Stop the Brain Drain: Retaining Middle Market Talent

As the tightest labor market in over 50 years strengthens its grip, middle market companies continue to lose talent—particularly those that rely on certain job categories—to their larger counterparts. Tech talent is devoured by FANG (Facebook, Amazon, Netflix, and Google) and other high performing tech companies. Non-exempt field service technicians are quickly absorbed by large manufacturers and supply chain companies. Qualified healthcare professionals are in dangerously short supply. And non-exempt general workers capable of passing background and drug tests are becoming harder to find for companies subject to federal safety standards, particularly if located in states with legalized marijuana.

While larger companies with sizable budgets enjoy well-staffed HR teams, large-scale on-boarding, and generous benefits and engagement programs, most middle market firms deal with lean HR teams and few or no dedicated talent acquisition employees. Larger firms also benefit from the most sophisticated Applicant Tracking Systems (ATS), the latest data technologies to identify and address employee dissatisfaction trends, and dedicated resources for employee training and professional development.

The combination of these factors puts larger organizations at an advantage when it comes to retention. The savviest of mid-market companies, however, know how to play to their strengths, speed and flexibility, and retain the talent they need.

 

Five Ways Middle Market Firms Can Do More to Retain Talent  
While there is no one-size-fits-all solution, there are viable best practices that can play a major role in making employees of middle market companies less likely to quit their jobs.

1. Build trust from the start
If trust is not established early, an employee’s tenure will be short. Hard to earn, but easy to lose, building trust starts in the interview process. Are you being honest with your candidates? Are you giving them a realistic job preview so that when they show up on their first day, the actual work is as you described?

Although you may be eager to make the hire, make sure the candidate is qualified and motivated to help make the company successful. Once on board, communicate regularly on goals, expectations, and performance. If an employee decides to leave, conduct a thorough exit interview to ensure you understand what went wrong and avoid repeating the same mistakes.

2. Get serious about data
Without good data, we are relying on “gut” calls to identify, alter, and repair attrition trends. Unlike larger organizations, middle market companies often lack the technical sophistication and budget to manage complex data and rely on the tools they already have available, like Microsoft Excel.  

Without the appropriate expertise, middle market companies often misunderstand the kinds of data that need to be captured for predictive talent management. For example, in addition to typical HR statistics like time-to-fill and cost-per-hire, also collect data such as attrition by hiring manager, department and function; data containing candidate profile info such as types of schools, degrees, and skills that work best in specific roles; performance against goals; and exit interview records. Net Promoter Score is a relatively easy way to assess company loyalty, and is one of the most important pieces of data that you can collect for retention.

You can also improve data management by making sure you are using the proper tools for the analysis you are trying to complete. Once you identify the business need you are attempting to solve, you may find that a database, rather than a spreadsheet, is required to yield the results you are looking for. Don’t ignore the problems that are identified in the data. If you feel overwhelmed, take small steps toward solving the problem instead of abandoning the project because the problem is too big or expensive for a meaningful fix.

3.  Make upskilling and retraining a priority
A recent LinkedIn Workplace Learning Report shows that many employees are less likely to quit if the company invests in career development. Yet, many companies still insist on hiring people “who can hit the ground running,” rather than investing in in-house training programs or reimbursement for outside-company training or certification classes and the associated costs for prep materials, training, and exams. Virtual training, consisting of videos and podcasts of high performing employees, is also becoming more popular. If you take this direction, provide extra pay to internal employees who volunteer to help produce the training materials. Shadowing is another practical training opportunity that lets employees apply newly learned skills to real-world tasks.  

Whether it is training new employees or investing in current employees, upskilling gives employees choice and flexibility within the company. This kind of investment is effective in reducing attrition as it creates variety in work, allows opportunities for growth, and signals to high performers they will not be strapped by an abundance of “stay-in-your-lane” rules.

4. Weed out bad managers 
While ping pong tables, bringing your dog to work, and a keg on tap are nice perks, you have to be doing everything else right before it makes a difference in retention. Most of the time employees don’t leave their job, they leave their manager. The opposite is also true. Employees will stay longer to continue working with a good manager. If you are having a turnover problem, look first to the manager and see what training may be necessary for that person to start performing at a top level. A bad manager is an extremely destructive internal force which adds to attrition and stifles growth.

5. Give employees what they want most
The key to employee retention is engagement - involved managers, opportunity for career advancement, trust in the leadership, and meaningful work. Most people, especially the Millennial demographic, need to be reminded about the value of their jobs to science, society, humanity or the planet. Middle market companies generally have less hierarchy and more chances to make employees feel they are part of the mission rather than just a cog in the wheel. At every opportunity, communicate the worth of an individual or a team. It’s not always easy, but a worthy exercise at a minimal cost.

Recognize your weaknesses and maximize your strengths
In-demand professionals get dozens of messages a month on LinkedIn from recruiters. Why do some choose to stay at their current company? Innovative and meaningful work. A good boss and a great team. Benefits and pay are table stakes. Improving retention may be more affordable than you think, so acknowledge your weaknesses, exploit your middle market strengths, and retain the talent you need to compete and prosper.