By Naweera Sidik on 23 Aug, 2018 11:26:50 AM
Your employees are your customers – seek to understand what they need and want, and you might be able to avoid talent-drain.
You’ve heard of brain drain – a phenomenon where highly trained or qualified people from one country emigrates to another. It’s a government’s worst headache! (Pardon the pun.)
But one doesn’t need to look far to see a more localised phenomenon of talent-drain. On the ground, organisations are facing the challenge of employees leaving much too soon, and far too frequent, before full potential can be reaped to benefit both parties.
Michele Ferrario, Co-Founder and CEO of StashAway, gave his own thoughts about talent retention, in his speaker session titled ‘From Start-up to MNC: Talent Retention at Different Stages’ at the SkillsFuture Festival Executive Series @ WeWork co-organised by Emergenetics Asia Pacific and Lifelong Learning Institute. He addressed why people tend to leave an organisation – both big and small – and what steps an employer can take to keep employees engaged, satisfied and be a positive contributing member of the company.
The Cost of Talent Drain
He began his session by bringing into awareness the cost of losing employees. In fact, the cost of losing one employee is more than twice the annual salary of the said employee. Yet, statistics showed a less than promising view of employees’ state of satisfaction in their current jobs or roles. More that 50% of people were found to be dissatisfied in their current jobs, and more that 20% were thinking about leaving after 6 months. Going by these statistics, the chance for a company to lose both money and talent seemed rather high.
So why are so many people dissatisfied in their careers? And if talent retention is important, why do so many companies do poorly at it?
The Reasons for Joining and Leaving
People join and leave organisations for various reasons. Michele illustrated the attractive and less attractive features of organisations and showed the differences between start-ups and MNCs. What was interesting to me was that the reasons for people joining start-ups or MNCS could be the very same reasons why they left and switched to the other side.
As for companies doing poorly at retaining talent, one reason could be because of a lack of awareness of what their organisation offered. Even if there was awareness, there was the question of whether those offerings matched what employees wanted.
A lot has to do with perceptions and expectations. Start-ups are expected to be more flexible, less stiff-necked, and brimming with innovation. MNCs are expected to provide job security, offer high base salaries and benefits, and showcase an attractive brand association.
Whether you are a start-up or MNC, your employees already have a perception and expectation of the workplace culture. They may join for these reasons, and they can also leave for the same reasons.
The UX to Employee Engagement
With all that said, does that mean there is no hope to retaining talent?
Not quite. Start-ups don’t always have to be the same, and neither do MNCs. In fact, there have been many progressive changes to the way MNCs have structured their workplace environment that is appealing to young hires, and start-ups are offering creative but also attractive long-term packages that can rival MNCs’. The workplace is evolving and there is a concerted effort to make changes to talent retention as well.
However, this is not to say there is one model to follow that can suit all companies and businesses.
Michele’s solution is to take talent retention like you would develop a product or an app, using a user-centric process that is widely familiar in most technology and Internet-based companies.
A user-centric or customer-centric process is defined as an iterative method that helps you continuously improve and refine your designs, and in the process, go through different stages repeatedly while evaluating your designs in each stage.
In this process, the first step is known as “Getting to know your customer.” Similarly, if you take your employees as your customer, the first step is to understand them.
And the best way to understand them – is to simply ask. What are your employees looking for? What is important to them?
This could be done through a simple questionnaire that have employees score what satisfaction factors are important to them, or even through exit-interviews of peers that have left before. It’s all about understanding your own people.
Michele reinforces this by mentioning that each individual is different, and are motivated by different factors, whether because of age, life stage, family or personal dreams.
When Michele mentioned this, I couldn’t help but nod in agreement. Sometimes, the simplest step is to not assume, and ask. Quite like how the Emergenetics Profile was designed to help individuals remove assumptions they may have of others, and improve understanding of each other. It also reveals how different people can view the same issue in a different light, because of their different thinking and behavioural tendencies.
It becomes apparent that companies should not adopt a one-size-fits-all approach when reviewing its employee retention strategies. Yet, customisation can be difficult because of budget constraints and feasibility. Michele acknowledged this and suggested this to us: prioritisation. We need to customise, but we can prioritise – it’s a matter of deciding which comes first. And you can only know this answer by first understanding your employees.
Four Key Factors to Retain Talent
However, for those who prefer to think more concretely and prefer a specific solution, Michele provided four areas in which companies can work on. These areas have shown to greatly influence talent retention.
He encouraged that companies need to focus on creating a culture that is transparent. Don’t overpromise during hiring, and neither party will get disappointed. Transparency is also important when fostering a culture of communication and feedback, which can help further improve your employee engagement initiatives.
Build a strong team and spend a little more on them. It is more cost effective to have a small but strong team, than a big but less effective team. However, compensation needs to be catered to what your employees want, and it can be creative. Offer strong, long-term incentives such as stock options and this can motivate your employees to stay medium to long term.
The saying that people leave bosses and not companies is very true in larger organisations and start-ups that have grown bigger. Training your managers becomes important so that they can continue to be strong advocates for your company and brand, and lead the rest of the team forward.
The goal here is to make your employees’ lives easier. What challenges are your employees facing? How can you value-add to their lives? If your people have trouble starting investing, why not offer investing classes to them? The benefits can range from health to lifestyle options.
The Meaning Behind Talent Retention
As I listened to Michele’s sharing, I was prompted to think about the meaning behind talent retention. At one point of time in history during the Industrial Revolution, humans were seen as a nameless, numbered entity in the long factory lines of production. Now here we are, into our 4th Industrial Revolution, and the conversation has changed. It seems that people are more needed to meet current and future demands. People are needed to solve problems, innovate ideas, create new experiences and nurture relationships. Perhaps that is why we still need to work hard in investing in people. One question I leave the session thinking: Have we done enough to help our people grow?
This article was originally published on the SkillsFuture Festival Executive Series @ WeWork.
About the Speaker
Mr Michele Ferrario
Co-Founder and CEO,
Michele is the former CEO of Zalora Group and the co-founder of Rocket Internet in Italy and Pakistan. Prior to that, he worked as Investment Manager at Synergo and as Engagement Manager at McKinsey. He earned his MBA at Columbia Business School and his Bachelor of Science in Finance at Bocconi University in Italy. Michele has been invited by Singapore’s Minister of Finance to be a member of the Committee for the Future of the Economy.