Bureau of Labor Statistics research indicates that employees will work for approximately nine companies during their professional careers. With the flow of talent between organizations on the rise, more enterprises will turn to their learning functions to help retain the best people.
The next time you are engaged in a discussion about your organization’s top performers and high potentials, you should ask yourself, “I wonder when these employees will leave our company?”
Sound like a silly question to ask? If so, it’s not as silly as you think. Given the trend of people moving from one employer to another much more often than in the past, the question becomes not if an employee will leave your company, but more likely when they will leave.
This perspective is important because of the concept of “talent flow.” This refers to the flow of employees in and out of organizations. The flow of talent throughout various enterprises has increased because the employment contract between companies and employees has changed. The Bureau of Labor Statistics indicates that, today, employees will work for approximately nine companies during their professional careers. Employee loyalty to a firm is dramatically reduced in an environment in which the idea of lifetime loyalty to an employee has diminished.
Part of this employee churn is due to corporate layoffs resulting from restructurings or mergers, but it’s primarily a case of the “free agent” mentality prevalent in the workforce today. The stigma of “job hopping” has been reduced, making it more acceptable for someone to work for several organizations without being tagged with the label. Employees, no longer feeling like they have to stick it out with a company when they are not growing, now find it easier to leave for better job opportunities.
The result of this changing employment contract is shorter employee tenure with a single company. The Department of Labor reports that, on average, employees are staying with their employers for approximately 3.6 years before moving on. This average tenure is at an all-time low and has dropped from an average tenure of 9.2 years in 1983.
Learning executives now have to manage this “talent flow” as employees come into their organizations and eventually leave at a much higher rate than in the past. The phenomenon has three main components: talent acquisition, talent management and talent retention. Each can be greatly influenced in a positive way by chief learning officers.
Companies realize that if they can attract and hire top talent, they will have a competitive advantage. In essence, companies are competing on the basis of their intellectual capital. Their ability to acquire top employees is critical due to the “war for talent,” in which organizations are always looking to lure the “best and the brightest.”
A simple way chief learning officers can help improve talent flow is to offer training on effective interviewing techniques. When managers are able to select more effectively, it lowers the probability of making a “bad hire.” But talent flow is more than just reducing poor hiring decisions. It also involves being able to attract top candidates.
These talented individuals tend to have several choices as to where they can work because they are in high demand. Knowing that they can no longer rely on — nor desire — lifetime employment, these talented individuals are seeking something else: lifetime employability.
Top candidates are seeking out jobs that will provide them with opportunities to learn and grow. By enhancing their skills, capabilities and education, these individuals know that they will be more marketable when they move on to their next employer. (Remember, the question today is not if an employee will leave, but when.)
These increased capabilities help ensure their employability throughout their career, thus giving them even more job choices. For today’s talented candidate, lifetime employability is the mantra.
Thus, providing challenging job assignments and robust development programs that will help an employee grow professionally are critical for organizations to enhance their appeal to star job candidates. A 2006 study conducted by Accenture indicates that one of the top elements impacting candidates’ decisions to join a firm is a company’s ability to provide fast career growth and professional development.
Alysia Vanitzian, assistant vice president of human capital at Farmers Insurance Group, indicates that a commitment to people development through stretch assignments and job rotation helps attract top talent.
“Farmers is successful because we attract people who are achievement and results oriented. People with those attributes are attracted to us because we promise them a professional challenge and professional growth,” she said.
Companies with poor training and development opportunities are at a severe disadvantage in attracting star employees. Candidates see a lack of learning opportunities, or minimal tuition-assistance benefits, as a sign that an organization is not truly committed to employee growth, making job offers from such firms less attractive.
While tuition assistance often is highlighted as a benefit in recruitment efforts, CLOs should ensure that staffing resources are able to sell all the learning programs available. It serves a company with excellent training programs well to promote such benefits aggressively as a part of its talent acquisition strategy.
The talent management phase of talent flow refers to an organization’s ability to enhance the performance of its workforce. While top talent expects to be well compensated, they also are looking for opportunities that money can’t buy: outstanding managers and opportunities for growth and development.
When assessing managers’ performance, their ability to effectively manage talent is often overlooked. Thus, CLOs can improve talent flow by providing learning opportunities and experiences that help leaders more effectively attract, retain and develop their employees.
Plus, when employees work for a leader who displays effective talent management capabilities, they are more inclined to promote those talent management philosophies as they move up the corporate ladder. This helps embed a commitment to talent management in the culture of the company.
