Organisation : Retaining Leadership Talent Is a Crucial Business Priority
Albert A. Vicere is executive education professor of strategic leadership at Penn State's Smeal College of Business, and president of Vicere Associates, Inc., a leadership consulting firm with clients around the globe. He is one of the country's top leadership coaches, and is the author/editor of several books including Leadership By Design, The Many Facets of Leadership and more than 80 articles on leadership development and organizational effectiveness.
According to the consulting firm TalentKeepers, the annual cost of employee turnover in the U.S. tops $5 trillion. In my own recent study of more than 5000 leaders in major corporations, nearly 30 percent indicated a sense of disengagement from their companies and another 30 percent indicated a concern over whether they had a future with their current employer.
Couple these notions with reports by the Human Resource Planning Society, the Human Resource Institute, the Society for Human Resource Management, Sibson Consulting, and others all indicating that employees will be leaving companies in unprecedented numbers as the economy turns up and it’s easy to see that a retention crisis is looming.
McKinsey and Company’s recent Global Survey of Business Executives reflects the urgency of the problem: while the overall economic climate was the top concern for participants, hiring and retaining talent was number two.
Search firms are gearing up for a boom in business and while many companies will try to fill leadership voids through recruiting, other firms will counter with pay raises and other perks in order to hang on to their talent. But forward thinking companies are not just relying on short-term solutions like retention bonuses. Instead, they are investing in talent management systems to retain leaders and strengthen organizational culture.
Michael Meltzer, author of the just released The Enthusiastic Employee: How Companies Profit By Giving Workers What They Want suggests a recipe for sustainable bench strength based on having a well-developed succession process, providing development opportunities for high-potential employees, and creating an atmosphere of enthusiasm throughout the company.
"In 2005, companies will most likely react to possible and actual changes in the job market. What they need to do instead is to address fundamental issues that will drive and sustain enthusiasm. Otherwise, when the job picture really picks up, we believe that many companies will rapidly lose bench strength," says Meltzer.
Emmy Miller, executive coach and President of Liberty Business Strategies sees part of the problem as a crisis of confidence in companies. “Leaders are getting fed up with bureaucracy. They’re feeling used and abused. They get to a stage where they want to be making an impact. Increasingly, they just don’t feel they’re doing that.”
To address this problem with early career leaders, PricewaterhouseCoopers created what they argue is a one-of-a-kind program entitled, Genesis Park. It takes young leaders off-line for a full five months in an intense leadership development experience that enhances leadership skills and behaviors, but also facilitates retention.
Those who complete the Genesis Park program become part of an alumni “family” that not only reinforces their leadership capabilities and keeps them connected, but helps to reinforce a "family" bond that encourages them to stay with the firm. In an industry where most firms loose 20 percent of their employees per year, Genesis Park has lost only 4% of its participants over four years.
During the past years, when corporate America had been spending less on training, PwC has spent approximately $2 million a year on Genesis Park. Was it worth it? "Start treating your future leaders like leaders today and you'll be amazed at the way in which they'll come together to effect positive change in your company," says Richard Baird, PricewaterhouseCoopers Global Human Capital Leader.
What’s the lesson for CEO’s and senior corporate leaders? “First, be honest with yourself,” says Miller, “Do you want people to leave or not? If you want them to stay, their direct boss has a huge role. If the boss isn’t a good leader, they’re a big part of the problem. People stay if they work for good leaders.”
But there’s more. "If a CEO doesn't have an executive recruitment and retention strategy, he or she is in the 'hope’ business,” exhorts Brian Sullivan, CEO and chairman of global executive search firm Christian & Timbers. “To compete, a company must have a strategy to attract the right talent and to keep them challenged and engaged. Hope is not a strategy," says Sullivan.
I couldn’t have said it better.
Ó Copyright Albert Vicere 2005