Digging Deeper podcast | What can companies do to retain talent?

In this Money Control Deep Dive, we will not only explore that question but also talk about what employers get wrong when they lose valuable human capital.

Equality is essential for development

Coming back to the ILO report for a bit, it  cautions that some new business models enabled by new technologies are threatening to undermine existing labour market achievements – in areas such as improving employment formality and security, social protection and labour standards – unless policy-makers meet the challenge.

One of the major areas of concern highlighted in the report is the lack of progress in closing the gender gap in labour force participation.  This observation could be of particular interest to India as in November last year, news reports cited ILO  to state that women are paid the most unequally in India, compared to men, when it comes to hourly wages for labour. On average, women are paid 34 per cent less than men. This gap in wages, known as the gender wage gap, is the highest among 73 countries studied in the report.

The employment and economy conundrum in India

If we disengage from specific employer practices in the Indian context, the bigger picture indicates a deeper malaise with India's unemployment rate hitting a 3-year-high of 8.4 per cent in August 2019. This was revealed by Centre for Monitoring Indian Economy (CMIE).

The report said and we quote, "Investment conditions have been weak. New investments into large and modern enterprises are important to absorb the rising working age population into the labour markets. However, data from the annual financial statements of companies and from announcements by entrepreneurs do not show any pick-up in investments. Growth in good quality jobs is therefore very poor."  Unquote.

Moving away from this bleak  scenario, if we were to look at the existing employment eco-system in India, what kind of a work culture would retain and sustain good employees? This question however is not just relevant in India but globally. Here is an interesting story about American CEOs that makes sense in the Indian context also.

A pledge to care for employees

Senior contributor Jack Kelly reported in Forbes this week that  in August 2019, in a groundbreaking statement, the Business Roundtable, an association of over 180 chief executive officers of America’s leading companies, collectively signed a promise to become more caring and compassionate. We quote, "The group of elite corporate executives, led by JPMorgan CEO Jamie Dimon, claimed that they wanted to significantly change and improve their business ethics. The CEOs said that the days of putting their shareholders first were over. Profits for investors, in their companies, would now take a back seat to the needs of their employees, the communities where they conduct business and the vendors who provide products and services. "

It is another matter that  one of its wealthiest signatories has already reneged on his promise. Multibillionaire Jeff Bezos, the CEO of Amazon—which owns the upscale Whole Foods grocery store chain—has broken his promise.

One of the principal parts of the contract stated the following and we quote, "Investing in our employees. This starts with compensating them fairly and providing important benefits. It also includes supporting them through training and education that help develop new skills for a rapidly changing world. We foster diversity and inclusion, dignity and respect.” Unquote.

As the Forbes piece informs, Whole Foods moved away from the pledge when it informed employees—who fall into the classification of working between 20 and 30 hours per week—that they’ll lose access to the company’s health plan effective January 1, 2020.  After losing their benefits, some employees may be eligible for coverage by the Affordable Care Act Marketplace. However, Whole Foods won’t have to contribute. Needless to say that this disregard for worker benefit is a guaranteed way to demotivate employees.

But as Forbes points out, when employers are unwilling to change, employees will seek better environments. We quote, "In today’s culture, consumers and employees want to be associated with companies and products that are ethical, socially responsible and environmentally friendly. Employees are quick to protest their own company if they believe that the corporations act contrary to their personal ideals. Twitter warriors routinely call for the boycott of organizations paradoxical to their values." Unquote.

The writer of the piece believes that CEOs at large global corporations  know that  it's in their best interest to say what their customers and employees want to hear. He thinks signing the agreement  was the perfect public relations stunt but since there are no mechanisms in place to oversee or enforce their bold claims,  they’ll revert to that default mode. He believes,  we will see more companies deviating from their promises. But maybe, we won't. Maybe, CEOs, even if under duress, are beginning to reevaluate their practices because in the long run, they too will benefit from employees who operate from well-being rather than resentment.

How to retain good employees

In July 2013, contributor Elena Bajic outlined a few steps for retaining good employees in another Forbes article.

One of the best things she says that employers can do is to have a two way dialogue based on trust about career goals. Communication about assignments, deliverables and aspirations based on trust can soothe misunderstandings.  As she says,  if, as a manager, you don’t know how an employee would like to grow professionally, you can’t tailor opportunities to meet their needs, and you risk losing them.  Communicate, communicate, communicate, she says for this is the primary tenet of the employee, employer relationship.

