I’ve found that what turns a good business model into a successful business is its people. Successful entrepreneurs have managed to get the right people with the right skills in the right seats, thinking and behaving in the right ways. How do they increase and maintain their talent retention?
Understand what is talent retention
That’s a lot to get right, which is why scaling a business is a very complex thing to do. But, there is a way to simplify all these “right” things by looking at the talent you have in your business. You see, talent requires more than just competence. It’s because the value that your people add is greater than just their skill set. Talent is how much of themselves your people bring to your business.
The fictional case of 2 software engineers named Charlie and Sam.
Charlie has been coding since he was 12. He went to the best university, interned at Amazon, and worked at Google before joining the team. He is by far the most skilled developer you have. This is why he is responsible for new product development and why he is being paid the most. Charlie has a bit of a chip on his shoulder and doesn’t seem to care much about where the business is trying to go and what impact the team is trying to make. He just enjoys the pay, the benefits, and the less complex and demanding job. He doesn’t put in more effort than he needs to. However, the work he delivers can be exceptional when he’s pushed.
Sam, on the other hand, started in mechanical engineering. But she changed to information systems in university because she enjoyed it more. She then jumped between a few corporates and start-ups before joining the team in its infancy. Sam isn’t the most skilled IT person in the house. However, she has constantly developed herself and grown with the business to the point that she now leads IT Operations. She loves the culture and is totally invested in seeing the business succeed. She is passionate about being a leader and helping the business run smoothly. She is often coming to the founders with solutions to problems they weren’t even aware of and she gets a kick out of seeing the business improve.
Although Charlie has very high competence, his low sense of commitment and contribution shows that he is only thinking of himself. On the other hand, Sam is dedicated. She’s passionate about the job and feels a sense of service towards her impact on the business. It’s very tempting to say that Sam adds more value to the business than Charlie. Yet, wise leaders know they would be comparing apples with oranges. The best way to maximise the talent of both Charlie and Sam is to view them individually. To do so, we need to understand more about what talent is. In this end, we’ll know how to turn talent attraction into talent retention.
Talent = Competence x Commitment x Contribution
- Competence: How capable and able your people are of meeting the requirements of their role, well and properly.
- Commitment: How dedicated and driven your people are towards the wider context, goals, vision, and growth of your organisation.
- Contribution: The extent to which your people – as individuals and as a collective – believe that what they are doing is having a positive impact on others.
The reason why talent is a multiplication of these 3 factors is that you can’t look at any of them in isolation. For example, someone can’t feel like they are highly competent in their role if they believe that what they are doing has absolutely no relevance to the strategy (commitment) or stakeholders (contribution) of the business. Their job would be pointless, which means their competence would be useless and so their talent would be worthless.
Without commitment and contribution, competence adds little value.
The reality is, talent isn’t fixed. Nor does it manifest in the same way, at the same level, for the same two people. Talent is unique to each individual and should be assessed, nurtured, and managed as such. The story of Sam and Charlie is a good example of that. They have different jobs, skill sets, teams, backgrounds, values and motivations. They have different contexts. As a leader, you have less control over managing and maximising your talent that doesn’t report directly to you. Yet, there are things that you can do about the context to increase your talent retention.
Develop a context for optimal talent attraction and retention
1. Understand what competence looks like, how to measure it, and how to develop it
Everybody is a genius. But if you judge a fish by its ability to climb a tree, it will live its whole life believing that it is stupid.
– Albert Einstein
Build a competency framework.
Competencies are sets of characteristics and skills that enable a job to be performed effectively. An example would be the following definition of Persuading & Influencing:
Gains clear agreement and commitment from others by persuading, convincing, and negotiating. Makes effective use of political processes to influence and persuade others. Promotes ideas on behalf of oneself or others. Makes a strong personal impact on others. Takes care to manage one’s impression on others.
A competency framework is the set of competencies that describe performance excellence within a role. By defining the competency frameworks for your roles, you can now predict, manage and improve employee performance more effectively.
Predict performance through assessment and selection.
Once you have your competency framework, you now know what is required for someone to perform well in the role. Assessing these competencies in the selection process can make a pivotal impact on the talent that you have in your business. By utilising competency-based interviews and psychometric assessments, you can assess and select for the softer skills that make a big impact but are harder to measure (like Persuading & Influencing).
Make competency-based development decisions.
The ROI for education and training is often vague. It makes it difficult to be deliberate about the developmental opportunities you provide to your people outside of work. By using competency frameworks, it makes it easier to map where someone’s strengths and development areas are in relation to their current (or potential) role. And doing so allows you to be specific about which competencies need to be improved and/or maximised. This is a big step towards changing the perspective of training and development from an expense to a deliberate investment.
