Winning the war for talent

We live in a world where the people sitting at machines are increasingly worth more to an employer than the machines themselves. In an intense climate of competition for talent, how do you find and retain the best?

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By  David Ingham Published  April 5, 2001

Valued and appreciated|~||~||~|How often do you hear people say that there’s no point investing time and money in the recruitment and development of personnel when those people are going to leave anyway? It’s an attitude that’s always been wrong, but could prove even more costly to Middle Eastern companies in a new economy of increased competition, shrinking profit margins and tumbling borders.

When an employee leaves you, you’re not just losing a pair of hands, but often the type of pro-active individual that could be the difference between mediocrity or success. And ask yourself: ‘Why do these people leave?’

Has someone risked a visa ban or even gone so far as to relocate to another country for no good reason? Or did they feel forced to move because their talents haven’t been adequately recognised and rewarded by their employer? “The ultimate goal of what an employer and an employee wants is the same everywhere,” says Hazel Jackson, partner at Attitudes, a human resources consultant.

The need to find and keep the best talent is forcing companies around the world to dramatically reassess their human resources practices. From Wall Street dressing down on Fridays to dot-com companies that give employees toys to play with, companies are going to seemingly ludicrous lengths to make themselves appealing as employers.

This type of cultural change is hard for any company to go through, but is even more difficult for the Middle East’s conservative organisations. “I think companies want to change and the media, companies like Attitudes and employees themselves are encouraging that change, but the reality is that some of them are still finding that change hard to manage,” says Stephanie Line, a partner at Attitudes.

The Middle East is a world where remuneration and seniority is normally dependant on length of service. The idea too of stock options, profit share or performance bonuses in all but a sales-led environment is almost non-existent. “It’s much easier to be a fairly autocratic organisation, go straight from A to B and cut out all the niceties. If you go the longer route, which is about empowering people, it takes longer, even though ultimately you will get better reward,” says Line.

||**||Get your recruitment right|~||~||~|
Becoming an employee-focused organisation means making changes from top to bottom. You need to look at every aspect of how you do things. How can you reward employees other than through remuneration? Is your office environment pleasant to work in? Do your managers appreciate and nurture talent, or do they squash it because it threatens them?
A crucial and badly overlooked element of the human resources mix is the recruitment process. Before you can even begin to build up a team, you have to make sure that the right people are walking in the door each morning.

For starters, bringing a person back for a second or third interview, or checking their references should be routine, but all too often regional employers don’t do it. Also, while the good old face-to-face interview technique might identify a person with raw ability, it can all too often fail to weed out personality flaws that make a person all wrong for your company. That’s why smart employers are taking more and more time to assess candidates’ personality.

Nadeem Younis, country general manager at New Horizons, a technology training company, says he now looks at a candidate’s personality even more than his technical skills. “We are paying 75% attention to the character of the person and 25% to the skills,” he says. “Probably as a result of that, we have a very high retention rate.”

Yasser Zeineldin, regional business development manager, Microsoft GEM, says that the recruitment process has to be able to spot a person’s ability to adapt to change and keep up. In the technology industry, change is, after all, constant. “I think a lot of recruitment agencies fall into the trap of writing the CV in a very traditional and classical way, whereas I think what matters more is the character,” says Zeineldin. “A lot of times, the CVs look good, but you meet the person and find that he might be good [only] for six months.”

That’s why some recruitment departments are beginning to invest in instruments such as psychometric tests and role play exercises. These tests, which take many forms and are often tailored for each industry sector, attempt to assess a person’s temperament.

Opinion on them is mixed. “It’s difficult to apply a psychometric test,” says Sean Kelleher, managing director of Mondial Dubai, a financial planning company. “I’ve seen some and I’m not 100% sure they work.” He prefers to focus on identifying personality types and how they will fit in with the rest of the organisation.

Patrick Luby, director and general manager of Clarendon Parker, a recruitment consultant, says the use of psychometric tests specifically is rare overall, but recruiters are paying more and more attention to a candidate’s personality. “It is still… quite rare to have proper psychological assessments of people,” says Luby. “As professional interviewers, we try to match a personality against a company’s philosophy and the requirement for this type of personality.”

||**||Creating the right environment|~||~||~|
Once an employee walks in the door, companies must make sure they offer an environment that stimulates and motivates an employee. Achieving this comes down to things as basic as creating a pleasant ambience in the office.

So does that mean that the Middle East’s companies should adopt casual dress codes, children’s toys and other New Economy gimmicks that seem to make dot-com companies more like sixth form colleges? These things in themselves probably don’t make an employer more attractive, but they help to create a culture and a perception. “I suppose what they’re trying to do is break the norm,” says Attitudes’ Hazel Jackson. “One of the things you always say to a businessperson is ‘try and remove any additional obstacles that people might have to communicating with you.’”

