With The Great Resignation afoot, many large companies in South Africa, the US and globally are finding their staff churn rates go through the roof (or rather, out the door). This is a huge problem, perhaps one of the most devastating silent killers of any company. To illustrate this point, imagine you are a large bank with thousands of employees and your staff churn is 15% annually. This means that you lose 15% of your staff every year, while aiming to hire about the same amount each year. Consequently, every 5-8 years, your organisation has a completely different staff complement.
This problem is made even worse if there is no replacement rate of staff. To intensify the issue, what we are seeing with The Great Resignation is that it is the best people in the company who are leaving first (we will call the opposite of the best staff as “rent seekers” as coined by Nassim Taleb, who have no desire to leave). We will caveat with the controversial statement that we believe most large organisations are bloated with “rent-seekers” who are working the bare minimum or less to collect their paycheck. So perhaps some churn is a natural rebalancing for some companies to regain efficiency.
PYGIO.com is an outsourcing software and analytics firm which focuses on enabling human beings to do their job well. Human ingenuity is our greatest asset. We remove the noise and provide resources to our humans. We are focussed on helping our people identify and fulfil their purpose. Clients and friends often ask sheepishly: 1. How do you manage to attract talent in such a competitive environment? and 2. Beyond attracting the talent, how do you retain them? Well, as much as swag hoodies, free Friday pizza and ping pong tables are nice to have, they are not the answer to either of these questions.
So what is the status quo in 2022? Since Covid began, we are seeing executives at large enterprises flaunt the idea of a 4-day work week and apply the most flexible remote work policies possible (work from home or work from anywhere). The results of WFH? A mixed bag. Some knowledge worker firms have mandated staff to return to the office, and the staff simply say “no way Jose”, to which most executives do not have a reply. Weak leadership is a signal for people to leave and seek work for better leaders.
One needs to dive deeper into the winners (see how Spotify succeeded in doing this here) here and understand why some companies are keeping staff and growing as a result.
So what is the answer? Here are some points we have found to be most impactful in terms of staff retention:
1. Purpose
This is a recurring theme on many of our blogs. For example, PYGIO is a purpose driven startup: we help South African enterprises build the best software systems and walk with them on their data strategy. At PYGIO we used to say: we have 2 types of sales pitches, one to clients and one to talent. But we soon realised that these are the same message – the purpose of our organisation. Stating the company’s mission or purpose helps your potential employees to feel like they are joining leadership who know why they are at the company, and know what they will expect from any new employees. Good leaders deter much more talent in this manner than they attract, however the ones they successfully attract join the company with the sense of having a “North Star”. When things inevitably get hard and work begins, people know what they are working towards.
2. Love what you do
Research indicates that most people love their jobs for the strangest reasons. Why does a plumber enjoy what he does? For most it is hard to imagine, but we spoke to a plumber who mentioned that he finds it extremely satisfying that he is doing work which others cannot or will not do. This claim gives him pride in his work. People want to love something about their job. We all know that no job is 100% enjoyable. Most of our developers despise admin (and sadly documentation too – but that’s another story). The organisations that are winning seem to have a culture of letting people find what they love about their particular job and letting them do that thing well, be it finance, ops, security or virtually any other role in the business. Everyone has their “productive idiosyncrasies” and good managers should uncover these, nurture these behaviours, not undermine them.
3. Perks, perks, perks
Unless you live in a wealthy country like the US or some Western European nations, perks do matter. But they matter to a point. Health insurance, flexible time, fuel, lunch and other allowances go a long way. We interviewed a consultant at one of the big 4 (or is it big 3 now?) and she mentioned that the only one thing she wished would be done better at her high-paying, lavish-perks job is if the office bought a decent coffee machine. This small coffee machine would go a long way to her happiness at work. However, these perks work to a point. A competitive firm cannot just have good perks, without the first 2 points mentioned above, as perks are largely a cheap and commoditised way to attract talent. People are not stupid and good perks alone are not a long term strategy to retain talent.
The bottom line is to look deeper into your people’s lives, skills and pay attention to their problems. Hold more 1-1 meetings. Have rigorous quarterly reviews follow through on action points from these reviews. To take a note out of Ray Dalio’s playbook “be radically open minded to people’s new ideas – but hold them accountable to executing these ideas, if you give them the platform to do so.”
