Why You Don’t Need More Star Talent

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The world’s best-performing companies possess more star talent, right? That’s the secret to their success, right? And these companies attract superstars through extravagant salaries and perks, right?

Turns out all of these assumptions are dead wrong.

Research shows the best-performing companies have roughly the same number of star performers as all other companies. And it’s not compensation that buys (or retains) star talent.

It’s About Clusters, Not Numbers

As outlined in a February article in the Harvard Business Review, Bain & Company performed detailed organizational audits on 25 global companies and surveyed more than 300 senior executives at large companies worldwide regarding workforce productivity. Its analysis revealed that the clear distinguishing factor of best-performing companies is not how many star performers they have but rather how they deploy these individuals—namely, in clusters.

According to Bain’s research, star talent makes up 16% of the workforce at the best-performing companies. This figure is 14% for the rest of the pack—not exactly a staggering difference. However, while the average company deploys star talent in an “unintentionally egalitarian way” (spreading their A players evenly across all roles in the organization), the best companies use “intentional nonegalitarianism,” purposely focusing their superstars in areas where they’ll make the greatest impact on company performance.

“As a result, the vast majority of business-critical roles—upward of 95%—are filled by A-quality talent,” the HBR article states. “In some technology companies, for example, software development is critical to business success. So the best-performing companies in this industry make sure that software development roles are filled with star talent. In other industries brand management matters more, so the A players tend to be clustered there.”

In short, stars are clustered where they can make the biggest difference to their organization’s performance. The egalitarian approach, the article observes, “may seem fair, even admirable, but it does not produce superior results.”

Money Doesn’t Buy Star Talent

There’s no denying that money matters to your employees—including your superstars. But dollars alone won’t bring them through the door or keep them from leaving.

A recent CNN Money article points to Uber as a prime example. Despite facing its share of challenges and PR hurdles, Uber has achieved remarkable growth: the company booked a stunning $20 billion in rides last year. As the CNN Money article notes, Uber has “enticed some of the most brilliant minds in tech to leave cushy jobs at Google, Facebook and Twitter” to undertake grueling roles with “long hours and a limited work-life balance.” Yet, the company doesn’t rely on high salaries or a battery of perks to attract these superstars.

What draws them? “Unique opportunities,” they say, including “the chance to solve real-world problems and a culture that frees them to experiment with radical solutions in a burgeoning field.”

Gallup tackled the subject of star talent in a March article titled, “What Star Employees Want.” Unfortunately, the data it presents are a bit confusing. Fortunately, the upshot isn’t.

The article states that 41% of surveyed employees say “a significant increase in income” is very important to them when considering a new job. However, Gallup clearly references a survey of employees in general—not star performers. Second, although it posits the importance of income, it goes on to show that income ranks fourth on a list of five key attributes employees consider when pondering a change of employers. Here’s the list in order of importance to employees:

  1. The ability to do what they do best.
  2. Greater work-life balance and better personal well-being.
  3. Greater stability and job security.
  4. A significant increase in income.
  5. The opportunity to work for a company with a great brand or reputation.

I’m not entirely sure what to make of the Gallup piece (especially its lack of focus on the “star employees” mentioned so prominently in its title) but it unquestionably mirrors the conclusion of the CNN Money article: the work itself is what matters most to star talent.

Indeed, Gallup urges employers who are hiring talent to talk about pay but to bring more to the discussion than pay alone. “People make decisions based on both reason and emotion, but they are more likely to be led by emotion. Therefore, organizations should clearly present how candidates can contribute to a role and an organization.”

What Is a “Star Performer” Exactly?

Aaahhhh … there’s the imperative and fundamental question raised by this entire discussion.

As indicated in the HBR article, it’s hard to deploy your star talent effectively without first identifying them. “Most companies employ some form of assessment based on performance and potential, typically as a vehicle for determining compensation and career progression,” the article states. “Following this approach, A players are employees who score highly on both dimensions.”

If you need additional help identifying your stars, an article from Lifehack cites seven traits they typically posses including initiative, integrity, adaptability and passion. You might also look at the Workopolis blog post, “8 ways to spot a star performer.”

