The recent spate of layoffs may be confusing organizations about the importance of talent retention, inadvertently signaling that people’s fear of losing their jobs is somehow a retention strategy. Unemployment is still at one of the lowest points in recent history, and employee expectations of work aren’t softening either. In times of economic uncertainty, talent retention shouldn’t move to the luxury category of organizational priorities. This is the time to ensure employees feel confident in your organization’s future and ability to weather the uncertainty. Otherwise, when things turn around, you can be sure your best talent will quit and leave, and your mediocre talent will quit and stay.
This is especially precarious in midsize companies. In a recent study of middle-market companies, a full 26% of employees said they were actively looking for jobs outside their organizations, compared to only 14% of their large-company counterparts. But despite the retention risk being higher in midsize companies, their size and more tight-knit, familial cultures may offer hidden advantages larger companies don’t share. For example, in the same study, 83% of employees in midsize companies say they’re proud of the company they work for, compared to 78% of their large-company counterparts. The study also showed that two of the top four priorities for midsize company employees are potential for advancement and promotion (46%) and fulfilling work (45%).
Larger companies are presumed to have more resources and sophisticated talent development processes to meet those needs. But the often-scrappy nature of midsize companies, plus the way their work is commonly designed, may offer counterintuitive advantages to creating accelerated development and advancement opportunities, as well as deeper satisfaction and meaning from the contributions people make. That would bode well for most midsize company executives, who in one study identified talent retention and upskilling as their second-largest challenge for future-readiness.
If you’re helping guide a midsize company through turbulence and change and worry that your key talent or your culture may be at risk, here are some ways you can leverage your size — and the uncertainty — to navigate both.
Leverage the knowledge that comes from broader roles.
Midsize companies are commonly in a more accelerated growth mode than large companies and haven’t yet had the opportunity to specialize their roles or teams. As a result, many employees’ work spans multiple activities and outputs. The “all hands-on deck” mentality that can help grow revenue and commitment to customer outputs also gives employees wider swaths of knowledge about the organization.
In larger organizations, roles like “customer coordinator” or “sales support specialist” are typically narrowly scoped to a few discrete tasks, and there are often multiple people doing those roles, organized by region or product category. But in midsize companies, those roles are far fewer and encompass a wider range of activities. That kind of breadth can be leveraged in challenging times. When hiring or promotions have slowed down, and the ability to take on increased costs has diminished, you can take risks on high-potential talent by creating opportunities for them to try new roles or projects.
For example, empowering a team to solve for challenges provoked by uncertain times, like customer retention or expense management, prompts employees in those broader roles to show up as company generalists — people who know more about the company than just their job — versus the narrow functional experts you would typically find in larger organizations. This will enable innovative problem-solving — integrating viewpoints from across the organization allows the problem to be seen in new ways — while giving your team the chance to explore and prove themselves in new spaces. They get to “try on a new role” without having to search out a new opportunity at a different company.
This helps break the myth that bigger opportunities only come with bigger companies. While that may sometimes be true, most employees in midsize companies know that it also comes with a “small fish in a big pond” price tag: You may get a bigger role, but you’re also less visible because you’re now swimming in a larger pond with many more fish. By intentionally creating opportunities for employees to demonstrate real impact while gaining new experiences, you strengthen their loyalty to your organization while solving critical problems and allowing both senior and emerging leaders to see and know one another more closely. This flexibility creates a development cycle that can be maintained when you move back to less-turbulent times.
Close ranks between the top and bottom.
Times of uncertainty naturally fragment organizations. People hunker down and retreat into their own silos, grasping at any sense of control they can get their hands on. In large companies, this can be especially destructive as leaders try to rally the organization around a unified path through whatever challenges they’re facing, only to have to work against the centrifugal force of the organization’s fearful and self-protective impulses.
At a recent client meeting, we rode an elevator with two employees who had just passed a cardboard cutout of their CEO (a promotion for their charitable work that month). The employees quizzed each other on who the person was: Was it someone famous? Someone they should recognize? Sadly, they had no idea it was their CEO. In that Fortune 200-sized organization it would have taken more than just a “skip-level meeting” for them to have direct access to the top ranks of the company and hear their vision for the future.
