As the business world scrambles out of the crater left by the global financial crisis, the war for talent will be more brutal than ever. But leading companies began mobilising their forces long ago. Chris Sheedy reports.
The global financial crisis hasn’t been all bad news. Around 18 months ago, after making a decision to better understand staff-turnover issues, management of Diageo Australia changed various policies and added new ones. As a result, staff turnover fell and commitment levels rose dramatically, even as other businesses fell to pieces. Diageo has always sought an edge over other companies in its extremely competitive drinks market, and the sharpest edge on offer is their people.
“The war for talent never went away,” says Angela Hawthorn, HR Solutions Manager for Diageo Australia. “What individuals seek is far more complex than just financial reward. People want to know they’re supported when times are bad as well as good.”
Just a few years ago, staff retention was about making people feel challenged, about regular progress meetings and 360-degree appraisals. It always had a little to do with income but it was also about managers showing empathy, understanding what it was that motivated their staff, and ensuring lines of communication were open and uncluttered.
In a post-GFC era these issues are still vital, but experts say the requirements for greater staff retention and commitment now run more deeply throughout an organisation, through its processes, strategies and policies to the very core of its philosophies and behaviour. “The core values of an organisation really matter to staff,” Hawthorn says. “That can make the difference as to whether a person is engaged or not.”
So what does this mean at a practical level? How can a manager alter what they do in order to protect their most valuable asset? Hawthorn says it’s about the organisation consciously acting to improve the life of that person.
“We have a review process called ‘Partners for Growth’,” Hawthorn says. “We have frequent coaching conversations around how a staff member is tracking. That’s not unusual, but an important new part is about finding out what their personal aspirations and dreams are. What are they trying to achieve in their life and what commitments do they need from the company to deliver on that?”
Succession planning is vital
An important part of this is succession planning, which, Hawthorn says, means truly understanding each staff member and what it is they hope to do within the organisation. A policy framework is necessary before the manager can have honest conversations about career opportunities.
The inability to have this discussion is a major flaw within many organisations, says Lenore Lambert, Director of Exit Info. It’s a glaring skill gap that must be filled. “Because managers think career development means promotion they often avoid having these conversations,” she says. “Sometimes that’s because they want to keep that employee in their current position, and sometimes it’s because they don’t have any promotion opportunities for them, so they think having the conversation will precipitate the person leaving.
“Employers must support managers better… for these conversations actually build the employee’s commitment. The employee may eventually leave, sometimes this is unavoidable. But having a constructive conversation would mean the employee leaves saying great things about the organisation.
“Given 30-40 per cent of people find new jobs via word of mouth, this is important in itself. Another outcome might be that they keep the employee for longer or they may find that with a little creativity they can make role adjustments for that person in a way that hits their sweet spot.”
Retention of talent means connecting more closely and honestly with each individual. Importantly, for a manager to achieve such a connection, they must have the relevant systems and processes in place within the organisation. Individual goals often revolve around flexibility such as the ability to work from home, days in lieu, the availability of social networks, gym memberships and other programs.
When the HR Services Branch of the Department of Finance and Administration within the Federal Government introduced such programs two years ago, for instance, their staff turnover fell by 10 per cent and applications for general recruitment rose by 11 per cent.
Diageo Australia, since implementing its new strategies, has also experienced great success. Turnover has fallen 20 per cent, internal mobility has increased by 10 per cent and the company is now ranked fourth in the BRW top 50 great places to work survey. It’s a powerful start in the post-GFC environment as the battle for talent heats up again.
“Look at statistics of supply and demand of labour over the next 10 or 20 years, this problem isn’t going to go away,” Lambert concludes. “It might have little dips like the past 12 months, but overall the demand for skilled labour will far outstrip supply.”
Implementation is everything
Managers may have the best intentions when it comes to staff retention, but if they’re not backed up by solid policy implementation then it is all for nothing.
Now that Diageo Australia has appeared near the top of the BRW top 50 great places to work survey the company has been receiving calls from other organisations asking how they did it. “If you’re asking that now rather than having had your eye on the ball throughout the GFC, then there’s a fundamental problem within your organisation,” says Lenore Lambert, Director of Exit Info.
Companies need to be more astute around building resources to develop people, says Angela Hawthorn, HR Solutions Manager of Diageo Australia. “And I mean entire companies, not just managers,” she says.
“They must ensure they have frameworks and tools that can foster career development and growth within people’s lives. So it’s about connecting with people and looking at different resources available within your organisation. If the resources don’t exist, your No.1 priority is to create them.”