RETENTION STRATEGIES

RETENTION STRATEGIES

It seems counterintuitive – however, more than ever, business executives and leaders should focus on and prioritize the retention of top talent.  Although job growth is stagnant, as leaders, we still have the responsibility to maintain a fully engaged workforce.  Retaining talent is critical to the success of our organizations; it is a strategic issue that commands focus, time and resources and should be a key priority for business leaders.

Misconceptions About Unemployment

Houston’s unemployment rate has risen to 5.8% in August 2016, up from 4.9% in August of last year and experts predict even more layoffs in the coming months.  The assumption is that employees wouldn’t dare leave their jobs in this economy.   After all, where would they go when the talent pool in Houston is only growing?

Despite the perception that there is large pool of unemployed professionals, unemployment in the Houston area is relatively low, especially with highly skilled workers.

The oil and gas industry has experienced the largest drop in drilling activity since the 1980’s so there is no argument that the price of oil has had a significant impact on employment and job growth in Houston.  However, much of Houston’s job growth since the 1980’s has come from growth in other business sectors including:  healthcare, construction, technology, global trade and manufacturing.  Now, oil and gas companies make up only 50% of the Houston economy.  So although the oil and gas industry has experienced tremendous job loss, other industries are hiring and expanding.

Still, many companies are struggling in an effort to manage this business climate.  With reduced budgets, employees are often forced to work more and produce more with depleting resources in an environment that is inherently more stressful.  Stressed employees, especially those who are top performers, are at risk for being lured away by another company.

Business leaders must focus on the following key areas to effectively protect its most prized asset-human capital-during the current economic climate:

Prioritize Retention

Too often retention efforts are minimal until the company suspects an individual may leave.  It is often addressed by offering some form of enticement to stay, and then it is back to business as usual.  This approach may seem effective, but it does nothing to cultivate long-term loyalty.

Instead, leaders must dig deeper and assess their retention strategies and prioritize a plan to engage and retain their best talent.

If business leaders are still not sure why it is important to prioritize retention, they should consider cost.  Studies show that the total cost of losing an employee can range from tens of thousands of dollars to 1.5 to 2 times their annual salary. Senior management should recognize that people represent an appreciating asset, and tenured employees provide far greater value than those just cycling through the organization.

Engage Employees

Employees who are consciously engaged in their work environment care deeply about the company and its success.  Despite increased pressure and decreased resources, they are more likely to stay.

Communication is key to employee engagement.   Employees need to know – on a continuous basis – how both they and the company are performing.  Communication creates a sense of security for an employee, even when the company may not be performing well.  If people understand how the organization is doing and how their contribution makes a difference in that organization, they are generally more connected and invested in it.

The steps to engage employees are clear.  Communicate clear expectations.  Provide frequent feedback.  Build opportunities for transparent conversations that leave the employees feeling valued, empowered, and confident in their ability to get the job done, regardless of market conditions.

Once the lines of communication are open, management also needs to seek input from employees.  This two-way street approach to communication solidifies loyalty and promotes cohesiveness across the organization.  Employees become committed to the long-term goals of the organization and are eager to contribute to the bottom line.

Make Retention Personal

At a time when many companies are not able to increase salaries and provide bonus incentives, it is important to realize there are other ways to compensate and retain valued employees.   Each employee is motivated differently so retention strategies need to be tailored to the individual.

Successful organizations make retention strategies personal.  How?  By simply asking the employee, “What motivates you?”.  It may be surprising to find that monetary incentives are lower than expected on the list of responses.  Top performers are often equally concerned with challenging work, personal and professional growth opportunities, work/life balance, and workplace flexibility.  Offering flexible work arrangements, like having the option to work from home or more flexible vacation offerings can boost employee morale during a sluggish economy.

In Conclusion

As the job market evolves in the coming weeks and months, recruiting talented professionals continues to be challenging and holding on to key players is more important than ever.

Regardless of the economic conditions, retaining talent is instrumental in the success of our organizations; it is a strategic issue and should be a key priority for business leaders.

LEADERSHIP DEVELOPMENT

LEADERSHIP DEVELOPMENT

Most people believe that leadership is innate.  You are either born with the ability to lead or you are not.  Although some individuals are born with a natural aptitude to influence, leadership is a skill that can be learned and mastered with time, training, coaching, and individualized leadership development programs.

Leadership development has been an established practice for cultivating the next generation of top executives.  This is why great companies like Walt Disney, Zappos, and Nordstrom have invested in leadership programs that elevate their employees and prove crucial to company success.

Leaders are change agents who play a transformative role in an organization’s ability to drive success.  If an organization faces a leadership deficit at any point in time, it will be unable to achieve its goals.  That is why the process of developing leaders from within your organization should be an essential component of your organization’s growth strategy.

