Smaller companies may be better placed to compete for both disenchanted women and impatient young high-flyers. Rain Newton-Smith, an economist who has worked for the Bank of England and the IMF and is currently head of emerging markets at Oxford Economics, comments:
In a smaller company, you have to forge your own career a bit more than in a larger institution like the Bank of England. There are fewer places to hide behind. It was undoubtedly a risky move for me to go to Oxford Economics but it certainly worked out.
From her perspective as a boss who manages a small team of young, highly skilled economists, she says:
The advantage of a small company is that when you see a very bright employee, you can make sure you recognise their ability quickly, give them the kind of work they want, and promote them quickly. Bigger companies have to worry about hierarchies and procedures, regulations and precedents and that gets in the way.
Money and challenging work
In the 2009 Ashridge/ILM study, 33% of UK graduate respondents placed challenging or interesting work in the top three most important factors in their working life. Next in importance was a high salary (32%) and career advancement (24%).
In the 2008 Robert Half/Yahoo! Hotjobs survey of American workers from generation Y, the three most important job considerations were:
salary;
benefits;
opportunities for career growth/advancement.
The Saudi-based Gulf International Bank (GIB) is building a new retail bank in the Middle East aimed at the emerging middle class in the region, and is working hard to attract high-flying graduates. The bank focuses on offering competitive salaries and the opportunity to have a fast-moving career; the new retail business is effectively a start-up venture in an otherwise staid banking sector.
The GIB’s goal is to slot its graduate employees into the right roles and vacancies as they become available in the new business. Its graduate development programme prepares graduates for specific jobs in the organisation. The priority is to make sure that graduates do not finish the programme and find themselves in limbo, waiting to be slotted into a position as the retail business gets up and running.
The bank holds careers fairs in places such as American universities, targeting graduates with international experience from Saudi Arabia and other Gulf Co-operation Council countries. There is fierce competition for these graduates, not only from Middle Eastern businesses but also from Western firms that want to gain a foothold in the region.
The GIB realised that it would quickly lose graduate employees if there was nowhere for them to go in the organisation once they completed their graduate development programme. As Cornel Fourie, the bank’s former chief human resources officer, explains:
We know for 2013 what our vacancies are going to be in terms of our growth strategy. We recruit our graduates to fill those vacancies and a big percentage of the training of the talent at the very young stage is directly linked to the skills they require for the vacancy they will fill. We recruit 40 graduates a year and each one of these graduates will fill a vacancy after a year on the programme.
Fourie says that the bank retains young talent “with difficulty”, and this is likely to get harder as some nearby countries, notably Dubai, scale up their recruitment efforts. Offering competitive salaries is important, but the lure of challenge and opportunity is even more so. Fourie comments:
In my experience, I find that talented people want opportunity and the way we sometimes create opportunity is not upwards but sideways. It might be that we move someone in retail over to wholesale banking for three to six months. We rotate our staff and we also give them the opportunity to stretch. We say “over and above what you are doing at the moment, I would like you to work on a stretch project which is outside your comfort zone”. A lot of our talented people thrive on these opportunities.
Both Apple and Google set great store on using exciting work assignments to attract and keep the brightest graduates.
Liane Hornsey, vice-president of people operations at Google, says:
We attract millions – and I mean millions – of applicants to Google each year. And the reason we attract millions of people to Google is because, first and foremost, everybody knows that it is a damn cool place to work. Second, because you could be working on tomorrow’s biggest problem – infrastructure in Sub-Saharan Africa, robotic cars, GoogleGlass. Okay? We have very, very innovative products that attract the brightest and best.
For Apple, it is a straightforward matter of offering the best financial incentives and work opportunities. In his analysis of Apple’s approach to talent management, John Sullivan, professor of management at San Francisco State University, says: “At Apple, the primary long-term attraction and retention factors are stock growth and exciting work.”
The company promises “corporate jobs, without the corporate part”, meaning an avoidance of endless meetings, routine tasks, bureaucracy and hierarchy. Stock ownership is the most important form of financial motivator. Most employees receive periodic stock grants to reward their contribution. Individual rewards are based on performance and consist of stock grants and cash bonuses of up to 30% of base salary.
Compared with Google, Facebook and Microsoft, Apple’s benefits are “spartan”, as Sullivan explains:
Because of the importance of these two factors, the message on benefits is clear. If you are doing the best work of your life and having a major impact on the world, do you really need sushi in the cafeteria?
