Organizational Culture and Talent Retention

Friday, April 22, 2011

Talent retention is often linked to tangible features such as pay, benefits, rewards, recognition, and promotional opportunities. Consider for a moment the potential impact of organizational culture in general on retention and specifically sexual harassment. An organizational culture which tolerates sexual harassment, even passively or unknowingly, opens the door to significant talent retention challenges, not to mention costly litigation. The key to remember with sexual harassment or any form of harassment is that it is defined in the eye of the harassed employee.

Organizations will spend millions of dollars in revenue to recruit and retain the talent they perceive will lead and manage their business enterprises to the top of the competitor list in their respective industries. Yet many of those same companies will fail to manage issues dealing with sexual harassment by ignoring the issues, thinking it will go away by itself, transfer the offending party, terminate the offending party or worst, terminate the harassed employee. Such behavior starts at the top, witness, “HP CEO resigns amid sexual harassment investigation”, ”Second Lawsuit Surfaces Accusing American Apparel CEO of Sexual Harassment” or “Exigen CEO Accused of Sexual Harassment”.

Now consider the disruption these events caused their organizations, the loss of goodwill, reputation, the fall out in turn and churn of lower level individuals, the employee reaction, the loss of direction and momentum within the affected enterprises. There is an interesting phenomenon going on in American workplaces today. Felix Verdigets, PhD, an organizational effectiveness consultant recently reported, “Despite national unemployment levels at five-year highs, top talent is leaving our organizations en masse. … Further, according to a study by Leadership IQ, 47 percent of high performers are actively looking for other jobs.” That means the co-worker sitting next to you is looking for a job somewhere else, outside of your organization.

While this may seem like a discussion about sexual harassment, it is really about management failing to “manage” the organizations which have been entrusted to them and thus risk the loss of key members of that enterprise. Many organizational managers are well trained, educated, talented, and experienced leaders, yet some will not “sweat the details”, “turn a blind eye” or “bury their heads in the sand” when it comes to a cultural environment which is hostile. Example, one UK employer was held liable for the failure of its management to act on first hand information and stop verbal abuse between co-workers.

Fundamental to an organizational culture supportive of talent retention is the education of all enterprise members as to their role in preventing a hostile work environment. In today’s leaner and flatter organizations, there is no luxury to be had when top talent leaves prematurely.