To attract talent, focus on retaining employees

Seven years ago, I predicted that within five years, attracting and retaining talent would emerge as the biggest challenge for employers and noted that demographics dictate that the number of people available to work will decrease at a greater rate than the demand for employees in most sectors and categories of employees.

Finally, organizational leaders are starting to recognize this. Recently, the Conference Board in its C-Suite Challenge 2019 surveyed 1,000 business leader to identify the top challenges and their strategies for meeting them. The biggest concern CEOs raised is attracting and retaining talent.

Of the top strategies highlighted in the report, two are related to that top concern. Ranked No. 1 among strategies by the CEOs was this: “Create a culture of innovation that encourages cooperation across functions and business units and promotes risk-taking.” The second strategy is: “Encourage an open, safe and transparent speak-up culture,” which was ranked No. 4. While both of these aspirations will go a long way to entice people to join companies and stay, they are not sufficient to capture the expectations that current and potential employees have of employers.

The technology industry has recognized its dependence on being able to attract talent in order to grow through innovation, and arguably has innovative cultures, but its leaders now are coming to realize their huge spend on attraction and retention has missed the mark on what employees expect. The perks and programs have been put in place to make employees happy, but they do not address the unnecessary stress factors that employees experience. The worldwide walkout by Google employees in November 2018 illustrated this. I often advise business leaders to gauge how employees feel — and more importantly, understand why they feel the way they do — before they go out and buy a ping pong table for the break room.

Most medium and large organizations have become dependent on engagement surveys, some of which ask how employees feel; however, few delve into the reasons for their feelings. In a Yale Centre for Emotional Intelligence/Faas Foundation initiative, “Emotion Revolution in the Workplace,” we are working to better understand why employees feel the way they do and their unnecessary stress factors.
Additionally, in a Mental Health America/Faas Foundation related initiative, “Mind the Workplace,” we are doing a deeper dive into understanding unnecessary stress factors and their prevalence. Of the respondents to our survey of more than 20,000 participants across North America, 70 percent indicated they are thinking about or actively looking for a new job. In the same survey, 74 percent indicated, “My work environment is overly focused on trivial or overly bureaucratic company policies.” 

This tells us two things. In addressing attraction and retention, the first focus should be retention. A prerequisite to adjusting compensation, and introducing new programs to attract employees, may not address why they leave. Second, the perceptions by employees on work activities being trivial or bureaucratic suggests that how a business operates is a stress factor. Google employees, in their walkout, made that point in spades. 

Having been responsible for cultural transformations throughout my career, I have come to appreciate how organizational culture and climate dictates decisions, behaviors and actions, which in turn defines how an organization operates and the relationships it has with all stakeholders. Attraction and retention initiatives impact pretty much all of the fronts. “The Chevron Way” is a great example: through its focus on diversity and inclusion, Chevron became an employer of choice, in what many perceive to be a “dirty” industry, by the way it operates its businesses and its holistic approach to diversity and inclusion.

This makes the argument that attraction and retention should become a leadership focus, rather than just be relegated to the human resource function — again, because it impacts most of the fronts that drive performance.

Twenty years ago, I helped lead a management buyout of Shoppers Drug Mart, Canada’s largest and only national drugstore chain, where I was a managing partner for a decade. At the time of the buyout, we assessed that although the chain’s overall performance was respectable, it was not performing to its full potential. To realize full potential, we had to increase significantly the number of stores and the operating hours of existing locations. 

A huge challenge was the reliance on pharmacists. Under Canadian legislation, drug stores cannot open, even for an hour, without having a pharmacist on-site. When we hired new pharmacists, it was like pouring water into a bucket with a big hole in the bottom. The attrition rate was over 30 percent, and the vacancy run rate was just over 20 percent. To operate, we used freelance pharmacists who had to be compensated at a higher rate than our own pharmacists. Part of the reason for this was, at the time, there was a worldwide shortage of pharmacists. I say “in part” because a bigger factor was in the way we operated.

We discovered this by conducting focus groups of pharmacists across the chain who relayed what, in essence, were unnecessary stress factors that highlighted deficiencies on a number of fronts, including our leadership structure, decision-making, accountabilities, metrics, rewards and recognition, technologies, physical conditions, communications, roles and responsibilities, internal politics, relationships with vendors, and alignment. Concurrently, we went through the same exercise with other employee categories, which revealed similar findings. We concluded from this that it was a broken institution, requiring a cultural transformation.

To that end, we fundamentally changed the way we operated on all of the fronts where there were deficiencies that caused unnecessary stress for employees. As result, Shoppers Drug Mart became an employer of choice, not only for pharmacists, but also for other categories of employees. The chain also became stores of choice for customers, a franchiser of choice for franchisees, a client of choice for vendors and organization of choice for investors and communities in which it operated.

Andrew Faas is co-CEO of Accordant Advisors, a Public Voices fellow at Yale University and former executive with Weston/Loblaw and Shoppers Drug Mart in Canada. He is the author of “From Bully to Bull’s-Eye: Move Your Organization Out of the Line of Fire” (RCJ Press Inc., 2016).