How to Hire and Retain Great Staff

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Remember when, as a child, you would find something that did not belong to you and to claim ownership of it you would shout out “finders keepers losers weepers”. This saying is truer than ever in the modern business world. The finders are the companies that are attracting the best people, the keepers are those that are managing to hold onto such talent, the losers and weepers are losing competent people on a regular basis.

Companies need people and talented peoplegive almost any organisation a distinctive competitive advantage. In a recentsurvey of over 100 entrepreneurial business owners in South Africa,the greatest challenge in growing a business was related to people. Forget cashflows, funding, technology, global markets or anything else, more than 80% ofthose surveyed said that people related issues where their biggest frustration.Common challenges included: “finding experienced staff”, “holding onto peopleonce you have trained them”, “choosing the right partners”, “affirmativeaction”, and “creating team cohesion”. Jerome Lucas, managing director ofPeople SA, a recruitment and people development consultancy, says: “Althoughmany of our regional social and political issues are proudly South African,there are many, including skills shortages and high staff turnover, which are aglobal phenomenon. Skills are more easily transferable across internationalboundaries and employees have an abundance of choice in an age where access toinformation is just a broadband connection away.”

A few years back, McKinsey released theresults of a seven year study focused on the war for talent. They contrast theold and new reality for companies as shown in the table below.

Few businesses are finding this new realityeasy. Globally, the employee turnover rates are approximately 25% per annum.This means that on average organisations are replacing their entire workforceevery four years. It has been estimated that the cost of losing an employee is150% of the total cost of employing that employee. Therefore if you lose amanager who has been paid R300 000 per annum, the cost of replacing that personand getting the new manager to the same level of productivity will be in theregion of R450 000. These horrifying statistics have important implications forcustomer service, competitiveness, cost control, morale and delivery withinorganisations.

South African organisations have someunique challenges when it comes to attracting and retaining people. HowardDavey, managing director of OTIS SA says: “The need for effective attractionand retention strategies is not restricted to South Africa; however South Africa does have addedcomplexities, as in addition to technical skills shortages, there is a generalshortage of basic managerial and leadership competencies. This is the directresult of an education system that has significantly deteriorated in itsability to provide adequate developmental capabilities in the core areas ofverbal reasoning and problem solving. A strategic review in 2001 indicated thatthe engineering industry in South Africa had experienced a massive migrationof technical skills – thus affecting engineering and manufacturing firms’ability to deliver the levels of quality the customer base had been used to inthe past. For South African companies the challenge is not just skillsretention – skills development is just as critical.”

If you want to be competitive in today’sbusiness environment, you need to attract, retain and invest in people so thatyou can be the one chanting “finders keepers, losers weepers” not the onelistening to your competitors chant it as they steal good, talented people.

ShiftingParadigms

Theold reality

Thenew reality

Finding talented people is a criticalbusiness leadership process. In a previous study that we did of highlyinnovative global organisations we discovered that one of the most criticalelements of creating an innovative organisation was recruitment. In order to beinnovative, step number one is to get the right people in the door. Getting theright people in the door involves accessing talent, selecting talent,incentivising talent and orientating talent.

AccessingTalent

Wheredo you find good, talented people who will fit with your organisation?

1. Your personal network. One of the bestplaces to find people with the same values, work ethics and motivation as youis within your personal network of contacts. Your network will know you andyour organisation and be able to recommend people that they feel fit well andare likely to succeed.
2. Your employees’ network. Everyone withinyour organisation has a network of contacts. They know the organisation welland if briefed appropriately will be able to target people with the rightskills, passion and values.
3. Your employer brand. Build a brand as agood employer. Google gets over 5 000 resumés a week because it has developed areputation as a great employer offering freedom, food, fun and many othersgreat perks to employees. Google makes sure that many outsiders in the ITcommunity and at universities know about the benefits of working there and itbecomes a destination employer, which means that people go to it. As long asyou have a process for quickly and effectively working through large numbers ofresumés, this can be an effective strategy for accessing talent.
4. Recruitment consultant relationship. Ifyou are going to work with recruitment consultants, build a relationship withthem. Make sure that they really get to know you, your organisation and yourneeds. If they are not paying enough attention to who you are and what youneed, look elsewhere. There are lots of recruitment consultants out there andyou will be able to find one that cares. Recruitment consultants that are justin it for the transactional fee are useless; recruitment consultants that arewilling to build a long term relationship will be able to add value.