There’s no cookie-cutter approach to identifying star talent. The definition is unique to every organization. But the one universal element is that “star talent” refers to truly extraordinary performers—the best of the best. There’s a whole level of reliable, solid performers below them who are vital to your business.

While you probably don’t need more stars, you do need to decide who they are if you want to deploy them for the best possible outcomes. And you may well need more of those solid performers to boost your organization’s success … but that’s a separate issue for another day.

Instead of a Hiring Spree, Redeploy Your Stars

The good news: star talent doesn’t have to cost you an arm and a leg. The great news: you likely don’t even need to hire more superstars.

You just need to rethink the way you’ve deployed the ones you have. And to maximize retention of your superstars, take a page from Uber’s playbook and free them to experiment more, to bring greater creativity to their work, and to be real-world problem solvers.

Photo courtesy of Pixabay.

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The War for Talent Isn’t Over or Lost, Fast Company Article Notwithstanding

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“The War For Talent Is Over And Everyone Lost.”

That’s the headline of Dr. Tomas Chamorro-Premuzic’s and Adam Yearsley’s recent Fast Company article, and here’s the callout that follows it: “Instead of winning a war for talent, organizations appear to be waging a war on talent, repelling and alienating employees more successfully than harnessing their skills.”

Don’t mince words, guys. How do you really feel?

I have to admit, I understand their point of view. The corporate recruitment process is broken. There’s a pervasive employee engagement malaise. And organizations continue to struggle to create great company cultures.

However, there’s another way to look at all of this …

1) The War for Talent Isn’t Over At All

It just needs to be waged differently.

Companies using the traditional talent acquisition model basically advertise their jobs, offer compensation packages they hope will attract the best possible candidates, evaluate applicants based on their resumes and work histories, and ultimately hire the individuals they believe are most qualified. Increasingly, though, employers realize this isn’t necessarily the best “battle plan” to compete for talent. In fact, it’s exacerbated their problems. Seventy-one percent of employers claim they can’t find candidates with the right skill sets, according to a Forbes article.

In order to attract the right kinds of talent, a growing number of employers are shifting to a new talent model—one that puts their company culture, their values and their work environments front and center. This model makes tremendous sense, particularly in light of one of the key findings of LinkedIn’s 2016 Global Talent Trends report: more than two-thirds of the 26,000+ professionals surveyed by LinkedIn said they want to know about a company’s culture and values above all else when considering a job. Not salary, not benefits, not perks. Culture and values. “They may know about your company,” the LinkedIn report states, “but they lack a clear picture of what it’s like on the inside—and the typical job description isn’t helping.”

As a result, savvy employers are illuminating their organizations’ inner workings by developing stronger social media profiles, for instance, and encouraging current employees (i.e., their best brand ambassadors) to openly share their work experiences on sites such as Glassdoor and Great Place To Work. Their new job ads put greater emphasis on life inside the company and opportunities for personal growth and development rather than merely listing job responsibilities and requirements. These companies are also borrowing an effective tactic from the marketing function by creating articles, videos and other content that are tailored to their candidates’ interests. This content never directly “promotes” their organizations; instead it shows these employers understand their talent and want to help them excel in their careers.

In addition, this new talent model delivers an improved candidate experience, eliminating byzantine application processes and forms that take ridiculous amounts of time and effort to complete. Candidates actually hear back from employers after applying to jobs; some are even interviewed for more than one position because these employers look for additional job “fits” early in the evaluation process.

The authors of the Fast Company article don’t seem to like the “war for talent” analogy much. Like it or not, the war for talent goes on.

2) “Everyone Lost” Is Hyperbole—and Hyper-Hopeless

Don’t get me wrong, when it comes to talent acquisition and management, there are many things all of us could be doing better.

Employers could be delivering a better candidate experience; they could match employees to specific roles and projects more effectively; and they could coach, mentor and develop their people with greater care. Workers, for their part, could be better at selecting jobs and companies they’re truly aligned with; they could take a more active role in their own career planning and development; and they could take greater responsibility for managing their own performance and engagement.

The authors of the Fast Company article put much of the blame on employers for workers’ disengagement and professional restlessness. Yet, as researchers have pointed out, employees themselves are also responsible for their own engagement. According to a 2016 TalentSpace blog post, a large-scale study of highly engaged employees across a range of industries, continents, cultures and demographics is documented in Timothy R. Clark’s book, The Employee Engagement Mindset. The study found “highly engaged employees take primary responsibility for their careers, their success and their fulfillment. They own their own engagement. They are the driving forces.”

