You Need to Offer More than Flexible Working to Stop the Great Resignation

We’ve all been there in the last year or so. You’ve completed the long ‘commute’ from your kitchen to your home office. Quite frankly, office is a grand term for the small room you’ve taken over with a makeshift desk, laptop and monitor.

Your day is spent speaking to teams virtually, some of who you’ve hardly met in real life.

It’s not perfect, but you’ve come to enjoy some of the perks of working at home – actually seeing your family and friends during the week is a plus.

But now, the call has come to return to the office at least some of the time. Simultaneously, you keep getting the tempting ping of messages via LinkedIn. There are a lot of opportunities out there right now in your field and flexible working means the radius of possibility is much wider than ever before.

It’s been an endurance challenge, working through the pandemic. Now the job sector is booming, is there anything actually keeping you loyal to your current company?

The Age of The Great Resignation

I am hearing a version of this story again and again, only from the top down as senior leaders ask why so many employees are leaving and how to halt the skyrocketing attrition rate.

The stats are not encouraging. Our Arrows tech job salary survey 2021, which was sent to our network of thousands of technologists, suggests around 47% plan to change job within the next year.

The huge growth in job vacancies will be fuelling this figure. According to the latest ONS data, the number of job vacancies in the UK between July to September 2021 was a record high of 1,102,000.

I wrote in a recent article about how companies can improve their interview process to secure new talent. But, on the other side of the coin, businesses need to focus on the existing workforce and their happiness and loyalty. Otherwise, it could quickly become a situation of “one in, one out.” 

“Businesses must focus on the existing workforce … or it could quickly become a situation of “one in, one out.”

The Critical Importance of Culture

I believe to keep a workforce engaged; company culture is the most important thing any business can focus on.

With flexible and hybrid working the norm, gone are the days when working in the flashiest location or being taken out for lunches are motivating. The companies that will win are the ones who have a culture that employees are proud of, that champions things that are important to them and makes them loyal enough to stay in the face of tempting opportunities.

Some of the most important aspects of this I hear about, from research among both Arrows employees and our candidate network, are:

1. Flexible Working is an Expected Benefit

Flexible working has become a benefit in the same way holiday days and the pension scheme are. If you offer no flexible working at all, people are likely to leave (and won’t want to join). I caveat that some jobs – like teaching – obviously can’t offer working at home options! Other than that, whether you offer two or three days a week in the office will only create a mild preference.

If you think you’ve solved the retention challenge just by offering flexible working, you’re mistaken. 

“If you think you’ve solved the retention challenge just by offering flexible working, you’re mistaken.”

2. Career Development is Still Key

There’s no doubt, lack of career development is one of the biggest reasons why people leave companies. Some 85% of respondents to our Arrows tech job salary survey 2021 stated career progression is important or very important to them.

In the sales world, people used to stay because they were learning from their inspirational peers. How to maintain this when you’re not in the office together five days a week?

At Arrows Group, we’ve acknowledged that now we can’t always do in-person training. The inclusion of more video-based learning has allowed us to create training plans where delegates at the same level from our international offices can come together. This shared experience helps different teams feel more connected to each other, as well as supporting development.

Peer learning remains critical for graduates and junior team members. Our junior staff members are in the office four days a week, instead of two or three. Senior staff rotate extra days in the office to support them on a voluntary basis. We are still working on the perfect combination and I’m not sure we’ve fully cracked it yet.

We do ‘lunch and learns’ every second week, paying for lunch on the condition that people eat with teams other than their own.

3. Embed Diversity, Equity & Inclusion

Aside from personal development, people care about what sort of company they work for, that it’s progressive and equitable. Policies and approach around DE&I are absolutely, critically important.

As a company, as well as it being one of our key pillars, the biggest thing we are doing is supporting listening and learning opportunities for all. We have held training sessions hosted by Johanne Penney, CEO/Founder of ‘Amp Up Your Voice’, who helps get DE&I on the agendas of corporate businesses. Her progressive approach helps facilitate a culture where we can all talk openly about racial equality, empowering confidence to make changes where needed..

People also want companies to follow through with their actions. This can start from the moment you interview – if you claim to embrace diversity, this should be represented by the interview panel. And one part of valuing equity means recognising what support people from different backgrounds may need to get them to a level playing field with their peers.

