1. 0Introduction In today’s highly competitive environment, the biggest challenge that most successful businesses face is to arrest attrition and retain talent. What is more, people’s ambitions are fast changing and concepts like loyalty do not seem relevant anymore. Tried and tested methods are fast losing their effectiveness as talented employees become immune to such formula driven approaches. Money is important but not adequate to solve the problem. That your attrition rates are comparable to industry is no consolation.
Companies are losing highly talented people, walking away with accumulated knowledge and experience that is not easily replicable. Best talents continues to aspire more as they achieve success and try to repeat the same experience at a faster and more ambitious pace. Companies typically find it difficult to keep pace with the growing aspirations of its top talent and this is when the point at which companies needs to rethink the ways they plan to engage its employees. For the purpose of this assignment, I will discuss the talent attrition and retention efforts in Maersk, a Danish business conglomerate.
Don’t waste your time!
Order your assignment!
Maersk is based in Copenhagen, Denmark, with subsidiaries and offices in more than 135 countries worldwide and around 120,000 employees. Maersk has activities in a variety of business sectors, primarily within the transportation and energy sectors. It is the largest container ship operator and supply vessel operator in the world. One of its human resource management efforts is a program called M. I. S. E. The Maersk International Shipping Education (M. I. S. E), an enterprising graduate talent pool program Maersk runs.
This is a 2 years international education program aims to develop international employees and managers for the global activities of the Maersk Group. Every year 450 trainees from more than 80 different countries are enrolled on M. I. S. E. program. Upon completing their M. I. S. E. education, graduates have the opportunity to be expatriated to over 325 offices in Asia, Europe, Middle East, Africa, Australia as well as North and South America. The Shortfalls of M. I. S. E. Program Who are these talent pool individuals? The M. I.
S. E. participants are vetted through stringent test and education modules prior becoming business graduates. Thus, these graduates upon the program completion are regarded as talents which need to be retained as each graduate is produced at a cost of nearly USD 100,000. One practiced retention method is providing opportunity to expatriate in any of the offices of the company. Whilst looking from the outset, the prospect of being a talent of M. I. S. E. pedigree looks a fantastic career path for bright and young individuals.
However, it’s becoming increasingly apparent that there is a weakness in this programme as many of the graduates leave the company within 3 to 4 years of joining. From a starting class of 450 students, the remaining graduates still employed by the company are around 150 only. The huge attrition rate of 33% is alarming, considering these talented graduates are trained and invested upon. Among issues stated for leaving the company is:- * misalignment in talent recognition and continuous development * uncompetitive remuneration * unequal career growth alignment across countries different level of expectations by talents vs. local management The graduates are a very ambitious lot, and rightly so as they have been selected basis strong showing in their Intelligence Quotient (IQ) and Emotional/Personality Intelligence (PI) tests. This highly motivated talented group of people would need a continuous career learning curve or growth as their ambitious character warrants a fast paced learning and high performance capability. 2. 0What went wrong in the M. I. S. E. Program At Maersk, working in a culturally diverse, stimulating environment, where resh ideas and different ways of doing things are a normal part of your everyday work life. These diversity adduces excellent socio-economical advantage as well as miscellany fresh ideas basis different cultured adoption. As much a gain the diversity brings on the table, the elements of managing the expectation becomes a greater test to preserve harmonious relationship while acknowledging the need for difference in anticipation of ideas thrown across. Lack of proper motivation and being a victim of different sets of expectations, kills off the burning desire to excel and may drag to eventual departure of a talent from the organization.
Imagine a young Japanese manager (product of talent pool) being tasked to perform at an Indian office, where the culturally varied working ethics at the latter organization hinder the bonding and performance of the young Japanese manager. The different sets of approach from the local offices complicate the young manager’s drive to succeed. The Indian office fails to harness the benefits of the Japanese working ethics, rather prefer to broadcast the differences for its own bragging rights. For this assignment, I have collected data from year 2000 to 2004 (myself being a M.
I. S. E. graduate from the batch of 2004) to present the empirical statistics of talent attrition in Maersk globally. Year| M. I. S. E. Attrition (%)| 2000| 20| 2001| 25| 2002| 40| 2003| 36| 2004| 33| Beginning of new millennium, where the generations X comes of age, representing the executives and professionals in most organizations middle management level. Amidst the flourishing global economy outlook and new wealth creation, employees are looking for the best opportunities for their career. When you have a market where conditions are changing quickly, people re realizing their skills are valuable, and employees are very willing to take their skills to a new company if there is a better opportunity. Attrition may happen for various reasons, the ex-M. I. S. E. employees collectively agreed their primary instigator to leave the company had been as shown in below pie-chart. 3. 0Accountability of Talent in Maersk Who is held accountable for the talent attrition in Maersk? Human resource managers are worried about employees leaving their organizations. Not only is it costly to lose trained employees but their replacements are not easy to come by.
Hence the human resource managers strive hard to keep attrition at the minimum. Superior or Manager as a cause of attrition Majority of professionals cited in Human Resource journals that immediate managers are a bigger reason for attrition. It confirms Wayne Hochwarter [an associate professor of management in the College of Business at Florida State University] theory that “Employees don’t leave their job or company, they leave their manager”. Meeting employees’ expectations is a difficult task, and most managers cannot do it effectively and consistently.
