You might be the most charismatic entrepreneur since noodles were invented, but recruiting the best talent, and retaining it for at least seven years, is a complicated task in today’s world where professionals are hopping from one company to the next. For many millennials in particular, staying four years at one company for four years is not desirable.
Who you bring into your company, can make or break its reputation. It can either be a disaster or glorious journey.
Jim Collins, in his book Good to Great, uses a bus to illustrate this. Before the bus starts driving, you need to find the right people, put them in the right seats, and only then can you decide where you want to go.
When the US government was breaking up John D. Rockefeller’s company, Standard Oil, he asked that he identify certain people he would like to retain. He did this because he knew he could put together another successful company with the right people.
Recruiting the same high-minded people, that share your ambitions, can be challenging. You end up with the scenario of leaders leading leaders, which can lead to friction.
I hear many entrepreneurs saying you should hire people more intelligent than you. This should be done with caution because you might find yourself in a position where your leadership is undermined. However, you also don’t want to be working with people that are incapable.
Some employees in your company may be entrepreneurial – they’re called intrapreneurs. They need to be enabled, rather than suppressed. Give them the freedom to come up with new ideas in your company, like Alphabet, which owns Google. This is a company that is innovative by nature and has a culture of enabling such restless souls – otherwise they will resign and start their own thing.
If you are, or ever have been, an entrepreneur, you will know that finding a right match for your company can be arduous. It is for this reason that numerous hedge fund companies, like Citadel and Bridgewater Associates, still interact with new candidates and recruits.
The conundrum we face is that we don’t always keep those recruits, no matter how much we value them. It has been found that, on average, only one out of 16 employees will remain for an extended period of time at a company.
Some companies, once they have shortlisted eligible candidates, try to talk them out of wanting to be employed there. They do this to ensure that they only hire people that are passionate about working for the company. The reason for this is that it is better, and more cost effective, to lose a candidate than an employee.
Goldman Sachs has one of the most vigorous recruiting processes. They will ask candidates to come at a certain time, then when they arrive, the senior personnel from Goldman Sachs won’t be there for the appointment, or will arrive late. The candidates who leave before the manager arrives will not go further in the process; those that remain are told the moral of the experience is to learn to wait for someone who is higher than you in business hierarchy.
In your company you have three groups of employees who roughly make up these percentages, the 20%, 60% and 20%. The first 20% are the unproductive people you wish to fire at the first chance you get; the second 60% are average employees, who are and consistent, and who form the core of any company; the final 20% are your top-notch employees, who generally over-perform. The problem with this group is that everyone wants them; competitors are continuously trying to snatch them. For this reason, they tend not to stay long at a single company, instead moving to the highest bidder in the market.
That middle group – the 60% – is who you need to nurture. They will stick with you and their loyalty will produce the best results.