Everyone talks about employee turnover, but does anyone know the real size of the problem? According to a very comprehensive survey from the Society for Human Resource Management (SHRM), nearly 50 percent of hires at a senior level from outside an organization leave within 18 months. That’s a spectacular failure rate, and one no organization can really afford to sustain, over and over again. Guess what? This still seems to be the case today. And employee engagement rates are still not where they should be globally.
So why do so many organizations and leaders look for talent outside, rather than promoting from within? A good friend and a former “placed candidate of mine” (when I worked in the agency recruiting world) worked for a software technology leader – no names but it’s a public company with a three-letter ticker symbol. He applied for a promotion and was told the role would go to an outsider because, as the manager said, the company valued ‘fresh blood’. Advancing at this company is difficult for certain. And the company culture, which is touted as an open meritocracy, has suffered – my friend left after three years, because he felt career advancement would be impossible.
If this organization had been thinking about talent alignment, not simply ‘fresh blood’, they’d have recognized how much talent they had on staff already. Writing in the Harvard Business Review, Claudio Fernández-Aráoz maintains companies need to do ‘talent-spotting’ which focuses on finding high-potential people, rather than looking for a candidate who meets the specific requirements of a job description. Approaching hiring – and retention – this way builds a talent pool of potential, rather than a list of skills. Skills, after all, can be acquired; potential is something else entirely.
Fernández-Aráoz indentified key characteristics of a candidate with potential:
- Motivation– I talk about this a lot; he describes it as a “fierce commitment to excel in the pursuit of unselfish goals”, which is a description that’s hard to argue with. He also identifies:
- Curiosity– another favorite of mine;
- Insight– Ditto – and a key component of Emotional Intelligence;
- Engagement– a big theme for many of us lately, and
- Determination– no one can succeed without the determination to be successful. (Read the excellent article to get the full story.)
So how can you identify potential early in such a way as to foster a culture of potential, one in which you can align talent with opportunity in real-time?
Ideally, your recruiting process should be linked to leadership, culture and the on-boarding process. How you bring a new employee on board will determine whether or not you keep them for more than 18 months.
I wrote about this four years ago, giving examples of two candidates who had very different on-boarding experiences. Since then, the woman in my example, who had a very distant and automated on-boarding (think video and conference calls without any meaningful follow-up after this point) has left that company. The supposed tight culture of the company, which was headquartered in a different city, never made it to the satellite office. Frequent trips didn’t help either – once an outsider always an outsider. In the end, although the company kept talking about how it wanted to see the employee stay because she had so much potential, they did nothing to help bridge the geographical gap. She was told she would be more successful if she had certain skills. The woman herself, who proposed several new services the company could offer to clients and prospects, has taken her ideas (and potential) to another company where they’ve been implemented – in less than three months.
Identifying employee potential is difficult; leading a company that rewards potential rather than status quo is even more difficult. My guidelines to success are pretty simple:
Get to know your employees. Don’t just assume the resume tells the whole story, especially when it comes to unrecognized potential. Ask questions, observe them in a number of different work settings and evaluate their relationships within the organization. See where they step up, how well they work in teams, and get a sense for their understanding of where you want to take the company.
Be prepared to make changes fast. You may think you’ve hired exactly the right person and find out in three months that they lack the spark of potential. Do what you can to move this employee to a new role, or invest in organizational development to help the employee thrive. IF nothing can be done, find a graceful exit.
Don’t hire a resume, hire a human. A list of accomplishments and skills is great, but you need a person who fits the culture, who understands the strategic direction of the company, and who is motivated to be part of your success (see the list above).
Hire ahead of need. This gives you the runway to find people with potential rather than a list of skills. If you have the resources, plan ahead so you have the time to spot people with potential – both within the organization, and without.
Real-time talent alignment is something innovative leaders do in the now. It’s part of their daily lives. Always be on the lookout for potential; always be on the lookout for people who could offer the organization more in a different role; always strive to keep people by aligning their potential with the company’s needs. It’s not easy, but whoever said it was easy to be a good leader? This is a common challenge for organizations of all shapes and size and industries. We have amazing HR Technology tools now – let’s continue to use these. People first. Technology second. No time like the present.
A version of this was first posted on Forbes.