Keep Greener Pasture and Star Employees on Your Side of Fence
Editor’s Note: Today, Work Place launches Career Challenge, a feature that occasionally will substitute for Career Make-Over. Career Challenge will focus on a company overcoming a problem situation, such as employee retention, productivity, customer service and motivation. Career Make-Overs will continue to deal with individual career concerns.
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Even in this jittery economy, companies are struggling to retain their star employees. This challenge is felt particularly in Silicon Valley, where skilled engineers, technical workers and scientists are in great demand.
Aart de Geus, chairman and chief executive of Mountain View, Calif.-based Synopsys, a 2,900-employee firm with $800 million in 2000 revenue, is implementing new programs to help him retain what he calls “highfliers” (star employees) and “solid citizens” (stable, loyal workers).
For his firm to continue to be a leader in his field--manufacturing electronic design automation software for companies like Motorola and Texas Instruments--it will need a healthy and enduring stable of talent.
De Geus hired Jerry Pike as a senior performance consultant. With the help of Cambria, Calif.-based consultant Sharon Jordan-Evans, Pike devised an overall strategy to carry out de Geus’ wishes.
The two men agreed that Synopsys’ senior executives will have to dedicate about 30% of their time to retention-related activities. And they could begin by querying employees about their values and needs and the incentives that will make them stay.
“This beats talking to them during the exit interview,” Pike said. “When you lose somebody, the first thought is, ‘Let’s go out and buy another person.’ But there’s a shortage of people here and it’s not just the money that’ll keep them.”
With consultant Jordan-Evans’ help, Pike initiated an ongoing series of retention workshops for the managers, designed to help them identify their top talent, pinpoint retention challenges and create strategies to keep workers content on the job. So far, de Geus and Pike said, the new plan has had beneficial results. One top goal, Jordan-Evans said, “is to re-recruit while [employees] are still with us, still inside the organization.”
But Synopsys management also has been aggressive when employees depart for what they perceive as greener pastures. The firm’s human resource staff holds exit interviews after the person has left to glean more honest feedback. Synopsys executives use what British Columbia-based consultant John Izzo calls “The Motel 6 Strategy”--”the light is always on”--meaning that they tell those valued former employees that they can return at any time. Last year, Pike said, 34 former workers came back .
In the past, dot-coms in Synopsys’ Silicon Valley community were able to lure workers with vague promises of wealth. But today, the spiraling rate of failed dot-coms has made talented employees in Silicon Valley and elsewhere more discerning about when and where to jump ship.
Some financially strapped firms are ignoring their retention problems, instead jettisoning employees to slash costs, Izzo said. During their downsizings, they inadvertently may be laying off their top talent, industrious producers, longtime workers and best managers.
“I think this is foolish and short-sighted,” said Susan Annunzio, leader of Nextera’s change management practice in Chicago and author of “eLeadership: Proven Techniques for Creating an Environment of Speed and Flexibility in the Digital Economy” (Free Press, 2001).
Added John Izzo, “It’s a very dangerous time for companies in the United States, because there are assumptions that there’ll be a slowdown in the talent crisis due to the current economic situation.”
Failure to retain star employees can prove extremely expensive, according to studies. The cost of replacing talented workers typically runs 70% to 200% of their annual salaries, said Beverly Kaye, coauthor of “Love ‘Em or Lose ‘Em: Getting Good People to Stay,” (Berrett-Koehler, 1999). Lost sales staff also can hurt a company’s bottom line, as customers leave and sales in progress fall apart.
That’s why it’s critical that company managers ask valued employees about their needs, Izzo said.
“Yet I’m amazed how many companies don’t do that,” he said. “Even happy workers will leave to go somewhere else if they want to try something new, and think they can’t do so at their present jobs.”
Added Deborah Holmes, director of Ernst & Young’s office for retention in New York, “It’s sort of astonishing how so many employers read the paper to find out what other employers are doing, then copy them without finding out what their own employees want.”
Retention consultants interviewed advised that, to bolster retention rates, executives should be sure their employees have opportunities for career growth, challenging projects, flexibility and autonomy, a stimulating work environment and recognition for a job well done. Gen-Xers, in particular, also seek employment situations that might allow them to “make a difference” and “impact the world,” Izzo said.
Managers also must be sure they are strong, inspiring leaders for their personnel. “We say, ‘No one ever leaves a job, they leave a boss’ and that’s based on our surveys,” said Rich Wellins, senior vice president of Development Dimensions International (DDI) in Pittsburgh. “The relationship between an employee and a leader is the single most important factor in retention.”
When management doesn’t clearly communicate its mission and goals, employees may perceive hypocrisy, get frustrated and leave, said Rosanne Ren, a partner at Change@Work in Manhattan Beach.
“For example, they might proclaim training to be important but not offer it to employees because they’re worried they might fall behind in work,” Ren said.
Unfortunately, in an economic downturn, career development and training frequently are the first programs cut, Wellins said. And with these programs often go companies’ best workers. “The mantra of the Silicon Valley employee is ‘Develop me or I’m history,’ ” Kaye said.
Companies interested in boosting their retention rates should offer perquisites such as employee assessment and career planning workshops, mentoring opportunities, internal job and talent banks and “learning accounts” (so employees can have paid-for educational opportunities), said Leigh Branham, author of “Keeping the People Who Keep You in Business: 24 Ways to Hang On To Your Most Valuable Talent” (AMACOM, 2001).
Larger concerns should make sure they do more than offer “institutionalized caring,” said Mark Rich, regional director of T. Williams Consulting in Randolph, N.J.
“They may provide all sorts of benefits and programs but not have individuals who are caring as managers, who make people feel more important and able to participate in decision making,” he said.
Added Joan Stewart, a Wisconsin-based consultant, “Companies have to keep in constant touch with their people about what they want to do with their career and then sculpt jobs accordingly to help them meet their goals.”
In these days following the dot-com gold rush, retention of key employees remains a pressing concern of American businesses.
“The new rules of competition have not been formed yet,” Annunzio said. “The business models for how companies can get the best and brightest minds are forming now, as we speak. And the companies who can attract this talent are the ones who will get ahead.”
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What Employees Want
Consultants Beverly Kaye and Sharon Jordan-Evans, authors of “Love ‘Em or Lose ‘Em: Getting Good People to Stay” did a two-year survey of employees about what they valued most about work--priorities that would keep them in their jobs. Here are the top 10 answers they gave.
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1. Career growth, learning and development 2. Exciting work and challenge 3. Meaningful work, making a difference and a contribution 4. Great people 5. Being part of a team 6. Good boss 7. Recognition for a job well done 8. Fun on the job 9. Autonomy, sense of control over work 10. Flexibility in areas such as work hours and dress code
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Career Challenge
Name: Aart de Geus
Title: Chairman and chief executive, Synopsys
Career Challenge: To retain his best employees
Quote: “We’ve been most effective in the last five or six months in regard to this issue. I’ve talked about Synopsys One and Synopsys Two. It’s very clear we’re at the beginning of Synopsys Two. Building the next phase of our culture...and gaining momentum is our next step.”