DE&I needs to be publicly embraced and not solely an HR initiative.

4. Company Purpose Matters

We increasingly hear – particularly from graduates – that what a business stands for makes all the difference, including its approach to people and the planet. In our Arrows tech job salary survey 2021, 65% of respondents said they find it important or very important that a company has a positive purpose in the world.

“What a business stands for makes all the difference.”

Supporting charities is great, but it can be a bit surface level. People are moving away from CSR to entrenched sustainability and actions to support climate change have rocketed up the list of importance.

It’s very clear that we all need to do our bit, whether that’s as individuals or as a business. If employees find their company lacks ambition and a clear plan, they may well vote with their feet and leave.

5. Listen to Feedback

What is normal in the world of work is still evolving faster than any time I remember in my career.

We try to make sure Arrows employees have plenty of opportunity to have their say – they’re the ones who’ll let us know if we’re getting something wrong! We do monthly surveys, but also make sure there’s that crucial facetime when in office, even if that’s an informal 15-minute coffee chat catch-up.

We recently discovered, for example, that our monthly Friday lunch incentives had lost their shine as a perk, given that most people work at home on a Friday. So, we’ve switched to quarterly overnight ‘staycation’ incentives, with activities like yoga, or a cooking course. This is much better suited to what people want and is proving very engaging.

The reality is, you’re not going to be able to stop everyone leaving. But, if you want employees to feel company loyalty, they need to see that the things they care about really are embedded from the top down.

Are you experiencing a rising attrition rate? How are you trying to promote company loyalty? I’d love to hear if any of these ring true for you.

We’re in a purple patch of opportunity for candidates right now – especially in the tech sector.

Recent research suggests tech jobs make up 13% of all UK job vacancies, with the number of advertised roles 42% higher than 2019 levels – i.e. before the disruption of COVID-19. *

This is fantastic news for anyone starting out in or seeking a new role in the sector. For hiring businesses, though, competition for the best candidates is fierce. In my view, companies need to look hard at their interview processes and ask if they are fit for purpose in this market.

Where I See Interview Processes Going Wrong

1. Excessively Robust

In this market, it’s important to shed the opinion that yours is the only company people want to work for. Never mind the top 10%, the top 40% of candidates have multiple options.

Getting the best of the best does not mean you need the hardest tests at interview, or the most interview stages. Waiting six months for the ideal candidate is not a realistic choice. Lots of people are affected by a failure to hire. It will pile extra pressure on existing teams, create lost opportunity costs and make it harder to keep up with the competition.

We write progress reports for our clients, showing job rejection trends among other things. The proportion turning down an offer between first and final interview stages has crept up from 20% to more like 60% among companies not embracing a more controlled interview process.

There must be a balance.

For many of our successful placements, we’ve been able to get clients to commit to a two-stage interview process within a two-week period. That means they get the choice of the candidate pool.

For candidates involved in this process, we’ve been able to keep them committed to the process and not accept any other roles.

“Crazy to think we used to have 4 stage interview process, by streamlining to 2 stages and paired programming tech test we have gone from hiring 3 engineers a month to 10” – Delivery Manager – Global Media.

2. Lacking Creativity

Putting in place a faster interview process should not mean looking for shortcuts. Of course, you can’t just ring someone up and say I’ve found your CV, I want to offer you a job! They’ll say no. People want to feel like they’ve earned their offer and job and it’s been a well thought out process.

But you don’t have to have a four-stage process with a two-hour technical test that runs across weeks. There are creative alternatives that can offer much more interesting insights.

For example, do you want to find out if someone’s technically good and are not sure how to do that without putting them through a 3-hour technical test? Paired programing is a great option, where someone internally in the team sits with the candidate for an hour to talk through some code together. You can get a lot more from that, seeing at the same time how they work together with others.

It’s also not necessary for candidates to meet every stakeholder – be confident in the judgment of the few!

Robust references, taken post offer, are also a huge help. Once that person starts, you’ll know within a few months whether the references and skillset are honest and the drop-out of new hires will be minimal.

3. Mediocre Candidate Experience

Candidates tend to look at two things when deciding whether to accept a job offer: the ease of interview process and the candidate experience. Salary and package tend to come after these.

