Talk About Talent
Insights from an EACUBO roundtable suggest how to hire smart, limit turnover, and incorporate new generations into the workplace.
By Marta Perez Drake
At EACUBO’s Senior Business Officers Roundtable, convened in Philadelphia, approximately 25 chief business officers explored the intricacies and implications of these significant questions. Peter Cappelli, professor of management and the director of the Center for Human Resources at the University of Pennsylvania’s Wharton School of Business, led the program, sponsored by Segal/Sibson, a human resources consulting firm. The event provided a unique opportunity for participants to partake in some high-level discussions around these important human resource issues.
When asked to identify the worries and risks that business officers were experiencing in the area of managing staff, participants listed the following: developing staff; dealing with “lifers;” providing staff with skill breadth and “bettering skills;” and sustaining change and new levels of excellence. They also sought strategies for succession planning and for understanding resulting new roles, tackling a lack of bench strength, and dealing with loss of institutional memory and organizational competencies.
Cappelli was quick to point out that many common hiring practices are not considered good predictors of an employee’s performance. Interestingly, grade point averages, personality tests, and unstructured, one-on-one interviews of a candidate by several staff members are not the most reliable evaluation techniques. In fact, it is more often intelligence tests that evaluate cognitive abilities, work samples or relevant material prepared by the candidate, and previous experience in a similar position that provide the most reliable predictors of how a potential employee might perform once hired.
Since interviews are a popular recruitment practice, how can one make that process worthwhile and predictive of an employee’s success in the position? Cappelli suggests revising the typical process in several ways.
- Avoid one-on-one interviews. Candidates interview differently in a variety of settings and with a diverse set of individuals, so interviewers end up evaluating candidates using very different information. To get around this potential assortment of reactions and comments from interviewers, which in the end are not very reliable or helpful, Cappelli recommends developing an interview process whereby a candidate will meet with groups of people, allowing the evaluators to see the “same candidate.”
- Encourage “behavioral interviewing,” which attempts to tap into the competencies a candidate needs for the particular position. Asking about behaviors, not preferences or likes, is more useful because it is not something candidates can prepare for; and you end up, says Cappelli, with more “nuggets of truth.” Good questions to ask for getting at this information might include: “What do you foresee your first two weeks on the job to be like?” And, “Tell us about a time when people didn’t agree; what did you do?”
Employee retention has taken on increased significance triggered by the advent of online recruiting, which, Cappelli asserts, is currently ranked the second most popular activity on the Internet. “People are not pushed out of their jobs, they are pulled out,” he says. “You are not going to keep everyone, and you don’t want to. The key is to create predictable turnover. That is, you can manage which, at what time, and from what positions employees leave.”
You can do that, says Cappelli, by paying attention to retention realities. For example, solid social relations within the office often hold employees more firmly than financial arrangements. Hence, he says, don’t underestimate the power of social ties and a supervisor who sincerely cares for his or her employees. As the saying goes, “Employees don’t leave the job, they leave the boss.” Therefore, solid and worthwhile connections between employees and their supervisors create a valuable professional environment that competitors cannot instantly provide.
Another key retention device, notes Cappelli, is to spot talent and give the designated individuals opportunities to show their potential. Many business officers who weighed in at the roundtable shared the opinion that the best professional development opportunities they had experienced were the ones in which they were “baptized by fire.” Such experiences pushed them, allowed them to learn a great deal, and resulted in their feeling valued and appreciated for their potential. For this to work, supervisors must identify such talent early and promote individuals sooner, giving high performers opportunities that they would not get elsewhere.
At the same time, notes Cappelli, retention isn’t the only answer. Employers, for example, sometimes react to an employee’s resignation notice by providing financial incentives to stay—a practice that often provides too little, too late. Such action may keep the employee in place for the time being, but often these attempts simply delay the departure (or even fuel the employee’s desire to leave because it was only after resigning that his or her worth to the organization was recognized).
Rather than focusing completely on retention, says Cappelli, consider what the real staffing problems are and accommodate turnover by thoughtfully redistributing responsibilities and better managing workflows. In the event that people leave, be sure that you maintain intellectual capital by creating a core team that can assist in the transition from one staff departure to the next. And, particularly if your high performers are heading for the door, consider the helpful practice of implementing an exit interview process that is outsourced to an objective third party. Exit-interview results provide a good indicator as to why people are leaving.
“People expect fairness and expect rewards,” says Cappelli. Performance management is about identifying performance differences and managing employees in a way that raises the level of accomplishment across the organization. Consider the fact, notes Cappelli, that the best employees are much better at influencing the workplace than poor performers whose behavior is “demoralizing.” Consequently, he suggests an informal approach to managing employees by, “ranking staff from best to worst…it helps you identify where the problems are within your office.”
Alternative ways of managing performance include providing more feedback earlier, establishing clear goals, and creating more objective performance measures. Implementing 360-degree feedback can also be of value. However, cautions Cappelli, recognize that the first couple of times you employ the process it's best to filter feedback because people tend to vent the first time that they are provided with the opportunity to comment on their supervisors. In addition, do not tie early uses of 360 feedback to compensation.
