Six rules for holding on to top talent and staying innovative

May 21, 2013

In 1978, when I started my career as a security guard at IBM, employers viewed their employees as property—static entities that wouldn’t dare stray. Back then, businesses professed to know what was best for their hires and looked after them in exchange for loyalty. Top talent was carefully hidden to prevent poaching by competitors and tenure was prioritized over talent, rewarded with tokens—gold watches, pens, and pins—for years of service.

(Illustration)
(Illustration)

Today, companies have much shorter life spans and a growing number of employees want to work for themselves. Online platforms and services such as LinkedIn and Monster.com have made it nearly impossible to keep the world from knowing about an organization’s most talented stars. Companies are forced to simultaneously contend with new attitudes and new technologies, and this could be scary for some executives. But their fear is a sign that their focus is misdirected.

The outdated company-first mindset cannot work if companies can’t offer just shy of a lifetime employment guarantee. Instead, executives must adopt a people-first mentality, since many organizations suffer from two problems: They don’t have all of the talent they need, and employees will have access to and, more likely than not, a desire for many jobs beyond the one they have. This means a reboot of management principles is in order so that they better reflect the current climate and lead to successful employer-employee relationships. With that in mind, here are six management practices companies should seek to employ:

1) Get voted onto the team every day.

San Francisco 49ers head coach Jim Harbaugh against the Chicago Bears during the second half of an NFL football game in San Francisco, Monday, Nov. 19, 2012. (AP Photo/Tony Avelar)
San Francisco 49ers head coach Jim Harbaugh against the Chicago Bears during the second half of an NFL football game in San Francisco, Monday, Nov. 19, 2012. (AP Photo/Tony Avelar)

Talented employees should feel that their employers consider them a prize worth fighting for. This means that great companies help employees achieve the goals they establish for themselves—even if it means letting employees pursue a better opportunity elsewhere. Jim Harbaugh, coach of the San Francisco 49ers, has a roster of talented coaches, many of whom are likely to go on and become head coaches for other pro teams.  He acknowledges this publicly, and it pays off in the team’s overall performance. Getting voted onto the team every day doesn’t mean an employer has to do away with asking employees to take on unwanted tasks. Staying connected to their e-mail and answering calls in the middle of night, if they’re part of the job and outlined upfront, can still be on the list of things to do. But great leaders understand these downsides and acknowledge them while simultaneously determining ways to inspire people to stay.

2) Promote employees to be their own executives. 

When I started at IBM in 1978, the joke among staff was that the company’s acronym stood for “I’ve Been Moved.” Indeed, I was repeatedly called on to uproot my home for the sake of the job. Frequent relocations are more palatable when there is greater job security.

Today, when a growing number of layoffs have nothing to do with performance, churn (defined in Henry Farber’s 2007 Princeton University working paper as workers leaving jobs after less than one year) becomes the norm. Young people today are far less likely than their parents to have a career characterized by lifetime job security. In fact, statistics show that the Generation Y employee, generally referring to individuals born between 1978 and 2000, will have ten jobs by the age of thirty-eight and stay an average of 1.5 years at each job.

That means employers should encourage people to do their best work in the time they are with the company.  It also means employers must understand that long-term employment is not necessary for an employee to achieve their goals and be considered accomplished or talented. It’s not only acceptable for an employee to be their own executive and chart their career course through many different employers. In the long run, it can be a boon for their many employers.

3) Coach, coach and coach some more. 

Companies have an obligation to coach their employees and grow their potential for success. Provide them access to executives and others inside and outside of the organization who can serve as mentors to keep them challenged and help them reach their potential. Yet few resources are available to help people identify mentors and make the most of their relationships with them. That’s actually why my colleague Mike Bergelson and I co-founded Everwise, which is using the emerging discipline of workforce science to work to improve workplace mentoring.The world has a dearth of top talent, which means companies should do everything possible to not only identify and augment that talent where it exists, but help others join that echelon.

4) Put people first.

Google employees settle into the company's new office space Monday, Oct. 2, 2006 in New York. The Mountain View, Calif.-based company has 8,000 employees worldwide, with 500 in its New York facility. Scooters are provided to employees who want to zip around the large floor space. (AP Photo/Mark Lennihan)
Google employees settle into the company’s new office space Monday, Oct. 2, 2006 in New York. (AP Photo/Mark Lennihan)

When a very talented job applicant approached me to talk about his career, I thought he’d be a terrific asset at LiveOps, the cloud-based customer support technology company where I was CEO from 2006 to 2011. Rather than snap him up, I remember encouraging him to continue exploring the job market and introducing him to people across Silicon Valley. Some of my friends in venture capital where aghast, even going so far as to question my sanity. But I told them I didn’t want this person to come work for me because he felt he had to, but because he wanted to. And he did, becoming a tremendous asset and loyal team member. He went on to become very successful, and  to this day, remains a great friend.

5) Rethink the send-off. 

Too many employers seek to exact retribution when a talented employee leaves the company. Then, in a strange twist, fired employees are given severance packages to dissuade a lawsuit. That system is backwards, and can create more problems for a company than it solves. Sometimes great performers leave. It happens. But they also, on occasion, don’t like the new job as much as they hoped they would. Why not seize the opportunity to welcome them back? As a board member, I saw a company gain back a great executive by allowing him to leave and then return within a matter of months.

6) Say “thank you”.

Often, employees don’t feel valued and appreciated. It’s a simple gesture, but employers should never forget to say “thank you”.

The era of command and control in hiring and retention is over. In order to innovate, companies must do more than create new, desirable products. They must be prepared to think differently about how they treat their employees. Ultimately, the shift of power to individual employees is not something that should be feared.  When everyone opts in and employees are happier, companies are more successful.

Maynard Webb is the author of “Rebooting Work: Transform How You Work in the Age of Entrepreneurship“. He is the former chief operating officer of eBay and founder of Webb Investment Network (WIN)

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