The three most valuable resources a company has are its product offering, reputation and, most importantly, human capital. When developing your company’s human resources strategy, an interesting piece of advice can be found in the Kenny Rogers song the Gambler: “You’ve got to know when to hold them, know when to fold them, know when to walk away and know when to run!”

In very simplistic language, this defines the challenges you are bound to face when shepherding new hires from the talent acquisition, training and retention phases – and, in the worst-case scenario when the termination of a resource is necessary.

This blog will walk you through best in class practices to follow when dealing with human resources. Let me start by examining, from the lens of an individual, the key considerations in selecting the best organization to join. I think that Google Executive Chairman and ex-CEO Eric Schmidt and former SVP of Products Jonathan Rosenberg gave the best advice in their book “How Google Works”: “When people are right out of school, they tend to prioritize company first, then job, then industry”. They go on to say that the correct sequence is industry first, company next and then your job. The reason being that: “while you will likely switch companies several times in your career, it is much harder to switch industries”. They use the metaphor of riding a wave (company) all the way to the shore to highlight the value of choosing the correct industry that is experiencing significant growth or, as the saying goes: “rising tides raise all boats”.

Times are changing and so are talent acquisition and retention strategies. Being able to acquire and retain employees becomes one of the most important tasks of the company leadership. Not too long ago, talent acquisition was solely the responsibility of the HR department. In today’s environment, this is stretched across the organization and the company must use internal, external and online channels to find talent. This includes relying on referrals from your employees who extend the reach of your message to more individuals who may not be looking to make a change but would consider it in order to work with their friends.

After acquiring the best talent, the challenge is to keep them motivated and not lose them. Workplace diversity complicates this task as you need to develop programs that appeal to all employees that encompass multi genders, age groups, marital status and ethnicities. There are many differences among the generations at the work place, and what makes them tick. One of the most concise depictions of this workplace diversity is captured in the infographics generated by the Future Workplace survey: “Multiple Generations @ Work”.

Special attention is needed towards employees who are part of the millennial generation (the population born between 1977 and 1997) who have developed a reputation as job-hoppers. According to CNN Money, most Millennials expect to change jobs 4 times during the first 10 years after graduating from college. Being able to retain up and coming talent has become priority number one.

Talent Acquisition Principles

Acquiring great talent is a prerequisite to building an excellent team just like a superb meal requires the best ingredients. I believe that there are three key personality traits that a person must have in order to deliver value very rapidly as a high performer: be a self-starter, have self-motivation and have disciplined work ethics. This is especially relevant during the early stages of your startup company where work demands far exceed the available resources. Precious time must be applied wisely. Hiring the right talent with these characteristics will minimize the need to over-manage and maximize productivity.

One important rule to follow is “hire slow and fire fast”. Take your time evaluating candidates and ensure that the person you hire has at least two of the above three traits. If you think they will fit easily into the company culture – give them a green lightHire smart people, who can continue to learn and grow with the company as it evolves. One word of caution though – don’t let a candidate’s paper credentials and experience be the deciding factor. Be careful not to interchange wisdom and experience.  As stated clearly by Miles Kington: “knowledge is knowing that tomato is a fruit, wisdom in not putting it in fruit salad”.

One important observation I have made over the years by examining other companies is that the more successful companies tend to have some individuals in key positions that have the characteristics of being happy to be “number two” and have no ambition to become “number one”. These individuals will provide your company with the added advantage of extended stability and reduced turnover during times where there might be a high external demand for their resources.

Retention Principles

Now that you have acquired the talent, the focus must shift to retaining and training these individuals. There will be a high cost to your company every time a valuable person occupying a key position is lost – both in direct replacement cost, and indirect cost in terms of knowledge loss and impact on the company moral. It is likely that you will build in various layers of management into your company. All levels of your team must be on the same wavelength when it comes to how to treat direct reports to maximize the retention.

Below are some principles that each person in your company who has direct reports should follow in order to increase the retention rate of their teams.

•      Focus on the needs of each individual not yours – If their work paths are void of obstacles, they will perform more efficiently. Your key role is to clear the mine fields for your direct reports.

•      Take care of pennies and dollars will take care of themselves – Take care about the needs of your direct reports and in return they will take care of their teams and subsequently the company.