Yes, employers everywhere continue to make talent-related mistakes, and workers are still creating roadblocks to their own fulfillment. But this doesn’t mean everyone has lost. It means we need to keep improving—employers and employees alike.

Talent acquisition and management have evolved dramatically over the past several years. It’s no wonder many companies are struggling to cope with these changes. The good news is there are companies such as Capital One and Comcast that have redefined and redesigned they ways they’re engaging with talent. If you’d like to read about these companies and others that are blazing trails to a new era of talent management, download a copy of the Talent Board’s 2016 North American Candidate Experience (CandE) Research Report and pay special attention to the case studies.

3) Organizations Are Screwing Up, Not Waging a War on Talent

Obviously there are employers who don’t treat their talent well, and there are others who do a crappy job of managing one or more aspects of the talent lifecycle. But the vast majority aren’t doing these things willfully. They’re not trying to undermine their own success or ruin their brand reputation. And they’re certainly not trying to send their best talent screaming for the door.

They’re making these missteps largely out of ignorance, flawed strategy and/or a lack of proper investment in the infrastructure necessary for effective talent management. (Arguably, subpar investments are deliberate on occasion but I’d counter-argue that cheaping-out on your talent investment is often a result of flawed strategic thinking.) In fact, infrastructure is a critically important element of effective talent acquisition and management. As Kevin Grossman stresses in his TalentCulture blog post, without the right recruiting infrastructure in place, it’s next to impossible to tap into today’s richest talent channels, build robust candidate pipelines, efficiently track and manage talent relationships, or deliver a great candidate experience.

Believe it or not, many employers are still trying to put the right recruitment infrastructure in place. Again, this doesn’t constitute an outright “war on talent.” It’s a problem they’re addressing, as evidenced by the roughly $2 billion annual investment they’re making in HR technology.

On the Other Hand …

Although I spent the last thousand words presenting alternative views to those of Dr. Chamorro-Premuzic and Mr. Yearsley, I’m not saying they’re entirely wrong. And Ted Bauer, a writer whose work I admire, echoes their opinions in his incendiary post, “The war for talent became the war ON talent.” The three of them make some damn good points. I’m just offering a different perspective.

At the end of the day, these three gentlemen are asking employers to wake up to the ways they’ve failed—and continue to fail—their talent as well as their companies. I’m not arguing against that. It’s a great way to map out a better path to a brighter future.

Photo courtesy of Pixabay.

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Can A.I. Heal the Broken Recruiting Process?

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Here’s how broken the corporate recruiting process is: 85% of job applicants never hear back from employers after submitting a job application … and 71% of employers claim they can’t find candidates with the right skill sets. The good news, according to Louis Efron’s Forbes article, is that a fix is on the way, and it’s going to make life better for employers and job seekers alike.

The fix: artificial intelligence.

Specifically, Efron is referring to an A.I. platform called Mya, which was created by FirstJob to automate as much as three-quarters of the recruiting process. One day, Efron reckons, Mya could automate the entire process.

“Mya is disruptive in every way,” he writes, “and she’s set to revolutionize the talent pipeline. As the first fully automated recruiting assistant, she instantly engages with applicants, poses contextual questions based on job requirements, and provides personalized updates, feedback, and next-step suggestions. By delivering custom messages designed to address specific recruiter pain points, and acquiring critical applicant answers, Mya enables recruiters to focus their time on interviewing and closing offers.”

Mya appears to be everyone’s white knight, restoring order to the chaos-riddled candidate experience and easing the recruiter’s burden at the same time. But how well has she actually performed? Efron says she’s improved recruiter efficiency by 38% and raised candidate engagement by more than 150%. “Even more impressively, candidates are 3 times more likely to hear back from a recruiter if they respond to Mya’s questions,” he notes.

Pondering the Implications of A.I.

Mya’s early performance aside, there’s a whole host of questions about A.I. and recruiting that are far from being answered definitively. Which of the dozens of recruiting tasks is A.I. best suited to? Is A.I. even practical or affordable for most companies? How will candidates feel about its use? And these are just the tip of the iceberg.

