Employment Dynamic Has Shifted: Understand Benefits of ‘The Alliance’
Companies are in constant competition to attract and retain talented employees. One dynamic which challenges todays workplace is the flawed relationship between employers and employees. Many new and successful companies assert that this is because the relationship is based on an outdated model. The older model is a throwback to a more stable time when employment was considered permanent. In today’s networked world, employees are more mobile and more connected. The best employees today can work as free agents (constantly scoping the market for a better opportunity). In order to keep employees satisfied and motivated management needs to consider what they want.
Top talent in today’s workforce craves more from their employers in terms of job enrichment, training, support, feedback and career experiences. Companies seeking to retain their best employees need to be alert to what their competition offers and try to stay a step ahead in terms of offering employees avenues for growth, advancement, and flexibility at work. The companies who are consistently featured as “best employers” recognize that their employees are their firm’s most valuable resources. They provide a culture and an environment that’s so desirable employees are enticed to stay longer and reluctant to leave. In fact, when top employees feel it’s a big risk to go out on their own, it’s often due to the fact that they are well cared for at work in terms of salary, benefits and career development opportunities. Companies can reduce the risk of losing an employee by incorporating strategies that make it hard for employees to consider leaving.
Reid Hoffman, LinkedIn Chairman and Co-founder and co-author of the New York Times Bestseller, The Alliance: Managing Talent in the Networked Age offers management a new employment model to reduce the disillusionment, disarray, disengagement and disloyalty in the workplace. He introduces a realistic loyalty pact between employer and employee and develops a radical new framework to rebuild that lost trust; Employees are encouraged to express their true career aspirations to management so managers can help them develop their skills so they can leverage them in their career. This talent management strategy is based on transparency and a relationship between employer and employee where both parties trust each other enough to commit to mutual investment and mutual benefit. Hoffman calls this new framework for attracting and retaining entrepreneurial, creative talent as ”The Alliance.”
Hoffman wrote the book because he believed there’s an underlying broken notion in thinking about how an employer and an employee relate to each other. “There is a breakdown in that conversation, the company and employee are lying to each other. Both know that’s not the modern world. We’ve swung to the opposite extreme of one-day employment contracts, where either side is ready and willing to cut off the relationship whenever convenient. The lack of trust hinders innovation and long-term collaboration.”
Hoffman Describes a Model that Builds Mutual Trust and Benefit
“The Alliance” is a new employment framework that facilitates mutual trust, mutual investment and mutual benefit. This framework encourages employees to develop their personal networks and act entrepreneurially without becoming free agent job-hoppers. In an alliance, employer and employee develop a relationship based on how they can add value to each other. Employers need to tell their employees, “Help make our company more valuable, and we’ll make you more valuable.” Employees need to tell their bosses, “Help me grow and flourish, and I’ll help the company grow and flourish.”
Employees invest in the company’s success; the company invests in the employee’s market value. Bigger payoffs come to both sides through building a mutually beneficial alliance. Employees invest in the company’s adaptability; the company invests in employees’ employability. As former Bain CEO Tom Tierney used to tell recruits and consultants, “We are going to make you more marketable.”
Hoffman suggests management improve employee retention by creating opportunities for career growth and education which employees could leverage for a career with the firm or elsewhere. He encourages a framework where employees can speak openly and honestly about the type of growth he seeks (skills, experiences, etc.) and what he will invest in the company in return by way of effort and commitment.
Hoffman says that when a company and its managers and employees adopt this kind of approach, all parties can focus on maximizing medium and long-term benefits, creating a larger pie for all and more innovation, resilience and adaptability for the company. Both sides set clear expectations and the team develops a winning culture. The “alliance” might involve building and launching a new product, re-engineering an existing business process, or introducing an organization innovation. This is a trust agreement handled by direct mangers rather than by H.R.
Don’t Think of Employees as either Family or as Free Agents
As a career coach I am in touch with many highly talented employees who are great at what they do and have outstanding performance reviews yet they’re seeking a career change (or a new job) because they don’t feel they’re challenged enough at work or they don’t see possibility for career advancement. Many clients express that their bosses aren’t interested in knowing their career aspirations and therefore they’re reluctant to express what would motivate them at work. When I ask what it would take for them to stay at their current job they often mention the following things:
- Better feedback from their immediate superior
- Flexibility to adapt their work schedule so it meets their personal needs
- Opportunities for training in skills that could help them advance their careers
- Experiences in other disciplines to broaden their skills
- Opportunities for creative work
- Opportunities for innovating and collaborating with other top talent
The surprising thing is that these employees are all highly motivated, extremely bright and yet feel they’re being under utilized at work. They want to contribute more and are being held back because of out dated management systems. They don’t want to lose their fervor to make a difference at work and therefore want to try something new. They like their industry and they like their co-workers. That situation could be turned around and they could be more engaged at work if management would truly take interest and invest in helping them achieve their career aspirations within the firm. They feel that management doesn’t really care if they leave as they were told early on at work by either a manager or someone in H.R. that it’s so easy to find new talent. This obviously causes a breakdown in the employees’ loyalty to the firm.
