The Facts
The struggle is real. With unemployment hovering nationwide around 5%, employees are back in the driver seat with where they choose to work. Employers have found themselves with less control in finding, hiring, and retaining top talent. Recent studies from Manpower Group has shown that there is an excess supply of skilled jobs, with a shortage of labor interested in those jobs. Couple this study with the fact that employees, now more than ever, are looking for value and purpose in their work, more of a balance with their personal life, and the feeling that their work is aligned with their own career long-term goals.
And, with a growing millennial generation that is expected to be 75% of our workforce by 2025, this trend is very likely to continue. What we know about millennials is true, they are self-driven, demand value and purpose in their work, and transition jobs at a rate much higher than previous generations, averaging 4 job changes by the time they are age 32. We are not going to change them, they are going to change our workforce, and in many ways, for the better. They saw their parents live to work, lose their retirements due to corporate greed, and have been shown very little loyalty by organizations they work for with pensions eliminated, benefit reductions, and inappropriate vesting schedules of their 401k plans. I can completely understand why this generation has chosen to respond with choosing to work to live. It’s refreshing.
A client of mine, PeopleFirst, who delivers services to their clients to improve their human capital performance, recently shared a study that found an 11% increase in productivity, 12% improvement in quality, and 6% decrease in turnover as a result of human capital development. Often it’s the emerging leaders of an organization that have a multiplicative impact on their teams around them, and when their skills improve, so do the skills of the team, creating a robust ROI through top talent retention. Leaders sometimes ask me, “what if I invest in this employee and they leave?” – And, my response is “what if you do nothing, and their performance flat lines, and they stay?” – isn’t that a tougher problem to solve?
All of these facts show us that it’s a new day in America, one where employers have less control, and employees have all the choices they want on where they want to work. This brings a challenge for organizations that want to retain their top talent. How do we hire and retain the leaders of the future? My hypothesis is to invest in their development over time. My intention is to build a case for investing in top talent, and not in the traditional ways – rotational leadership programs, learning management systems, or corporate learning and development classes – but in new and interesting ways that engage the employee up front.
The problem is that the “old school” traditional methods feel more like “check the box” events. In fact, innovative companies that retain their top talent above industry leaders, have a common strategy – they set a budget per employee on professional development investment, and then give those employees the freedom to choose how they want to invest in themselves. In fact, the Association of Training & Development has been advocating this for years. They track the investment per employee nationwide, and it hovers around $1,200 annually. They, along with other credible organizations like Gallup, believe that setting an investment per employee per year helps organizations commit to their employees long-term development. Especially top talent.
Furthermore, by giving employees choices on how to invest their budget, they feel empowered, bought in, and committed to their development, and likely to stay longer to demonstrate their new skills and pay gratitude for the employer for investing in them.
How to Implement Employee-Driven Development
I understand the temptation to dismiss this idea. I am asking you to consider handing over the budget to your employees, and let them choose how to spend those hard-earned organization gains. It’s not an easy thing to do, but it works. It empowers top talent to work even harder, smarter, which pays dividends in return to organizations.
Take Marla, a millennial leader I have had the privilege to coach. She has been with her non-profit organization for 3.5 years. She found great value and purpose in her work, yet she wanted more. Her manager and the organization’s owner, Erin, had a new idea to have a development budget per employee. She set aside $1,200 per employee. Marla brainstormed ideas independently, and with Erin, on how best to invest in her development. They evaluated project management classes, leadership classes, and career coaching as options. Erin included her manager in the process, yet Marla drove it.
Ultimately, she decided a career coach would best help her gain feedback to build leadership skills for future roles critical to the organization’s success and growth. And, with a strong rationale for her choice, she gained buy-in from her manager to proceed. The great thing about coaching is that coaching sessions can be adjusted to fit the desired budget and outcomes. Over the course of our time together, we completed a Wiley 363 ® assessment to gain feedback from her peers and clients, and met one-on-one for individual coaching. In our six coaching sessions together, Marla built developmental goals for herself to be more vulnerable, be a more inclusive leader, and maintain composure in times of stress. I’ll never forget one of our coaching sessions, where she came in with a long list of successes over the past two weeks. She proudly shared stories of times she stepped out of her comfort zone, tried some new techniques to engage her team, and how she truly focused on listening more to the strong team around her.
