate a gripping vision – lived by all|
|Exercise strong leadership. Recognise generational differences and exercise leadership appropriate to the situation (situational leadership)|
|Institute meaningful mentoring and coaching structures. Follow through.|
|Provide continuous challenge and excitement|
|Empower staff to be part of the business|
|Foster an innovative culture|
|Reward output, not input.
Nurture and encourage work- life balance.
|Institute employment arrangements based on trust and common understanding.|
|Recognition for effort (monetary and non-monetary)|
|No vision, or even worse a strong vision that is only paid lip-service.|
|Still applying 20th Century control and command management principles in the 21st Century|
|More concerned with operations. No time for leaders to mentor or coach staff.|
|Routine jobs with little scope for change|
|Decisions are made by leadership and staff only get to implement without any attached meaning|
|Still driven by 9-5 desk job syndrome|
|Extensive, restrictive contracts to keep staff in place|
|Hard effort goes unnoticed. Everyone is too busy to notice. Effort taken for granted.|