CCA_Leaders and Corporate Culture Insight Paper

Leaders and Corporate Culture – The Impact They Have on

Employee Retention and Development

Why are there some organizations that constantly lose employees while others are able to retain some of the country’s best talents

for years? Is it because of lack of compensation? Is it because they do not offer their employees an opportunity to grow? Or did these former employees find their jobs boring and unchallenging? These are extremely important questions that companies and their leaders must have the answers to as quickly as possible, if they want to attract, retain and develop the next generation of leaders. This is especially true in today’s fast changing environment wherein employee retention has been a challenge for most companies including those deem to be most innovative or listed as best places to work.

Organizations that are consistently experiencing employee resignation letters should already realize that there is something wrong. There is a plethora of possible reasons for poor worker retention rate, and those that have been mentioned above are just some of them. In fact, those that have been previously stated do not even make it to the top 5 most common reasons as to why employees leave. And while it is true that there are some reasons for leaving that are beyond an employer’s control, most people leave their jobs because of the overall quality of corporate culture they face every day.

The goal of this paper was to examine the factors that contributed to the decision of employees to leave their current jobs and look for another

employer. The results of the research, which have been detailed here, reveal the ten main reasons why workers quit. In addition to tackling the important issues in the workplace that affect an organization’s rate of employee retention, it also provides insightful information that can be used by employers to improve their employees’ engagement. Recent research shows a direct correlation that happy employees are more likely to have higher productivity, improve performance and a lower number of employee turnover.

10 Most Common Reasons for Employees Leaving their Jobs

According to the United States Department of Labor, the monthly average number of people who quit their jobs from February 2012 to September 2014 was 2,000,000. If this trend continues, not only will the rate of unemployment rise; organizations will also be forced to hire people who are not that suitable and qualified for the job. They would have to do this just so that they can fill the position. This may result in reduced work quality, poor morale, and low job performance, which may then affect a company’s overall bottom line.

Employers need to know the reasons why they lost talent. This will help them come up with an approach that will resolve the issues that led to these workers quitting their jobs. So what are these reasons then?

1Leaders and Corporate Culture – The Impact They Have on Employee Retention and Development

Leaders and Corporate Culture – The Impact They Have on

Employee Retention and Development

2 MillionEmployees

quit monthlyaccording to

U.S. Departmentof Labor

According to Forbes, a great percentage of the working sector is just simply not happy with their current jobs. In fact, a Harris Interactive study, which has been cited in the same article, has revealed that 74% of the employed sector during that time would consider looking for a new job. And in light of the growing concern on poor employee retention, Accenture has conducted its own study to find out the reasons why people are leaving. The following are the 10 most common reasons why talents file for resignation.

1. Lack of Appreciation – The vast majority of workers who have resigned say that not being appreciated is their main reason for leaving. 43% of the group that Accenture has studied say that lack of recognition or appreciation is what makes them unhappy with their current jobs. It is important for employers to make their employees feel special, especially those who truly deserve it. This should not only be in terms of compensation; it should also include rewards and recognition.

2. Lack of Recognition – Most individuals have this inherent need to know exactly how they are performing. This is only logical since they want to experience growth in their careers. One of the key aspects that make talent management exceptional is the provision of regular employee recognition in areas that deserve praise. If an employee is not or barely recognized for his/her contributions, the company that he/she is working for can expect to lose a talented worker.

3. Lack of Growth/Advancement – Most, if not all employees aim to go through career growth and possible advancement in their positions. According to research, one of the top priorities of skilled employees is the chance to grow and develop their skills further. In fact, 31% of the participants in the Accenture study said that lack of empowerment is their reason for their dissatisfaction at work. This is because most, if not all working individuals aim to go through career growth and possible advancement in their positions. However, if they are given the same tasks over and over again, they will not be able to reach this goal. In order for a company’s employee retention rate to increase, managers have to work with their team members and come up with sufficient career development plans. This way, their top talents will have something to look forward to.

4. Bad Management – There is something wrong with the relationship between an employee and his/her supervisor. Many employees just quit their jobs because they no longer want to work for a bad boss or they have no respect for the leadership team. 31% of the working sector said that bad relationships with their bosses are their reason for leaving or considering quitting. 35%, on the other hand, had/have problems with the company’s internal politics.

2 Leaders and Corporate Culture – The Impact They Have on Employee Retention and Development

Bad management creates active disengagement that cost the U.S.alone an estimated $450 billion annually

5. Boredom – Employees who are given unchallenging tasks get easily bored, since they are not able to employ their skills and knowledge to the maximum. It is important that your top talent are given opportunities to be challenged and they enjoy what they are doing. This is why implementing effective employee engagement procedures are a must in the workplace.

