This means war

Society-hosted seminars on "Retaining Talent" advise employers how to improve their prospects of retaining staff against a predicted shortage of quality people

The Journal, May 2008, page 46

The “second war for talent” has arrived, and the losers may be unable to find the people they need to stay in business. That is the stark message to emerge from a sponsored CPD seminar now doing the rounds.

The first war for talent, in case you missed it, was the rush in the 1990s to hire IT-literate people as the digital revolution moved into top gear. There is little debate today that the most profitable legal practices are generally those with the most efficient transaction management and document recording systems. But a wider front has opened, based on the fact that in Europe at least, to put it crudely, there are simply not enough people being born.

By 2010, 47% of the European working population will be 55 or older, and the overall number in the labour force is set to go into decline. UK surveys disclose that for 75% of managers, talent is the top priority, and 62% worry about talent shortages. At the same time the multi-faceted expectations of the “Generation Y” pool of labour entering the market (see opposite) present greater challenges to those seeking to hire and keep them.

These profound changes in the labour market form the backdrop to a series of lunchtime seminars, run by the Society in conjunction with Hudson Talent Management (details below).

“It really is a huge issue”, says Neil Stevenson, the Society’s Head of Strategy. “Some of the issues are so structural that it’s not just a current fad – it’s an inevitable challenge we will all face.”

Hidden costs

Given that picture, the figures presented by Hudson director Victoria Speers show a serious leakage from the average workforce which points to obvious room for improvement in businesses’ efforts to encourage essential staff to stay. Across the UK private sector, 22.6% of employees leave their companies each year; in professional services, the figure is almost as high, 20%. That’s one in five of your people.

What is more, two thirds of companies surveyed admit they don’t work out the true cost of employee turnover. When you add up recruitment and training costs, lost productivity and knowhow, rebuilding client relations, managerial and facilities time, and various other consequences, you could easily arrive at the equivalent of an annual salary or more.

Of course it is positively desirable to bring in new blood from time to time, and there are even those who advocate an annual “cull” of employees who score lowest in performance reviews. But there is no advantage in creating a climate of fear, and the balance of opinion is that a good turnover rate should be no more than 10%.

When push comes to pull

There will always be a proportion of employees who leave for domestic or other reasons outwith the control of any employer. In many cases, however, a significant motive will be not just the “pull factor” of a new job, but some element of dissatisfaction with their present position – the “push factor”, which is, Speers maintains, “a great deal more significant in most resignations than most managers appreciate”.

And it isn’t just a question of money or benefits, which form only one of six main categories of “drivers of turnover” that Speers identifies. Also potentially significant are issues relating to leadership and communication; personal career development; employee support; work environment; and employer resources and brand value. In fact if some surveys are to be believed, salary considerations are less important than a number of others, including career and company culture issues.

The main drivers, however, will vary from one organisation to another, and remedial action needs to be grounded in fact. You also need to prioritise issues according to their cost to your business and their importance to your employees. Understanding why your own people are leaving is therefore your first step to tackling the problem. Interviews with managers, focus groups, online surveys and feedback from leavers can all be deployed – preferably in combination as none of these on its own is a wholly reliable source of information.

On board and buying in

Armed with that knowledge, you can begin to devise solutions. To make them work, you have to be prepared to commit sufficient time and resources. Equally important is ensuring the buy-in of those you are aiming to keep onside. And finally, you have to monitor what happens once you have put your ideas into effect, and be ready to change course where necessary.

It helps, as Speers pointed out, to hire the right people in the first place. Ensuring you have correctly identified the competencies and behaviours required for each role, understanding what your target audience wants from your business, tailored candidate sourcing, and effective screening and selection methods all play a part. And don’t neglect a proper on-boarding process (the phrase covers more than just induction): 19% of leavers have been in post for less than six months.

Increased staff engagement in, and commitment to, your action plan also has a direct correlation with improved retention rates. Clear and consistent communication, sharing information with staff to build their trust, linking initiatives to your findings to make it clear you are listening, and a collaborative approach will all pay dividends. The desire for good leadership and management was a recurring theme in Speers’ presentation – see the “success factors” panel.

There is, inevitably, no magic wand or guaranteed formula for success, and typically a range of measures is required. But aim for the best mix of “quick wins” needing relatively little investment, and bigger gains, shorter and longer term, which may require more resources.

The home front

Following up, Neil Stevenson set the retention issue more closely in the context of Scottish solicitors and their businesses. The new status of registered paralegal (see p33), for example, could present a key opportunity for many practices. And with the competition that alternative business structures and outside investment will bring, he posed the question, is your talent for this market, or the next? Do you have a five year, or 10 year, strategy for expanding your turnover or redesigning your business?

The gaps in legal advice provision in some areas of the law and some parts of Scotland, have led to the project between the Society, the Scottish Government and the Scottish Legal Aid Board to monitor current and future trends in recruitment and retention of solicitors – but the issues raised in this seminar are relevant to the whole workforce.

Whatever the answers, Stevenson passionately believes that solicitors need to be aware of the national trends and the issues thrown up by the research. “Whether you are succession planning in a small firm or competing for global talent in the City, these social, economic, and population trends will be affecting you today, tomorrow, and for the foreseeable future. There is no doubt that failing to engage with these issues now will see businesses placed at a competitive disadvantage.”

Two events in the series remain – Wednesday 4 June in the Hilton Hotel, Dundee, and Monday 23 June in the Copthorne Hotel, Aberdeen. Each runs from 12 noon to 2pm, with lunch provided. Details of how to register for the free events, which count for one hour’s CPD, are at www.lawscot.org.uk/diversity/news.aspx .

Implementing change: 10 critical success factors

1. Leadership support
2. Upfront commitment to address the issues
3. Comprehensive initial diagnostic
4. Share findings with staff to build trust
5. Collaborative solution design process
6. Line manager (and key influencer) involvement and education
7. Clear and consistent communication
8. Follow through on action planning
9. Link initatives to diagnostic finding
10. Leadership support (yes, it really is that important)

"Generation Y" and expectations from work

• High value on self fulfilment – look for fulfilling jobs
• Have a sense of purpose and look for meaning in work
• Work-life balance isn’t just a buzzword – they expect great flexibility
• Financially savvy, they care about benefits, pensions, savings
• Multi-taskers, they don’t like to stay too long on one job or assignment
• CSR conscious, they care about ethical management and tend to promote a corporate agenda that looks beyond value creation for shareholders

They are also:

• Used to “self serve”, highly personalised and immediate services (think of the latest TV services where you can fast forward, and download films) and expect that in their work environment
• Interested in gap years/career breaks
• More comfortable working with background noise than their predecessors, and not with “sitting in rows, in silence”, as commented on some trainee blogs from big firms
• Aware of the affordability of working – in relation to levels of debt, property and commuting costs etc – and that their seniors voted away their free education!

Have you heard of reverse mentoring? It applies when a senior person takes time to listen to a junior about such things.