SelectingTalent

Howdo you select the right people?

1. Hire for passion, accountability andcultural fit – train for skill. Passion, accountability and cultural fit arealmost impossible to develop. Either the person is passionate about thebusiness or they are not; they either take accountability for their actions orthey blame others; and they are either going to fit into the culture or theyare not. You can always train for skills but you can seldom change a person’svalues, so make sure they fit with what you need.
2. Employee interviews. Make employees partof the interview process. Current employees often have a better idea of the jobrequirements than you do and if they are part of the hiring decision, then theyare likely to make a greater effort with the new person as they will have avested interest in validating their decision. Ricardo Semler of Semco went asfar as to involve subordinates in the interview and selection of new managers.
3. Presentation and simulation. One of thethings that we have found to be powerful in the hiring process is to simulateactual situations that the applicant will face in the job. For instance if theyare applying for a training position, make them run a training session; if theyare applying for a research position, make them do a mini research assignmentand feed the results back to a small group.
4. References. References are critical toany selection process, but in collecting references, do the calling yourself,take a bit of time to build a relationship with the referee and ask them to behonest and forthright with you. Many referees just want to get the call out theway (we know because we have been there) but if they sense that you really careand are genuinely interested in the truth, they will give you more time andhonesty.

OrientatingTalent

Howdo you orientate people in a new job so that they can be as effective aspossible in the long-term?

1. Peer mentor. Provide a new employee witha peer mentor who serves the purpose of drawing close to the new person andshowing them the ropes. Such a person should not in any way be responsible forthe new person’s performance evaluation.
2. Spend time. Adrian Gore, founder and CEOof Discovery spends a morning with all new employees introducing them to thecompany and challenging them to “be great”. Ronnie Apteker, founder of InternetSolutions does the same for new IS employees, even though he is no longer partof executive management. Interaction with a high level founder or leader has aprofound impact on new employees and causes them to catch the essence of theorganisation faster.
3. Feedback. New employees yearn to knowhow they are doing. Give them constructive feedback, positive and negative, ifyou want them to acclimatise faster.

IncentivisingTalent

How do you incentivise people to join yourorganisation once you have decided that they are right for the job?

1. Passion and purpose. People areattracted to passion and want to work on something that is meaningful.Demonstrate your passion for what you are doing in interactions with applicantsand highlight the bigger purpose of the organisation (over and above justmaking money) as you tell them what you do.
2. Development opportunities. New economyemployees place a great deal of emphasis on their development and willtherefore factor training, coaching and challenging tasks that fosterdevelopment into their decision about where to work.
3. Appeal to a value system. Every personhas a unique set of values that they look to satisfy through work activities.These values usually supercede money in a decision about where to work. If youbelieve that an applicant’s values link with the organisational values and yourpersonal values, highlight this and try to demonstrate it in the selectionprocess.
4. Payment range. Although it has beenproved on a number of occasions that salary is not the number one factorinfluencing a person’s decision to take a job, if the payment you are offeringis not within an acceptable range then you won’t even be considered. Make sureyou are higher than the bare minimum if you want to have a chance of engagingthat person.

Keepingtalented people.

Finding talented individuals is one thing,but keeping them is a completely new challenge. Trained talent is worth so muchto an organisation’s productivity, customer service and ability to seize newopportunities that talent retention cannot be seen as a random ad hoc process.