6. Poor Salary – Many employees quit once they realize that the compensation they are being given is below what is the market standard. They believe that they can make more money by looking for another job. This is especially true for positions that are very difficult to fill – companies need to make sure that they properly compensate their employees or they will lose them to their competition.

7. Conflict with Fellow Co-workers – The relationship that an employee has with his/her co-workers can also lead to problems that may result in resignation. According to the Census of Fatal Occupational Injuries (CFOI) between 2006 and 2010 an average of 551 employees were killed as a result of a work related homicide. It is important for leaders to address conflict when it arises.

8. Work/Life Balance – This reason is sometimes outside of an employer’s control. However, through the enforcement of correct talent management procedures, such as working on a compromise in terms

of work load and schedule, organizations may be able to counter the decision of their top talents who are about to leave by supporting them in achieving work/life balance.

9. No Accountability – Corporate leaders always talk about autonomy, independence, and empowerment. However, those that are in the position of leadership need to understand that these are qualities that a person needs to pursue on his/her own. In other words, they cannot be given by those above them. What leaders should do instead is to ensure that they are able to work in an environment that allows them to foster these qualities.

10. Poor Communication – Communication plays an important role in the lives of human beings, and without this, problems will begin to arise and resolutions will not be developed. Communication is essential for building trust, respect, rapport and a winning culture. Therefore, it is the responsibility of an organization to ensure that the workplace, particularly its corporate culture, develops excellent communication. Companies that excel with attracting and maintaining top talents are those leaders who inspired through their communication skills. They are able to ignite and empower their team to reach for higher heights, to believe the impossible and to dominate their industry.


87% of C-Suite Executives recognize that disengaged employeesare among the biggest threats to their business

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When corporate leaders pay attention to all of these factors, their employees, especially those that they consider as the company’s best talents, will no longer feel like they would be better off working for someone else. It is also crucial for employers to monitor the reasons why their employees leave, particularly those that have something to do with problems that arose from the workplace. Being able to establish resignation patterns and creating methods to deal with these issues are critical to preventing the loss of an organization’s best talents.

What Employee Engagement is and the Important Roles It Plays

In a nutshell, employee engagement is an approach used by organizations to make certain that all of its members are dedicated to the goals and values of the company. It is designed to motivate employees to become contributors to the success of the institution. Furthermore, it is employed by corporate leaders to ensure that its team members are able to improve the sense of well-being they feel and experience.

When an organization makes use of the right tools and methodologies in its employee engagement strategies, it can expect to deal with higher rates of productivity, reduced workplace conflicts, decreased accident rates, better employee retention, fewer incidents of sick leaves, and more innovation.

Impressively-engaged companies are those that have strong and intrinsic values. The leaders of such organizations strive hard to show proof that there is fairness and trust in the workplace.

However, it is important to note that engagement is not a one-way approach. Of course, it is the responsibility of the organization or the employer to engage all of its employees. Employees, on the other hand, should also be direct when it comes to choosing how engaged he/she will be. If the employee is happy and satisfied, employers can expect to be provided with the exceptional performance.

So how should companies keep their employees engaged and committed to the mission, vision, and goals of the organization?

One is to focus on the skills crucial to management and leadership as well as the basics of proper management. Corporate leaders should host programs that are designed to enhance their talents’ abilities in terms of interpersonal skills, consulting, engaging, communicating effectively, and handling difficult conversations.

Recognizing your top talent early is a key element of employee engagement. Once a supervisor or a manager notices significant contribution from an employee, appropriate recognition should be given. Career growth plans, which may include executive coaching,


Gallup Poll reports

of employeesare disengaged or

actively disengaged.Engaged

DisengagedActively

Disengaged

70% 18%52%

30%

should be considered. This way, talents will feel that they are valued by the organization they are part of, and thoughts of leaving will not come into mind.

Rewards are some of the other critical aspects of excellent engagement strategies. When companies evidence their appreciation of a talent’s contribution through rewards, that particular employee will feel special and will strive even harder to reach his/her goals. As a result, both parties benefit.

Leading Multi-Generations in the Workforce

According to the Forbes Magazine, there are four different generations in today’s workplace. These include the Traditionalists, the Boomers, the Generation X, and the Millennials. Each of these generations has its own values and goals, things that corporate leaders should understand and base their approach for employee engagement on.