Identify Leadership Candidates

While traditional leadership development programs have offered a variety of training and courses to all employees in hopes of bettering the entire workforce, an organization’s development dollars would be much better spent focusing on those specifically identified potential leaders in the organization.

How do executives identify these potential leaders?   Beyond standardized tools that are used to identify an organization’s “bench strength”, there is a set of critical behaviors and disciplines that indicate an aptitude for leadership.

Focus on High Potential – Not Performance

An employee’s potential should outweigh performance as a parameter when evaluating a potential future leader.  Performance defines ability and expertise.  Consider his or her aptitude, desire to grow, and overall potential as an indicator of success in a leadership role.

Observe Level of Engagement

Ask the question, does the employee proactively make suggestions for process improvement or demonstrate interest and willingness to push outside his or her knowledge-base to achieve tangible results for the organization?

Ask if He/She is a Catalyst or Watcher

A catalyst makes things happen – they become an integral part of the decision-making process.  They drive results.  So instead of watching and waiting for things to happen or to be told what to do, this person makes things happen.

Ask if He/She is Accountable

Employees who are not afraid to hold themselves accountable for failure, as opposed to shying away from responsibility afraid it might reflect poorly on them, demonstrate leadership potential.

Look for Evidence of empathy and Emotional Intelligence

Is the individual a good team player?  Does he/she help others?  Put others before themselves?  Does the employee focus on building personal relationships?  If the answer to these questions is yes, then you have identified a leader, someone who can constructively use people for the benefit of the organization.

Integrate Learning Into Work Environment

Traditionally, development has consisted of providing promising leaders with more knowledge alongside an expanding skill set in order to gradually take over the reigns of a particular role in the organization.

While this conventional approach means well and can positively impact the quality of leaders within a company, it merely scratches the surface of developing the solid corporate leadership talent required to propel an entire organization forward in today’s challenging business climate.

Take a Holistic Approach –

To develop leadership capabilities that drive results across the organization, executives must take a more holistic approach to how they develop leaders and how learning integrates with the organization’s overall strategy.

Routine executive training programs should be revamped to cultivate a comprehensive leadership development mindset.   Off-site educational courses and yearly assessments should be replaced with meaningful experiences that mirror the company’s mission and strategy.

Direct Instruction –

One of the most effective ways to expand leadership capabilities is to offer relevant direct instruction (or on the job training).  Typical shadowing of a senior executive is not sufficient; instead the managers should engage and trust their future leaders to take on existing challenges outside of his or her comfort zone.  Business leaders have a duty to embrace comprehensive training—from personal coaching to practical opportunities that stretch a candidate’s capabilities.

Collaborate with Potential Leaders –

Executives should collaborate with staff members to identify and build a plan for the competencies they want to develop.  These discussions can be integrated into the performance evaluation process, a natural setting to explore skills team members need to advance the organization.

According to the Corporate Leadership Council, achieve maximum effectiveness, developmental opportunities must involve: Discomfort, Accountability, Clarity and Relevance.

Provide Practical Application –

Senior leaders should identify potential crossover projects, board presentations, creative initiatives, and other opportunities that provide practical experience.  The key is to determine activities the organization already performs.  These day-to-day functions should provide sufficient opportunity to put rising stars in leadership situations, at little cost and with minimal disruption to the organization.

Many successful leaders would add that allowing the employee to struggle a bit can provide a meaningful opportunity for growth.  So instead of intervening in a situation where the employee may genuinely need help, a manager can sit back and push the employee to figure out how to get what they need – on their own.  For a top performer, this process can be very motivating and empowering.  However, for a non- top performer, this might feel overwhelming and perceived as a lack of support.

Create Empowerment

Most leadership development programs focus on doing –  mastering new skills and knowledge to evoke certain desired skills and behaviors.  True leadership effectiveness starts with how a leader thinks – how he or she thinks about his or her influence in the organization.  Employees can be coached on leadership – but they will not actually use those skills unless they believe they are a trusted and valued contributor to the organization.

If employees are taught how to make intelligent informed decisions but are still required to run every idea by his or her manager, how empowered will they feel?

Leadership development programs must drive an ownership mentality that starts with trusting employees and giving them the authority to make decisions.  If employees feel like an integral part of the company, they will naturally emerge as leaders.

In Conclusion

To compete in today’s ever-changing global marketplace, it is essential that organizations expand their current leadership development programs into an active process.  Once organizations tailor a development process that integrates learning and empowers their leadership candidates, they will be poised to create future leaders who are prepared to expand the vision of the company and drive success.