Organisations across the world have been witnessing a decline in employee retention rates for a long time barring the period when the pandemic gripped the world. This trend may vary in proportion across regions, industry sectors and the age profile of the employees, but it is ubiquitous. Talent management has emerged as one of the most difficult conundrums for leaders across the world.
Is it the structure?
Most new-age organisations leverage technology at their core; promote independence and flexibility for their employees and partners; decentralise the responsibility of making decisions and tend to keep many aspects of their organisation including their strategic priorities and key deliverables of their employees flexible. As a result, employees get organised into small teams and work on specific deliverables; they communicate easily among themselves; they enjoy the significance given to them and are happy to work on small aspects. However, they lack the grand vision and their importance in the overall juggernaut of the organisation. Those who are ambitious to grow in their careers find this level of silo-based working insular and suffocating. Leaders have the responsibility of communicating the vision, again and again, using multiple channels to spread the same communication and giving an idea to each team on how they contribute to the overall results of the organisation.
Traditional organisations for their size and the legacy that they carry follow established practices and a structure that cannot change overnight. Given the need of the employees to look for financially stable companies, one can imagine that traditional organisations retain their people better despite being more hierarchical and inflexible compared to the new-age ones. Today’s workforce is significantly young and looks for empowerment and speed in anything they do. Hierarchical organisations fail in fulfilling these aspects. More often than not, these become more significant than anything else in the lives of our youth. Hence, these traditional organisations need to evolve and make some adjustments to fulfil the expectations of their workforce.
Is it the policies?
Organisations spend a huge amount of energy in defining their policy, reviewing their implementation and making course corrections. These policies are for their smooth operation and offering the guide rails for their employees to function. They hope that their employees will feel empowered by these policies to make decisions and carry out their respective duties. They review and make changes to these from time to time as the business situation changes. One wonders why this noble intent is not resulting in employee retention.
Let us take an example of a rewards and recognition policy for employees and partners. Most organisations have a well-defined policy to reward and recognise their employees so that they feel connected with the organisation, walk the extra mile to earn more rewards and bask in the glory of the awards endowed to them. Extravagant and elaborate award ceremonies are held; the celebrations are broadcast not only within the organisation but also on social media far and wide. The employees wear their badges of honour with pride. Yet the larger workforce does not enhance its depth of engagement with the organisation; hence, the retention rates do not go up.
In this example, the policies are clear and are executed well. However, the policies lack depth and hence, do not fulfil the intent of building an emotional connection.
The leadership practices are the bedrock on which all other practices related to various functions and business units are rooted. These practices leave a lasting impact on the psyche of the employees and all the stakeholders of a business.
Employees hold a wide gamut of expectations from their employers. Some of those are easily fulfilled by the new-age companies better and some others are served better by the traditional companies. The talent conundrum does not have an answer in the age of the company, but rather in its practices.