Why are good people resigning? What are we doing about it? The case for ‘flipping the investment’ from the recruitment process to the fighting turnover process”
By Dr. Constantine 'Dino' Kiritsis, China, August 2019
Image Credit: by Gerd Altmann from Pixabay.
I totally understand that people can move from company to company as it is a free market. There is nothing wrong with that. There is also nothing necessarily wrong with employees moving ‘fast’ from one company to another, for example, in a year, especially when employees are young. It is like a football team that always signs new players so as to create the best “mix” to win trophies.
However, in team sports the teams that really make a difference (in most cases – limitations recognized) employ a solid ‘backbone’ of talented individuals that will stay for a longer period than 1 year in order to build a challenging team around them. For example, a football team would build around some star players (maybe 3-4 our of 11) and a coach would stay for more than 1 year. It is quite impossible to win a championship and stay competitive for more than a year if you do not build around a nucleus of individuals. This has been the norm in football, basketball, volleyball and other sports. Just check Michael Jordan’s team in Chicago, Isiah Thomas’ Detroit Pistons, LeBron James’ teams in recent years, or Lionel Messi in Barcelona, Cristiano Ronaldo at Real and other amazing dynasties. Things are built around a nucleus of people which stay for a longer period of time. Which brings me to my point.
If we accept the fact that companies are groups of individuals that try to become ‘teams’ (a much more powerful word in management than groups), why don’t we try harder to keep the best talent and build around them? History has proven that the best companies had a solid nucleus of talented individuals and I urge anyone who like research to check how Apple was successful, how Amazon became the most valuable company in the world and other examples of SME’s (which are probably worth even more attention) where a team of 3 – 4 individuals in the company, or each department (depending on the size of the entity) really made a difference.
Most employers either ‘don’t care’ when talented people leave and very rarely make a counter offer to keep someone. This is because they rely on their powerful brand name to recruit more (if the brand is powerful) and their ego does not allow them to think differently. However, even if more do apply to be recruited, what are the mechanisms in place to keep the best? Companies have mechanisms to recruit, interview, assess, offer case studies, re-assess, shortlist, onboard, mentor people in the beginning and spend lots of money doing so, but it is a totally different ball game when the recruits stay for some time. What are companies doing with those talents who really can make a difference? This is where the effort needs to be made. Again – don’t get me wrong – big companies have systems in place to detect deal with the problem, but if we agree that 20% of companies have some systems in place (research stats indicate that 1 in 10 companies is actually considered ‘big), what are the rest doing about the problem? How are they making people stay? How are they building their employee’s careers? How are they nurturing the talent through training and development? The big brands continue to make their revenues despite departures mainly because the brand is bigger than the people who work for it. However, they do not – and probably do not want to - calculate the opportunity cost when top performers leave.
It seems to me that we should ‘flip’ the investment by focusing more on what goes on AFTER the recruit has entered and not before. Through my involvement through consulting & training with a number of HR Directors from around the world, I would suggest recruitment should be based on attitude not skill (something we like saying more than applying). As most in the industry say “You hire for attitude and you train for skill”. If that is the case, it means that some will gain the skill after some time. Therefore when they get the skill and they couple that with attitude, you arguable have some talent. The examples of Zappos in the USA, or McKinsey are noteworthy as they have seemed to understand the problem and focus more on trying to keep the best on the team and not offer them to the competition. Zappos even gives money to people to leave the company. Their amazing innovative culture proves my point.
No one calculates the loss and the damage in the market when something like this happens as it would be a disgrace for the leadership who let someone go, especially someone very important. Every team is a team, but undoubtedly some people stand out. Ronaldo and Messi are great players. If you have them on your team they can win you championships and world cups. Make sure you keep an eye on them…
I feel big companies should make an effort to build a nucleus and stop counting on the brand doing all the work for them. Before they became ‘brand names’ someone actually did try to keep the best and they should never forget that. In an era where the average life cycle of a company is less than 15 years, transparency is paramount and disruption is everywhere, I feel the focus needs to change. Remember, the war on talent has been won by the talent…