The candidate experience must be really engaging, with a committed time frame and feedback loops. If the candidate experience is not great, if they’ve gone through lots of hoops, if it’s not been consistent, if it’s been time consuming, they will make preferences for other companies.

I do see a growing awareness that the interview process can cost good people. I’d say the companies who are winning have really linked this together and said, “we must improve our candidate experience”.

I underpin all of this with the massive difference between an effective process and rushing or dropping quality. It’s detrimental if you’re just trying to pop offers off left, right and centre. But the halfway house is a robust process captured within two stages that is consistent and fluid.

“Having started 10 different interview processes, I had to reduce down to the top 3. The companies offering a robust and defined interview process played a major part in my decision of who to continue with. To my surprise the best interview process was with a global Tech Business, and I start in a month!” – Senior Front-End Engineer.

If you want to talk more, I have plenty of case studies with specifics on how it’s done well in the market and am always happy and open to discuss.

Charlie Sell – Group MD, Arrows Group

*Source: https://www.cityam.com/booming-uk-tech-sector-now-accounts-for-one-in-eight-jobs-and-theyre-much-better-paid/

If you are a frequent user of LinkedIn, you too will probably have noticed a significant volume of polls in your News Feed in recent months. These could easily be dismissed as irritating, attention-grabbing gimmicks. Having created a few polls myself recently, instead, I have been overwhelmed by the number of views and comments.

I am now re-thinking them as a useful addition to real-time business decision-making, giving extra support to choices around the rapidly changing future world of work.

The Strength of Your Network

This was the poll that kick-started it all. I asked my network how many days people would ideally like to work from home vs in the office. There were more than 3,500 votes from my followers ¬— this blew my mind!

This sort of information snapshot is important. As we navigate the new world of work, attracting and retaining staff is front of mind. With most of my LinkedIn network working in the tech sector, this is as close to polling a relevant population as I can get. It’s much more pertinent than a Google search of the same question.

Shaping Policy

I’m not suggesting LinkedIn polls should drive policy. They can be a helpful, quick dipstick. They can support an approach you’re already planning to take or spur further research. We also conduct anonymous internal staff surveys – polling everything, without causing death by poll.

Taking that first poll again as an example. It suggests the most desirable way of working right now is two to three days a week at home. This aligns with the approach we are looking at for Arrows Group. We’re asking people to come into the office two days a week, along with five flexi days a month. These flexi days are reserved for face-to-face client or team meetings outside of the normal working days.

The trick is not making it a hard rule. You can see from the results, 64% wanted a different working balance, from 1 to 5 days at home. In the comment section, several people said they would have ticked zero days at home if it was an option! We are trying to make it possible for people to choose what’s right for them. It’s not about a micro-management environment and success is not judged on physically being in an office. On the other hand, people need to be more accountable to fixed outputs when working from home, so you can judge results.

Facilitating new ways of working has also meant some important logistical changes. We are moving offices. We are changing from a location with 200 spaces to one with 100 spaces plus large events area for full-company occasions. We’ve invested in hot-desking, with people booking their space. Everyone’s moved onto laptops, lockers and ‘bring your own device’ with an app, instead of telephone landlines. A lot of this was done within a matter of weeks in March 2020, it’s now just about making it the new norm.

“The trick is not making it a hard rule … We are trying to make it possible for people to choose what’s right for them.”

Continual Listening

Polls, whether external or internal, only indicate what people are thinking right now, and we know this is a time of rapid change. In six months, the results could be different. There are also conflicting results to balance. Another poll I conducted, for example, suggested loneliness was an impact of working from home for a lot of people.

The most important thing we can do as a business is to keep listening, seeing how we can cater to the differing needs of our people and achieve our business goals.

Expect to see a few more polls from me in the future!

Charlie Sell – Group MD, Arrows Group

I clearly recall my first cultural error at work. I had been in my new role as Director for the Netherlands for two months. I was still adapting to a new country, finding my feet managing our first fledgling international offshoot. There were five of us, all Dutch except me, working in a dimly-lit sous office in central Amsterdam.

