How Companies Lose Great Talent: 10 Counterproductive Actions That Are Too Common

If you ask leaders about their organization’s greatest asset, most will unhesitatingly respond, “our people.” However, if this were the case, it would be easily evident through visible actions and a clear money trail.

For every company investing heavily in their employees, dozens are not. And, although it’s currently an employer’s market, the pendulum will swing back as it always does.

Stellar talent – the kind that moves the dial on profits, brings an innovative mindset and influences others to drive the vision forward whether in the mailroom or boardroom – isn’t going to settle for a company who invests less in them than they invest in the organization as employees.

Here are 10 common counterproductive practices that cause companies to lose great talent:

  1. Not compensating promotions adequately. This one is first because as a career coach who helps clients negotiate compensation packages, a huge pet peeve is how silly internal raise policies typically are. Many organizations put arbitrary limits on how much of a bump an internal employee can receive, even if promoted, taking on extra work or significantly outperforming peers. This is counterproductive for many reasons, but primarily because if an outside candidate was pursued, the combined cost of recruiting, training and compensation would far outweigh what they could rightfully pay an internal employee who is proven and can hit the ground running. There’s a lot of data showing people who stay with a company for several years are compensated lower than market rate, which means jumping to a competitor may be the best way to get a healthy boost. Employees be aware: If you don’t ask, you won’t get, so build your case and show your manager concrete results. While it may take time, notice if your manager is willing to go to bat for you or give you specific tasks to impact your compensation. If you get the, “that’s our company policy so there’s nothing I can do” reply, you may need to pursue external options to get a bigger boost.
  2. The cookie cutter approach to rewards. In an effort not to rock the boat, many companies uphold policies which end up rewarding the lowest performers and punishing the highest performers. This leads to a performance culture of mediocrity as the A-players leave to find an organization that will reward them for their extra contributions. It really doesn’t make sense to invest extra time to be proactive, forward-thinking and exceptional in a department that rewards everyone in generally the same manner. If there are no incentives to rise to the top, you’ll be left with a bunch of employees who regress to the average. Employees be aware: If you’re okay doing twice the work for the same pay as those who are slacking, your company will be happy to let you. Be proactive in advocating for yourself with data, and if the response is lukewarm, consider future options where your abilities might be recognized.
  3. Atrocious recruiting practices. Ghosting, a lack of transparency, dozens of application hurdles or putting candidates through hoops when an internal candidate has been identified are a few popular hiring practices that need to stop. If you’ve been in a job search over the last few years, you’ve likely experienced all of these. If this is how a company courts you, it’s likely an unfortunate reflection of how you’ll be treated once you join. No matter what the website highlights as their company values, if you’re not seeing these enacted during their first impression when presumably they’re displaying their best behavior, it’s a good sign of what’s ahead. Employees be aware: In the same way an employer is looking for red flags in candidates, you need to evaluate them for the same. Trust what you see, not what they say so you can make the best decision for yourself.
  4. Cutthroat or club culture. Whether it’s using intense competition to drive productivity or a lack of diversity which creates an environment that suppresses certain groups and inhibits their success, a negative culture is a perfect way to drive good talent to a place where they feel appreciated and can do their best work. While I’d love to say this leads to automatic doom, many companies have flourished despite a well-known reputation for displaying this type of behavior. However, social media has become a platform for calling out some of these companies, so change is possible through the power of the masses. Employees be aware: Culture is strong and driven by leadership, so if a department’s values (the real ones, not what’s displayed on a website) don’t align with yours, you’ll likely be happier and more successful someplace else.
  5. Short-term thinking. While this isn’t always evident on the outside, many companies survive without a viable strategy, focusing on short-term gains or spending money on optics and advertising versus viable, long-term solutions. When the timing and market are right, these companies can sustain and even thrive. However, when a crisis hits, the facade shatters quickly, and they throw even more energy into siphoning the water out of the boat instead of repairing the hole. Many companies are experiencing this now, so pay attention to how the impact of the pandemic is being handled. Employees be aware: Some less agile companies may need more runway to transform, but if you don’t see signs your organization is evolving in a direction consistent with the market of the future by taking risks, engaging different thinking, and being open to testing new ideas, it may be only a matter of time before you’ll be applying for unemployment.
