In good and challenging times, company leaders are always the ones who need to give the purpose and the direction. My MBA Thesis from Henley Business School offered some recommendations based on academic and field studies, on how leaders can increase employee retention and make a difference.
The research has outlined qualities that a leader needs to be successful and an ideal leadership style, the strategic leadership.
However, the balance between looking at a company’s interest from inside and outside is often difficult to reach. Executives’ agendas are always busy with urgencies and the capacity to step back in a world ever changing is becoming the number one priority to chase.
Believing in a clear mission and making decisions with the awareness of their outcomes on people, company reputation, and financial results is a daunting task for leaders. In an era of social medias and a heavily connected society, mistakes can be seen quicker, communication is scrutinised, and any misstep is outlined ten times more than successes.
It is recommended for leaders to start their mission by building an executive or a management team composed of people sharing their values and having the ability to work with each other.
Researchers have made comprehensive work on the topic and Belbin team roles in an example of framework that could be used to make sure the nine key behaviours are represented as per below in the management teams (Belbin, 2010). Leaders surrounded by their peers will be able to build better working organisations and hire the right talents to work more efficiently.
Companies are often created with a project or an idea in mind that develops with a business overtime. When investments are raised, different shareholders have different ambitionsfrom an immediate return on investments to a more philanthropic vision.
Hiring the right set of leaders and employees aligned with the founders’ values can take time, be difficult and costlier that quickly aggregating a set of competencies. However, overall, this is the only way to build a profitable and respected business where employees will stay and develop massively.
It is recommended to all leaders to watch closely their company vision, their mission to the world and the values of their stakeholders.
By considering this, leaders will make sure to create or join a business where they feel respected, appreciated, and rewarded. Then, they will be able to build something sustainable with their teams based on the same principles.
Are you using the Belbin model, would you like to understand it further? Let me know and I can help you further!
Leaders can reduce employee turnover through their roles in their organisations and the one of their leadership team. My MBA thesis gave me the opportunity to talk to more than 50 leaders in the IT Industry. The importance of leadership and how to be bring purpose to your employees was discuss at that time. But what else?
A major topic covered by industry leaders is Employee development.
Some interviewees noticed an increasing demand for more responsibilities from their employees and wondered if this was due to the younger generations repeatedly called “millennials” coming into the workforce.
Others outlined this positive trend into growing as an individual or a leader inside their organisations.
In such a pressurised market as Dublin, employers have now little to no choice to discuss further education options as a key benefit for their employees.
Some see employee development as a cost and I would like to offer a strong alternative.
Everybody needs to learn in a role and stay up to date with their industry, internal systems and procedures. This is undoubtedly a question of credibility for your business.
From the onboarding process to the daily life, you certainly noticed some of your employees are willing to learn more and understand better how things around them are happening.
These employees should be prioritised for career growth plan and future leadership positions. But what about others? Is this fair? Should this be linked to performance?
It is time to sit down with your Management Team and ideally your HR Business Partner to remediate to this challenge.
Strategic leaders suggested to use the 9 Box of HR model to align performance and potential.
This model has been recommended by key industry leaders coming from mid-large size organisations as an enabler for growth for start-ups and SMEs. Originallybuilt by McKinsey, it compares in a matrix potential and performance of any employee in an organisation.
Categories like “Growth Employee” or “Star” and “High Impact Contributor” are considered as high-value for the business and should not be lost.
Other categories of employees especially when their performance is high, should be challenged to develop their potential.
Employees categorised with high potential growth, but low performance should be also assessed in terms of potential change in the job role or intensive training.
Then what about the cost? Indeed, the cost of training can be high despite various Universities and private schools running in Ireland.
This should be perceived, as an investment in your talents, motivated to learn, and a great occasion for them, to mingle with like-minded professionals.
For smaller budgets, LinkedIn offers through an online learning module accessible 24/7 and 365 days a year, a comprehensive range of trainings and certifications for €1.00 or the price of a coffee per day.
Employees engaged in some learning programmes or academic degrees will stay longer in your company especially if you partly or totally fund it. They will be eager to do the extra mile for your business and ready for their next role quickly.
So, no, employee development is not a cost but an investment.
Indeed, in Dublin’s candidate-driven market, your most talented employees will be leaving first. Feeling familiar?
So are you using the 9-box of HR model? Would you like to know more about it? Contact me and I can go deeper about how you can use this model in the best way.
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