Also the piece says, in these times of  teams working off site,   if you only meet “virtually” with your employees, much of your message and their response to it may be lost. Face time, however scarce, is an immensely important factor in communicating well and establishing trust, says the writer. We quote, " If you are managing employees in remote locations, try to meet with them in person on a regular basis – maybe not monthly -- but at least 2 to 3 times per year." Unquote.

Balance, clarity and rewards are essential for growth

Another key thing according to the writer is to balance giving your team members the authority, the tools and the space they need to do their jobs. Empower  them  and stay  checked-in as they execute their responsibilities. We quote again, "Be accessible for, and open to, problem solving – whether it’s brainstorming next steps or fighting fires.  And, be accessible personally – taking a genuine interest in employees as individuals, as people."

The third important thing is to establish clear performance metrics and make employees accountable for delivering.  Expect and demand good work, advises the writer. Reviewing performance versus those metrics on a regular basis, acknowledging good work when it’s delivered, discussing work that missed the mark and jointly determining how to avoid mistakes, will bring clarity all around.

Employers also must  create growth opportunities  and offer tangible rewards for jobs well done beyond salary/bonus/equity. Gestures like a dinner on the company as a spot award, recognizing employees’ start-date anniversaries show appreciation in a tangible way. The writer   adds that the return in terms of employee loyalty and commitment will far outweigh the financial cost of these awards in the long run.

But on the opposite end of the  spectrum, what are some of the things that employers don't do to retain good employees?

Leadership mistakes that make employees quit

Jon Christiansen wrote an article in Harvard Business Review on September 10, 2019 ad it is  applicable to Indian companies as well. The reasons people quit are deep-rooted and complex, he says and  adds that losing an employee can have a drastic effect on team morale, and result in a domino effect that leads to poor performance and productivity. Not to mention, it is expensive, and not just because of lost talent.

During  his fifteen years working in data science, the writer has run countless predictive models on employee retention, student retention, and customer churn across industry verticals, including healthcare, energy, and higher education. And he has identified common leadership mistakes.

People leave when they are barraged with  inconsistent goals or expectations. Shifting goalposts, unclear roles and work briefs make employees feel disempowered and stressed without well-defined priorities.

We quote, "How can you avoid this situation? Take a note from Disney. Each worker in the Magic Kingdom is given a list of priorities with items ordered from the most to the least important. Safety comes first, followed by courtesy, performance next, and finally, efficiency. When team members find themselves in sticky situations, no one is confused about how to manage them.

You can create this same kind of stability on your team by being consistent and clear with your expectations. Write them down — even if it is only for yourself — to see if any contradict or overlap. Then, make necessary changes and share. In doing so, you will empower your team and ease their stress by giving them a greater sense of control over their tasks. Most importantly, you will be making work a more pleasant place to be." Unquote.

Keep your eye on the big picture and the small details

Leaders must have a macro and micro view of processes because as the writer says,  process constraints are common morale  killers as well. They occur, says the writer when a lack of information, resources, or another factor, stops an employee from doing their job to the optimum. Leaders hence must consider how much control their employee has over their outcomes and if process constraints are in fact affecting their performance, they must use their influence to improve the situation. Even if this requires having difficult conversations with other departments or leaders.

Leaders  also must figure if they are wasting their resources or the resources of their employees. In most cases, the resource being wasted is time.

We quote, " Employees who are constantly crunched for time tend to get burned out faster. If you don’t give your team the resources they need to succeed, you are setting them up to fail. It’s not uncommon for employees in this situation to leave. How can you avoid this situation? Creating a list that ranks the importance and impact of your employees’ tasks can help. If your employee knows their campaign plan is due Friday, for example, help them itemize the tasks they need to complete by that deadline, and consider if doing so is realistic given their current workload. Before assigning them additional tasks or inviting them to meeting after meeting, ask, “Is this new task a priority? Does this employee really need to be in the room?” If the answer is “no,” give them space to do their most important work." Unquote.

Recognise core strengths

Many companies make a common mistake by putting people in the wrong roles. The writer calls it, knowledge and skills waste where unused abilities can leave employees feeling undervalued and faceless. You may not be able to change the role entirely, and it may take time, but together, suggests the piece, you can come up with a plan to help them take on more meaningful responsibilities, and drop tasks that add the least value to your team.

