21 NOVEMBER 2020 – London, UK
Note: Stratum’s original article published in Global Business Reports’ MACIG West Africa Edition. See link.
MAKING THE BEST PEOPLE STICK
2020 has been the year when the ubiquitous phrase ‘our staff are our greatest resource’ became akin to an awakening. The storm of the Covid-19 pandemic continues to blow a stark reminder to businesses that their people are genuinely indispensable. Adjusted workforce needs, ominous risks, and the call for true leadership have been catapulted centre stage.
The next few years announce themselves to be tumultuous, as we traverse a post-Covid world and learn to navigate an increasingly candidate-driven market ahead of the inevitable commodity boom currently gathering pace. These factors demand the best people and the best leaders.
Attracting star talent is only half the question though; they also need to perform and “stick”; that is, to fit with the culture, generate ROI, etc.
But how do you do that?
A sharpened focus on people strategies marks the right time to look more critically at recruitment strategies and address some of the most common, yet costly mistakes.
First, we must understand where it goes wrong.
A fundamental error we see time and time again is that the most commonly used hiring strategies are designed to get the candidate in the door, not support retention. Companies are then left exposed to the risk of a new hire leaving after only a short period, resulting in substantial additional cost, lost time and commercial downtime. And, perhaps worst of all, going back to square one in finding a candidate, again without any guarantee of success.
Over the last decade, mining companies with operations in emerging markets, particularly Africa, have to deal with high attrition rates – often up to 25% per year at GM and GM-1 level. Said differently, each mining site loses at least 1-2 of its top six-eight business-critical managers every year. Senior-level, site-based appointment failures occurring in the first year can cost companies sums in the six to seven digits range, excluding the upheaval and culture/morale impact.
Research across industries indicates that around 80% of people will leave roles for behavioural reasons (such as poor cultural fit or friction with co-workers/ managers). Yet only 20% of these decide to exit due to a poor fit with the role itself (e.g. a mismatch between required skills and existing skills).
The data clearly pinpoints compatibility between candidate and organisation as the key to improving retention or ‘stick rate’.
Despite this glaring evidence, the majority of organisations still hinge hiring decisions on competencies and skills and mostly ignore cultural fit (especially from a scientific perspective). A staggering 80% of people are recruited based on only on subjective skill assessment (the routine CV appraisal, interview and references).
Mike Tyson famously quipped that “everyone has a plan until they get punched in the face”. But what if your plan, if you have one, is suboptimal?
Back in 2016, questioning this inefficient hiring approach led Stratum on a deep dive search for scientific ways to match candidates and clients for a long term fit. Is there a way to assess cultural fit just as well as job fit?
The good news is, there is.
In 2016 Stratum started conducting scientific behavioural profiling as part of our standard recruitment process, giving clients a meaningful, in-depth view of each candidate. Through this, we augmented conventional assessment methods such as an interview, CV, (and, admittedly, gut instinct). Crucially, it also offers stakeholders the opportunity to agree on the behavioural profile they seek in the new hire before the recruitment process commences, rather than afterwards. This method proved to significantly boost retention rates of new hires; retention rates in year one now stand at 96%, resulting in significant savings on time, money and commercial downtime.
Mining companies can dramatically de-risk their recruitment process by obtaining multi-dimensional insight into candidates before they make hiring decisions.
When it comes to people, there is always complexity; people-based transactions can never be mechanical or static. Culture fit is dynamic and has to be continuously tested and managed internally to support retention throughout the hire, and not just at the outset at the recruitment stage.
Another common mistake companies make is failing to treat recruitment as a strategic, carefully planned business activity that is integrated into routine operations and thinking. That approach should also apply when outsourcing hiring processes, particularly when it comes to business-critical roles with a substantial effect on the bottom line.
Miners often underestimate the importance of rigorously vetting the Search Firms they engage with, ending up paying hefty fees for what amounts to a rushed reactive search or advertisement on LinkedIn, often performed by a junior member of staff.
Not all partners are equal. Executive search and mine-site focused recruitment consultancies should have the depth of experience to act as a true partner. They should challenge common thinking and ask hard questions. They should be a sparring partner, ready to join in with innovation, IP, valid and trusted selection methods, market access, and data-driven insight.
Fundamentally, they will value quality over speed, proactivity over-reactivity.
This is the scientific data-driven formula that works. But only when applied to the right people. Our advice is to align yourself with professionals.
High performance is the best arm to survive a highly precarious economic outlook, as well as the inevitable mining talent squeeze, closer than we wish to admit. Going a step further, the right people will most likely make the difference between thriving and surviving.