If executives of your C-suite are the same as those who participated in our recent study, here’s how they were viewing their jobs and careers over the past year:
- About 7 out of 10 are fully engaged in their jobs
- 42% would say they feel satisfied with their jobs
- Yet a full 96% would take a recruiter’s call about a new, promising career opportunity with a different company
- In fact, more than half are actively looking for a new job now
- And many more plan to ramp up their new job search in the next 12 months
These are the results from a study our firm conducted with ExecuNet during the summer of 2010, at a time when the U.S. was recovering from a rugged recession. Participants included nearly 1,500 CEOs and various members of their top teams.
You are not alone if this data surprises you. Most CEOs believe no more than 20% of their direct reports are currently actively looking for a new job today. More alarming than any other data in the survey is that more than 90% of respondents said they would “accept or strongly consider a better career opportunity in the next 30 days”. Or said another way, “The right offer will get me out of here now”.
Those who report to the CEO say they stay because of the city and state locations of their jobs, relationships with others at work, and the work/life balance their current job provides. Top reasons to leave are about opportunity for input into company decisions and directions, current and future pay, and their company’s performance. It is interesting to note that amount of input trumps their need for more dollars.
So the hard message for CEOs in our emerging new economy is don’t assume hard-working executives who like you and are critical to your success are loyal. Instead, know they are looking for fast ways to pull themselves out of the crumbled economy, just like your company.
And if survey participants’ estimates are correct, the cost of losing executives is high. Those who likely have a direct line to the top believe their own replacement cost is nearly in a range of $250,000 to $500,000. Of course, losing a top sales executive or an IT pro can literally cost millions for some organizations.
All indications are that 2011 and beyond will offer more opportunities for our key players than they have today. In fact, buried amid the rubble of high unemployment is data that suggests good workers could usually find jobs throughout the recession. The number of those who voluntary quit their jobs in 2008 was just 11% less than 2007, telling us that our chance of losing a good worker as our economy crumbled was a full 89% as strong as it was when the economy was flying high.
So what’s a CEO to do? Here are 3 steps that I believe will drive retention rather than turnover for those you need the most.
- Choose the 30% of your top team who can break your business if they leave. You might wish all would stay but it’s likely that the ones you need most will have the most opportunities to leave, so this is a second reason why they deserve most of your attention.
- Tell them they are important and you are depending on their continued contributions. Lay out your growth plans for the next two years that include what they will do, learn, and earn. Then ask if you can depend on them to stay. If they trust you they will probably be truthful.
- If they say they will look or are hesitant to commit, ask them why. If they need more money, ask how much. If they want to learn new things, ask for specifics. If they want another executive’s job, ask what about that job is attractive to them. Be inquisitive, take detailed notes, and above all else avoid being defensive. Their words represent your best opportunity to build a real retention plan. Then conclude the discussion by asking if they have an open mind to hear your plan to retain them.
For those who plan to look, think big. Saying they can “break your business if they leave” means they have great potential, likely more than they are achieving today. Compare your company’s 5-year goals to the expectations you are setting today for the must-keep team. What obstacles are in their way that you can remove? What management style quirks might you be imposing such as micro-managing that hold them back? Which new talent might they need in order to reach higher goals? What subordinates might be dragging them down who you are reluctant to fire? Or for that matter, which peers who report to you who didn’t make your top 30% need to be let go?
In fact, think big before you enter your meetings with each critical management member. What commitments can you make? How far are you willing to push yourself and your business to keep them?Employees often tell us in surveys that they would leave if offered more money, but that doesn’t tell us they are looking to leave. But if your high-value executives tell you they are looking because of money, they’ll eventually find it unless you provide it first. So consider what goals they must achieve or what projects they must complete that collapses your 5-year plan down to 3 years and generates more revenue for all.
If your team is like the ones who participated in our survey, they like their jobs and they like you, so they might not really want to leave. Hopefully our data will cause CEOs to ask and learn about the deepest career thoughts of those they need the most in order to keep them. And doing so might be the catalyst for thinking bigger in order to get our national and global economic engines revving again.