Talent Tech Labs’ recent Trends Report, Volume 7 offers fascinating insights into these questions from several subject matter experts. They explore A.I.’s incredible potential for positively transforming talent sourcing, candidate engagement and the selection process. To be honest, some of their commentary was pretty technical and way over my head … but they also addressed basic and practical concerns many of us have about A.I. and talent initiatives.

For instance, Shon Burton, one of the report’s contributing authors, asks: “Is it ethical to predict race, gender, honesty, intelligence, performance, reliability, or culture fit? Is it OK to use A.I. as a proxy for candidate communication and, further, to optimize and manipulate the candidate to accept the lowest predicted pay rate?”

He invites readers to do a little thought experiment: imagine you’re a job candidate who has to qualify for a role, negotiate pay and communicate healthcare concerns to an A.I.-based system—a system that’s constantly “analyzing your interactions with it and using that information to predict your suitability for the role or the lowest salary you are likely to accept.” How would you feel about that experience—and that employer?

The real question isn’t whether we can build this type of application, Burton says, but whether we ought to. However, Burton knows that genie is already out of the bottle. “A.I. is here to stay,” he writes, “in HR as well as every other industry.”

A.I. to the Rescue—But How and When?

Burton candidly admits that A.I. may cause the candidate experience to “suffer in the short term,” especially as automation takes over more of the communication and evaluation processes. There are bound to be glitches along the way, especially since A.I. tools are built and programmed by humans. But he also believes plenty of big advantages will spring from A.I.

For example, job seekers consistently cite lack of response from recruiters as one of the most frustrating aspects of the candidate experience. Burton says that not only could an A.I. assistant intelligently respond to every applicant who doesn’t get a particular job but it could also offer coaching based on an analysis of the individuals who did get the job.

So, the obvious question is when will A.I. really take hold and repair the broken recruiting process?

According to Brian Delle Donne, president of Talent Tech Labs, the A.I. applications furthest along in their development are those that solve the sourcing rubric, identify matches between resumes and job requisitions, parse data, and predict a candidate’s fit. Applications that truly solve engagement challenges, predict behavioral outcomes and mimic human intuition are “still mostly future state.”

“For true Artificial Intelligence and Deep Learning to come into prominence in TA, there is most likely much work to do and a significant cost of entry, especially for startups,” Delle Donne writes. “We believe that the data giants of Google, Facebook Microsoft, IBM, and others could decide to build their own solutions (as each are dabbling with now) or conversely make the data available to companies with specialized domain knowledge in HR and Talent Acquisition.”

In other words, it’s anybody’s guess when A.I. will well and truly cure the recruiting process’s ills. In the meantime, however, the healing has begun.

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Optimal Engagement Boost Occurs When People Work Remotely 3 to 4 Days a Week

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According to Gallup research, there’s a remote work sweet spot that optimizes employee engagement and productivity.

An “optimal engagement boost” occurs when individuals work remotely 60% to 80% of the time (roughly three to four days a week), Gallup says. These employees are 31% more likely to “strongly agree that they make more progress in their workday” than those who work remotely fewer days per week. And employees who work remotely all of the time actually lose ground in terms of engagement and productivity—at least for particular types of work and job functions—because they miss out on some meaningful connections and conversations with colleagues during the week.

Gallup plans to explore the issues surrounding full-time remote work in an upcoming article. I’m looking forward to reading it because the “disconnect” Gallup refers to is often not the fault of remote workers. Rather it’s the result of poor performance management and communication practices—problems that employers must learn to resolve to fully leverage the advantages of remote work (e.g., lower costs, increased retention and productivity, and greater employee well-being, to name a few). You can read about these advantages in the recent Entrepreneur article, “4 Reasons Why Smart Companies Are Going Remote.”

What Else Drives Engagement?

Gallup’s research also reveals that high engagement is closely tied to how well employers meet workers’ developmental and personal relationship needs. When examining the most engaged employees (again, those working remotely three to four days a week), Gallup found they’re the most likely of all employees to strongly agree that someone at work:

  • cares about them as a person;
  • encourages their development;
  • and has talked to them about their progress.