“Making generalizations about generations is a slippery prospect and risky undertaking,” writes Mark Taylor, director of guidance services, Arkansas State University, in “Working With the Generations.” At the same time, Taylor notes that some generalizations can help in understanding the various cohorts (Traditionals, Baby Boomers, Generation Xers, and Generation NeXt) who currently share the workplace.
Taylor’s presentation at last year’s CACUBO annual meeting provided not only a description of workplace habits and expectations that generally characterize individuals in each cohort; more important for business officers, he offered insights from his studies of Generation NeXt students. Taylor’s writings and programs are geared to helping college and university faculty, staff, and leaders better understand young people in order to more effectively recruit, retain, develop, and teach those students.
In financing talent management, says Cappelli, the key aspect is to match your supply of talent to the organization’s anticipated demand for it. Traditionally, he explains, supply meant developing your internal employees by providing upfront investment in candidates with the expectation that these investments would be recouped over time. However, one does not own talent and in today’s workplace such practices can prove costly.
When determining the human resources that you need, Cappelli says you must focus on three areas:
- Aim to match your supply of staff resources with demand. When you overshoot staffing resources, it is because supply and demand are mismatched. You end up with a deep bench of employees or with the need to restructure, either of which can cause layoffs and, in some cases, costly severance packages. One way to avoid overshooting is to be conservative in your supply and use outsourcing or temporary resources when you fall short.
- Develop your current employees on a faster track as opportunities arise. With regard to building staff skills, just-in-time development, in which you move people into a new role and give them on-the-job training, is preferable to providing training in specific skills prior to knowing what expertise is needed.
- Forecast your staffing needs across smaller increments of time. It is better to consider what resources you will need two years from now rather than four. This way you avoid the pitfalls of typical succession planning in which forecasts are too far out and expectations are unfairly set—conditions that ultimately lead to disappointed and disgruntled employees who thought they were in the pipeline for a particular job at a certain point and now feel stuck.
Tenure and Next-Generation Expectations
In the 1950s and ’60s, reminds Cappelli, Fortune 500 executives had been with their companies for 24 years on average. It was typical for employees to stay with a particular employer and acquire ever-increasing responsibility by moving up the chain of command, changing roles, and increasing their levels of responsibility within the same organization. The notion of a secure, long-term career is much harder to imagine today. It’s more typical for people to change employers while remaining in the same functional area.
In addition to the disappearance of the long-standing career track within one organization, other factors affect employee movement and loyalty. For instance, Cappelli says that “next-generation workers”—which he identifies as those younger than 30—are not willing to put in the extra hours at the beginning of a new job to establish themselves within the company; and a higher salary is not as strong a motivator as more vacation time, schedule flexibility, and signing bonuses. Workers under 30, says Cappelli, also tend to be impatient, are not particularly loyal to their employers, seek excitement, and suffer from “me”-ism.
The results of a recent study conducted by Seminarium for PricewaterhouseCoopers exemplify this shift. When 25- to 30-year-old MBAs were asked what is most important to them in their first jobs, most articulated the aforementioned trends–regardless of where they were ranked within their class standings. In addition, the top-tier students pointed to priorities such as obtaining a good reference for future employment, finding a company that values balance between personal life and career, and working with likeable and inspiring colleagues. Those in the bottom tier indicated that they sought a variety of tasks and assignments, immediate responsibility, and the opportunity to influence their work schedules.
Based on this and other data, Cappelli notes that next-generation workers require employers to provide them with autonomy while giving them constant feedback. “Members of this generation want to know how they are doing and want explicit expectations, clear measurements, and articulated rewards based on performance,” he explains. Although this, at times, is misinterpreted as being “needy,” says Cappelli, in actuality this tendency is due in part to the recognition of the short-term aspects of the jobs today. One way to take advantage of this approach, he advises, is to be more contractual with these employees. For instance, when possible, tailor a particular project or job to the person responsible for it and indicate straightforward outcomes. For example, you might say, “If, in two years, you accomplish project A and accomplish particular goals, then you will be offered a specific reward and renegotiation of your position will occur.” Remember, says Cappelli, that this generation believes failure is okay because risk taking is seen as a positive. (For more information on incorporating multiple generations into your staff or on your campus, see the sidebar, “Intergenerational Insights.”)
But it is not only the next-generation employee that business officers must work with. A number of aspects to managing talent relate to employees of all ages. For instance, consider the inverse relationship between employment rates and annual turnover: When the unemployment rate increases, annual turnover decreases. Hence, fluctuating economic trends have an impact on your existing retention plans and your supply-and-demand formula. And think about the results of some of Cappelli’s recent studies that show that one third of employees do not know the next step for them within their organizations. Don’t be surprised if the resulting lack of patience on the part of eager staffers creates a kink in your succession planning. In the end, advises Cappelli, you must create a clear strategy for hiring, retaining, and managing staff while being ready to revise your plans when other variables apply.
Marta Perez Drake is director, constituent services for research universities and comprehensive and doctoral institutions, at NACUBO.
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