Editor's Note: This story contains one of our 10 Best Business Lessons of 2016. Click here to read the full list.
In a recent Wall Street Journal article, Superbosses author Sydney Finkelstein argues that some of the most successful leaders encourage their top-performing talent to leave. He also observes that some of the most transformative executives have the shortest tenures at the companies they reshape.
The reason, Finkelstein says, is simple: It's difficult to acquire and hold onto outsize talent, but far better to house it within your organization for a short time than not at all. Rather than fight turnover, companies may do better to embrace it—and instead focus on improving the quality of the people who cycle through its doors, as opposed to reducing the quantity of those who do.
This a concept my own company is taking to heart. After all, more money and bigger titles can only go so far, particularly for talented employees who aren't primarily motivated by extrinsic incentives like those. Sometimes the next level up simply doesn’t match an employee's aspirations, skills, or career timetable.
So the best thing for an employer to do is to help them find another great opportunity, instead of pouring time and resources into trying (and failing) to get them to stay. The companies that succeed will build reputations for launching leaders' careers, which can help them attract the next wave of promising talent.
That's the theory, anyway, that recently led us to formalize the exit route as a key part of our staffing plan. The way it works is this: Throughout their tenures, we ask our employees to consider (and reconsider) their desired career goals for the next five to 10 years. We discuss possible paths to help them achieve those goals, and the skills and experiences they'll need to acquire along the way.
Because we hire many younger professionals with limited work experience, we often have to invest heavily in developing their skills and expertise. Generally speaking, we hope that all high performers will stay with us for at least three years, both so our investment will pay off and so they'll have time to thoughtfully consider what they want next in their careers. After that period, though, we work with them on advancement opportunities—inside the company and out.
To do that, we work with our employees to define three potential paths: two within the firm and one beyond it. If they choose the exit route, we make introductions to potential employers, serve as references, write LinkedIn recommendations, and even coach employees through the search process. Sure, these are resources we could be putting into retention efforts instead, but the preliminary results suggest we're doing the right thing.
Here are a few of the benefits we've already begun to see.
Increased employee engagement and retention. Being able to openly discuss career routes is a great relief for many employees, and this openness contributes to a supportive, transparent culture. The program also encourages managers to think more like career coaches than micromanagers preoccupied by short-term needs. Managers learn how to engage with team members in thoughtful, authentic ways, building trust and loyalty and improving overall employee engagement.
And since managers actually understand their employees’ career objectives, we’re better equipped to assign meatier projects—even if they're not directly tied to employees’ roles—to help them build their desired skills. This can help increase the odds that our most talented employees stick around longer, because they feel valued and see tangible advantages to doing so.
More predictable succession planning and smoother transitions. When exit paths are discussed forthrightly, managers can gain more time to plan employees' departures. There’s plenty of runway to document all their projects and processes. There's also more time to think carefully about contact changes for customers and partners, making the handover smoother and more thoughtfully carried out.
Outgoing employees benefit as well, getting to leave the company on a high note, feeling celebrated, appreciated, and grateful to the company for helping them land their next big role. Nobody's blindsided or left feeling bitter.
Employer branding and recruiting benefits. In the age of Glassdoor, Yelp, and Quora, it’s more important than ever that employees leave feeling like their time with an employer was well spent. Companies that have built reputations not just for hiring well but for supporting talented people can get a major recruiting boost. Former employees are potentially some of your most powerful assets—people you can leverage for referrals or even consider rehiring later in their careers.
It's far from intuitive for most companies to invest heavily in recruiting and professional development, only to actively facilitate employees' departures. But after years of thoughtfully considering our employees’ needs as well as our own, we've come to the conclusion that sometimes the best path forward is out.