2. Garner commitment by communicating where you’re going, how you’re getting there, and what your objectives are
Building a visionary company requires one percent vision and 99 percent alignment.
– Jim Collins and Jerry Porra
Clarify your vision.
As the leader, you’ll have some kind of vision of where you would like to see the business in the future. The hard part is getting it out of your head and making it clear enough for your employees to picture in their imagination. There is a big difference between a vision statement that people can read and understand, and a clear vision that someone can actually see happening in their minds. If someone can clearly picture what the end goal is, then it becomes a lot easier to commit to the process of getting there. It’s not easy to see the woods from the trees. So getting a coach (for a single leader) or a facilitator (for a leadership team) to unpack what’s in your mind(s) will help you drive your vision throughout your business. And if the vision is clear and shared, then your talent retention increases.
Build intentional growth pathways.
Once you have your direction, the next step is knowing how to get there. Pick a pathway you want to prioritise business growth in the medium term:
- customers (e.g. expanding into customer segments or market arenas);
- offerings (e.g. growing new or existing products);
- geographical regions (e.g. local, provincial, national, or international).
Then, consult with your teams on how they think you can make that growth happen.
Talent retention happens when you know the journey you want to go on and contribute to the plan. Because your people will know how they can make that growth happen. If they feel like they are part of bringing the plan to life, then they will be more committed to making your growth a reality.
Define measurable objectives.
The cliche holds – what gets measured gets done. Well-defined objectives and key results can work wonders for the performance and motivation of your employees. These provide a point of focus over the shorter term of a year. Your managers will be able to define smaller objectives relevant to their teams that contribute to the achievement of the greater objectives. That way, each team in the business knows what their goals are and how they can collaborate to achieve those goals. The key results metrics can be a great source of motivation because they will show how well the business is tracking against its objectives. Every employee wants to be a part of a successful business, so seeing positive results and knowing that they made those results happen is a great way to reinforce commitment.
3. Create more meaning at work by living your purpose, being consistent in your culture, and connecting your people to the impact of their work
Life is never made unbearable by circumstances, but only by lack of meaning and purpose.
– Viktor Frankl
Put purpose at the core of everything.
An authentic and truly lived purpose provides a golden thread throughout your entire business and ecosystem. It simply (and powerfully) communicates why you do what you do and what impact you’re trying to make. This acts as a guiding principle to follow whenever there is uncertainty in what to do. Put your purpose at the core of your decisions by using the flashcard test (i.e. “is this decision aligned to our purpose?”). If it’s apparent that your purpose is at the core of your decisions, then this provides the golden thread that helps connect your employees to a sense of meaning in what they’re doing. Competence and commitment will get you their hands and heads, but a sense of contribution is what gets their hearts.
Reinforce your desired principles and behaviours.
Whilst purpose provides the guiding principle for the bigger picture, the principles and behaviours that make up your culture provide clarity and consistency to the day-to-day. If candour is an important principle in your business, then think of a time when you witnessed one of your employees being effectively candid with a customer and use that to define what candour looks like for you. By defining behaviours, you make your values more practical by showing everyone in the business what that principle looks like in action. If you’re consistent about reinforcing that behaviour, then the people that buy into your culture will start reinforcing those behaviours themselves. Fast-forward and you’ll have identifiable culture champions who feel like they belong and are part of something bigger than themselves.
Help your people understand what fulfilment means to them.
Everyone wants to feel fulfilled in their lives. Work can be a great place to help your employees feel this way. The simplest way is to gather feedback from the stakeholders your people interact with so they can see the impact they make on other people. Another way is to help them fulfil themselves. By providing your people with the opportunities and tools to develop their self-awareness (e.g. psychometric assessments or consultations with a psychologist/coach), they get to discover what makes them tick. They’ll learn more about what they’re wired towards and what motivates them. Then help them see the link between what drives them and what the business is trying to do. If this link clicks then you’ll have a self-motivated employee who feels like they’re making an impact in your business.
Bringing It All Together
Talent doesn’t exist in isolation. It exists in how well an individual can apply what makes them unique to your context. The level of talent attraction and retention depends on your leadership, your strategy, your culture, and how you connect all of these together. Knowing how to create the right context for your people means you have increased control of the quality of talent you have and the type of talent that you want. By using the talent equation, you can ensure that you have the right people with the right skills in the right seats, thinking and behaving in the right ways.