Many employees, not just people from generation Y, want challenging work, as is evidenced time and again in engagement studies. However, Emily Lawson makes the observation that this is an especially effective means of retaining women after a career break:
One of the things we know is that if we can get women into roles where they perceive themselves to be making a difference before they have children, they are twice as likely to come back to work afterwards. If they are in a relatively low level job where they feel anyone can do it, they are less likely to come back.
Opportunity to innovate
Organisations with experience of employees from generation Y believe that they particularly thrive when given opportunities to innovate. Khurshed Dehnugara, a partner at Relume, a UK research and advisory firm, says that this can be difficult for older managers to handle. Formerly commercial director at GlaxoSmithKline for ten years, Dehnugara has written about “the challenger spirit” needed in organisations. He comments:
On the one hand, the next generation is desperately excited by some of the new trends [such as social media and the digital industries], while we are scared. The difficulty is that they come expecting this exciting, often anxiety-provoking career – they are up for it, they are up for quite a bit of disturbance and quite a high degree of personal risk and commitment.
Then they come into environments where the company will only move when it is absolutely certain about a trend. That is really depressing for them. This next generation loses heart, they lose energy. They either leave or the seat is warm but the brain is not really there. I think they are more ready than we imagine they are and we are not providing an environment in which they can thrive.
Many entrepreneurial women have been unwilling to wait for more conducive conditions and have left to start their own business. The implications for talent management are explored in Chapter 6, but it is worth looking at the reasons these women leave.
A 2001 study by Korn/Ferry International, one of the world’s largest executive firms, provided some valuable insights into the motivation of women who had quit senior positions in corporations to start their own business. The reasons for leaving were positive and opportunistic – but they serve as an indictment of their previous employers. Based on the responses of 425 women (of whom 30% were former directors, 27% were vice-presidents and 9% had top roles such as chief executive and president), the top three reasons for leaving their corporations were the opportunity to:
take risks and test
personal ideas;
create wealth;
have an impact on strategic issues.
The Korn/Ferry study noted that large companies were losing the “war for talent” in the case of innovative and entrepreneurial women. The conclusion, made over a decade ago, still rings true today:
This top talent looks to the small business setting for their next career move. Unlike previous decades, today’s businesswomen do not consider the large corporate environment as the ideal place to pursue their dreams of innovation and creativity. In fact, many of them are taking the skills they learned in the corporate setting and applying them to new positions in the small business world, either as owners or non-owners … The women we studied have strong desires to pioneer new innovations – generating ideas, developing ideas and learning from their impact. Corporations would be well advised to consider the role of women … offering them more control over the strategic process and reducing constraints on creativity if they hope to retain [their] talent.
Work–life balance
The 2009 Ashridge/ILM study suggests that although generation Y graduates are ambitious, they want a good work–life balance, ranking this as fifth most important in their working life. They tend not to take work home with them but they expect to be able to undertake personal tasks while at work.
In the 2008 Robert Half/Yahoo! Hotjobs survey, having work–life balance was ranked the third most important aspect of generation Y’s work environment. Some 73% of respondents said they were concerned about balancing work and personal obligations.
This shift in motivation is apparent among young MBA students, according to both London Business School and IMD. Fiona Sandford, executive director, global business and careers at London Business School, comments that today’s students are “more thoughtful” about what they want from their careers: “What we are finally seeing is what everybody in 2008 predicted – which is a change in student ambitions.” She says that MBA students are no longer automatically applying for positions in big global banks or the top-tier strategy consultancies:
We are seeing students being a little more thoughtful. Very often it is about achieving the right work–life balance. If you are working for one of those wonderful consultancies, you are not going to have much of a life. You are going to be working excessively hard for quite a long period. And for some graduates, this is just not right.
Claire Lecoq of IMD has noticed the same trend among MBA students (who tend to be slightly older than MBA students generally and in middle-management roles):
They are definitely looking for something different. There is a much stronger desire for life balance. Even five years ago, you would have had people opting for careers in finance or consulting, but now MBA students are definitely looking at life balance and this is high on their list when they are approaching a company [to explore job opportunities].
She believes that some of the emphasis on work–life balance among younger managers is because of their reluctance to give their employer the same degree of loyalty as their parents did. Perhaps because of the economic crisis, they are less drawn to a traditional career in a big organisation:
These shifts started about five to seven years ago, but now it is a deep trend. This generation is not going to sacrifice everything for their career as their parents did. They are more balanced – they want a career but their life and family is important. We are seeing a much bigger desire among our students to being their own boss, contributing to society and living a better life.