It was our end-of-the-month talk. It had been an average sales month at best. With the end of quarter looming, I thought – here’s my opportunity to do a loud, rallying meeting and get the team excited for the month ahead. Exactly like we did in the UK. “OK team,” I boomed. “Here’s how we’ve done this month. Not brilliant. But it’s fine. Each one of you just needs to bill £XXX next month and we’ll be on track. It will be hard work but it will be worth it. Just think. If you make it, you’ll get £XXX in commission! That’s a lot of money!”

Pause. Wait for cheers and applause.

“Er, Charlie,” one of the team cuts in. “That’s great and all. But. We really want to understand WHY we’re doing this.”

Why? What do they mean why? Surely I had just explained the financial potential.

“The money is nice,” another one of them chipped in, “But if we reach that target, how do we compare to the rest of the company? And to other companies in the Netherlands?”

This was a crossroads moment. I had two choices. Keep conducting business in the way that had worked when I was in the UK. Or listen, and change. I chose Door B.

The changes came almost immediately. I started discussing our market share and goal within Amsterdam with them. They told me they cared more about team performance than individual results, so I switched to team targets. We created friendly internal competition between the Dutch and UK office. And from there, we made other cultural shifts. They told me they didn’t appreciate regimented office hours and break times. So we moved to a more flexible way of working. Suits were out, smart jeans and shirts in. Eventually, I even started bring my dog to work.

If you’re wondering if we did the right thing – and a vital part of this was the UK leadership giving the Dutch office the freedom to make changes – the proof, as us Brits say, is in the pudding. Financial results improved almost overnight, as did morale and a natural – as opposed to forced – work ethic. As the office started to grow, staff retention improved and we found it easier to attract new colleagues because of our genuine culture differences.

By 2014, Arrows Group international sales – now also including our new Munich office – had grown from £1.5m in 2012 to almost £9.0m per year, making us the highest entrant on the Sunday Times HSBC International Track 200.

Navigating differences between international cultures is hugely important for globalising businesses. This is true for a huge number of my clients – the UK has the most globalised ICT sector in the world according to the Economist’s ICT Globalisation Index. At the same time, a recent report suggests two thirds of senior UK business directors are worried young adults joining their company will lack the education or perspective to function in a multicultural economy.

I would love to say my positive experience in the Netherlands has given me the magic bullet for success in an international context. What it has taught me is that each country is unique, and expecting to directly export the way of working from one country to another probably won’t work.

Take my current challenge. Just over a year ago, we opened a new office in India as a means to offer our clients global staffing solutions. My first visit to the office – essentially, for cultural immersion and to get to know the team personally – was received with nothing but positive feedback. On the second visit, however, I went with a more ‘down to business’ attitude. Weeks later I received feedback from the senior manager that some of the team missed my collaborative coaching style, and thought I’d become more dictatorial. What had changed?

Nothing has changed. I just needed to push the performance button a bit more firmly. So now, I’m at that crossroads again. It’s time to listen, and balance the needs of the business against what makes different people tick.

How often do you stop and reflect on the most important things you’ve learnt in your career?

I recently celebrated 12 years working for Arrows Group Global. When I joined the company in 2004, I was its first employee, working out of a small office in Clapham Common along with the two founders. Today, the company generates revenues of £100m+, has offices in London, Amsterdam and India and is in the top 20 in the Sunday Times Best Small Companies to Work For.

I have, unsurprisingly, seen a lot of changes, growth, successes and the odd miserable failure in that time. Here are my top six most valuable lessons I have learnt along the way.

1. Learn to embrace change

Change is one of life’s few certainties. Arrows Group has been through transformational change in the time I’ve worked there, evolving from a traditional recruitment business to a true consultancy.

My advice is to never see change as a roadblock and instead, try to act as a leader of change. Not every new idea has worked out. But, by approaching change with the right positive mindset, it has been easier to persuade others to follow and – when it has gone well – enjoy the results.

2. Celebrate your successes

A series of little (and big) victories have shaped and defined my career. I still remember the very first person I placed in detail. It was 50% skill and 50% luck and involved hours and hours of telephone calls (this was, after all, pre LinkedIn). It was a big moment for the business – the first deal by someone other than the two owners. I celebrated then, and I make sure I celebrate my teams’ successes now.

