Tech valuations are popping (frothy is the well-used word) in the San Francisco Bay area. And the requirement to have high performing talent to quickly scale and produce a winning product may drive it all.
The scalp price for hiring or retaining top engineers was recently tabbed at $500,000 and the talent acquisition strategies of firms like Facebook includes the purchase of small start-ups only to shut them down and employ the newly acquired talent. It’s an interesting tactic, and one no doubt learned from Google, a firm that’s made over 90 acquisitions in the last 10 years and taken many of the same steps.
Like the McKinsey reported “War for Talent” in 2001, competition for talent is back in full force. McKinsey, for one, claims it never went away.
While the publicity has been on hiring, just as sure as night follows day, retention will be the next shoe to drop. The leader in the tech field, highly respected software company SAS, had a astoundingly low turnover rate of 2.6% in 2010. The industry average that year was 22%. If Google at 24,400 employees, which does not publicly report turnover, had a rate of 10% (probably reasonable), it would have to hire 8,600 employees in 2011 to hit its net add goal of 6,200 employees for this year.
No wonder retention will become so important.
The third leg of the talent performance formula is engagement; your employees are in their seats but are they performing? And unfortunately like plaque build-up in arteries, the engagement challenge usually gets worse for a period of time after its discovered rather than getting better.
So here’s the little secret. The firms that will do well on all fronts are the one’s the belong to what I call the 4H Club.
At the 4H Club the stuff you do on the human side of the business is pitched and anchored in one or more of the following four ways:
- Head
- Heart
- Hands
- Humor
How does it work? You think in terms of those four lenses for the work you do with your human capital – talent in regular day parlance.
As an example, an outfit like SAS is constantly works out ways to recruit, retain, and engage by connecting with an employee’s head (why is this such a great place to work, why is it smart to work here), heart (connecting with people in an authentic, personal, and meaningful way that says we care for you), hands (work that is important in the context of the business and provides a appropriate challenge and growth) and humor (people take their work seriously, take themselves not so seriously and are down to earth).
Look at any well regarded company that’s more than 10 years old and you’ll see these qualities time and time again. Here’s a Fast Company infograph for 2011 that provides a visual way to see that connection for what makes a company great to work for.
Who knew that belonging to the 4H Club could make a firm so successful?
Life Back West is an occasional set of writings focused on ways people, teams and organizations can be both more effective (doing the right thing) and more efficient (doing the right thing well). More about executive, career and team / leadership coaching services can be found at the “About J. Mike Smith and Back West, Inc.” sidebar or the “Hire Me” tab above. You can also read an online interview with me at WhoHub, as well as participate in my learning community courtesy of KnowledgeCrush.