Sandra Schwarzer of INSEAD agrees:
This generation for me is the generation that has seen their parents and grandparents lose their jobs – so their loyalties have shifted. They are much more loyal to themselves than to any one organisation. I don’t think it is selfishness, it is a matter of trust … Whether it is due to the economic downturn, I also think a lot of them have been faced with setbacks. They have developed a certain resilience. They know they cannot rely on an organisation, they have to rely on themselves.
McKinsey’s 2012 study found that women slow their careers or shift roles, especially from line management to staff roles, to obtain more predictable working hours and to reduce the need to travel for work. This often occurs at a critical time when the talent system requires them to be mobile, gain international exposure and take tough developmental assignments.
Women can take themselves out of the “talent game”, but high-flying women can take the more drastic step of leaving the organisation altogether.
Lisa Calvert, senior vice-president, human resources and facilities, at Getty Images, an American company that creates and distributes images, footage and music online, stresses that large corporations need to remember that talented women always have “the freedom to choose”. She says:
My perspective on women and unlocking leadership positions is simply that women have choice. I’m very fortunate. I work for a very creative company. It’s young, it is 17 years old. It is 50% women. I have worked for much larger corporations but I chose to leave. I did not feel I was getting the support that I needed to move myself along in my career. I knew “aspirationally” where I wanted to go as a woman.
I had to make a hard choice. I had to make a choice about my family and my children, work–life balance and all of these things. I chose to go to an organisation that supported all of those things for me … It sometimes takes that kind of initiative by women to have the people who are making the decisions to wake up and ask “is this a problem for us?” and “do we really care?”.
Freedom and autonomy at work
The graduates in the Ashridge/ILM study valued a high degree of freedom and autonomy, both in how their work was organised and how they were treated by their boss. They did not want their managers “watching over their shoulder” or “behaving in a controlling and micro-managing way”.
Asked about what behaviour was most important in their line manager, graduate respondents ranked as their top three:
respects and values the graduate;
trusts the graduate to get on with things;
communicates well to the graduate.
The two lowest-ranked behaviours were setting clear objectives and providing regular feedback about the graduate’s performance. However, managers in the study said that regular feedback about performance and setting clear objectives were the most important management behaviours for them to display. The report points to a “significant disconnect between graduates and managers” in how they view their relationship. For example:
Graduates define their ideal manager as a coach or mentor (56%) or friend (21%), rather than someone who directs (8%) or examines and audits (2%).
Some 19% of graduates view their manager as someone who directs and allocates work, while only 9% of managers believe they act this way.
Just 26% of graduates think their manager acts as a coach or mentor, while 75% of managers believe they fulfil this role.
Fiona Sandford of London Business School says that the desire for autonomy is an equally powerful motivator for young undergraduates and MBA students:
We see it with our undergraduate management students who are 22 to 23, but we are seeing it increasingly with our MBA students. And the magic word is “autonomy” – that’s what people look for and that’s the word that crops up time and again.
Do these two groups define autonomy in the same way? Sandford says not quite:
With classic Gen Ys, they think they can rule the world now, thank you, and would like to get on with it! More grown-up MBA students want to be valued for their intellect and their skills. They want someone to really value their toolkit and their soft skills, to trust them to manage their own work and to follow up their clients.
Clearly, the task of providing the right degree of freedom and autonomy lies with line managers – and hence they have a pivotal role to play in ensuring their rising stars remain challenged and engaged.
Becky Snow, global talent director at Mars, is aware of the importanc
e of bosses in any talent management system:
There is loads of research around the fact that people leave bosses, not companies, and I really wonder just how much individual leaders will come to the fore, especially as companies do so much work to position themselves as forces for good.
Middle-manager engagement
Middle managers play a crucially important role in engaging rising talent. A number of employees interviewed for this book mentioned how middle managers can open doors for younger talent by allowing them to spread their wings. However, middle managers can also block talent if they so choose.
The Gulf International Bank’s move into retail banking has led to it targeting its recruitment at smart young graduates, but this has sometimes caused tensions with more conservative middle managers who joined the bank before this shift in strategy. As Cornel Fourie explains:
Sometimes our existing middle managers act like a layer of mud and cause our talented people to leave. This is because some middle managers are intimidated by talented people, especially by their knowledge, and manage them at arm’s length. They themselves don’t want to go anywhere and they won’t move – this is often a turn off for a lot of talented people.
The GIB has tackled this issue by creating talent management committees to make sure that promotion decisions are taken collectively rather than by a few individuals. The bank is also moving to a coaching-based culture to make sure that staff are developed and stretched.
PepsiCo takes prompt action when it sees managers standing in the way of ambitious younger managers. Richard Evans, president, PepsiCo UK, Ireland & South Africa, asserts:
Managing Talent Page 11