3. Nothing is more important than your people

One of the things I am most passionate about is helping people reach their potential. I am a huge believer in giving people the room and autonomy to be fulfilled – even if that means giving them some of the responsibilities I really enjoy myself. As a result, I have almost never had a superstar leave.

I have occasionally lost really good people because they needed something different at the time in their life. It is hard when great people go, but sometimes it is in their best interests. Then, the right thing to do is to support them on their way.

4. Joining a start-up is a recommended risk

Joining a new company, instead of a well-established business, is a gamble. I joined Arrows because I believed in the owners and their vision and I saw the growth opportunities. I can honestly say it is the best gamble I’ve ever taken.

If you want to be part of a business long-term, I would recommend joining a small growing company you can be an influencer in. There are of course flip sides – you meet more people in your industry in a big company and will probably have more structured training opportunities – but nothing takes away from pioneering something yourself.

5. Positivity and persistence are two of the most valuable personality traits

This is hardly new news, but positivity and persistence are really essential for success. Without a positive outlook, internally and externally, people won’t follow you. And persistence gets you through any setback. During the early stages of company growth, we all had to be persistent about getting out there and winning business. You can’t fall apart because of one bad month – you pick yourself up and get on with the next one.

6. What satisfies you in work evolves over time

When I first joined Arrows, I didn’t know what my career would be. I was attracted by sales and the opportunity to earn good money quickly. Today, my satisfaction comes from growing and developing business, instead of from short-term wins. I like to look year-by-year, not month-by-month.

I believe mindset and motivations change too. When I started, I worked 12-hour days or more every day. The camaraderie and energy made it worth every minute. The number of hours I work is no longer a big focus, though I still tend to do long days. I believe when people are busy counting hours, they’re missing the point of why they’re working. For me it’s about the things I want to achieve. It’s a true cliché to say you get out of work as much as you put in.

One thing that doesn’t change though: recognition. From a graduate to a director – it’s always appreciated when someone says well done. And it’s great to pass that on.

Charlie Sell is Global Director – Sales & Operations at Arrows Group International.

Follow if you would like to hear more from Charlie in the future. You can also connect with him on Twitter.

It is the age-old debate for any business. What compensation structure should you offer to keep senior managers motivated, fairly rewarded and, at the same time, encourage them to act in the best interests of the company?

The ink is now dry and the dust has settled on our budget planning process at Arrows Group Global (AGG). Almost 20 iterations later and I’m confident we have a solid plan in place.

One of the most critical issues for me during months of budget discussions has been setting the incentive plans for my management team. The consulting industry is sales-led, so it is normal from day one to offer base salaries with bonus targets. But, at a senior management level, there is an even greater expectation that part of the compensation package is linked to business performance – reflecting a higher involvement in decision-making.

Changing behaviour through compensation

Here’s a spoiler: there is no ‘one way’ for creating incentive plans. At AGG, we set bonus targets for our managers based on either EBIT or Gross Profit. I’ve worked to both myself. What experience tells me, is that the choice can make a huge difference to how people behave.

EBIT vs Gross Profit

EBIT = ‘Earnings Before Interest & Tax.’

Calculated as revenue minus expenses (excluding tax and interest). Also known as ‘operating profit’. It focuses on a company’s ability to generate earnings from operations.

Gross Profit

Total revenue / sales minus the cost of goods sold. Costs only include variable costs, like materials, equipment, contract labour etc. Costs do not include fixed costs, like rent, marketing, salaries or office supplies.

Source: Investopedia

For and against EBIT-based incentives

In my experience, EBIT-based targets drive the following positive and negative behaviours:

Positive:

• Under EBIT targets, the individual takes responsibility for the outgoing costs of the business as well as driving revenue. That means you can trust them not to be too exuberant with costs
• They are more aligned to your interest as a shareholder – which is the bottom-line profit
• It brings a high-level of trust. They will typically behave as though it is their own business
• It can be very motivating for employees to have an extra sense of ownership and accountability.

