leadership development


There are 8.1 million boomers in the Canadian workforce today. They started retiring about three years ago and are exiting the workforce in vast numbers.Ā 

But did you know that there is only half that number of Gen-Xer’s (age 35ā€“50) to replace them?

Some companies in the Canadian oilpatch already feel the harsh effects of the demographic changes disrupting the workforce. However, those companies that are still unprepared are in for a shock as competition intensifies for scarce talent at all levels.

Increasing competition means increasing employee turnover. If you routinely manage employee turnover between 10 and 15 per cent, itā€™s time to prepare for the new normal of 25 to 30 per centā€”and much higher for front-line workers and employees in the field. Some companies have reported employee turnover rates exceeding 50 per cent for entry-level drilling and service operations, according to the Petroleum Human Resources Council of Canada. One 2013 human resource survey confirms this problem when 70 per cent selected ā€œretaining talentā€ as the top challenge. Other reports show that most executives expect employee retention challenges to increase further.

With employee turnover at these levels, the higher (and usually underestimated) cost of employee turnover isnā€™t the biggest problem. The issue is business continuity. Itā€™s about losing the key people who make your company function. If youā€™re facing a war for talent, you had better be good at keeping the people you have, especially those critical to the success of your business. Traditional employee retention methods are no longer adequate.Ā Ā 

That said, there are four employee retention strategies at your fingertipsā€”strategies that are largely overlooked but very impactful in the new world order of the skilled labor crisis.

Strategy 1: Measure what matters

One of the first steps is to measure what is most important to your business. Total employee turnover may not be the most helpful business metric. Itā€™s essential to identify who your key people are and focus on their employee turnover rates and employee retention strategies for them. However altruistic you feel, the three most important types of employee or manager are mission-critical roles, the so-called ā€œhigh potentialsā€ (at every level, especially your future leaders) and the top performers.

Mission-critical roles are roles that your organization cannot run without or, if left unfilled, would have a significant impact on corporate performance. Donā€™t assume all executives are mission critical. In fact, a control panel operator could be. Job title does not identify a mission-critical role.


According to the Centre for Creative Leadership (CCL) a ā€œhigh potentialā€ is an employee who has been assessed as having the ability, aspiration, organizational commitment and motivation to succeed in more senior roles throughout the organization. But not all companies identify these key individuals. A recent survey shows that 44 per cent of companies donā€™t have a formal process for identifying and developing high potentials.

Many companies know who their top performers are through performance management processes. In an article on Monster.ca, John Sullivan suggests that top performers contribute 10 times more to your organization than average performersā€”unless the company is Microsoft, which claims the number to be closer to 100 times. Sullivan also notes that top companies tend to keep top-performer turnover below five per cent.

But research shows that only 15 per cent of top-performing employees are high potentials. Itā€™s important to know the difference. Many companies are guilty of promoting high-performing technical people into management positions without assessing their leadership potential or giving them the training they need.

By creating processes to assess, identify and then develop these three types of key people, you will keep them longer. The CCL found that 95 per cent of high potentials said they were overwhelmingly committed to their organizations and 97 per cent were motivated by their jobs.

Strategy 2: Commit to the development of key people

Identifying and developing mission-critical, high-potential and top-performing individuals is a strategic investment in the future of your company. To do this well, you need to commit the budget. It may cost you more than you are currently spending, but this cost will be far less than if you do nothing to protect them. A 2013 report on retention states, ā€œCompanies in the current economic climate ignore rising turnover trends at their peril. Improving employee retention can save your organization millions of dollars.ā€

A report by the Human Resources Institute of Alberta earlier this year found that the most common practices for trying to reduce resignations were better onboarding, flexible work arrangements, improved wages and benefits and more teambuilding events. However, several surveys show that many executives admit that their employee retention plans do not impact turnover.

