Any organisation, be it a business house or a political party, should invest its time and effort to populate its talent pipeline with potential leaders
Jet-setting corporate India and politics seldom display similar attributes. Therefore, it becomes a matter of immense interest when such similarities develop once in a while. The unbridled enthusiasm of these young leaders and their impatience to make it big in the shortest possible time make them comparable to corporate stalwarts of India Inc. The political turmoil in Madhya Pradesh triggered by Jyotiraditya Scindia and in Rajasthan by Sachin Pilot serve as apt examples of restless young leaders who want to desperately come out of the shadows of political veterans. They get solicited by competing camps with lucrative offers, just the way headhunters scoop up talent in the corporate world. It has become tough for even the most capable leaders in politics and the corporate world to retain and motivate talent. However, staff retention is critical for any organisation and has many financial implications.
According to analysts, the cost of the annual turnover for any mid-sized organisation with 1,000 workers and a 10 per cent annual turnover rate, is nearly $7.5 million. Several expenses like the cost of recruitment, training, lost productivity and new hires form a part of this overall turnover cost. Worldwide research suggests that in the organisational context, leadership is one of the crucial determinants of staff retention. The Saratoga Institute, after comprehensive research spanning across 20 years and 60,000 interviews, found that nearly 80 per cent of the employee turnover has a direct relation with the level of dissatisfaction with one’s boss. In another interesting study by Gallup Organisation, a bad leader is a reason quoted for quitting by as many as one million workers. The productivity and profitability of any group led by an incapable leader is almost half of the group managed by a competent one, says the study.
In fact, as concluded by author Roger Herman in his book, Winning the War for Talent, employees don’t quit jobs, they quit their bosses. There is ample evidence to note that the leadership style and an innate ability to manage people has a direct impact on an organisation’s capability to retain its workforce. Employees are more likely to remain with an organisation if they have a clear description of their job profiles and their expected targets and timelines. Workers appreciate an impeccable ability to choose the right person for a job or have the right job fit. Regular quality feedback and a mechanism to analyse and improve one’s performance go a long way in keeping staff motivated. In addition, timely recognition to make staff happy about their contribution to the organisation is an absolute must.
Plus, if an employee has a positive relationship with his/her boss, the tenure of the employment definitely goes up along with the increase in organisational commitment. Respect and dignity have a special place for staff and a great leader is very mindful of the same. An encouraging and supporting ecosystem should be developed by leaders to help employees achieve their best. Therefore, if leadership falters, the organisation fails due to a plethora of factors like low productivity due to low organisational commitment and job satisfaction, leading to high-stress levels of workers and eventually turnover. Indecisiveness and insufficient or lack of communication with the employees, which is another hallmark of weak and ineffective leadership, can spread dissatisfaction among staff and fuel their turnover intentions. Therefore, the human resource department should not only hire managers but likely leaders.
Since in large organisations, it is not possible for leaders to have a communication channel open with all workers, training and development must be envisaged to create leaders at all checkpoints. This will nurture a culture of participation, organisational commitment and can be the best strategy to retain talent.Twenty years ago, when stability was a norm in the business world, leaders made most of the decisions with little input from employees. They gave clear what-when-how instructions. A stable business environment with small staff turnover also provided an easier path for the identification of future leaders. But today, workers need a collaborative and participative leader who understands the consequences of technological disruption in businesses and is adaptive. This has led to a paradigm shift in leadership styles — from autocratic to transformational.
A transformational leader understands the needs of the employees, motivates them and provides reasons for them to continue working for the organisation. Transformational leadership is also a better-suited leadership style in today’s world with Covid-19 forcing people to work from home. Here the emphasis is on trusting people to work towards the overall organisational goals without constant supervision. The focus should be to steer high-potential employees into leadership roles through institutional mentoring programmes. Great leaders are extremely valuable to organisations as they are instrumental in retaining talent. Happy employees, in turn, make successful firms. So, leadership and employee retention have a direct relation and go hand-in-hand. Any organisation, be it a business house or a political party, should invest its time and effort to populate its talent pipeline with great potential leaders. After all, leaders can help organisations retain their talent. Is the Congress listening?
(The writer is Associate Professor, Amity University, Noida)