Negative:

• Managers can get too sucked into operations and cost-savings instead of top-line revenue. Saving £100 on a printer isn’t important if you’re missing out on £1,000 of sales
• Managers prone to penny-pinching won’t want to invest – e.g. in staff training or entertaining. They will think of short-term annual results, instead of the long-term importance of looking after and retaining employees.
• Another effect of EBIT short-termism may be reluctance to hire new people as it’s an added cost, or firing people too quickly if they’re not performing

For and against gross profit-based incentives

The same exercise, but this time on the behaviours when compensation is tied to gross profit:

Positive:

• It keeps people thinking about the top-line and bringing revenue into the business
• If someone is valuing your business – private equity companies, banks etc. – they’ll be most interested in your gross profit. So, arguably, it is better for increasing the value of your business
• It leads to a longer-term view, looking at the growing enterprise value
• They are more likely to hire new people and take time to train them and improve their performance

Negative:

• If EBIT compensation makes people too tight with money, gross profit can have the opposite effect. Managers may become overly generous with entertainment costs as they don’t affect their target
• You need to have another party keep an eye on their expenditure. The behaviour is less likely to be that of someone who feels like it’s his or her business too.

A split-incentive solution

My view, having tested and worked under various types of compensation plan, is that only a small number of people should have a bonus based primarily on EBIT. It should be reserved for senior individuals who have an additional long-term motivation through, for example, equity shares.

For everyone else, they should be targeted on gross profit. Or, better yet, a split-incentive solution where, say, 80% of their bonus is from the gross profit of their team and 20% from the EBIT of the team (or company). This provides the right balance between long-term and short-term behaviours.

And finally – never under-estimate the need for a strong Finance Director, who can strike the balance between releasing money when necessary and not saying yes to every request. They will be greatly helped by a watertight budget. Which explains why we didn’t settle our budget until version 20 …

The biggest headline in the staffing world right now is ‘New Year, New Job’. Put it into Google and you’ll get over a billion results. For business leaders and hiring managers concerned about their employees leaving in droves, I have good news. In my experience, reports of January job-hunt mania are hugely overinflated – certainly when it comes to your star employees.

For top professionals, the only thing that will tempt them away is a great opportunity and these can come up at any time. Bonuses and budget years also have their own impact – in the City, people typically hold on until after bonus time to look around.

In case you do hear of your people being headhunted, here’s my advice on how to react based on my professional experience (yes, ironically the headhunters in my team also get headhunted), plus some thoughts on keeping your employees happy and motivated all year round.

Don’t be afraid of your staff getting headhunted

My theory is that the good ones will stay with you, the others will leave. That’s provided – as a leader – you’ve created a career and environment they want to be in. I’ll come back to that.

I’m also not afraid of people testing the waters by listening about new opportunities, as long as there’s a balanced view at the end of it.

A cry for help or a genuine job?

You tend to find out your staff are speaking to headhunters at one of two points: when they first get called, or when they’ve got a job offer.

If someone tells you they’re being called, it’s generally a cry for help. If they’re one of your top employees, this is an alarm signal and a sign you need to invest in them in some form (pay is not usually the big issue – see below). If it’s someone whose long-term place in the company you’re not sure of, support them exploring other options.

One insider tip: sometimes headhunters call because they’re trying to find out information. This can be flattering to the recipients’ ego, but might not actually mean there’s an opportunity for them right now. So, hearing that your staff are receiving calls from headhunters might not mean anything.

If someone tells you they have a job offer, again if they’re in your top 20%, find out why they’re thinking about taking it. If it’s about money, let them go. Getting drawn into a Dutch auction rarely works. If it ‘s something else, find out what you can offer to keep them. If people really want to go, they’re unlikely to tell you until the ink on the new contract is pretty much dry.

Be confident in what you offer

Top employees are rarely motivated to move by money alone. But, you need to be confident that you’re offering what you can in terms of total package – money, benefits, career progression and training. If you’re underpaying people then, to be blunt, more fool you.

Make sure you nurture employees, supporting their career progression. This way, the only ones who will leave solely for a salary increase are the job hoppers, forever chasing a pay cheque.

January blues is real. So is August blues.

A number of articles will suggest this is a good time of year to set extra incentives and competitions to beat the January blues. I agree. Not because you’re afraid of people leaving, but because you want your workplace to be enjoyable. So, don’t stop at January – I also run incentives in August to combat quiet holiday months, and do random competitions if it seems like a quiet week. It’s always the right time of year to create a happy, motivated, office.

Finally, if you want to be worried about any month – watch out for March. In my experience, that’s when the market really moves.