If you want to be wise in managing yourbusiness, then you need to be strategic and clever about retaining your goodpeople. Some 70% of managers think employees leave organisations for more moneybut in truth 88% of employees say they leave for much more than just money.Good, talented people don’t actually leave an organisation; they leave amanager or supervisor in that organisation. Therefore, organisations thatbecome magnets for strong talented people have good leadership at all levels ofthe organisation. How effective are you as a leader and is your leadershipstyle a strength or a weakness in your talent
retention strategy?

WhatDO talented employees want?

In trying to understand what influencestalented individuals to stay with or leave an organisation, we asked over 30skilled, educated people working for small and medium sized entities whatattracts or repels them in a job. In summarising these findings we came up witha list of demands of talented employees.

If you want to hold onto your talentedstaff, consider whether you are providing them with what they want. If they arenot getting what they want they may decide to look elsewhere.

At a recent seminar, Ricardo Semler, CEO ofSemco, said: “I haven’t made a business decision in 13 years. I don’t need to!”All his employees are empowered to make these decisions and they do. Perhapsthat is why in 25 years, Semco has an average employee turnover rate of 1% perannum compared to the global average of 25% per annum.

WellsVs Fences

Dr Graeme Codrington, head of intellectualcapital at TomorrowToday.biz, a strategy consultancy focused on helpingcompanies get the most out of their talented staff, tells the story of a SouthAfrican sheep farmer who goes to Australia to visit his brother. In South Africa, a lot of his time as a Karoo sheep farmer is spent on maintaining the fences atthe edges of his farm. The Government even knows how important fences are, andprovides many incentives to help farmers keep them perfectly in tact. Ofcourse, the sheep often move to these fences and graze at the edges of the farm– sometimes even putting their heads through the fence to taste the sweet,green grass on the other side. But on his brother’s farm in Australia, thefocus is not on building fences. In fact, many outback sheep stations don’teven have fences. Their focus is on building wells at the centre of theirfarms. They know that the best way to keep sheep on their stations is to digdeep, clear, cool wells of water at the centre, and to draw the sheep in andkeep them close. Codrington says: “The same applies in our businesses. Toooften, we spend our time building fences (contracts) to protect the edges, anddon’t take the time to focus on making the centre attractive. We focus onstopping people leaving, rather than giving them a reason to stay.”

All the trends suggest that the skillsshortage is not going to go away anytime soon. When it comes to talent, theconcept of “finders keepers, losers weepers” will remain a reality for years tocome. If you wish to be competitive in the future, you need to be strategic anddeliberate about attracting and retaining the best talent. If you don’t, thenyou may just find yourself surrounded by “bozos”, unable to compete and gettingbeaten in every aspect by those who have been effective in this regard. Thechoice is yours.

WhatTalented Employees Want:

1. An organisation with a stronglycommunicated and lived vision. They want to be strongly connected to anorganisational purpose.
2. Strong, visible leadership.
3. An opportunity to gain work and lifeexperience.
4. A fun, stimulating environment.
5. To be challenged intellectually andemotionally. In fact some effective employees refer to work as a spiritualexperience when fully engaged.
6. To feel like they are adding value tothe organisation. They want to contribute to colleagues and clients daily. Theydon’t want to feel like a number regardless of their position in the company.
7. Ongoing learning, both formal andinformal.
8. Strong mentoring and coaching processes.They want ongoing feedback from leaders.
9. The opportunity to be connected to otherpeople and teams. They thrive in a positive collaborative working environment.
10. To be given the resources to do theirjobs with excellence.
11. To be fairly remunerated.
12. Recognition for their work.
13. The opportunity to gain a broad rangeof skills.
14. No bureaucracy, red tape and meaningless procedural activities.
15. To know that their organisation has bigambitions and that they are included.
16. An end to micro management.
17. To be trusted and held accountable fortheir actions.
18. To be in an organisation that isinnovative and value adding.
19. Work-life balance.
20. An organisation that assists them inbecoming the best they can be.

Finders Keepers

Losers Weepers

About the Author

Greg Fisher CA(SA), MBA, is an associate faculty member at the Gordon Institute of Business Science (GIBS). He is currently researching Technology Entrepreneurship at the University of Washington in Seattle.