In order for organizations to operate seamlessly and flawlessly, it needs to come up with different management approaches for the multi-generations in the workplace. Some of the most effective methods to handle these generations are the following:

1. Recognize the experience of traditionalists and understand that their

hard work may often come with some level of flexibility. For many of them, recognition and appreciation are enough to make them stay. Most traditionalists no longer aim to further their careers because of age.

2. Respect the belief of boomers that they deserve to be given individual value, they are special, and they should be provided with good compensation. Recognizing their contributions and being rewarded for it is what characterizes this generation. Individual, executive coaching is a way to engage this group.

3. Provide the Generation X with the flexibility to perform their tasks in their own unique ways and expect that usual employee engagement tactics normally will not work for them. There is considerable talent in this generation, so in order to retain them, corporate leaders need to be somewhat more relaxed in the talent management rules that they enforce on the group.

4. Group Millennials with people that they consider just as smart, devoted, committed, and social as them. This generation believes that they deserve to be recognized and appreciated for every contribution they make, and failing to do so will result in them becoming disengaged. In order to handle this group properly, leaders have to make it a point to praise and reward them, while still ensuring that they do deserve it. Leadership development is crucial for this generation.


By 2025 3 quarters (75%) of the workforce population will make up the millennials

75%

How Leading Companies Attract Talent and Retain Them

Attracting the right talent is one of the greatest challenges that employers are regularly faced with. So when they find exactly who they are looking for, they need to make certain that they do everything to create a sense of loyalty to the company. While it is true that paying hardworking, skilled, talented, and purpose-driven people is a must, it is no longer enough to retain them. In today’s market, corporate leaders should offer not only appropriate compensation, but also meaning.

This is especially true with the generation known as the Millennials. According to a Deloitte study, this group will make up three quarters of the entire workforce population come year 2025. The individuals that comprise this generation say that the organizations they would want to work for are those that put emphasis on innovative thinking, skill development, and societal contribution. In addition, Millennials also prefer to become part of companies that make leadership development one of its top priorities.

With the Millennials being forecasted to make up 75% of the workforce population a decade from now, companies should begin incorporating strategies built around the beliefs of these individuals. Corporate leaders should understand that this generation has strongly believes

that organizations can do more than what they are currently doing to positively impact the society. For corporations to attract the best talent, particularly those who belong in this generation, being knowledgeable of the problem areas that the Millennials think should be addressed will be of great use.

Resource scarcity (68%) Climate change (65%) Income equality (64%) Ethical business practices (50%)

With all this being pointed out, how do companies go about attracting talent and retaining them?

Corporate leaders should:

• Recognize skills and talents and reward their people for their contributions. Leading organizations have a complete grasp on what motivates its people to work hard not only for themselves but for the good of the company as well. They understand the differences in each generation and tailor the approaches they have to each. They adjust the recognition programs and rewards that they provide to those who deserve them.


• Acknowledge the existence of shared needs. Everyone wants to be respected and to feel that they are contributing something to the good of the organization they work for. This is why leading companies build their winning corporate culture on the understanding of shared needs and strive hard to ensure that these are fulfilled.

• Focus on employee engagement strategies designed to foster teamwork while still ensuring that each member performs individual tasks.

• Have a mission that encourages, inspires, and motivates everyone involved.

• Empower employees to step out and think outside the box. They highlight the importance of using technology while still making sure that the traditional beliefs of each worker are not stepped on.

• They address concerns before they transform into more serious problems. Bureaucracy and politics are always approached with caution or eliminated altogether.

• They constantly update their employee engagement methodologies, which include further innovative and enhanced leadership development, executive coaching, and talent management programs.

This is especially true for one out of four Millennials, who, according to the Deloitte study, want to be able to display their leadership skills. Nurturing and developing future leaders is one of the key priorities of leading companies that enable them to attract and retain talent.

• They reward their people with more than just money. Leading companies have long since realized that using just money to reward the people who have displayed considerable contribution to the organization is not enough to make them stay. Of course, these companies still compensate their best talents with higher than normal compensation, but they continuously develop other rewards programs that have added-value aside and not just rewarding them in monetary forms.

Employees’ Point of View – What They Really Want From and Look for in Leaders

According to Gallup’s State of the American Workplace Report, 70% of the employed sector makes up the group known as the “disengaged employees.” These workers are known for their negative behaviors that not only affect the quality of work they produce, but also that of their co-workers. Their actions, aside from poor performance, also lead to an increase in the frequency of accidents. They are the employees that have the highest absenteeism rate and have the highest likelihood of leaving the organization.


