The media reported last Monday that the “UK is officially out of recession”, business sentiment and a reality check by the end of the week on Friday suggested that leaders now fear a W-shaped recovery. Over the weekend some better news from Austria, where the manufacturing output expanded at fastest pace since March 2008 (Key Points: 1. Both production and new business increased at steeper rates. 2. Outstanding business rose. 3. Slowest fall in employment since August 2008.) This morning the FT reports that Eastern Europe have outshone their peers with the strongest performance in the world over the past 6 months.

Why talk about retention in the midst of recession when there isn’t much of a job market? Retaining top performers is of course key for any business, this year most especially with the prospect of the upturn arriving (especially for the banks who fear the loss of key talent to rivals as they adjust to regulatory requirements from the government’s that prevented them from sinking). Stronger signs of market recovery will see HR and talent functions scrambling for the decision frameworks that will logically connect talent decisions to project and strategic success …. “on time”.

The first question to ask is why do employees leave organisations?

Every company faces the problem of people leaving the company for better pay or profile.  One of the largest studies by the Gallup Organisation surveyed over a million employees and 80,000 managers and was published in a book called “First Break All The Rules”. To quote:

If you’re losing good people, look to their manager …. manager is the reason people stay and thrive in an organization. And the reason why people leave. When people leave they take knowledge, experience and contacts with them, straight to the competition.

“People leave managers not companies,” writes author Marcus Buckingham.

Mostly manager drives people away?

HR experts say that of all the abuses, employees find humiliation the most intolerable. The first time, an employee may not leave, but a thought has been planted. The second time that thought gets strengthened. The third time, the person looks for a new job.

A book of recommendation which hits on some of this is abtly titled “The No Asshole Rule: Building a Civilized Workplace and Surviving One That Isn’t” by Robert I Sutton. Personally, I have seen projects, departments and businesses suffer even fail because of such - AH’s. Most people, I imagine have had similar experiences in some way, shape or form at work. Different managers can stress out employees in different ways – by being too; controlling, pushy, suspicious, critical, etc and forget that people are not fixed assets. What’s worse, the behaviour tends to filter down through the management organisation to reinforce a culture of ”command and control”. 

People who cannot retort openly in anger will often do so by passive aggression. By digging their heels into the ground and slowing down. By doing only what they are told to do and no more and ommiting to offer crucial information and feedback to the boss.

Talent leaves! Poor performers stay?

Underperformance is endemic of every company especially those excited about their high retention rates/lack of retention challenges. I don’t believe “the corporation” will ever have the ability to remove poor performance, no matter how many performance/reward systems and measures are put in place. In fact, there is a good chance that poor employee performance will probably increase in large corporations over time. Engagement and employee surveys are all saying the same thing for years – people leave in most instances because of the manager/leader. This should resonate through for anyone in HR or leadership who have conducted exit interviews, most of the responses are not about policy and procedures, but are about the person who was meant to be not only managing, but leading the individual.  Employee turnover is not a once off event but a process of disengagement that takes days, weeks, months or even years until the actual decision to leave occurs.

People complain of poor management when what they need is good management. Identifying some of the key reasons employees leave we can perhaps better identify what it takes to make employees want to stay and become more engaged.

 Why people leave their employer’s?

Employees begin to disengage and think about leaving when one or more human needs are not being met. These needs include:

• Trust. Expecting the company and management to deliver on its promises, to be honest and open in all communication with us, to invest in us, to treat us fairly and to compensate us in a fair and timely manner.
• Value proposition and self worth. The confidence that if we work hard, demonstrate commitment, do our best and make meaningful contributions, we will be recognized and rewarded accordingly.
• Competence. Expectation that your job is aligned to your talent and desire to be challenged. Top talent want new and positive challenges. Your competition’s recruitment process emphasizes new challenges; your 2010 survival plan does not.
• Energy: For the majority last year was a tough year. Morale in many organisations is at an all time low – for many it will be time to move on.
• Hope. The belief that we will grow, develop our skills and have the opportunity for advancement or career progression.
• Change: The world has changed, the way we work has changed, industry has changed, the technology has changed, the crisis has changed and even the change has changed! 2010-2020 offers up a new and very different business/employment landscape.
• Leadership: Managers have not really changed their leadership approach since the advent of the economic downturn, and communication and recognition are lacking. As a result many employees think they’re no longer a priority to their company. There’s a distinct connection between turnover, and how a manager communicates with their employees.

 

At many companies the best employees are often taken advantage of while the less successful employees are allowed to basically just to turn up on time for work, which leads to burn-out and total dissatisfaction with what they once believed to be a great job.

Companies with successful growth often outpace the skill sets of their employees. The employees who were essential in starting a great company are often not the employees needed to sustain that growth or diversify it. Resulting in a talent gap, a negative culture change and inevitably a revolving door/talent deficit.

Many organisations have during the recession taken advantage of their employees. Asides from cutting costs many organisations go too far – jobs are not only cut (skills development, reward, teams, career development, etc). This is why companies must take the risk to continue developing employees who will be open to it, as well as recruit better employees. They must fill the gaps. Average employees cannot do this. The company must look for talent at all levels elsewhere. This in turn, brings with it resentment. Average employees resent the recruitment of better employees. Companies will find it easy to hire talents instead of developing from within.

It’s important to emphasise that leadership will remain the most important aspect of retention, making excuses usually denotes incompetence, bad manners or self-pity.

Useful Book on Managing Talent Retention by Jack Philips

The Wall Street Journal recently profiled top talent across Europe, finding:

“Top talent across all sectors of the European economy—from bankers to lawyers—are increasingly becoming fed up with roles that they feel don’t exploit their skills and are waiting for a strong signal that the global economy is actually recovering to jump ship. One in four high-performing employees say they want to leave in the next 12 months, according to new survey of 35 companies in Europe …… the results highlight a “worrying” developing trend for businesses. While these individuals perform 21% better than colleagues, they are 10% more likely to leave their organizations today than a year ago. … When the economy does pick up, up to 65% of the high-performing employees who said they are most likely to leave, could actually do so.”

What is your experience of why people leave and retaining top performers?