Brand, opportunity, and purpose can create compelling promises, but in such a competitive market the temptation is to overpromise just to get people in the door. Failure to deliver will sour current employees on the company and ultimately hurt its appeal for potential employees. That is why keeping promises- important in any market-takes on particular urgency in emerging markets, where employees can quickly and easily move to global competitors or local companies that appear to offer greater overall rewards. Many companies we've studied have experienced extraordinarily high attrition rates.
Culture, however, can play a central role in employee retention. Hemant Mishr's team at SCB sells into several of the most economically depressed areas in the world; Mishr joined SCB largely because of its brand and its purpose, which includes a commitment to supporting local communities. He stays, he says, because of the culture: SCB is a meritocracy that carefully nurtures his career, and it lives up to the values that attracted him in the first place. "It's not about pay," he says. "I could go elsewhere and earn more-lots more."
Like Mishr, many of the people we interviewed were seeking a culture that would support the promise of an accelerated career path with growth opportunities for everyone, a commitment to meritocracy, and custom career planning. HCL Technologies has such a culture. A global IT company headquartered in India, HCL employs about 55,000 people in 18 countries. When Vineet Nayar became its president, in 2005, he knew he had to do something drastic to turn around the company, formerly one of India's most innovative, which in 1999 had been first in the country in terms of revenues but by 2005 was fifth.
Nayar started with culture. He told us, "I wanted to create an environment where employee development and empowerment was the most important thing, because ultimately I wanted value-focused employees who were willing and able to drive an innovative, sophisticated experience for customers." Nayar quickly assembled a 20-person team of "young sparks," an energetic group from among HCL's top employees; they coined the slogan that became HCL's strategy for the next two years: "Employee first, customer second." The notion is simple-the best way to bring value to customers is to empower employees.
Throughout 2005 Nayar and the young sparks unveiled initiatives designed to remove barriers to employees' doing their best work. They started by revamping the company's intranet. Using a software application, employees can "raise tickets" to report problems with HCL services and processes. In real time they can watch the actions taken to correct a problem, and a ticket can be closed only by the employee who raised it. By 2006, employees were raising 30,000 tickets a month. The site also created transparency: An employee can pose any question at all to Nayar, who personally answers up to 100 inquiries a week. Shortly after its revitalization the intranet was being visited by close to 25,000 employees every week.
In addition, after a few months in office Nayar posted his own 360-degree feedback on the intranet and encouraged his senior managers to do the same; today more than 2,000 managers publicly post their feedback. Indian companies traditionally control information at the top, so the move to public 360s truly distinguished HCL. In interview after interview employees told us of the tremendous impact such transparency has on their career choices.
In another differentiating move, HCL instituted "trust pay." Many IT companies in India offer employees a combination of 70% fixed pay and 30% variable pay. In practice, high internal targets make it difficult to earn that 30%. HCL decided to offer 85% of its employees (mostly junior engineers) a fixed compensation rate, to be set at the beginning of each annual cycle. Some new hires actually thought a mistake had been made in their offer letters, because they'd never known another company to offer trust pay. This is very appealing to recruits from the developing world, because often their whole families are invested in their success. Parents, siblings, and other relatives have worked hard to send them to school, and once they know they can support their loved ones, they can focus on their work.
Because HCL has stayed true to its promises, its employees are dedicated and its customers are taking note. The company's reputation for customer service has consistently improved over the past four years, resulting in major new contracts. Nayar, who is now the CEO, says, "Putting employees first isn't about launching a few initiatives that make them feel good. It's about offering a workplace where employees, no matter their level, can have an impact, can be a part of something exciting, and can grow professionally and personally."
Leadership development is another cultural element that strongly influences retention. Careers must be carefully nurtured, and finding the time to do that may seem like a luxury when the pressure to grow is so great. But companies can't set such concerns aside, lest they lose high-potential talent as fast as they bring it in.
Lenovo very methodically provides accelerated development opportunities for its employees. Mary Eckenrod, the head of talent management, has conducted extensive research into how leaders learn and the potential career stages at technology-based organizations in emerging markets. She has worked with Lenovo's top team to construct career maps and pipelines for every member of the company's pool of high potentials, including the CEO. All employees are asked to reflect on their career aspirations, the experiences and education that have led to their current roles in the organization, and the development they need to reach their goals.
What makes Lenovo's talent-tracking process work, however, is that the career maps are linked to key slots across the globe and accountability for the entire process rests squarely with line leadership, not with HR. Its employees are ambitious, and Lenovo needs to demonstrate that it is serious about developing their careers.
Do SCB, HCL, and Lenovo have a choice about how they approach development? Absolutely. They could focus on attracting the small handful of people with proven experience, as many companies do, but instead they hire largely on the basis of potential. They could enroll in the "cream rises to the top" school of leadership development, believing that the best talent will emerge even if the company fails to provide development opportunities. But the companies that are winning the talent race in emerging markets are not only using brand, opportunity, and purpose to attract the best people; they are investing heavily in career planning and professional development even at the lowest levels, because the workforce is so young. These companies' cultures send a powerful message to employees: Your potential is limited only by your dedication, effort, and ability to produce results.