Satisfying employee needs often gets lower priority in a manager’s quadrant of activities. Further managers do not have appropriate tools to manage employee related tasks and this leads to further dissatisfaction especially the talented ones. Where Maersk is concerns, this aspect presents huge challenge as MISE talents at most of the times appear a challenge to the existing manager/superior. This face off between manager and M. I. S. E. leads to frustration and unfulfilled performance capability by MISE talents, which eventually leads them to parting ways with the company.
Employee as a reason for attrition From research conducted by Greg Weiss, human resource professionals felt that employees leave organizations on their own. Except in a cases such as personal reasons, family issues, location preference, company brand and peer relationships, employees are not self-motivated to leave the company they are working in. Nevertheless it is important to find out common causes for employee initiated exits where superiors and/or job profile/compensation are not the cause. In the case studied, M. I. S. E. raduates feel they are not relishing their full potential and afraid the opportunity to do so is hard to come by. Therefore, rather awaiting the new challenge, they dare to seek new mission in aspirations to fulfill their ambitions. Inadequate compensation and mismatch of job profile basis for attrition With a war for talent, disparity in the compensation packages is bound to occur and a mismatched job profile increases the likelihood of an exit. The responsibility for compensation policy and enriching the job profile lies on the management of the organisations.
However, balancing financial bottom line and employee compensation is always a nightmare for them given the high cost of talented employees. Every company wants to become the ‘best paying employer’, but market forces, tough competition and a slow economy dictates otherwise. A fair and transparent compensation policy can still be adopted where each employee gets his/ her dues based on company, team & individual performance. If employees are convinced that they are compensated in direct proportion to their productivity, half of the battle is won.
The other half is won when each individual is assigned SMART (Specific, Measurable, Achievable, Reviewable and Time Based) goals and these can be cascaded from organization objectives. When all employees work on goals that are aligned to the company objectives and there is a fair and transparent system to capture employee performance, the likelihood of a satisfied and motivated workforce increases and compensation become manageable causes. Employee Satisfaction surveys is one of the ways to identify such areas of dissatisfaction, one of which may be human resource policy guidelines of the company.
If you conduct these surveys on a regular basis and map their results to exit interviews; new findings may identify critical gaps in how the employees perceive your policies. Very important trends can be identified by regular surveys conducted over the period of 1 – 2 years. These can also help define future human resource guidelines with minimal disruption and dissatisfaction. Even though, Maersk is considered a good paymaster generally, the constant poaching of talent by rival companies, the luring of talented and experienced M. I. S.
E graduates to other firms is easily done as Maersk do not compensate the remuneration equivalent to talents skills nor push for the appropriate job profile / promotion within this talent pool graduates. 4. 0Recommendations/Suggestion for Maersk Human Resource managers in Maersk should train its managers in handling employee expectations and provide them with tools to manage tasks related to their teams. Managers needs to be trained on coaching techniques to allows a manager to constantly counsel employees, manage their career growth and aspirations and track their achievements.
Employee motivation is a primary factor in retaining the talented pool of resources, thus the appreciation and compliments on their good performance needs to be made visible constantly. Employee motivation theory, namely McGregor’s X-Y Theories, is used for human resource management, organizational behavior analysis, and organizational development. Theory Y for employee motivation assumes that employees are ambitious, self-motivated, and anxious to accept greater responsibility and exercise self-control, self-direction, autonomy and empowerment.
This theory relies that management believes that employees enjoy their work. Given a chance, employees have the desire to be creative at their work place and become forward looking. There is a chance for greater productivity by giving employees the freedom to perform to the best of their abilities, without being bogged down by rules. A Theory Y manager believes that, given the right conditions, most people will want to do well at work and that there is a pool of unused creativity in the workforce. They believe that the satisfaction of doing a good job is a strong motivation in itself.
A Theory Y manager will try to remove the barriers that prevent workers from fully actualizing themselves. Human Resource managers should also be able to track changes in employee performance rating, gaps between employee and manager performance, sudden increase in paid-time-off and should be prepared to act quickly if any visible trends are evident. In the case of Maersk M. I. S. E talent retention, an erstwhile effort needs to be laid to further build it Talent Management program. The talented graduates’ needs to be compensated adequately and incentives are provided for the enhanced performance shown.
It’s also vital to take organization temperature periodically to ascertain the employees’ opinion and aspirations matching the current business actions. A continuous learning plan will also become handy, as progression through ranks and file should be complemented with increased theoretical knowledge periodically. Sponsorship to study management courses, in-house seminars for effective human resource management or leadership training are few of must attend courses that young talents be exposed to.
Reference 1. A. P. Moller – Maersk Group (21st Septmeber 2010), http://www. maersk. com/AboutMaersk/WhoWeAre/Pages/WhoWeAre. aspx 2. Maersk Line Graduate Programme (21st Septmeber 2010), http://www. maersklinegraduates. com/ 3. M. I. S. E. Graduates Batch of 2004, Copenhagen Denmark. 4. Greg Weiss (2010) Zdnet Australia. 5. David Braue, (2005). “Why do good employees leave? “, ZDNet Australia. 6. Douglas McGregor: Theory X and Theory Y. Workforce; Jan2002, Vol. 81 Issue 1, p32.