Keeping Top Talent In A Down Economy

In good times, companies say that people are the most important asset. In bad times, they get rid of them. Is that a paradox — or hypocrisy?
At the heart of the problem is that a lot of the top performers out there feel totally ignored and out of the loop. Their bosses are perhaps focusing on the clamouring clients in this recession or on the vaporizing bottom line. And these top performers feel that they’re being taken for granted. Many bosses seem to think that — with a 10-plus per cent rate of unemployment — they can rely on their best people putting their nose to the grindstone and delivering 110 per cent day in day out. But that’s not true: there’s a lot of alienation, a lot of disengagement. My sense is that 50 per cent of the workforce is spending more than half of their time looking for their next job. I think the flight risk, as well as the productivity losses, that happens because bosses are out of touch with how their workers think and feel (even their best workers!) is enormous.

You commented recently that the loyalty rate among star performers has now plunged from over 90 per cent to about 53 per cent. Why has that happened?
Top performers feel neglected, and many of them are struggling by working in companies with broken business models. Imagine being in a company within the financial sector right now — or the pharmaceutical industry or maybe the media industry. There is massive turbulence in those entire industries, and those working in such companies feel that they’re not involved in figuring out how to help move their company forward. They also feel that somehow they’re not nearly as important as they used to be. They’re struggling by working within depleted teams, given that many of their peers might have been fired over the last couple of years. If you are working in a company today, the odds are you’re doing much more work with less help or resources. In our surveys, we find that 20 per cent of employees are working nine hours more than just a year ago. So the pressures are intense and the recognition of effort is very low. Obviously there’s a lot of disengagement, a lot of turning off of trust and loyalty to the company and its bosses.

How many people are totally engaged in their work?
Only about 10–20 per cent of people in any organization are fully engaged. There’s a mass of people who aren’t really one way or another, and then there are people who are actively disengaged. A new UK study released in October 2009, the Watson Wyatt survey, confirms that the engagement level of top performers is down 25 per cent. This is dangerous. Keep in mind that the top performers are the most mobile, the ones who can get new jobs easily. When a company lays off workers thinking it will be a boon to the bottom line, they’re being myopic. The top talent, the people who were not laid off, are most likely to be among the survivors, the ones who will have to work harder as a result and who will feel underappreciated as a result. And these are the folks who can get jobs most easily on the outside, who can even cross over to other sectors. The smart employer needs to place this task at the top of his or her agenda these days: be proactive about nurturing, supporting and making sure your top talent knows they’re important.

Are your observations and advice applicable to all industries?
I think right across the board, as we pick up our heads from the economic rubble and try to find renewal and growth going forward that, no matter what sector you’re in, it’s your collective workforce brainpower that’s going to be the big driver of success tomorrow. And that’s true in basic industry, it’s true certainly in science and technology, it’s true in the media, it’s true on Wall Street or in the oldest economic firms in the City of London. It’s really across board; we now have a knowledge economy that’s highly dependent on innovative thinking by top people in order to spur the next wave of corporate growth. Ignoring your best people right now is a definite business risk.

Do you see some companies that revere their top talent?
In the most recent research my team and I conducted, we focused on 30 different companies. Half of them are on Main Street, more locally owned; the other half are on Wall Street or in a larger city. And what we found is that there are some very important top-management interventions that really are working, in terms of ratcheting up engagement, re-igniting effort, making sure that people can really fire on all cylinders even in the midst of a great recession when perhaps bonuses are rare and pay raises are again something that many companies can’t pony up.

You’ve said that such companies have a “no spin” culture. What do you mean by that?
One thing we find is that silence and mystery, feeling that you’re not in the loop, is corrosive for all employees and particularly for team leaders who are trying to figure out to the best ways to lead their teams. On the other hand, we found models of openness. For example, Jeff Bewkes at TimeWarner (a company that is now only half the size it was 18 months ago) found that having an open luncheon (basically, a kind of bull session) with his junior-level as well as his high-potential people made a huge difference. Those who came to the luncheon came away feeling that they were on Bewkes’s radar and that their views were being included in his mind in terms of trying to recreate the business model going forward. Bewkes calls them skip-level lunches, and he has them most weeks; they’re two-hour luncheons with all kinds of talent at TimeWarner. It’s his effort to break down the barriers and make sure that people across the company are in the loop in terms of figuring out where the company’s going.

