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Keep Employees from Leaving by Emphasizing Teamwork

November 07, 2016
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An entrepreneurial society is one in which innovation and new business creation are, as Peter Drucker put it, “an integral, life-sustaining activity” across organizations and the economy. There’s no question we live in such a society today, and the impact has been mostly positive.

However, we can’t ignore the downsides of this new world of work—not just for the unskilled laborers whose jobs have been outsourced or automated, but also among the professional classes, who now seem to think free-agency and job hopping are the new normal, with no expectation of a long-term organizational affiliation. To sustain our entrepreneurial society, and the growth it fosters, we need a much higher level of engagement and continuity at both new and established companies.

According to two recent comprehensive studies of employers and job seekers by Indeed.com (the world’s highest-traffic job website) a full 91% of people are either openly looking or open to a new job, and 76% look at opportunities at least monthly. Getting hired barely changes this behavior, with a full 65% of people resuming their searches within 91 days of their start dates and 59% of people acknowledging that they are constantly looking via job notification service subscriptions.

It seems obvious that such limited commitment will dramatically hurt organizational performance: A major meta-analysis of studies involving more than 51,000 corporate workers from Nathan Podsakoff from The University of Arizona has demonstrated how committed and collaborative attitudes reduce costs while increasing productivity, efficiency, and customer satisfaction.

The act of job-switching also hurts personal and organizational performance. For example, research on knowledge workers conducted by Harvard Business School’s Boris Groysberg showed that their output declined significantly after moving to a new company, since what they produce depended heavily on not just them but also the people, platforms, processes, and politics in their prior workplace. The University of Virginia’s Rob Cross has meanwhile found that, while networks are a key to success at work, they take some four years to forge, an unthinkable time horizon for many of today’s “free agents.”

How can we change this dynamic?

By emphasizing that entrepreneurial innovation is a team effort. In partnership with Linda Hill, also of HBS, we are helping organizations and their management teams to update their leadership models. Instead of laying out a vision for others to follow, those at the top should create contexts in which others can and do set the direction. This must be reinforced with practical changes in the way people are compensated—that is, collective, rather than individual, incentives.

This is the approach we take at Egon Zehnder. While most executive search firms pay consultants on an “eat-what-you-kill” basis tied to the business they bring in and work on, we instead use a simple formula related to tenure (which builds commitment and attracts people looking for long-term employment) and to the firm’s global profits.

As a result, we think and act like a team and feel we are part of something greater than ourselves. Clients benefit from our collective wisdom, and collaboration is seamless. We freely share cases, candidate knowledge, sources, and references and forge strong relationships across geographic and functional borders. Productivity, engagement, innovation and job satisfaction remain high, and we benefit from the lowest attrition levels in our profession.

The entrepreneurial society has much to offer. However, in order to truly capture its benefits, we must switch our focus from the individual, to the team. In other words, it’s not about you or me, but all about us. Do you want a disengaged collection of followers poorly executing on the vision of those at the top while looking for a new job? Or do you want a committed community of innovators seamlessly working together to bring ever finer products and services to the world?


Claudio Fernández-Aráoz is a senior adviser at the global executive search firm Egon Zehnder, an executive fellow at Harvard Business School, and the author of It’s Not the How or the What but the Who (Harvard Business Review Press, 2014).


Rajeev Vasudeva is the CEO of Egon Zehnder, the global executive search firm.


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