Case Studies
CRITICAL TALENT LEAVING
Today, in order to retain talent companies are offering more perks, giving out bonuses, and increasing pay. But they are still losing good employees and finding it hard to attract new talent.
While companies often think people want more money, the pandemic has made it clear that while good employees leave companies for many reasons, the feeling that their job lacks purpose or meaning is (and always has been) a major factor. More money has less impact on retaining good talent than executives realize.
Studies have found that:
89% of leaders wrongly believe their employees quit because they want more money.¹
Only 12% of employees actually leave their job because they want more money. ²
Over 70% of employees would accept a pay cut for their ideal job and 23 percent of active job seekers would take a new position without a pay increase. ³
Why do so many leaders not know their employees want more purpose? In a large study done McKinsey (2021)⁴ , they found that:
“Whereas 85% of executives and upper management said that they are living their purpose at work, only 15% of frontline managers and frontline employees agreed.”
“Executives are nearly eight times more likely than other employees to say that their purpose is fulfilled by work.”
Executives are out of touch and do not understand how their employees really feel about their jobs. Which is why they are often surprised when good talent walks out the door.
So, how do you find out why your best talent is leaving? Let us show you how we did it with one client
A sinking ship
Automated Regulatory Compliance (ARC) was a company in crisis. After 12 years of rapid growth and market leadership, suddenly customer satisfaction scores and revenue were dropping. Critical talent was leaving, and competitors were taking market share. In fact, a senior officer had recently left and went to a competitor to help them build a compliance unit that was stealing ARC’s clients.
Revenue was dropping and they weren’t sure what to do. They had tried to implement some changes, but they were not working. They were still losing key talent, and they didn’t know why.
That’s when they called us.
How we revealed why talent was leaving.
The ARC executive team agreed to have everyone in the company complete our DnA® Assessment to reveal why they were losing key talent.
Results revealed several reasons people were leaving, but two pieces of information really stood out.
The first thing that stood out to the executive team was that employees did not feel aligned with the purpose and values of the company. For example, the data showed that in general, employees did not think the company values reflected their own values (Figure 1). This discrepancy is important because a 2021 study by Beyond Blue Consulting and Future Workplace of Fortune 500 companies found that “52% of workers say they would quit their job—and only 1 in 4 would accept one—if company values are not consistent with their personal values.”
A second set of the results revealed the employees, in general, did not feel that senior management was living the espoused company values. That is, they felt the leaders were not modeling the company’s values.
So, not only did employees feel disconnected from company values, but they also saw their senior leaders displaying behaviors that were inconsistent with their own espoused values. Employees felt disconnected and cynical. No wonder their best talent was leaving.
Consider that a recent study by the Corporate Executive Board found that “78% of organizations rely on leader role modeling as a key component of their culture strategies”. Because ARC senior management wasn’t modeling behavior consistent with the espoused company values, leadership created a culture incapable of retaining their best talent. Talent that no longer found purpose and meaning in their work with ARC and had skills valued by their competition.
But now, with data from our assessment, they had insight into what they could do differently.
How the client used our data.
One of the disconnects in philosophy the results showed was that while senior leaders said customer focus was the key to their competitive advantage, the leaders were, in actuality, focused on internal dynamics while the frontline tried to focus on serving the customer. The data clearly showed that how much attention was paid to the customer varied by level and function. Customer satisfaction was being undermined by a culture dominated by silos and power struggles.
While the executive team agreed they needed to transform the company to break down silos, they felt the undertaking would be too costly, take too much time, and generate resistance from the workforce. They concluded that redesigning roles, processes, and relationships would need to be outsourced to a consulting firm at great cost.
They were stuck. They knew they needed to change to survive, but they felt the “cure” might cause an even quicker death.
The results we shared with the client clearly indicated that the employees had the most knowledge about their customers, and also knew exactly how the customer delivery process worked. So, we asked, “Why not have the employees help?”
Even though the executive team initially snickered at the idea of the employees re-designing the company, they eventually decided to undertake an employee-led redesign.
They thought at the very least it might improve engagement and slow or even stop the loss of key talent. The risk was now less than the reward.
We helped the employees use the data collected by the survey to guide the re-design. During these meetings, the executives would watch and provide information as needed, but the discussion and decisions were solely led by the employees.
Once the redesign was done, the employees and their managers created implementation plans together. The plans specified what needed to be changed, identified the sequence of the changes, developed action steps, and assignments. The implementation plan maintained critical aspects of the old system while they were creating the new one so that unexpected blockages and missed connections could be fixed without disturbing on time delivery to customers.
Even before the redesign was fully implemented, clients were measurably happier, and revenue started to grow again. And because employees were fully involved, morale increased, turnover slowed to a trickle, and commitment to the transformation was extremely high. The CEO and the entire management team said the turnaround was due to the spirit and knowledge of their employees. The effort was a complete success.
With the right data and a willingness to believe in it, the company was able to transform their culture in a way that not only worked, but was sustainable.
With the right data and a willingness to believe in it, the company was able to transform their culture in a way that not only worked, but was sustainable.
References
(Leigh Branham, author of The 7 Hidden Reasons Employees Leave, AMACOM Books, January 1, 2005) https://medium.com/@checkli/why-employees-quit-20-stats-employers-need-to-know-b921c253f767
(https://www.hays.com/press-release-do-not-use-/content/us-workers-willing-to-compromise-on-salary-for-the-right-benefits company-culture-and-career-growth-opportunities)
[https://www.mckinsey.com/business-functions/people-and-organizational-performance/our-insights/help-your-employees-find purpose-or-watch-them-leave] they found that