Culture, however, can play a central role in employee retention. Hemant Mishr's team at SCB sells into several of the most economically depressed areas in the world; Mishr joined SCB largely because of its brand and its purpose, which includes a commitment to supporting local communities. He stays, he says, because of the culture: SCB is a meritocracy that carefully nurtures his career, and it lives up to the values that attracted him in the first place. "It's not about pay," he says. "I could go elsewhere and earn more-lots more."
Like Mishr, many of the people we interviewed were seeking a culture that would support the promise of an accelerated career path with growth opportunities for everyone, a commitment to meritocracy, and custom career planning. HCL Technologies has such a culture. A global IT company headquartered in India, HCL employs about 55,000 people in 18 countries. When Vineet Nayar became its president, in 2005, he knew he had to do something drastic to turn around the company, formerly one of India's most innovative, which in 1999 had been first in the country in terms of revenues but by 2005 was fifth.
Nayar started with culture. He told us, "I wanted to create an environment where employee development and empowerment was the most important thing, because ultimately I wanted value-focused employees who were willing and able to drive an innovative, sophisticated experience for customers." Nayar quickly assembled a 20-person team of "young sparks," an energetic group from among HCL's top employees; they coined the slogan that became HCL's strategy for the next two years: "Employee first, customer second." The notion is simple-the best way to bring value to customers is to empower employees.
Throughout 2005 Nayar and the young sparks unveiled initiatives designed to remove barriers to employees' doing their best work. They started by revamping the company's intranet. Using a software application, employees can "raise tickets" to report problems with HCL services and processes. In real time they can watch the actions taken to correct a problem, and a ticket can be closed only by the employee who raised it. By 2006, employees were raising 30,000 tickets a month. The site also created transparency: An employee can pose any question at all to Nayar, who personally answers up to 100 inquiries a week. Shortly after its revitalization the intranet was being visited by close to 25,000 employees every week.
In addition, after a few months in office Nayar posted his own 360-degree feedback on the intranet and encouraged his senior managers to do the same; today more than 2,000 managers publicly post their feedback. Indian companies traditionally control information at the top, so the move to public 360s truly distinguished HCL. In interview after interview employees told us of the tremendous impact such transparency has on their career choices.
In another differentiating move, HCL instituted "trust pay." Many IT companies in India offer employees a combination of 70% fixed pay and 30% variable pay. In practice, high internal targets make it difficult to earn that 30%. HCL decided to offer 85% of its employees (mostly junior engineers) a fixed compensation rate, to be set at the beginning of each annual cycle. Some new hires actually thought a mistake had been made in their offer letters, because they'd never known another company to offer trust pay. This is very appealing to recruits from the developing world, because often their whole families are invested in their success. Parents, siblings, and other relatives have worked hard to send them to school, and once they know they can support their loved ones, they can focus on their work.
Because HCL has stayed true to its promises, its employees are dedicated and its customers are taking note. The company's reputation for customer service has consistently improved over the past four years, resulting in major new contracts. Nayar, who is now the CEO, says, "Putting employees first isn't about launching a few initiatives that make them feel good. It's about offering a workplace where employees, no matter their level, can have an impact, can be a part of something exciting, and can grow professionally and personally."
Leadership development is another cultural element that strongly influences retention. Careers must be carefully nurtured, and finding the time to do that may seem like a luxury when the pressure to grow is so great. But companies can't set such concerns aside, lest they lose high-potential talent as fast as they bring it in.
Lenovo very methodically provides accelerated development opportunities for its employees. Mary Eckenrod, the head of talent management, has conducted extensive research into how leaders learn and the potential career stages at technology-based organizations in emerging markets. She has worked with Lenovo's top team to construct career maps and pipelines for every member of the company's pool of high potentials, including the CEO. All employees are asked to reflect on their career aspirations, the experiences and education that have led to their current roles in the organization, and the development they need to reach their goals.
What makes Lenovo's talent-tracking process work, however, is that the career maps are linked to key slots across the globe and accountability for the entire process rests squarely with line leadership, not with HR. Its employees are ambitious, and Lenovo needs to demonstrate that it is serious about developing their careers.
Do SCB, HCL, and Lenovo have a choice about how they approach development? Absolutely. They could focus on attracting the small handful of people with proven experience, as many companies do, but instead they hire largely on the basis of potential. They could enroll in the "cream rises to the top" school of leadership development, believing that the best talent will emerge even if the company fails to provide development opportunities. But the companies that are winning the talent race in emerging markets are not only using brand, opportunity, and purpose to attract the best people; they are investing heavily in career planning and professional development even at the lowest levels, because the workforce is so young. These companies' cultures send a powerful message to employees: Your potential is limited only by your dedication, effort, and ability to produce results.
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