Research shows that developing skills with employee training, mentoring and coaching increases motivation and commitment far more than many other employee retention techniques. As Josh Bersin, a talent management expert, points out in an article this year, ā€œI have always felt that one of the biggest ā€˜undiscoveredā€™ ROIā€™s [return on investment] of training is retention.ā€

Strategy 3: Cultivate a coach approach

ā€œLeader as coachā€ is now a progressive and preferred leadership skill. Its effectiveness has been validated by many organizations and reports, including a Forbes article that states, ā€œBusiness coaching has gone from fad to fundamental. Leaders and organizations have come to understand how valuable it can be.ā€ Forbes also points out, ā€œBut inĀ reality, few managers know how to make coaching work. Nearly half spend less than 10 per cent of their time coaching others. With such limited time devoted to coaching, organizations need to be sure their managers know how to do it right.ā€

Clarify your double vision

How to take a coaching approach as a manager is still widely misunderstood. Many confuse coaching with mentoring. Both are valuable. Here is a simple contrast between the two. Mentoring is offering advice and guidance from your experience. A coach approach is inquiry-based and therefore focused on asking questions and listening, rather than telling.

Often the management mindset of knowing and telling is far less effective for the employee than asking questions and listening. This is especially true with younger generations. Asking questions rather than offering solutions is the most fundamental skill of a coach approach and is utterly learnable. The shift for both manager and employee can be dramatic. The impact on engagement and motivation can be remarkable.

A Bersin & Associates study finds that three coaching behaviours are more critical than the rest and are the most important performance coaching elements to teach:

  1. Listening actively
  2. Reinforcing positive behaviour
  3. Asking open-ended questions

Simply asking others for their input more often has huge value. Shifting to a culture of coaching employees will increase engagement, motivation and staying power.

Strategy 4: Create a culture of ongoing feedback

The most influential component of the manager-employee relationship is the feedback conversation. Regular feedback conversations lie at the heart of engaging, motivating, developing and, most importantly, retaining your people. Yet these are so often completely absent or are failures despite best intentions. A 2014 Harvard Business Review article cited a survey that asked senior HR executives about their biggest performance management challenge. Sixty-three per cent cite managersā€™ inability or unwillingness to have difficult feedback discussions.

Almost all managers know that they should be providing their employees with feedback whether it is corrective, developmental or recognition for good work. Yet there seem to be a lack of skills and confidence to do it well. Managers report that they sugarcoat or stumble over their words when trying to be candid. They also fear causing uncomfortable emotional reactions. Many employees receive no feedback at allā€”not even a performance appraisal. The paradox of this leadership gap is that most employees, especially Gen X and Millennials, want more feedback. Preferably lots of it, regularly.

This absence of regular feedback occurs despite the fact that the numerous and compelling benefits of effective feedback are intrinsically understood by most managers. Studies show employee engagement increases when any feedback is provided. Just think what would happen if really effective feedback was offered regularly. Not only would performance improve, but so would retention as competition for good people becomes fierce.

In his 2012 bookĀ Surviving the Talent Exodus, John Grubbs says, ā€œLeaders must be taught to give, and then held accountable for, sincere feedback. There are clear skills that anyone can learn to utilize. A dangerous assumption is that we already know how to deliver proper feedback.ā€ The skills to hold highly effective feedback conversations can be taught and learned easily. Despite the historical poor performance in this management skill itā€™s not too late to radically improve it.

Strategies three and four focus on improving specific people management skills. Unfortunately there is still plenty of truth in the adage that people join companies but then quit their manager. Nearly 90 per cent of employers believe that their employees quit because of money. In reality, people leave for other reasons.

In his bookĀ The 7 Hidden Reasons Employees Leave, Leigh Branham identifies seven primary reasons that employees quit. Shockingly, five of these point to management shortcomings. It makes sense that helping your managers (especially front-line supervisors) improve these two skills can have a significant positive impact on turnover and the retention of the three types of key people. They are the most impactful people management skills for todayā€™s evolving workforce.

These retention strategiesā€”to identify and develop your business critical people and to equip your managers with the skills to use a coach approach and give regular feedbackā€”can change the culture and performance of your entire organization. This shift will reduce total turnover and increase theretention of your most important people at such a critical time.

This article first appeared in Oilweek online December 22, 2014.Ā 

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