The question of how to attract and retain skilled talent and create a company culture that will help them thrive is no longer relegated to the back burner but is instead now positioned squarely at the heart of strategy discussions—and for good reason.
After years (decades!) of HR trying to convince senior executives that their employees were invaluable assets (and often most responsible for the organization’s success), the light bulbs finally began to go off over many leaders’ heads during the Great Recession. At that time, they witnessed firsthand the actions of dedicated and engaged employees who made numerous heroic "saves" in response to the unrelenting threats that the financial crisis posed to the markets. One positive result of the recession was that leaders began to think that perhaps there was something to the often cited—and often ignored—statement "Our employees are our most valuable assets."
Even though the recession has ended, the momentum of this train of thought has continued to build. Thanks to more and better research and an accelerated interest in talent management by groups that CEOs can’t ignore (namely, investors and boards of directors), talent and culture now top many CEOs’ priority lists. The question of how to attract and retain skilled talent and create a company culture that will help them thrive is no longer relegated to the back burner but is instead now positioned squarely at the heart of strategy discussions—and for good reason.
The value of a high performer.
A recent report by Indeed Insights confirms what the recognition and incentive industry has known for years: high-performing employees outperform average performers and provide their organizations with significant competitive advantages. At Bain & Company, for example, high performers are four times as productive as average performers. At General Electric that multiplier is 10, at Apple it’s 25, and at Google it’s a whopping 300. With these figures in mind, it’s hard to imagine how organizations can remain competitive in any market without the benefit of substantial numbers of high performers.
A growing interest in talent.
CEB Analytics reports that institutional investors are beginning to request information from public companies about workforce performance and have petitioned the U.S. Securities and Exchange Commission to adopt rules requiring public companies to disclose human capital metrics. The 2017-2018 edition of CEB's annual report "Top Insights for the World's Leading Executives" highlights this trend in investors' growing interest in culture: in 2016, the "percentage of companies discussing talent during earnings calls" hit the 61% mark. Although some investors have been making these inquiries of CEOs for years, until recently they were largely in the minority. but now they are increasingly finding themselves surrounded by like-minded colleagues, many of whom are serving on corporate boards of directors.
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More and more CEOs, too, are recognizing the importance of talent. The business threat posed by not having the skilled talent necessary to compete is driving much of CEOs’ increased interest in that area, according to the 2017 edition of PwC’s annual CEO survey, with 77% of CEOs expressing concern about "availability of key skills."
Start with purpose.
Whether it’s called a vision, a mission, or a purpose, every company must have some unifying declaration of its goals. Employees of organizations with a defined purpose that is regularly and openly discussed by the senior leadership team stay three times longer than employees of organizations that lack a clearly articulated vision; similarly, EY research finds that "89% of clients believe a purpose- driven company will deliver the highest quality products/services." Now that CEOs are giving talent issues their full attention, it’s time for the leaders to look at the incontrovertible logic and math—and focus on attracting and developing high performers.
This piece originally appeared in Advanced Resources HR Insights Magazine.
