It is refreshing to finally hear human capital cited at the No. 1 challenge in 2014 based on The Conference Board’s global survey of more than 1,000 corporate leaders. These leaders further described human capital as involving how to develop, engage, manage and retain talent. This is a great list, and I am pleased that human capital is finally getting its rightful place in how to win in the marketplace.
At the same time, I am a little disappointed not to see talent acquisition on that list. Some of the need for development, engagement and retention will be reduced if you get the “right” people on the bus to begin with. Using well-developed tests and assessments can be a tremendous help in screening problem candidates out of the selection process before they become your employees.
I’ll get off my selection bandwagon until another time. I do want to share my thoughts about development, engagement and retention, how I define them, and how an organization can leverage these areas.
Let’s start with engagement. You made a candidate an offer of employment and they accepted. They are now your employee. So then what is engagement? W. A. Kahn in 1990 defined it as “… the extent to which a person is psychologically present in work roles.” What that means is that the more engaged an employee is in a work setting the greater the likelihood that he will go the extra mile and use what is sometimes called “discretionary effort.” Here’s an example: It’s 4: 45 p.m. on Friday and you need people who are willing to stay an extra hour to finish loading a shipment to meet your customer’s need. The engaged employee will make this discretionary effort. In many organizations only one-third of the employees are highly engaged. The potential impact that has on productivity is huge. We can talk about how to engage your employees in another column.
The second area cited in The Conference Board survey was development. Years ago people used to talk about training and development. I once led a project where we revised the performance management system at a Fortune 100 company. The new system was going to focus 50 percent on the things the employee would do in the next 12 months. In the past, an employee’s development meant they went to training. Attending training was the goal. Under this new system we said that where most employees learn and develop is “on the job.” An aspect of their development can be attending a training program, but it must be followed by several situations where they must apply the skill on the job. The supervisors that we were working with said, “We know you are right about this being the best way to develop employees, but we don’t know how to do it.” We helped the supervisors figure out ways to incorporate development into people’s jobs. The bosses and the employees were thrilled and it led to huge gains in employees’ capabilities. We can talk about “how” to do that in another column.
The third area mentioned in The Conference Board survey was retention. In my mind if you do an effective job of engaging and developing employees you usually don’t have to be concerned about retention. There are two types of ways that employees separate from an organization. There is voluntary (they leave) and involuntary (you ask them to leave). What are we talking about trying to minimize is voluntary. Once a person tenders a resignation it is too late to do anything. Making sure you keep the people that you really want to keep means that there needs to be good candid communication. Employees don’t leave organizations because of bad “management,” they leave because they have a bad supervisor. Once you identify your high potentials, you don’t have to tell them that they’ve been identified as such. But you better show them that they are special by your actions and the opportunities you give them. You need to effectively communicate with them. You need to give them good constructive feedback (the want it so they can improve). You need to challenge and develop them. You need to reward their performance. If you do those things well with the people you want to keep, retention should be less of a problem. You should, however, do exit interviews to find out “why” your people left.
In conclusion, if you engage and develop your people, it should result in higher retention and your organization should have the human capital to win in the marketplace.
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