Midsize companies have the advantage of creating more immediate connections between senior leaders and frontline employees. Their smaller size makes it possible for leaders to get close to all employees, regardless of hierarchy, and ensure that the messages they want delivered are clear, consistent, and understood. Large organizations are forced to rely on clumsy processes of cascading information, watering down messages and losing the intended impact of strengthening the organization’s focus and confidence. By contrast, midsize companies can create direct access to employees with messaging directly from leaders that can speed up execution and bolster commitment. Take advantage of this by increasing your top leaders’ engagement with the broader organization. The cohesion you’ll strengthen will help ease any angst and build confidence in the face of uncertainty.
Build stronger leadership by pivoting toward emerging opportunities and threats.
Quite often in large, corporate environments, even high-potential emerging leaders can wait years to get their shot at advancement. And during turbulent times, those opportunities dry up as large corporations tend to turn to their “usual suspects”: the proven leaders who they know get things done. The agile nature of a middle-market company — in terms of scope, size, and market visibility into threats and opportunities — offers the chance to build leaders who can succeed and fail fast. This clear line of sight allows you to gather critical feedback on leaders, give them the specific development support they need, and adjust accordingly.
During troubling times, challenges and opportunities are endless. Unfortunately, so are the imagined risks and downsides to taking a chance on emerging leadership. If you can look past those fears, the evolving nature of your midsize company will offer a plethora of opportunities to develop younger leaders. Look for dissatisfied customers, products or services that have never been fully developed, or processes that were cumbersome even in good times. Giving less-experienced leaders, especially those who have not yet been tested with end-to-end responsibility for realizing a result or heading off a significant problem, can prepare them for broader leadership roles.
Consider the growth priorities you may have had to pull back on to weather the current market volatility. Carve out aspects of it to refresh, reexamine, or build acceleration plans for, and get future leaders involved. This builds a cadre of leaders ready to be activated in new leadership experiences when things turn around and you’re ready to double down on growth again. That way, three years from now, if the growth bets pay off and you’ve had to expand the organization’s size, you’ll have leaders already invested in keeping things successful.
Feature your values when making hard trade-offs.
When times get tough, a company’s purported values are usually the first thing to be exposed as good only on paper. In large companies where subcultures more readily form, the nebulous connection between values and actions is almost expected to be cosmetic. But in midsize companies, the clear line of sight between decisions made at the top and actions taken in the middle and on the frontlines emerges more quickly. And decisions and actions that reinforce — or violate — your stated values can strengthen or weaken your culture when the company and your leaders are tested by uncertainty. Lean into this and show employees how committed you are to the company’s values when having to make difficult choices. If you must shut down lines or deemphasize certain markets, make clear how your values are driving those choices. Openly talk about how, even though adjustment or retrenchment may be hard, your belief system enables you to lead.
One midsize company we worked with had to make the painful decision to drop customers they’d been serving for years because it simply wasn’t profitable to keep them any longer. Their industry was undergoing massive digital transformation, commoditizing certain offerings. The company’s value of exceptional service to customers had been the tenet they’d held tightly to justify keeping those customers. Market headwinds forced them to be honest about the fact that they needed to part ways because they weren’t able to serve them well. But rather than dropping them cold, leaving them without service, they found regional partners they could help the customers transition to over a six-month period. The leaders’ self-honesty, open conversation with employees, and fresh look at their customer-service value made the decision more palatable for the employees who’d served those customers for years. It wasn’t a retroactive rationalization. They openly wrestled with the tough alternatives that ultimately brought them into true alignment with their values.
To be sure, volatile times can batter midsize companies in ways larger companies can more readily withstand. But there are ways smaller companies can leverage their size to take advantage of tough times. Those that do are far more likely to come out on the other side of uncertainty not only stronger, but ready to grow when the headwinds become tailwinds.
Source link: https://hbr.org/2023/05/how-midsize-companies-can-use-uncertainty-to-their-advantage
