It’s not about luck or misfortune. Executives have a powerful retention solution at their fingertips. And in contrast to the high cost of losing good people, the cost OF retention is free.
While the media continues to report U.S. unemployment around 7 percent, Central Florida technology executives risk falling into the trap of believing that their key employees have few other job choices. The below story tells a different tale that sounds like fiction but actually happened recently.
I met with the top recruiter from a name-you-know global technology company in the lobby of a Walt Disney World hotel. He was in town for succession planning meetings and had identified the players they needed for the next five years. I said I was surprised they had that much internal talent, and he said they did not. But through LinkedIn and other tools, he had targeted their needed talent and had already transposed the photos of targeted technicians from other companies onto their organization charts. That’s how sure he was he could attract them.
In other words, one or more of your key players’ smiling faces might be on their charts and will soon be getting a call. Or a hundred calls. If you have the courage, ask your best players how many headhunters call each week and you might get a chill.
We have moved dog years past the Great Recession when measuring the needs for technical talent. Unemployment for anyone with a college degree is just 3.9 percent and this includes artists, musicians and sociology majors like me.
For most technology executives, thoughts of retaining talent lead to thoughts of paying more money … but here’s the interesting twist: Research and our experience working with clients around the world tell us the following:
- Top reason most employees say they will quit? Money.
- Top reason most employees say they did quit? Money.
- Top reason most employees really quit? Bosses.
Studies by Gallup, Yahoo and the Saratoga Institute all tell us this is true, and another study by global consulting firm Kenexa drives the point home in can’t-miss fashion. Kenexa interviewed 1,000 workers who recently quit and found that how much they liked their pay, benefits, development and advancement was directly correlated with how much they liked their bosses. Said another way, “Bad boss means pay is bad, too.”
There are outliers for sure—workers who will make almost any change at any time for more money. But the data takes us to a clear path that while money matters, direct supervisors matter more. And they need to be your retention point of attack.
Our clients in technology and health care, both in the U.S. and across China, have discovered that people problems and solutions are basically the same in any work environment. People want:
- challenging work they like to do,
- to work with colleagues who pull their fair share,
- to work for managers who they trust.
All three of these conditions are completely controlled by their managers.
Executives, then, have a powerful retention solution at their fingertips that is free: Tell supervisors on every level that they are responsible for retaining their talent, and then assign retention goals and hold them accountable.
Next, teach them to conduct stay interviews with continuing employees and new hires on an established schedule so they learn why employees stay and what will make them stay longer. Focus on duties they have and duties they want, projects that are important to their development, new information that intrigue them, colleagues they want to work with, and behaviors they want their managers to change.
Then build customized “stay” plans for each employee and make those plans happen as appropriate.
As a finishing touch, ask managers to forecast how long each employee will stay. Then develop reports that include stay forecasts and performance ratings so you at the top can track the retention likelihood of your best performers and ask to see stay plans along the way.
When employees do quit, ask managers to disclose their stay plans and forecasts for exiting employees so they learn they are accountable for their talent. Doing so also fine-tunes their skills for conducting stay interviews, developing stay plans and forecasting future turnover. Companies we know apply this step-by-step approach to reduce employee turnover by 30 percent and more.
Above is a graphic representation that adds a twist. We start with costs, as we know CEOs value talent but will value it more if they assign dollars to it first. When the CEO of Webroot learned that losing one software engineer cost $131,000 to replace, he immediately established retention goals and quickly held his managers accountable for turnover.
We like to ask CEOs if they can think of any manager on their teams who fails to build trust with their employees. So far, every CEO has thought of at least one, and this drives home another reason to start retention strategies with managers first. Asking managers to achieve retention goals and forecast future turnover are not just tools but also retention solutions, as they alone generate change. Skilled managers will achieve their retention goals most of the time and fine-tune their forecasting skills by conducting stay interviews effectively. Other managers will either beef up their skills or tell you with their results that they might be in the wrong chair. And that can be a very, very expensive chair.