An immersion of the leadership challenges in the Irish Tech Industry in 2019…
Employee retention. Who has not discussed this topic before? What could be done? Can leaders have a better impact on the challenge? Or is it just the present context in the IT sector in Ireland, especially in Dublin, that generates this problem? After 12 years working for multinationals and Irish companies, both as a leader hiring talents and as an employee constantly approached by recruiters, I decided to try to understand what was going on.
*** Context ***
My MBA thesis explored how business leaders can decrease employee turnover in Dublin. After 300 hours of studies, including a literature review covering all types of leaderships, key insights on the Irish economy, more than 30 conversations with leaders from companies of all sizes and associations in the IT Sector, some key insights deserve to be shared.
A few interesting statements made me think a lot. “I don’t have a process to measure employee turnover and its costs but I am sure it’s not that much” or “I know when one of my sales guys is leaving, it will cost me up to €200,000 between the hiring and training costs and also the business I will miss during that time”. Another leader mentioned that, “People come and go, nothing can be done… Better focusing on the product and the best will stay and help you grow.”
The challenge is, you cannot grow a sustainable business if you ignore turnover.
With 9 out of the 10 top global software companies operating here, the ICT sector is thriving in Ireland with more than 105,000 people employed in 2016 — up 40% from 2010 — including another 12,000 people working for indigenous companies, producing more than €2 billion turnover per annum (Irish Software Association, 2017). This situation has created a candidate-driven market. Turnover is high for companies having to fight to retain their staff longer
*** 5 Recommendations that can change the game ***
Leaders and their executive teams can make a difference. Build an executive or a management team composed of people sharing the company mission, vision and their values and having the ability to work with each other. Then, they will be able to build something sustainable with their teams based on the same principles. Key models can be used like Myers-Briggspersonality tests or Belbin team roles to build the perfect mix.
Bring purpose to employee engagement to get performance. Help your talents to understand their strength and build an employee success plan from the hiring to the reward stages. Companies must onboard every employee on a journey of mutual success. The V2MOM framework from Marc Benioff is suggested as a tool to map out Vision, Values, Methods, Obstacles and Measurement from a companywide to an individual contributor. Every decision should be run through this framework and every V2MOM accessible directly by any employee.
Employee development is an investment into the present and the future.Discuss further education options as a key benefit for employees. It is advised to use the 9-box of HR model from McKinsey to display, in a simple way, performance and potential of the employees. This makes it easier then to invest in employees with high potential and investigate what is needed to make others strong performers.
A strong culture is a culture of employee success and retention. Run anonymous employee surveys quarterly to evaluate employee pride in working for the company, willingness to recommend it to their contacts, frequency of their thoughts to leave, willingness to work in the company in 2 years’ time and, finally, what motivates them to deliver more than they would in a similar role elsewhere. Solutions from companies likeQualtricsare very easy to implement for quick and efficient results.
Ignoring reality is not a choice. Get back to the origins of the company and the values that made leaders proud to create or join the business they are currently leading. This is the leaders’ responsibility to permanently think about re-recruiting their own employees to keep them and not to consider them “bought” forever. They should also never forget to ask for help, if needed, from their peers, alumni, mentors, or business associations like the IOD.
*** Further thoughts ***
Bear in mind that while those recommendations can be applicable in any candidate driven market, the one experienced in Dublin right now dramatically influences the need for companies to care for, and grow, their talents, to remain attractive and competitive.
Driven by the willingness of talents to be more mobile and embrace change, accelerated by the increase of head-hunters professionally recruiting through every conceivable way, and affected by the lack of housing to attract new professionals in Dublin, the current setup seems unlikely to change.
While this situation is very positive for talents to embrace new opportunities, it can be also challenging over the long term for smaller companies to be able to sustain this pressure. It can even impact employees’ work-life balance with the obligation to get a higher salary in the hope to cover the ever increasing cost to afford a proper house.
While those recommendations are just the beginning, I am hopeful they will allow more businesses to sharpen their focus back on their talents, whatever the external context may be.
Trusting and empowering employees is the best way to develop a business in a healthy way.
I also wish that every leader and talent would have a better understanding of the situation and realise the chance we have, to be able to choose our next challenges whereas other European countries cannot offer to their young and older graduates the same opportunity.
The future is ours, and it’s within our power to shape it.
This thesis was submitted in partial fulfilment of the requirements for the degree of Master of Business Administration of Henley Business School (University of Reading, 2019).
A version of this blog first appeared on the Institute of Directors in Ireland website on the 3rd April 2019