In addition, these individuals are the most likely of all employees to say they have opportunities to learn and grow.

Bottom line, working remotely gives employees flexibility to maximize their productivity, while working onsite enables them to interact face-to-face with coworkers and managers. It’s this “best of both worlds” approach—applied in the right proportions—that lifts engagement.

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Employees, the Performance Review Revolution Can’t Happen Without You

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For the past few years, employers have been ditching annual performance reviews for alternative approaches—more frequent appraisals, informal one-on-one discussions, and performance coaching, to name a few.

The list of reasons behind this exodus is as long as your arm: annual reviews happen too infrequently to be of any real help; they’re based on opinions, not data; too often they’re a one-way conversation; they fail to address long-term employee development; they’re too closely tied to salary. And so on.

Normally, employers take the blame for the shortcomings of annual reviews. Take Victor Lipman’s 2015 Forbes article, for instance, in which he writes, “The real problem isn’t the annual employee review itself. It’s management. It’s the way annual reviews are all too often administered.” Dozens of other articles make the same case.

I believe there’s a lot of truth to Lipman’s argument. But another Forbes piece, this one by performance strategist Laura Garnett, reminded me that employers and front-line managers aren’t the only ones culpable for the quality of performance reviews. As Garnett puts it, “The individual needs to take ownership of their own performance. One of the biggest myths of managing performance and one’s career is the idea that we must look to others and outsource performance management.”

Employees Need an Internal Guidance System

Garnett states there are five principles that guide great performance: mindset, perceived impact, challenge, effort, and enjoyment. These five principles are “a distillation of all the latest psychological and social science research on what creates peak performance.” And it’s the employee who must continually track these performance keys.

“You need to be conscious of your confidence, your impact, and if you are challenged or bored—and why,” writes Garnett. “Nobody can do that for you. We have been taught to be told what to do, which is why there are so many people who are not truly engaged in their work. We need a revolution, and that starts with individuals learning the habit of managing their own performance.”

She’s dead right. Individuals should continually monitor and assess their own performance—in other words, hold ongoing self-guided performance reviews. This would be a tremendous boon, not only to their performance but to their career planning and advancement as well.

Clearly, employees can’t “learn this habit” on their own. They need to be trained to assess and manage their own performance. And where will this training come from? You guessed it—their employers.

The indisputable truth of performance reviews (regardless of form or frequency) is that employers and employees share responsibility for the review’s ultimate quality and value. A performance review revolution simply can’t happen without commitment from both parties.

One small postscript from a 2017 Bloomberg article: the shift from annual reviews to more frequent ones hasn’t been a cure-all. “More feedback in smaller doses can still be time-consuming, and employees don’t always find evaluations fair. And companies that ditched numerical ratings have seen declines in worker performance.”

In short, the search for the perfect performance review, unsurprisingly, continues.

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Technology Alone Won’t Make Your Organization Agile

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What’s the difference between agile working and flextime?

As Alison Maitland explains in her Financial Times article, the difference is profound: “Flexible working arrangements, which have been around for a long time, are individually negotiated, require management permission and are seen primarily as an employee benefit and an exception to the norm. Agile, or smart, working is business-driven, harnessing technology to create a new norm where everyone may work anytime anywhere, provided business needs are met. It is based on evidence of benefits such as higher employee productivity, lower office costs, a reduced carbon footprint and more motivated workers.”

So, although people often use the terms “agile working” and “flextime” interchangeably, they’re not the same at all. Plus, the evidence-based benefits of agile working accrue to both employer and employee. To be fair, research supports a similar argument for flexible working but in a truly agile environment the benefits are far more extensive because the entire workforce is involved.

There’s another key difference between an agile organization and one that simply supports flextime: agile organizations have agile leadership.

Technology Enables Agility — It Doesn’t Create It

To gain agility, many organizations focus deeply (if not solely) on technology. Without a doubt, technology is essential to agile working. However, as Maitland points out, agility can’t flourish unless the company’s senior leaders are on board. And the strategy driving agility “needs to be business-wide, with heads of departments such as finance, human resources, IT and property driving it together.”

