Retaining Top Talent with David Nast
Dave is a three-time CEO and an award-winning business coach with over 25 years of experience in executive coaching, leadership development, change management, career coaching, executive search, talent acquisition, and human capital management.
“The Recession Hangover”
Employers know all too well that workforce behavior is changing, or has changed already. According to the Harvard Business Review, 45% of people who are happy in their jobs are still looking – because it’s worth looking.
Dave attributes behavior changes in the workforce to a “recession hangover,” and it’s creating what he calls a mercenary culture: employers are spending a lot of money headhunting the best employees from other businesses.
The end result is that employers have less power than they did during the recession, and there’s now a talent-driven market. There are a lot of skilled jobs that are coming on the market every day, and people are starting to develop themselves, especially the millennials and Gen Z, by going from company to company to company.
As a recovering headhunter, Dave reports that 75 percent of employees are called once a week by a headhunter… So what are you going to do to make your employee not pick up the phone?
Dave warns business executives not to hire skilled employees by throwing a lot of money at them because if they come to you for money, they can be torn away by more money. That's not loyalty. You want employees who believe in your culture and are a good fit.
Another piece of the recession hangover is that a lot of people ascended to middle management due to attrition and weren't properly trained in best ways to lead teams.
Forbes, Business Insider, and Gallup have all reported over the past few years that bosses and managers are a leading reason why people want to leave their job, and a significant cause of employee disengagement – as much as 70 percent.
The Cost of Low Retention & Disengagement
According to Gallup, engagement among U.S. employees is now less than 33 percent, and this has a serious cost.
Dave has a turnover calculator he share with clients: for a $50,000/year job, employers spend about 213 percent of that salary to replace the person, on average.
If you consider that the average tenure of an employee right now is 17 months and the average time it takes for an employee to master a job is 11 months, employers - on average - are really only getting 6 good months out of the average employee, and that's an expensive way to grow a business.
What can executives do to help improve retention?
- You can’t manage what you can’t measure. Workforce analytics are important for getting buy in from executives, and informing a conversation about culture.
- Identify and publicize your values as an organization, and build it into the culture. Shared values are important when employees consider where to work, and when there’s a good fit employees are more engaged and more productive.
- We spend too much time selecting people based on the skills and experience they have, and that changes over time. If we're investing in our people, they're going to take classes and develop anyway. So how can we keep them after we develop them? Create an environment where they don't get bored and they're constantly being developed.
- Get rid of the annual performance review and replace it with short, weekly one-to-ones. Even just 15 minutes. This fosters trust between managers and employees, and helps managers stay up-to-date so they can remove any obstacles to current projects.
Three Things To Discuss With Your Team:
- The best way to retain top talent is to create a transparent and open culture. An organization that invests in their people; one that sees people as an asset as opposed to a liability, on the balance sheet and in the boardroom.
- Put workforce analytics into play so you can understand, with objective data, what drives your people. Not only will you be able to better accommodate the differences between employees, but you’ll love the differences.
- When looking at the different generations that are working, understand what they need and what they want. Whether it's Gen-Z coming in, the millennials that have been there for the last decade or so, or maybe Gen-X moving up towards the top now... How can we leverage each other to get the most out of each other? If everybody has their eye on the same mission, it will go a lot better for everybody involved.
And remember… Develop. Always.
Production & Development for Top Employers Institute’s Talent is Transforming by Podcast Masters