SCG looks at what motivates high calibre talent.
How do great leaders of successful companies spend half their time? They spend it on people: sourcing and recruiting new talent, picking the right people, grooming young stars, developing global managers, dealing with under-performers, and reviewing retention strategies.
Everyone agrees that talent is a competitive advantage. Jack Welch, ex-CEO of GE, said “having the most talented people in each of our businesses is the most important thing. If we don’t, we lose”. Yet surprisingly, 3 out of 4 companies in Australia do not have as a priority an Employee Value Proposition (EVP).
So what exactly is an EVP?
Essentially, it is the sum of everything people experience and receive as part of an organisation; the culture, values, satisfaction, leadership, and more. In other words, it is the “get” versus the “give” (and we know how important that is to Generation Y). From a recruiting perspective, it is this “get” part of EVP that is all-important. To generate the best response when advertising, an employer must answer the candidates’ most simple question: “what’s in it for me?”
So what do employees value? The old theory was pay people well and that’s reason enough to work here. New theory, however, says that pay is only part of the story. When surveyed, talented managers responded that they wanted exciting work, a value driven culture, excellent leadership, career development, and work/life balance.
The ability to define, develop, and deliver a winning EVP should also be at the core of all retention strategies. If in the employees’ minds they “get” rewards equal to or exceeding what they “give”, the company will invariably have more satisfied employees and increased retention.
A new work force
The new age work force comprises mostly of knowledge workers, who are techno-savvy, aware of market realities, are materially focussed and have a higher propensity to switch jobs. They prefer to experiment and explore new opportunities, are high-risk takers with higher aspirations and higher expectations. So companies need to cater to this changing landscape.
A McKinsey study (1998) that looked at 77 companies from a variety of industries to investigate talent problems, suggests that “creating a winning EVP means tailoring a company’s brand and “products” – the jobs it has to offer – to appeal to the specific people it wants to find and keep”. It also means paying what it takes to attract and retain strong performers – the “price”.
As a rule of thumb, a great job is that which consists of at least 80% of things that an employee would love doing. As for the “price”, money is not the prime determinant (but it does matter).
In another workplace reality survey (Seek 2007) employee satisfaction actually decreased with increases in salary; of those paid up to $50,000, 42% of employees were unhappy, between $100,000 and $125,000, 43% were unhappy, and of those paid in excess of 150,000, 49% were unhappy. So what does this tell us (apart from we should pay unhappy employees less!)? That excellent leadership, living the company values, flexible working conditions and ongoing training are things that employees place above pay as their prime motivations for leaving and joining organisations.
So what are other companies doing?
This is the question often posed by executives, but emulating another company’s approach to best people practice is not necessarily the way forward. A recent example of the “best practice trap” occurred when Ford CEO, then Jacque Nasser, adopted the GE ABC performance ranking system. Nasser thought the system would ratchet up the performance culture, but unfortunately it backfired. Managers placed in the “C” category threatened lawsuits and those in the “A” category were uncomfortable with the distinction. The Ford culture was simply not ready for the ABC rating system. The high performance culture at GE was developed over many years, in large part, through the aggressive efforts of Jack Welch.
When all is said and done, a distinctive EVP must be designed to support the company’s unique business objectives and operating model within the constraints created by the industry, geography, and macro-economic conditions. Getting this right requires an understanding of the company’s people objectives and issues. Such an understanding doesn’t come easy, but even harder is the delivery. There are always “quick wins” that a company can promise, but unless commitment is made, there are only promises and hopes and whilst hope springs eternal, it cannot tolerate over-promising and under-delivery.
Stonewater Consulting Group – SCG – is a leading firm of executive recruitment consultants, providing professional career advice and guidance for candidates seeking executive jobs and management positions across a wide range of industry segments including accounting, legal, finance and banking. Our client services include talent management, executive search specialising in locating senior level managers and corporate executives as well as providing human capital advice & services. Make an online enquiry or contact one of our Principals to hear first-hand how we can add genuine value to your business.