A lot of startups fail before they even start scaling and actually become “scaleups” or “unicorns” (companies valued at more than $1 billion) but, the ones that do succeed have great rewards in terms of opportunities, evaluation and customer acquisition. Unfortunately there is also a dark side to scaling and becoming successful, that dark side might include Talent Management, especially with regard to Talent Training, Talent Retention and giving top talent the opportunity to grow professional skills through various means, and not just ‘in the field.’
The hidden (and unhidden costs) of losing talent are:
- Hiring time: it usually takes a long time to find the right person to fit the company’s needs and culture. Imagine for example how difficult it might be to find a Marketing Automation expert for the B2B FinTech sector outside of Silicon Valley, and then losing that resource after 2 months of work and a very structured and costly onboarding process.
- Onboarding time: it takes a relatively long time to onboard a new resource, with related training activities and transfer of competencies.
- Investment risk: risk of losing the time and effort the company invested in the resource.
Is hiring talent a “long term relationship?” Most definitely YES.
In well-capitalized scaleups or unicorns, CEOs are under the impression that they can simply offer the following three elements in order to retain Talent:
- The CEO must have empathy. Leaders must be part of the team/family, and both lead and be a mentor at the same time: “Leadership is about making a positive difference and you cannot do that without empathy.” (Carly Fiorina, in Forbes)
- A nice – and fun – work environment, with pleasant furniture and amenities.
- A very good compensation plan and benefits
BUT (and there is always a BUT) when top, young talent start working in a more complex environment (that is very different to working in a ten-person startup), expectations change.
They ask questions like:
- How will my career evolve in this company?
- What can the company I work for do to increase my skills?
- What are the strategies that will help make this happen?
If the above questions, and others like these, are not addressed, the CEO will soon start facing issues that will impact on Talent Retention (and then Talent Turnover). How can we address the needs of top talent? Addressing this is part of the scaleup evolution phase. Based on my experience in deploying elearning projects for well-funded scaleups, the answers are:
- Offer a clear vision, career roadmap, and learning plan (along with related benefits to the employee’s professional skills).
- Work on the learning management process through a structured learning plan that allows employees to acquire new skills.
- Work on the talent management process, assessing competencies and planning a career ladder.
Working on the talent management process, means starting to explore your company and your employees, identify (and formalize) roles, skills, and gaps to fill in order to reach the desired skills and competencies. After that you have to start to train your employees, and during the setup of the strategy one mustn’t forget the 70/20/10 model.
Working on learning management process, means giving employees learning opportunities. Learning doesn’t refer only to formal training (10% of learning is formal), but also to coaching opportunities (eg learning from the best employees), and means leveraging informal learning (that is 70% of learning in the workplace).
Then, at a certain phase of the scaleup’s evolution (in fact the sooner, the better) the CEO must build a L&D and HR department, remembering of course that the role of HR is not only related to hiring.
In conclusion, the creation of a team requires the Board’s agreement and needs to be shared with the company’s C-level execs. All top team members need to agree that the ‘human factor’ is a key strategic element in the company’s long term success.Author: Claudio Erba, Docebo Founder and CEO