Top talent also expects to have the tools and training to perform and opportunities to prepare for the next job, including management and leadership positions. Training for specific initiatives increases the likelihood of their success and reduces the de-motivation of lost productivity that comes with poorly executed initiatives.
While every CLO wants to enhance talent management, it is accomplished in various ways from organization to organization. It also should vary based on the different generations, according to Dr. George Wolfe, vice president of global learning and development at Steelcase, a global office environments manufacturer. The company has studied the learning preferences of the different generations and is building learning programs with multiple delivery models to match these learning preferences.
“Some of our training programs are aimed at the learning styles of our millennials; others are a better fit for the learning styles of our baby boomers. When employees see our commitment to provide a meaningful learning experience that is catered to their learning preference, they know we are committed to helping them learn and grow,” Wolfe said.
Let’s face facts: The top performers within our organizations also are the ones who are highly sought after by other companies. It is the top performers who are more likely to receive calls from executive search firms informing them of opportunities elsewhere. Because top talent is in high demand in today’s knowledge economy, it is unlikely any company will be able to keep all its best performers.
Research has shown one of the top reasons employees leave companies is because they feel stifled in their development. If employees feel they aren’t learning and growing, they feel they are not remaining competitive with their industry peers for promotion opportunities and career advancement. Once top employees feel they are no longer growing, they begin to look externally for new job opportunities.
Giant Eagle, a grocery retail supermarket chain based in Pittsburgh, leverages its college intern and retail development programs, a formalized succession-planning process, talent-assessment process and a new corporate university to help retain its top performers and position them for the future. Lynn Lambrecht, senior director of organizational development and talent management at Giant Eagle, indicates that her company’s decision to make learning a key strategic differentiator definitely helps it retain its top performers.
“Our employees see that our senior executives are committed to providing them with opportunities to prepare them to be leaders in the grocery retail industry. Because they are learning and growing, our top performers stay engaged, and we are more likely to retain them,” Lambrecht said.
Along with internal leadership development opportunities and rotational job assignments, companies can leverage their tuition reimbursement programs to help retain their “A” players. Tuition assistance programs become highly valuable to talented employees because they know an advanced degree will enhance their performance on the job, improve their career growth opportunities and potentially allow them to earn more money.
Grooming Talent for Other Employers?
Because of the talent-flow phenomenon, some critics of learning and development programs argue that employees will take their improved capabilities, knowledge and education with them when they leave the company.
However, a research study done at Wharton indicates when companies groom people to leave, they are more likely to stay. Why? The study indicates as long as employees feel that they are learning and growing, they’ll be less apt to leave.
While some executives fear the loss of top talent if they invest in their development, most experience the exact opposite. Employees value learning opportunities as long as they are given the chance to apply their new capabilities.
Critics of learning and development initiatives fail to realize that their counter argument does not make practical business sense. In essence, opponents of learning programs are promoting an approach where a company does not invest in the growth of their employees in the hopes that they will stay. Such logic does not appear to be a viable long-term solution because it does not improve an employee’s capabilities.
Enhanced Employment Brand
No matter how hard a company tries to retain its top talent, it will be difficult to keep all its star employees due to today’s increasingly mobile workforce. However, if companies take into account some amount of turnover due to talent flow, their talent development programs still can provide a benefit. Employees who feel their current employer has helped them learn and grow by helping them keep up their skills will still have a positive impression of the company even if they leave for a new opportunity. This results in a positive employment brand, and alumni of the organization will speak favorably about their old employers.
Companies can then leverage this positive employment brand to further help attract future talent. For example, a high percentage of the employees who join management consulting firm McKinsey & Co. do not stay very long at the firm. However, these employees know that while they are employed at McKinsey, the company will invest in their growth and development, thus enhancing its marketability in the future.
Not surprisingly, McKinsey alums often are big advocates of the firm and help enhance McKinsey’s employment brand. In fact, the company’s employment brand is so strong that people who are “ex-McKinsey” are highly sought after by other employees. This reputation further enhances its ability to attract top talent. In the annual survey in Fortune magazine of the most desirable employer by graduates of top-tier business schools (Harvard, Wharton, etc.), McKinsey has ranked first or second throughout the past 10 years.
As the talent-flow phenomenon continues in today’s knowledge economy, it is clear a robust learning and development effort helps a company recruit, retain and develop the best.
Not only do development programs help lengthen the average employee’s tenure at a company, they enhance that employee’s performance level during his or her time with a company. Thus, CLOs should seek a better understanding of the positive impact their programs have on talent flow.