Transform Your Company for the Future: Care About What Drives Your Employees
This positive transformation will happen only if both sides trust each other enough to commit to mutual investment and mutual benefit. Sadly, trust in the business world has never been so low. Reid’s strategy is based on knowing that people want to have meaningful work and they yearn to be appreciated for adding value. He says that money really isn’t the sole motivator in keeping people happy and nor are the well-meaning incentive programs that offer trophies and plaques. His idea taps into the psychology of what makes a person feel fulfilled at work. When employers show genuine interest in their employees personal and career goals, that inevitably leads to higher levels of productivity engagement and overall motivation at work.
Show Concern For Your Employees’ Career Aspirations
Kevin Scott, Sr. VP for Engineering at LinkedIn, asks perspective new hires “what job do you want after LinkedIn?” His intent is to open the conversation to hear what the candidate might really need in order to motivate him. It could also give the employer the opportunity to develop a career path for a new hire within the firm. If you learn something you don’t like about a candidate it could give you an idea that something may or may not work in this investment. This says Hoffman is also a good thing.
Netflix’s contract with its employees is an example of what these new arrangements can look like. In a famous presentation on his company’s culture, CEO Reed Hastings declared, “We’re a team, not a family.” He gave managers this advice: “Which of my people, if they told me they were leaving in two months for a similar job at a peer company, would I fight hard to keep at Netflix? The other people should get a generous severance now, so we can open a slot to try to find a star for that role.” The new contract isn’t about being nice. It’s based on an understanding that a company is its talent, that low performers will be cut, and that the way to attract talent is to offer appealing opportunities.
Develop Your Network Using Employees Who Leave
Hoffman encourages managers to develop a rapport with employees so even if they leave the firm you have people you have good relationships with go to other places. The company can benefit from using the previous employee’s network because when the relationship continues, that network can be used by the employer. He even established a LinkedIn alumni group to perpetuate the relationship between employees and employers even if they move on to another firm.
Establish a “Tour of Duty”
Hoffman debunks the idea that employers can promise lifetime loyalty: Sooner or later, most employees will pivot into a new opportunity. Recognizing this fact, companies can strike what he calls, “incremental alliances.” When Reid founded LinkedIn, he set the initial employee compact as a four-year tour of duty, with a discussion at two years. If an employee moved the needle on the business during the four years, the company would help advance his career. Ideally this would entail another tour of duty at the company, but it could also mean a position elsewhere.
How does the tour of duty work? The company gets an engaged employee who’s striving to produce tangible achievements for the firm and who can be an important advocate and resource at the end of his tour or tours. The employee may not get lifetime employment, but he takes a significant step toward lifetime employability. A tour of duty also establishes a realistic zone of trust. Hoffman says that “Lifelong employment and loyalty are simply not part of today’s world; pretending that they are decreases trust by forcing both sides to lie.” During the Tour of Duty employees learn practical skills that could be used within the firm or transferred to another workplace.
It usually lasts two to four years. That time period seems to have nearly universal appeal. In the software business, it syncs with a typical product development cycle, allowing an employee to see a major project through. He says that consumer goods companies such as P&G rotate their brand managers so that each spends two to four years in a particular role. Investment banks and management consultancies have two to four-year analyst programs. The cycle applies even outside the business world—think of U.S. presidential elections and the Olympics.
Properly implemented, the tour-of-duty approach can boost both recruiting and retention. The key is that it gives employer and employee a clear basis for working together. Both sides agree in advance on the purpose of the relationship, the expected benefits for each, and a planned end.
The problem with most employee retention programs is that they have a nebulous goal (retain “good” employees) and an indefinite time frame (indefinitely). The lack of commitment and clarity in both of these areas destroys trust: The company is asking an employee to commit to it but makes no commitment in return. In contrast, a tour of duty serves as a personalized retention plan that gives a valued employee concrete, compelling reasons to finish her tour and that establishes a clear time frame for discussing the future of the relationship.
What Can Managers Do For Employees
Hoffman suggests that management think of employees as allies in order to rebuild their trust and loyalty to your firm. He makes a strong case reinventing the employer-employee relationship framework; Managers may not be able to guarantee employees lifetime employment, but you can give them lifetime employability. “That’s when you have been awesome to your people. This bold but practical guide for managers and executives offers tools to recruit, manage, and retain the kind of employees who will make your company thrive in today’s world of constant innovation and fast-paced change.”
“The Alliance” creates a model for work that encourages companies and individuals to invest in each other. In this ideal world, managers and employees have honest conversations about each other’s goals and time tables. These conversations allow managers and team members to define jobs that match their values and aspirations. When management matches the right talent to the right opportunity in a company with the right philosophies, amazing transformations can happen for your employees’ careers and for your company. This is an ideal worth working towards and a risk worth taking in today’s competitive economy.