Add to this the uncertainty in the employed sector which is driving the need for exceptional leadership. Employees nowadays are demanding more from their leaders, a direct result of the recession that exploded back in the year 2008. With so many leaders during that time having failed their people, workers, particularly the best talents, have begun to be wary and cautious of the people above them.

This then brings us to what employees really want from and look for in the people that are supposed to lead them. There is a multitude of qualities and characteristics that talents believe should be possessed by their leaders, things that have the power to increase employee engagement. Corporate leaders should know that 29% of fully engaged workers, as reported by Gallup, can complete tasks in much less time than those who are disengaged or are not fully engaged.

1. Accountability

Employees are expecting their higher ups to display accountability not just for themselves, but for the people that they are leading. Some leaders have failed to do their responsibilities because they assign too much to their employees that there’s nothing left for them to do. Many of them demand their employees to fix problems that they are supposed to do on their own.

Leaders who possess this critical quality are those that have the loyalty, admiration, and respect of the individuals who work under and with them.

2. Empowerment and Respect

Employees value empowerment from their leaders. They want their leaders to respect their individual strengths, which is why they want to be allowed to make decisions on their own without having to run everything by their supervisors or managers first. They want their leaders to encourage them to utilize their own set of knowledge, skills, and abilities to complete tasks. In the event that a problem arises, employees expect their leaders to give them the help they need so that they can find a way to resolve these issues.

3. Honesty and Authenticity

One of the most common mistakes that many leaders today do is telling their employees half-truths. Yes, some leaders do this in order to prevent bigger problems, but this does not hold true for every leader. Employees expect their leaders to be just as truthful, trustworthy, and authentic as they are.


3 Areas of Focus for Keeping and Developing Talents:

Executive Coaching

Leadership Development

Talent Management

Programs

It is a sad but unfortunate truth that there are only a few honest and authentic leaders out there. However, corporate higher ups should understand that developing and exhibiting these qualities will ultimately result in a better workplace environment, which will then lead to greater and more impressive employee productivity.

4. Specificity

Employees are looking for specificity in their leaders. They don’t want to deal with individuals who tend to always give them generalized tasks. They dislike it when their leaders beat around the bush. What they really look for in a leader is someone who tells them specific directions, guides them with insightful yet clear advice, and gets straight to point.

5. Vulnerability

Leaders are supposed to be more experienced, skilled, and knowledgeable than the people they lead – this is why they are leaders. However, this does not mean that they know everything. If they don’t, they should not act as if they do. Employees actually admire leaders who are transparent when it comes to their own vulnerability. Leaders who tell their employees that they know they have of their areas for improvement are treated with admiration and respect.

One of the main reasons as to why vulnerability is a key component that employees look for in their leaders is because this quality is associated with compassion, empathy, and understanding. Employees who are led by individuals who are honest about their vulnerabilities know that they are with someone who will understand them, be compassionate, and know the value of empathy.

In a nutshell, leaders are those who have a complete understanding of their accountability, just as how they hold their employees accountable for the tasks they are assigned with. They value the opinion and insight of their employees, just as how they want their coaching and lessons valued by the people who are working for and with them. The most effective leaders are those who can easily empathize with their employees. These people hold honesty, authenticity, and respect in high regard, which is why they show these qualities to their employees who are deserving of them.


Conclusion

Determining the reasons why employees are leaving their jobs is a necessary step that organizations should take if they want to become an industry leader. Corporate leaders have to constantly find ways to ensure high employee retention, with employee engagement being one of its top priorities Organizations should develop a winning corporate culture that is designed for all generations, rather it be for the Traditionals, the Boomers, the Generation X, or the Millennials. Companies should implement the right recognition, appreciation, and reward programs if they want to lower their employee turnover rates. Investing in your employees, especially in terms of having them undergo leadership development training, executive coaching programs, or any other form of talent management strategy, will ultimately result in you attracting, developing and keeping the top talent in your industry. By investing in the growth of your employees, you in fact fortify your company against the risk of losing your great people to your competition or even worst having your great people become your competition.

Sources:

1. http://www.forbes.com/sites/alanhall/2013/03/11/im-outta-here-why-2-million-americans-quit-every-month-and-5-steps-to-turn-the-epidemic-around/

2. http://www.harrisinteractive.com/3. http://www.accenture.com/us-en/client-successes/Pages/case-studies.aspx4. http://www2.deloitte.com/global/en/pages/about-deloitte/articles/millennialsurvey.

html

Further Reading:

The Corporate Exodus: How America Top Companies Build a Winning Culture (to Attract, Keep and Develop Their Emerging Leaders)


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