So communication is crucial?
Totally critical. Google, for instance, is another case study. It has always had something called TGIF (Thank God It’s Friday). It’s a meeting within the company, Friday mornings, at which folks at the Mountain View, California, headquarters — but also around the world via a website link — are able to ask all kinds of tough questions of the senior executives. The tradition at Google is that you can ask anything you like, and it’s honoured and it’s answered. That tradition has made all the difference in this year of knocks and downturns and all kinds of stuff; even a company such as Google has found it’s tightening its belt in various ways. This is a method of making sure that there’s transparency and honesty vis-à-vis where the company’s really going.

What else should companies be doing to get the most out of their top talent?
Of the management initiatives I’ve seen, one of my favourites is the endeavour to use time as currency. People feel pressured everywhere, packing their days with too much work. A mini-sabbatical or the ability to do a four-day week for a few months makes all the difference if you want to rekindle loyalty to the boss and to the company’s mission. KPMG in Britain has done a very good job on this front. Just last winter, it was facing the problem of needing to cut payroll by about 20 per cent; but it didn’t want to fire any of the best people. So KPMG offered 11,000 professionals the following choices: (a) they could go to a four-day week and take a 20 per cent pay cut, (b) they could take a mini-sabbatical and again take a pay cut, (c) they could do both of the above and enjoy a real chunk of personal time off or (d) they could stay precisely where they were. Guess what? Some 80 per cent of the KPMG professional staff actually opted for one of the time-enriching options.

KPMG managed to hit its saving figure without any redundancies; and engagement went through the roof because employees, both men and women, in this very time-starved, pressured workplace understood that they were being given the choice to take a little real time in a way that wasn’t stigmatized. Because the time off was seen as helping to boost the health of the company, no one was seen as being a loser or as being less valuable to the company than someone else. As a result, all kinds and levels of employees took this option. It was one of those win-win situations in which top management understood that, today, giving employees time as an incentive, as a reward, can work. I find this is particularly true in an environment in which it’s really hard to conjure up financial incentives to boost morale and loyalty.

Keeping top talent means that a company won’t have to recruit as hard when the economy does turn positive, doesn’t it?
Absolutely. And another great benefit can result from tapping into the altruism that employees have, particularly in difficult years. So many workers these days want to do something about climate change or healing the planet or saving lives. Companies like Pfizer and Moody’s have decided to give their top talent an opportunity to give back.

The Pfizer example is very interesting: last winter, realizing that there was a morale issue throughout the company, it started a programme called Global Access, which was a new business initiative at Pfizer that attempted to create low-cost health care solutions for the working poor around the world; it partnered with the Grameen Bank, the micro-finance lender. About 19,000 employees at Pfizer wanted to engage in this programme because they thought that it was so wonderful that their company was in the business of doing good in the world. It became a huge engagement tool, especially for Pfizer’s younger employees and for its female employees — both sectors of the workforce that wanted to give something back to their communities. This business of including some altruistic give-back option in the incentive structure is a win-win situation, especially now when workers increasingly understand that there are a lot of people who could be helped by special programmes such as Global Access.

You have written nine books. Is there a common theme?
Yes. I’ve done a lot of writing on how best to manage high-performing women, minorities and multicultural workplaces. The interesting link is that many of the motivational drivers are the same for, say, a 37-year-old woman who’s trying to decide whether to stay in her career or go home and spend more time looking after her kids — or a 35-year old Hispanic man who’s trying to decide whether to stay in corporate America or start his own small company. What makes the most difference is whether the corporate employer can pony up rewards that go beyond the pay cheque, whether it can offer the employee the ability to give back to the community and whether it can operate on a flexitime basis, which provides employees some control over when and how work gets done. Those items are very important both to the woman and to the Hispanic worker.

Are there other issues as well?
The other thing that they’re very sensitive to is recognition and working in high-functioning teams. Many of the recommendations for managers in my latest book strongly suggest that they need to have a more generous viewpoint as to what really motivates top people. Flexibility counts. Encouraging great teams and building a culture that encourages considerate colleagues — these are things that can make a great difference to someone working long hours with limited options for increased pay.
I think the lessons that I’ve learned on how to retain women and how to retain multicultural leaders really translate to workers in many industries and countries.

Going into 2010, we’re going to need to rely on these other drivers much more than we have done in the past. Even when pay is not an issue, just dangling a bunch of money in front of someone doesn’t work so well any more. Companies need to place other things on the employment agreement because, remember, the average managerial worker these days puts in a 73-hour work week. To make that kind of commitment and still really bring your whole self to the job while firing on all cylinders, you need to be rewarded in ways that you feel are attractive. Thus, companies need all kinds of drivers, not just money. And that’s what my latest book explores. Whether it’s time as currency, whether it’s new forms of recognition, whether it’s great ways of turbocharging your teams, it’s clear that top talent today responds best to a wide and generous set of human motivators.