It’s what these things say about the company, that it’s relaxed and informal, that really matters. In the same way, sitting on a broken chair in a shabby office at a computer that doesn’t work properly, also says something about your company — that it doesn’t care too much about employees. “Having the right environment to work in is very important,” says Jackson. “People can be very depressed being in a work environment where their chairs are broken or they haven’t got the right equipment to work on.”

The bottom line for any employee is being valued and seeing an opportunity to progress. New Horizons’ Younis says that allowing employees to progress has been key for his company. “We have been operating in Dubai for the past two years, and we have grown 100% per year and we had a very low staff turnover,” he says.

“We were anticipating that growth, which meant that there were opportunities within the organisation to grow. If individuals are growing and the organisation isn’t, then they are going to go and look for opportunities elsewhere,” he adds.

||**||Knowing where you stand|~||~||~|
Offering an opportunity to progress means making it clear to employees where they can go in the organisation. Better still, show them examples of employees who have worked in the organisation and have worked their way up. This can be difficult though in organisations where managers have reached their position because of length of service, as is often the case here.

The same goes for pay scales structured around length of service and seniority. Bruce Tulgan, an international management consultant, says, however, that companies must be prepared to trash pay structures that are based on hierarchy. “Pay for performance, and nothing else,” says Tulgan. “Bring compensation practices into alignment with the value that people are adding. Easily said, but whether it can be widely done in the Middle East is uncertain.

An employee motivator that has worked spectacularly well in the US in recent years is to give out stock options. Prior to the dot-com crash, Internet companies routinely used options as a way to entice big names on board. Giving individuals ownership in a company, it was thought, would bring out the best in them and tie them to the company long term.

That’s not a scenario that’s very likely to play out in the Middle East, as few companies want to give up control over equity. Because of the 51%-49% ownership rule, foreign owners don’t want to dilute their share of a company.

From their side, local partners don’t want to give up their psychologically important majority ownership. Besides, local stock markers offer little prospect of serious return on equity, which means that few companies want to float.

Putting in place some of the employee incentives described here will be devilishly difficult, and even smart companies competing for talent can make mistakes. Inadequate recruitment processes can of course lead to the wrong people being hired. But companies keen to succeed in the market can easily overpay and hire ‘star’ employees whose loyalty may be only to themselves.

That’s a trap that financial services and dot-com companies in the US have fallen into. It’s a mistake that Mondial Dubai’s Sean Kelleher says he has been careful not to make. “Financial advisors should not just be turned on by money, because if they are they have a short shelf life,” he says. “We pay the highest anyway, so the only way they’re going to get more is to go to a competitor and negotiate on a prima donna basis. That’s something that I would never allow,” he adds.

Clarendon Parker’s Luby says employers should be wary of people that move around a lot. “If they haven’t made a success with their last three employers over the last three years, why do you think they are going to be successful for you now?” he says.

||**||Leaving can be good|~||~||~|
The challenge of recruiting and retaining the best is obviously complex and is probably going to become more so. Moving from a system where status and salary is based on length of service to one based on merit is a huge step. Offering employee profit share schemes or even stock options is an even more radical move.

But as you think of how to grapple with these challenges, just try flipping the argument on its head for one second. Beyond the interests of individual employers, is it necessarily bad for a country as a whole if the brightest and best leave entirely or move around inside the country?

What if the people that are leaving you to go and work in the United States come back one day, bringing valuable skills and investment dollars back with them? Dr Jaideep Prabhu, lecturer at the University of Cambridge’s Institute of Management, says returned émigrés have contributed significantly to the development of Asian economies.

“While it is true that the best trained people might leave the country that has invested in them, this should not always be regarded as a bad thing in the long run,” says Dr Prabhu. “Those that leave might acquire valuable skills and experience that they might be able to use to the advantage of their home countries at some later point.”
He gives Taiwanese expatriates much of the credit for Taiwan’s dominance of computer hardware manufacturing in the 1980s.

Similarly, returning Indians, including many that worked in the Gulf, have driven the phenomenal success of the Indian software industry in the last ten years. “Investment in education and R&D will yield positive returns over the long term, especially as national boundaries start to matter less and less as time goes by,” says Dr Prabhu.

Whilst Dr Prabhu speaks more about the wealth of nations, Stephanie Line at Attitudes says that letting people move on can also be good for companies. One person’s departure, she says, is often the opportunity that another person needs to come through and shine.
“The New Economy will thrive if organisations can provide genuine learning opportunities and development, and out of those will come talented people,” she says. “You may probably already have employed a talented person in your organisation and you didn’t even know it.”||**||

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