Assigning boring, or overly easy, tasks is another kind of a workplace buzz kill. Any work situation, informs the writer, that suppresses, rather than acknowledges, a  feeling can take a toll on  energy level. We quote, "If you have an employee with a light workload who constantly takes an excessively long time to finish their tasks, don’t assume they are lazy. Less work is not always easier work. When employees don’t have enough to do, they can lose motivation and experience negative emotions. If they suppress those emotions, they can become physically and emotionally exhausted. The net result is a lack of work satisfaction and engagement, forcing employees to finally ask whether this job is the right fit for them." Unquote.

Getting creative and assigning tasks in line with interests and passions may not always be possible but it can become part of a company's work culture with sustained initiative. Employees who are given tasks that enhance their knowledge, skills, or growth stay enthused and motivated.

Turn off hostility

A big work culture failure is a hostile environment where  team members are either overly agreeable or quiet. Fear culture in any company  makes employees  feel psychologically unsafe, more prone to error and less likely to take risks. When work spaces do not encourage healthy dialogue or creative growth, employees cease to be productive, innovative, and lose a sense of belonging.

How can you avoid this situation? Harvard Business Review answers that question and we quote, "  To create a psychologically safe work environment, show your team that you are open to new ideas. In meetings, ask questions before posing answers and reward those who speak up by thanking them for their input or following up with additional queries. Consider all viewpoints when brainstorming solutions to difficult problems and make sure your team knows that there is no such thing as a  wrong answer. The more you can incorporate your team’s feedback into projects and strategies, the more empowered, valued, and safe they will feel working for you.

Take on the perspective that failure is an opportunity to grow, and your team will start to do the same." Unquote.

Can a work environment  be too safe for its own good?

Yes. Harvard Business Review cites studies to show that a moderate level of pressure and friction at work is healthy for employee growth. But the key is moderation. The article says, when employees feel overly pressured to perform well in their roles, they can lose sight of what’s important, and in acts of desperation, use unethical means to excel. On the other hand, says the writer, if  employees have no pressure at all, they may start to wonder if their work even matters. People who find no meaning or purpose in their work perform below their potential, are less productive, and are often less loyal than those who work in purpose-driven organizations.

How can you avoid this situation? We quote, "One way to create a healthy amount of friction is to provide your team with regular feedback — both positive and negative. When delivered thoughtfully and without judgement, negative feedback can give people something meaningful to work towards. In turn, they will begin to see how they fit into the big picture, and may even start to feel a greater sense of purpose." Unquote.

How  not to lead with  bias

Equal opportunities, it goes without saying build equitable companies and when employees are treated fairly,  trust is built. Says the Harvard Business Review, employees value being treated fairly by the companies they give their time to. Putting yourself in your employee's shoes is a good strategy  and managers who can recognize their implicit biases and make adjustments to overcome them are more likely to lead in a fair and just manner.

We quote, "Before you make an important decision consider what is driving you. Are you basing your choices off of evidence, or preference? Have you considered other perspectives? Are there any gaps in your knowledge you need to fill first? Asking for regular feedback from your team, and acting on it, will also build a culture of fairness and open communication.” Unquote.

The writer however concedes that there is no way you can control every aspect of your team’s work experience. If someone wants to leave bad enough, sometimes they just will. But as he says, if leaders  focus  on their own behaviors, what they can control, they will help improve the performance and cohesiveness of their team. The better they manage, the more productive, innovative, satisfied, and most importantly, loyal their team will be, the article concludes.

What do employees expect from a company?

Workplaces are driven by expectations and to elucidate that,  on December 18, 2018, India Today's web desk published a piece by Venkat Rao V, Managing Partner, Executive Access (India) Private Limited. The piece was about how fun and productive companies are built when  the needs of an employer and employee align.

The piece pointed out that today not just employers , but employees too look for certain qualities in the teams they work with. They look for companies that have a culture of empowerment, trust and respect,  great career opportunities, flexi working hours and creative freedom. Millennials  want to work for companies whose values they can align themselves with.

Employees look for  organizations that have a generous promotion policy, international postings, long-term incentives or retention pay.

For many employees and companies,  says the author,  cross-functional experience by job rotation is very critical because grooming leaders within the organisation is always less expensive than hiring outside talent. Proper delegation of work, mentoring, offering women maternity leaves and  special programmes or drives to attract employees returning from a career break is less expensive than seeking out new talent. In the end, what a workplace invests in its team, will return manifold and hence the need to make sure that there is more synergy and less conflict between leaders and their workforce.