In his blog post, “How Business Leaders Can Create Agile Cultures for Digital Talent,” Zenith Talent’s CEO, Sunil Bagai, notes that “companies must not only become digital, they must transition to cultures of agility. A virtual workforce ensures that pressing projects can be completed in real-time, from any location. By rethinking bygone management structures and embracing the fluidity of digital ecosystems, we can develop high-performing virtual teams that deliver real results.”

Hierarchical, command and control type structures fail to support agile working, says Dr. Simon Hayward, chief executive officer of Cirrus, a company that specializes in leadership, talent and engagement. In the recent Forbes article, “Cultural Barriers To Agile Working,” Hayward states, “If a company wants to become more agile, leaders and managers need to devolve responsibility and decision-making across the business. This requires that they ‘let go’ and trust others.”

For lots of companies, these issues of leadership and trust are the biggest barriers to agility.

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Two Great Reasons To Get Your Company Culture Right

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Google the term “company culture” and you’ll find yourself, like Alice, falling down a very deep rabbit hole. Only this one doesn’t lead to Wonderland. It leads to a mind-bending universe of conflicting ideas and opinions.

For example, you’ll discover there are five types of corporate culture, seven types of workplace culture, nine types of organizational culture, strengths-based cultures, values-based cultures, acquiescent cultures, positive cultures, dysfunctional cultures … and on and on and on.

Unfortunately, this glut of viewpoints hasn’t exactly helped business leaders. In fact, it’s made things curiouser and curiouser. Many leaders are as uncertain as ever about the type of company culture to nurture within their own organizations. Their basic problem is succinctly summarized by Deloitte: “While culture is widely viewed as important, it is still largely not well understood; many organizations find it difficult to measure and even more difficult to manage.”

According to Deloitte’s 2016 Global Human Capital Trends survey, 82% of participants believe that culture is a potential competitive advantage but only 28% believe they understand their culture well. Even fewer (19%) believe they have the right culture.

Despite all this uncertainty, there is one thing more and more business leaders are sure of: company culture is a matter that deserves their attention.

Reason 1: Culture Drives the Bottom Line

The link between company culture and key performance indicators—including profitability, employee engagement and turnover—is well documented. Recent studies by Deloitte, the Great Place to Work Institute, Glassdoor, the Journal of Organizational Behavior, SHRM and LinkedIn all show that culture has both direct and indirect impacts on the bottom line.

Last year, The Wall Street Journal reported on a study of car dealerships showing stronger bottom lines are the result of corporate cultures that engage and motivate employees. Companies that showed no improvement in culture generally became less profitable over time.

A few weeks later, Fortune published a piece, “Corporate Culture and the Bottom Line,” that stated: “The publicly traded companies on (our) annual list of the 100 best workplaces outperform the S&P 500 3 to 1. Privately held businesses also enjoy superior performance: Overall, the 100 best companies to work for average nearly twice the annualized stock market return of the general market. Not only that, but these organizations also report lower turnover, less shrinkage, and a higher caliber of job applicants than other businesses.”

Clearly, figuring out the culture challenge is in the best interest of business leaders, not to mention their companies, employees and investors. It’s also essential to solving one of their top concerns—finding the right talent.

Reason 2: Culture Determines Your Talent Strategy

“Get your culture right and your talent strategy will follow.” This brief but brilliant line appears on the website of exaqueo, an employer branding firm that, for my money, gets the culture/talent equation right.

The firm’s philosophy is that employers “need to define the culture of their business and then create a plan to infuse and manage that culture to keep it alive.” Only by taking this crucial step can they consistently draw the right people to their companies—people who truly fit their culture and who will bring passion, dedication and innovation to their work day after day.

Of course, exaqueo isn’t the only organization that believes in this philosophy of aligning company culture and talent. It’s been spreading among employers and talent firms for the past several years. But creating this alignment can be tricky. Once you begin wading into issues such as values, behaviors, beliefs, practices (and all the other fuzzy concepts encompassed by culture and talent) it might feel like you’ve fallen into a bottomless rabbit hole.

The best way to fight this feeling is by taking small steps, as outlined at the end of the Harvard Business Review article, “Don’t Let Your Company Culture Just Happen.”

It takes real effort to get your culture right but the payoffs can be substantial—not only for your company’s bottom line but for your talent strategy as well.

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