What price should we put on leadership today? Apple came up with one particular figure this week. And a rather impressive figure it was too. John Browett, who swapped Dixons/Currys for Apple and the California sunshine is to receive a $56m (£36m) golden hello from Apple for taking charge of the tech giant’s network of stores around the world. That should keep him in after-sun for a while. But what sort of difference should a leader make, particularly one attempting to justify such largesse?
This difference might not necessarily manifest itself for all organisations, it would appear, in terms of engagement and on-boarding. Two fascinating, and quietly disturbing, pieces of research this week from the Allied Workforce Mobility Study and the Economist Intelligence Unit, paint an interesting picture. Despite the fact that the study puts the average cost per hire at $11,000, organisations lose no less than 25% of all new employees before their first year is up. And the study, helpfully, hints at one of the reasons behind this. 25% of all organisations said their induction and on-boarding process includes exactly no element of training and 60% set their new people no milestones or objectives. Perhaps more damning, 35% of surveyed organisations spent nothing, yup, nothing at all, on this induction/initial engagement process. Possibly little wonder that 25% of people decide to leave within 12 months, so delivering very little return on their cost per hire.
Perhaps this is no surprise when we look at the most recent Economist research into skills shortages – Plugging the gap. The most incredible piece of insight from this study suggests that just 9% of all respondents, and just 4% from the C-suite, believe that excellent people management throughout the organisation is an essential component of retention, engagement and alignment. 4%? Mmm…
This is all the more surprising given the amount of data which makes a clear case for engagement – Towers Watson, for example, suggest that a 15% increase in engagement equates to a 2% increase in operating margin. Perhaps CEOs and leaders are more comfortable with the process of recruitment rather than the people (and their subsequent engagement) that such a process delivers at their door.
And if leaders sometimes lose track of their people, then the opposite is definitely not the case. TMP’s own recent research into talent mobility hints at the importance of strong leadership for people contemplating their next move. Of 500 employees surveyed, more than 50% suggested this was the most important strategic factor in their decision to join a new organisation.
Let’s contrast this with two search giants and how their respective employee bases (and candidate bases) might currently view their leaders. For people at Yahoo, life must be somewhat disconcerting if not completely dis-engaging. A couple of weeks ago saw the departure of their recently hired CEO, Scott Thompson. His sudden farewell, the result of some factual inaccuracies in his CV. If a CEO lying about his career details wasn’t bad enough, his interim successor, Ross Levinsohn, is the fourth incumbent in the role within less than 12 months. And Mr Thompson probably didn’t help his cause by trying to blame the search firm, Heidrick & Struggles, for making the error on his CV.
Contrast this with a recent interview with Chade-Meng Tan, Google’s Chief Happiness Officer. If his job title alone wasn’t enough to inspire the people around him, Chade-Meng talks about the key skills that leaders should demonstrate: ‘Their ambition is for the greater good, not for themselves. This type of leader wants to inspire everybody’. I suspect he is probably doing a better job of that than Mr Thompson managed.
It would be fascinating to understand quite how much responsibility senior leaders have for engaging, inspiring and aligning their people – and the extent to which they realise this.
Getting to the heart of your employee mindset 