Who the hell is in charge here, a bunch of accountants trying to turn a dollar into a dollar ten? I want to work! I want to build something of my own, how do you not understand that?
-High-value executive Don Draper to his boss on TV's Mad Men
In the last issue of WJManagment Advisor, we conducted a survey to which 48% of the respondents claimed to be "miserable" or "sometimes miserable" with their jobs, versus 18% two years ago. Other signs of spreading discontentment:
The most obvious culprit in the surge in worker misery is the global recession. Fear of job loss and having to shoulder more work with fewer resources are cranking up anxiety levels throughout the workforce. Feelings of being "stuck" are exacerbated by a housing market where one in four U.S. homeowners owe more on their mortgages than the properties are worth, making it difficult to leave town for a better job.
With unemployment in the U.S. at 10%, executive happiness and retention understandably become less of a priority for organizations that are preoccupied with bolstering productivity and protecting profits during difficult economic times. In fact, one of the key reasons our economy has proven so resilient over the long term is the speed with which our organizations adjust the size of their workforce in response to business conditions. This talent "flexibility" and resultant gains in productivity are the envy of the rest of the world.
However, this flexibility swings both ways. Historically, as job market conditions improve there is a surge in executives leaving their companies for new opportunities. There is no reason to expect the next recovery to be any different, especially given the pent up frustrations of the increasingly disillusioned and disengaged. According to Monster.com, 79% of jobholders said they have stepped up their search for a new place to work since the recession began. And due to prevailing demographic trends it will soon get harder and harder for corporations to fill the vacant seats: low birth rates, baby boom retirements and caps on immigration could reduce the number of working people by 20-40% (The Economist, 10/10/09).
In other words, an economic recovery may herald a seller's market for talent like we've never seen before. And of course, the ones most likely to hit the exits are the ones with the most talent and potential - i.e. the executives most sought after by your competitors.
What can be done to alleviate executive disenchantment and avoid a talent flight? More companies need to take the human side of management seriously. As Don Draper so pointedly explains in the quote above, talented people want to accomplish things and be recognized for doing so. They want the opportunities and the tools to be successful. Helping executives enhance their personal "brand", and ultimately their value on the job market may seem counterintuitive to companies trying to retain talent, but this is exactly what executives consistently say they want most.
Research shows that executives intend to stay the longest with those companies that offer the greatest opportunities to enhance their employability. On balance, a company will keep more talent by helping its executives grow than it would be denying them these opportunities. And as a bonus, its executives will be more valuable to the company itself.
- How to Keep Your Best Executives- The Wall St. Journal, 10/26/09
Having a well-earned reputation for developing talent does more to reduce executive turnover than even pay does. Executives are longer-term thinkers than many companies give them credit for - they are more interested in developing their skills and competencies for the future than in marginal pay increases today. Conversely, when people become cynical about their jobs, careers and organizations, money becomes the only thing that matters.
Sure, as a leading executive and organizational effectiveness consulting company, we're biased. But we're not so naive as to argue that investing in executive development can completely supplant cold hard compensation as a loyalty-builder. Still, with the U.S. Congress trying to curb pay at firms receiving federal aid while preserving the ability of these companies to retain key personnel, one can't help but wonder whether diverting a little bonus money towards investing in developing, rather than just paying talent couldn't help ameliorate some of the pervasive bad press and truly benefit the executives, the companies and (God forbid) the U.S. taxpayer/owners by helping ensure that the talent not only stays but actually performs.
Here are a few guidelines for keeping your most valued executives happy, and thus, well, keeping them.
A key to building a high-engagement and high-retention culture is to develop your leaders' communication skills. This includes the C-Suite articulating compelling, strategic business goals and promoting the growth and improvement of the company's talent to support these objectives. This not only means leaders being clear about the business plan, but also transparent about talent selection and promotion, as well as coming clean with employees when there is bad news to share. Particularly during stressful times, a poorly thought-out turn of a phrase, or outright secrecy can lead to a great deal of speculation and anxiety. Also, leaders need to LISTEN. We often recommend programs for bolstering an organization's top 10-15 managers' awareness and skills to stay close to the company's high-value executives. Being an inquisitive and active listener and consistently engaging in meaningful dialogue (not just during performance reviews) with subordinates can do wonders for engagement and head off problems before an important executive becomes a flight risk.
Executives view opportunities to take on new challenges and more responsibility as more important than any other factor when it comes to career satisfaction. This not only adds to the executive's value by helping them acquire knowledge and skills outside of their current areas of expertise, but helps the company to identify and cultivate tomorrow's leaders. "It takes more than money to make people passionate. We recommend consistently raising the bar and setting new and challenging objectives," says Dr. Tracy Duberman, WJM's SVP, Organizational Effectiveness. "It's really about giving people increased opportunity, bigger roles, empowering them more, and watching them closely to see if they step up to, and are able to handle, each increased level of responsibility."
We have found that the largest discrepancy between high performing and average or poorly performing organizations is how experiential development assignments are managed. These assignments, as well as action learning programs, should be designed to enhance an executive's development and promote cross-functional team interaction, as well as exposure to the senior leadership team. Most companies with extraordinary talent retention rates use experiential development assignments aggressively, usually at twice the rate of other companies. Open dialogue with executives about their career goals, skill gaps and what kind of assignments will prepare them for the next promotion will go far in keeping them at the company.
Research shows that identifying high-potential talent and providing networking or collaboration opportunities among these executives can drastically increase engagement and retention. Although the high-potential identification process must be handled very carefully - "It's critical that the process is kept transparent and dynamic. A mechanism should be in place to move on and off the list based on performance measures, rather than becoming ensnared in a 'chosen-few' or other elitist process." cautions WJM Faculty Member Dr. Edmund Piccolino. We often propose that once high-potentials have been identified, they are given the chance to team up on action learning assignments or other projects and encouraged to continue networking with one another after the work is done. This community-building not only allows the sharing of fresh perspectives and new skills, but strengthens the connective tissue among them and with the organization.
Executive developmental is an investment - after all, it's much simpler to leave your best logistics guy in charge of logistics rather than take a chance by rotating through a "high-potential" with no experience in logistics in the name of development. Many companies, especially in the current economic crisis, are too distracted by short-term challenges to fathom an investment in development that won't pay off until years later. However, if companies want high-value executives to make a long-term commitment to the organization, the organization needs to make a long-term commitment to them.
Tim Morin is President and CEO of WJM Associates.