  6. Complacency. Similar to short-term thinking, complacency tends to be more of a standard operating procedure (SOP) of companies who believe they’re too big to fail, thrive on long-held traditions or are so insular they believe what’s happening in the world doesn’t impact them. Holding on for dear life to old ways of operating instead of trying innovative solutions has been a death sentence for many long-standing organizations. And many have become so large, agility and adaptability are all but impossible due to the internal systems that have been implemented. For motivated, inspired employees looking to make a difference, being told “that’s the way we’ve always done it” is soul-crushing. Eventually, they stop sharing ideas and instead put that energy into finding a role where they can have an impact. Employees be aware: The world is changing at warp speed and job security doesn’t exist, even in what may seem to be the most stable companies (see Enron, Arthur Andersen, Lehman Bros, Kodak, Toys ‘R’ Us, etc.). Stay vigilant – consistently build your skills, brand and network.
  7. Treating performance reviews like a checkbox item. If you’re in an organization that actually takes the performance management process seriously, including aligning it with job descriptions in the hiring process, you’re in the minority. There are many reasons this process may not work – it’s not enforced, the forms are too cumbersome, measures aren’t actually measurable or don’t fit the role, no training is provided, etc. Regardless, it’s critical to know where you stand as an employee, and how you’re being evaluated. Employees be aware: If the performance process at your company is less than adequate, consider maintaining your own dashboard to capture what you’re doing and ask that it be included in the discussion (and your personnel file!) so you know there’s a record of your efforts. Here’s one way to do it.
  8. Appeasing the incompetent. A common practice in large companies is to simply transfer difficult employees instead of doing the work to implement a performance improvement plan or to fire them. To avoid the hassle (and paperwork), the poor performer is passed to the next department or worse, promoted into another role. Some managers simply ignore the bad behavior and instead start to pile work onto the rest of the team, sometimes even masking this as a “reward” for doing such a good job. If you want to quickly tick off stellar employees, allow them to witness or experience this behavior. They’ll soon be updating their LinkedIn profile and resume. Employees be aware: While there’s little benefit to pointing out your teammate’s inadequacies (your boss likely knows and is choosing to do nothing), track your own output and results to show your productivity to your leader. Also, asking what to take off of your plate to accommodate extra assignments can be a diplomatic way to express you recognize the inequity of work distribution.
  9. Not re-skilling/up-skilling. While no one could foresee the pandemic, technology was advancing at a record pace even before “Covid-19” became a regular part of our vocabulary. New industries were emerging, old industries were dying out, and organizations were learning the status quo wasn’t going to be sustainable for the long-term. The pandemic has accelerated that. In this brief video, Michelle Weise shares startling statistics regarding the future of work including that in 2014, LinkedIn’s top 10 jobs were roles that didn’t exist five years earlier (e.g., big data architect, cloud manager, UI/UX designer, etc.) Employees be aware: If your company is more focused on surviving than thriving right now, then reinventing yourself to align with the needs of the new market will fall on your shoulders. Don’t wait for your company to change direction – take charge now to ensure you have a marketable skillset for the future.
  10. Requiring a 4-year degree. For decades, companies have used 4-year degrees as an easy way to whittle down the hundreds of resumes they received online, regardless of their relevance to the role. Thankfully, this is one counterproductive action that’s losing steam. With technology being part of nearly every job today and AI growing by leaps and bounds, many tech giants no longer require a college degree and instead are hiring coders and programmers who prove they have the chops. Google recently announced it’s offering 100,000 scholarships that will be treated like a 4-year degree when applying to related roles in the company. Forward-thinking organizations know the computer science lessons learned in universities are nearly history even before students walk across the stage to receive their diplomas and that education isn’t finite, but lifelong. Employees be aware: Coding bootcamps, MOOCs focused on programming, trade schools and several other real-world training is at your fingertips. Be open to options and ensure your education equips you with the skills you need to be employable.

Changes in these areas will take investment from top leaders in organizations. And, if you can’t run your company without people, it seems like a no-brainer to invest. Unfortunately, top leaders – the ones who decide where the dollars go – likely have no idea what’s happening below the VP level (ask your C-Suite if they know how people are hired, what’s programmed into the ATS or what online gymnastics applicants need to perform to even have a shot).

With social media pretty much ruling the world, everything eventually makes it into the light. And with the economy shifting rapidly, technology advancing at warp speed, and now a pandemic that’s redefining how we work, interact and live, organizations can’t afford to wing it any longer when it comes to paying attention to their best asset.

In the meantime, buyer beware. While the job market may not be in your favor right now, don’t wait. There’s no time like the present to start building your runway to your future career.

Happy hunting!

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