Talent retention implies that a company actually knows who their 'talent' is. One of the most robust ways of retaining talent is to identify who your 'vital few' are, and retain them – something very few executives can do with confidence.
Approaching retention according to your vital few is hard and takes resources, but what’s the alternative – not knowing? Companies should focus more of their efforts in knowing and retaining their vital few according to Pareto’s Law.
Pareto’s Law – the law of vital few
Coined by Dr Joseph Juran in the 1940s, Pareto’s Law states that in any situation, approximately 20% of the inputs/activities are responsible for 80% of the outcomes/results i.e. 20% of customers are responsible for 80% of complaints, or 20% of products account for 80% of quality issues.
In terms of talent, Pareto’s Law suggests that 20% of a company’s workforce accounts for 80% percent of the output – and it is these 20% of talented employees that must be retained.
Identifying the vital few
Dr Tomas Chamorro-Premuzic, Professor of Psychology at UCL and author of The Talent Delusion, suggests that when measuring and identifying talent there are two crucial questions that organisations must ask themselves: what should we assess and how should we do it?
Identifying talent from scratch involves defining 'value creation' and analysing who's doing it. Each organisation will have their own curated definition of what constitutes value and, therefore, talent. However, unsuccessful practices stem from people in the same organisation not agreeing on what the ‘value’ is.
One of the most common responses when asked how managers identify talent is ‘I know it when I see it’, although this method of talent identification is almost always plagued by biases.
Hiring new people should involve knowing ‘what’ you should be measuring to predict value contribution.
It is thought that, despite the billions of jobs available and the millions of possible employers, individuals who are more likely to be part of the vital few display certain characteristics: a) they are good to work with (interpersonal); b) they are competent and up to date (technically qualified) and c) they work hard and are resilient (motivated).
When defining ‘what to assess’, this is a good place to start.
One of the most common responses when asked how managers identify talent is ‘I know it when I see it’, although this method of talent identification is almost always plagued by biases. Furthermore, people don’t tend to share or remember the instances when they screwed up - their win/loss ratio is skewed favourably.
A much better alternative is the use of well-established, valid and reliable talent identification tools, namely interviews, assessment centres, tests of intelligence and personality assessments. If resources are abundant, it’s hard to trump the effectiveness of assessment centres (compared with other methods).
Using these methods allow for much greater accuracy when assessing a candidate which, in turn, allows leaders to make better selection decisions. In practice though, organisations usually opt for the cheapest ones and tick the box.
Retaining the vital few
After hiring the right people in the first place, employee engagement is key to talent retention. Studies show that a high level of employee engagement is beneficial for all because there is a positive correlation between employee engagement and good organisational outcomes. Yet, despite this knowledge, many organisations still have significant room for improvement.
Employee engagement has been defined as “the emotional attachment employees feel towards their place of work, job role, position within the company, colleagues and culture and the effect this attachment has on wellbeing and productivity.” [See full definition here.]
Organisations should approach their talent metrics with the same rigour as their financial ones. Many don’t.
Thus, enhancing engagement is not just a simple matter of finding the right people with the relevant skills for the right role, but also ensuring that the values and interests of the individual can be fulfilled by the role and organisation.
With managers hounded by persistent email, quarterly reporting, steering committees and PowerPoint decks, how can anyone carve out enough time for their direct reports, let alone tap into their individual motivations and career aspirations? Good leaders will bridge the gap between individual needs and organisational essentials and hence, higher levels of engagement.
Leveraging the vital few
This is not necessarily about quickly hiring more A players. For example:
You might hire more support staff who can takeover administrative tasks and release the vital few to create more value.
It might be that you plough resources into understanding what characteristics predict an A player’s performance and alter your recruiting strategy – something PWC dida few years ago.
It might be that organisations make sure that every A player has a C-suite mentor or gets considered for 'special projects' with increased exposure and responsibility.
Organisations should approach their talent metrics with the same rigour as their financial ones. Many don’t. In practice, getting talent right is a big, hairy, complex task – just the type of challenge someone who is motivated, qualified and pleasant should succeed at.