This blog was co-authored with portfolio company, The Mentor Method CEO, Janice Omadeke.
The race for talent is on. Everywhere you turn, you read about the great resignation and up to 40% of the work force is thinking about leaving. If that’s not bad enough, in a digital world, where your white-collar workers can be remote, all workers are fair game. You’re not only competing for talent in your local market. You are also competing against the biggest national players like Amazon, Google, Facebook and Microsoft who have deep pockets and sexy incentives. Not only are employees leaving at a dizzying pace, but the time to fill open jobs is increasing as fast as the pay raises your employees receive from your competitors.
We are facing a retention crisis of epic proportions and it’s costing companies more than just money. On average it costs between 30-400% of an employee’s salary in replacement costs every time an employee leaves. Companies are draining institutional knowledge and losing hours of productivity when sourcing, hiring, and training. Company culture and morale are also impacted by an exodus of employees seeking more balance in their careers.
One definition of insanity is doing the same thing repeatedly while expecting different results. If companies don’t change their talent retention strategies now, they will lose the war for talent long-term. It’s that simple. Every CEO in our networks and Boards we sit on is trying to solve this critical issue, but most are shrugging their collective shoulders and going back to how they’ve always done things. This includes:
- Mandates to return to the office
- Relying on legacy networking practices despite a majority virtual environment
- Survival of the fittest mentality
We get it, many employers find this easier to implement, could be stuck in long-term leases for office space, fear change, or are simply resolved to accepting massive turnover.
Relying on your HR department to drive retention strategies alone is not the solution. Company culture, while critical, is not the solution. The only way to truly, proactively be ahead of the trend is to be in close contact with each and every employee, in a deeply personal, authentic, and trusting relationship on a constant and on-going basis. An employee experience function that is in partnership with HR can be the key to the race for talent.
EMPLOYEE EXPERIENCE NEEDS TO EXIST INDEPENDENTLY FROM TRADITIONAL HUMAN RESOURCES.
In the past, Human Resources’ main job was to protect the mothership from harm and make sure that the trains are running on time. In a challenging moment, HR will, the vast majority of the time, side with the Manager and protect the company over the needs of an individual employee. To build a truly trusting relationship with each employee, they need to feel confident that their best interests are at heart and HR can support that through partnering with the employee experience and DEI teams.
Employees today are demanding more from employers. Millennials, in particular, are more likely to work with values aligned organizations that are invested in their development with consistent feedback. Many enterprise organizations are just getting rid of yearly performance reviews, which is too slow for a generation that is confident they can find another role that is just as good or better than their current role quickly. Human Resource organizations are shifting to meet these demands, but it’s not happening fast enough to keep up with the Future of Work.
Putting the employee at the center of the experience would be a major shift for traditional HR functions, but it’s the only way to create more tension and balance between HR compliance and process and employee experience demands. This is akin to the major shift of moving the customer to the center of buying and experiencing products. It will take time to make the shift and provide outsized advantages for early movers.
EMPLOYEE EXPERIENCE, DEI AND HR NEED SUBSTANTIAL BUDGETS TO ADDRESS EMPLOYEE RETENTION
Relying on one department to address this critical and growing problem isn’t sustainable. Between the size of these departments, timing, budget and competing priorities, talent retention can take a back seat when you consider the small budgets these teams are given to address all aspects of the talent experience. After George Floyd’s murder, there were hundreds of public statements from enterprise-size companies pledging to advance DEI. However, a year after these public statements, it was revealed that internal budgets weren’t adjusted to support advanced inclusion efforts. Our concern is that without giving these teams a sizable budget, they’re left to bootstrap their own solutions to talent retention. Meaning an overworked Program Manager with a full set of tasks and responsibilities is tasked with building a retention strategy for the entire company on their free time. Or worse, talent retention is pushed further down the list of priorities due to resources and bandwidth. Providing a substantial budget empowers teams to use tech-based tools to help them scale their talent retention needs and solve problems faster than one person can.
WE MUST STOP SADDLING MANAGERS WITH BEING THE PRIMARY MONITOR FOR EMPLOYEE’S HAPPINESS.
The number one reason employees leave their job is their manager. In our traditional 20th century business model, the only way to scale is to make each manager responsible for monitoring their employee’s performance and satisfaction. To be fair, there are excellent managers out there. Most are decent and quite a few are terrible. Neither longevity nor craftsmanship in a skill-set guarantee that someone will be a good manager and care about their employee’s needs.
Mark recently spoke with a 24-year-old woman who just changed jobs. She liked her previous company and loved her old boss. By all accounts, she was a top-performing employee being groomed for rapid promotion. She got a new boss who was okay, but had a micromanager leadership style. She didn’t hesitate for a minute to look outside for new opportunities. She immediately got a new job with a big promotion and pay raise. What is the real cost to the company she left? What would it have taken to keep her?