In the end, the feedback from her manager was validation her hard work had paid off. Erin had stated from the beginning that improved leadership skills was what success looked like from the coaching process. Through her leadership strategies, Marla was able to hit this expected outcome out of the park. For coaching to work, employees need to include their managers in the dialogue – sharing assessment findings, brainstorming strategies, and even sharing in the developmental experiences throughout the process. With the inclusive leader strategy, Erin actually decided to participate with Marla in trying the new behaviors she was trying – having more brainstorming sessions with her team, recognizing her team for their successes, sharing her vulnerability through the “when I was in this position, I know I felt overwhelmed…,” and it paid off big time. Together, they built even more trust between them and with the rest of the team, leading to even higher employee engagement. As a result, Marla has a new leadership position to lead a new growth area of the organization.
Now, take me, four years ago I was a team leader of a management consulting strategy group. I had been very successful – our team was hitting our numbers in billable hours, project margin, and client satisfaction. Yet, the organization was not hitting their numbers, while our group was over-performing. This led the organization to make hasty decisions to cut back on employee development, bonuses, benefits, and pay increases overall. It hurt our team’s engagement. Several team members left, and I found myself playing on what felt like was a losing team. It was painful. I seriously considered leaving.
So, the senior leadership came to me with a developmental opportunity. They had limited funds for development, and wanted to retain me, so they were willing to invest in hiring a career coach to work with me. I was very interested. While having a coach was honestly not my idea, this decision completely changed the course of my career. It was in those coaching sessions that I found my own strengths, explored my sources of confidence, set challenging goals for myself, and I learned to ask for it and lead with influence. These are all the development areas I continue to emphasize for myself and others today. My coach helped me self-discover who I was and who I wanted to be. In fact, she inspired me to want to take it a step further and get certified myself in coaching. That investment paid off – it bought my company two more years of my employment – with continued results. I have no doubt I would have left this organization had this important investment not been made.
Reflecting back on this pivotal moment in my career, I fondly recall the coaching discussions and how much it changed me and who I am today. Yet, if I were to go back in time, I would have encouraged my employer to let me participate in the process of deciding how to invest the dollars to maximize the impact, and to participate in selecting and interviewing my own coach. While it serendipitously all came together in the end, I believe that if I had been involved, and even knew how much of an investment had been made, I would have been even more committed to the process and outcomes, and perhaps would have stayed longer.
Over the course of my career, I have had four unique employers, and 13 different positions within that time. I have been through two rotational leadership programs, participated in every type of e-learning class I could get my hands on, and a battery of corporate learning programs. Having a coach was far more impactful, and for a fraction of the cost. The thing is, when I felt involved in the process, I was far more committed and hungry to learn more and implement what I had learned. I suspect your top talent would say the same thing. Let them be involved early and often in choosing their own development path, and with your guidance and coaching, they will surprise you with strong results. And, they just might stay a few more years.
Call to Action
If you are a leader or team member of an organization that does not currently offer employees choices on how to invest in their development, Help Your Team Grow is here to help. We have resources, including a Guide to Align Your Manager with Your Decision to Hire a Career Coach, successful transformation stories and videos, and leadership blogs that challenge traditional career and leadership development schools of thought. At HelpYourTeamGrow.com, you will find the resources to support the case for a positive ROI of coaching and the impact employee-driven development has on top talent.
Organizations that invest in their top talent, and empower those employees to choose how to invest in themselves, experience lower turnover, higher productivity, and better quality.
Now, what are your strategies to retain your top talent?
#talentretention #careerdevelopment #helpyourteamgrow