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ESSENTIALS FOR LEADERS AND THOSE THEY LEAD
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Edited by Rama Ramaswami Senior Editor, New York
As chronic labor shortages and high attrition hit organizations around the world, both private- and public-sector leaders are looking for imaginative ways to keep the talent they have. Popular solutions include extra pay and perks, personalized benefits, flexible work arrangements, and inviting office spaces. But sometimes, you may need to look beyond the obvious to prevent talent from leaving. Here are some inventive strategies that organizations have adopted—and that may inspire you to create your own.
AN IDEA
Can a high-performing organization have a soul? Rishad Premji, executive chairman of India-based IT services provider Wipro, answers that question in this discussion with McKinsey partner Anuj Kadyan. “To me, culture represents the soul of the organization,” says Premji. That conviction underlies his initiative to make Wipro more “empathetic, vulnerable, collaborative, and decent.” Premji’s cultural-transformation program, launched after he took the helm in 2019, is centered on the development of five simple core habits among Wipro employees—being respectful, being responsive, communicating, demonstrating stewardship, and building trust—that together improve performance. “These habits provide a very strong foundation for what is necessary to build a high-performing organization,” says Premji. “We want to institutionalize this in our thinking, so many of our people processes are incorporating it, including our appraisal process and salary increase process.”
A BIG NUMBER
47%
That’s the percentage of companies in a McKinsey survey that are not experiencing greater turnover—at a time when attrition is increasing on a global scale. What’s their secret to retaining talent? According to research by McKinsey’s Neel Gandhi and others, it may lie in their ability to balance “hygiene” factors, which are basic employment features such as compensation and working conditions, with “motivators”: elements that influence employees to stay, such as concern for their well-being and development, rewards and recognition, and strong relationships with coworkers and managers.
A QUOTE
That’s managers responding to a McKinsey survey question on what prevents their companies from matching top talent to their most important business priorities. Respondents cite the same reason for their companies’ reluctance to provide more skills-based training. In our survey of 21 talent best practices, company leaders come off as the biggest impediments to adopting better ways of working: for example, 52 percent of non-CEO respondents believe that their company leadership doesn’t value the use of “clear structures, roles, and responsibilities to streamline work.” Considering the positive effects of talent management on business outcomes, as shown in research by McKinsey’s Dana Maor, Bill Schaninger, and others, leaders may want to consider making talent the most important thing to worry about.
A SPOTLIGHT INTERVIEW
‘Talent requires development,’ says economist and author Tyler Cowen in this Forward Thinking podcast hosted by McKinsey partner Michael Chui. “If all you end up with is what you start out with, you’re not going to be good, really, at anything.” One aspect of developing talent may involve creating higher aspirations in people who may not normally think of themselves as successful. “I don’t think we think carefully or explicitly enough of how [we can] bend upwards everyone’s what I call ‘aspiration curve’ so they can strive for higher and better things,” Cowen says. One way that organizations can encourage progress on that curve is to support employees in taking on new roles, which can offer better learning opportunities or a more significant share of skills and responsibilities than their previous job did. McKinsey research shows that 40 to 50 percent of role moves involve pay increases and that workers making these moves manage to boost their earnings by 30 to 45 percent on average each time.
STAR TURN
Be prepared to work extra hard to keep your best people. “It’s remarkable how much of a productivity kicker an organization gets from top talent,” says McKinsey senior partner Scott Keller in this article on the relationship between talent quality and business performance. “In highly complex occupations ... high performers are an astounding 800 percent more productive.” But don’t take these superstars for granted, warns the author of this Harvard Business Review article on retaining high-potential talent. “If you rely on these people for outstanding organizational performance, you must treat them as valued, unique individuals,” he says. “Never dismiss their ideas, never allow their progress to be blocked, and never miss the chance to shower them with praise when they succeed.”
Lead with talent.
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