•      Provide positive reinforcement – You’ll need to provide regular feedback with praises when your team performs well and proper encouragement when they are not doing as well as expected. Consider the moral of your team to be like car tires. Every time you provide positive praise it inflates the tires and the car drives smoother. But when you offer negative opinions, it is analogous to deflating the tires and the car does not drive well.

•      Lead from the front – As defined by Oxford dictionary: “Take an active role in what one is urging and directing others to do”.

•      Be a role model/change agent – Show them the way. If you want some to dress better, dress nicer yourself and if you want them to write a trip report after attending a conference, make sure that you do it first.

•      Lead; don’t manage – People are not pawns on a chess board that can be managed. I am of the opinion that the word management should be removed from the lexicon when describing how to deal with people. People can outperform your expectations when led by a leader who they respect and are given the leeway to execute. As George S. Patton, the famous American General, said: “Never tell people how to do things. Tell them what to do and they will surprise you with their ingenuity”.

•      Manage commitments not people – There are three variables to consider when asking your team to perform a task:  scope, resources and time available to deliver it. It is valuable to negotiate an agreement using these variables and then hold your team accountable based of the commitment that was made to deliver the results.

•      From Good to Great! The Millions dollars difference – It is worthwhile to outline to your direct reports the substantial increase in potential earnings over their careers when they perform well. Consider a person who is promoted rapidly to a leadership position and is making an average of $60K more per year over 30 year career yielding $1.8M differential in compensation.

Talent Termination Principles

Sometimes, no matter how well your acquisition and retention programs are, some individuals don’t perform well and won’t fit into the company structure and culture. Clearly, you first must try to work hard to assist each person to become a better performer by offering an individual performance improvement plan (PIP) and guidance. If after going through the PIP program, the person’s performance is not improved and the attitude has not changed you need to terminate the employment of this individual.

If you notice degradation in the employee’s performance it may be a leading indicator that the individuals lost their way in the company and most likely will start to exhibit a “don’t care” attitude. Whereas you can improve performance, it is virtually impossible to change attitude once it becomes the mindset of the individual. Furthermore, the person’s attitude may lead to poisoning the environment and impacting the team moral, and thus it is vital to accelerate their removal from the team to avoid contaminating the well water.

When facing employees that lost their way, it is best is to follow a quote by Michael Martin Hammer, a famous professor of computer science at MIT, who said that in process re-engineering they would carry the wounded and shoot the stragglers”. You must act very fair, treat them with respect and offer them an appropriate termination package. I urge you to remove the Band-Aid very fast no matter the short term pain.

As important it is to deal with these unfortunate, sensitive situations rapidly, and respectfully, it is also important to take stock to understand what caused this to occur and to ensure that you are addressing the problem, and not treating a symptom. Has this type of situation occurred in the past, and is there a risk of it happening again with one or more other employees? Does the work environment foster passion, freedom to take charge and a desire for excellence? Do employees feel appreciated? Are broader changes required to prevent this from reoccurring?

On some occasions, for a variety of reasons including unmet career expectation, divergence in directions between personal views versus the company roadmap, some individuals will inform you that they wish to terminate their employment with the company. The first step is to try to find out why they truly want to leave. You then need to ascertain if the issues leading to this situation can be bridged and resolved satisfactorily for both parties and whether there is an opportunity for the decision to be revoked. However, you should not resolve the problem at all costs as it could impact other people in the company. Furthermore, my experience is that once someone has made the decision to leave, trying to stop them will only provide a short term relief and their exit is inevitable.

Talent acquisition and retention is a continuous process that never stops and is the responsibility of all people in the company. The success of a company is built upon the strong foundation of acquiring a great team of smart individuals that are led by wise leaders who set up the correct culture to enable all individuals to innovate and reach their potential.


Written by

Eli Fathi

Eli has been a technology entrepreneur for the past 30 years and has founded or cofounded a number of companies with a few successful exits. Currently, he is the CEO of a company offering automated fraud detection platform. Eli was the cofounder of Fluidware Corporation, an Internet software company offering Software as a service (SaaS) online applications based on collaborative feedback. He was the co-CEO from inception until the acquisition by SurveyMonkey.

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