Rishad Tobaccowalla likes to remind us that people come to a job for three reasons:
· Money
· Fame/Recognition
· Power/Autonomy
They will stay as long as some of the first three continue, but they leave if they find the following:
· a lack of connection to their boss or other colleagues
· a loss of belief in purpose and values of companies
· the feeling they are not growing their skills and expertise
In this incredibly competitive job market, where every employee matters, we should not be relying on the traditional model of manager/employee monitoring and engagement alone. The cost of losing a good employee is simply too high.
CULTURE IS CRITICAL – BUT IT’S NOT ENOUGH.
A great culture is table stakes – knowing your employees as human beings is the new standard of excellence in employee retention. Most companies don’t pay enough attention to company culture and values and mostly pay lip service to it. If your actions are not aligned with the behavior of your stated culture and values, it’s not believable or authentic. As important as a healthy culture is, in this environment it’s not enough.
Culture is expressed and reinforced through the systems that run your business. Culture is how colleagues interact in groups, on and offline. Culture is the true north of distributed decision making. Cultural alignment is not an early warning signal into an individual employee’s feelings and motivation. It’s the last signal. When an employee is unhappy, it’s too late in this competitive job market. We have to be in a regular and trusted conversation, not pulse survey, with every single employee – in addition to having a great culture.
The transition to putting the employee at the center of the employment experience and creating a new function is a massive transformation for many organizations. There are a few ways that organizations can act today to work towards the ideal and improve retention of key talent.
INSTITUTE A FORMAL MENTORSHIP PROGRAM
71% of millennials say that mentorship is the number one benefit they evaluate when interviewing at a new company. When done right, mentorship is a powerful tool to increase employee retention. Benefits include increased productivity, satisfaction at work, eagerness for promotions and leadership opportunities. However, most formal mentorship programs take place in a vacuum or are department specific which doesn’t ensure retention the way cross-functional mentorship at scale can. Given the hybrid nature of workplaces today, companies risk a divide between those that come to the office and those that do not. Mentorship can bridge that gap by connecting employees outside of their geographic region or department to promote diversity of thought and implores the employee experience overall. Scalable mentorship tools like The Mentor Method help departments responsible for implementing a mentoring program provide a top-tier talent experience without the burden of extending resources or working in a vacuum.
CREATE A NEW JOB – AN INDEPENDENT EMPLOYEE RELATIONSHIP MANAGER.
Think about that person with a winning personality that everyone loves and trusts. What if we had Relationship Managers that were part Social Worker, Employee Concierge, Career Coach, and Personal Ombudsman/Advocate? Their only job would be to ensure the healthy well-being of each employee. They could be trusted, because their ONLY job is the happiness and well-being of each employee.
This person can be owning the data around engagement, partnering with managers to provide best practices for engagement interventions, and fostering an environment for growth within the organization. By decoupling this position from HR, a healthy tension between compliance, process, and experience is introduced. The organization is challenged to balance requirements with the needs of employees, without the historical need to protect the organization. This role becomes integral to the strategic operations of the organization, much like customer success did for customer-centric companies.
Now you may think you don’t have budget to do this and it would be too expensive to implement. It might upset the status quo. All true. But it is better than the alternative.
The war for talent is only going to get more fierce. Doing the same thing and hoping for different results will guarantee you will be on the losing side of that story. The best companies have the best talent. What are you doing to protect yours?
About Janice Omadeke:
Janice is the founder and CEO of The Mentor Method. Janice is a 2020 Austin Under 40 nominee and winner of DivInc’s Champion of Change Diversity Champion of the Year for the city of Austin. Black Enterprise recognizes Omadeke as one of DC’s top 5 Black women in tech. She is certified in Entrepreneurship from MIT and is PMP certified with over 10 years of corporate leadership experience for Fortune 500 companies.
About The Mentor Method:
The Mentor Method aims to democratize career opportunities and empower career development by leveraging their unique curriculum and SaaS solution. The organization’s software, powered by a patent-pending algorithm, helps forward-thinking companies affordably match diverse talent to mentors within their organization, so diverse talent is more likely to succeed, stay, and grow in their career. The Mentor Method is a member of the Google for Startups program, was a finalist at the Grace Hopper annual conference in 2018, is a MassChallenge Texas Gold winner, a 50 on Fire winner for both Austin and DC Inno, a 2017 Startup Grind Global Exhibition selection, and was a national semifinalist in Tech.co’s Startup of the Year competition in 2016. Learn more at TheMentorMethod.com.
