Recruiting and Cultivating Talent in the ‘Disengagement Economy’
On first blush, Robert Hall’s vision of contemporary life seems nearly apocalyptic: families are breaking apart, customer loyalty is a joke, people hate their jobs, faith communities are fragmented, and the red state/blue state divide looks unbridgeable. In short: human relationships are in a sad state. It’s a bleak picture, but Hall, cofounder and former CEO of ActionSystems, now a consultant and author, isn’t the kind of person who shrugs his shoulders and declares it all hopeless. Instead, Hall tackles this societal “relationship crisis” head on in his second book, “This Land of Strangers.”
In the book, Hall looks at four domains of life — home, work, politics, and faith — and traces how breakdowns in each domain have a commutative effect on society that “makes relationships decline and disengagement a mega trend.”
The mega trend of disengagement is perhaps most obvious in the domain of work, with an overwhelming 70 percent of employees not engaged in their work. This may be the most widely touted metric on disengagement, but, as Hall points out, the relationship crisis affects almost every facet of how we do business: “It impacts how we lead companies, it impacts how we recruit, it impacts how we develop talent, and it impacts the kinds of results [we see].”
The result is what Hall calls the “disengagement economy,” which he describes as “an economy running — and not very well — on all of these disengaged relationships.”
The ‘Overwhelming’ Numbers of the Disengagement Economy
Perhaps Hall’s idea of “relationship crisis” resonates with you. Perhaps you walk around with the vague feeling that something’s wrong with the world today – that people aren’t as connected or engaged with each other as they were 50 years ago. According to Hall’s Flight from Relationships Index (FFR Index), you’re right to feel that way.
The FFR index looks at 16 metrics across the four domains mentioned above and measures how they’ve changed in the past 50 years. The metrics are:
- in the “home” domain: the number of unmarried adults, the divorce rate, the number of unwed mothers, and the “friendlessness” of the average person;
- in the “work” domain: customer defection, skilled employee turnover, CEO turnover, and shareholder turnover;
- in the “politics” domain: defections from political parties, ideological extremism in voters, ideological extremism in Congress, and the “presidential approval gap,” which measures the difference between how voters of each party view the president;
- and, in the “faith” domain: shifting affiliations, lack of affiliation, lack of confidence in one’s faith group, and ideological extremism within faith groups.
Hall’s FFR Index isn’t strictly scientific, and he says as much, but he notes that the point is to illustrate the dramatic trend of disengagement and relationship breakdown in the world today. While he has plenty of interesting findings that fall into the other three domains, we’ll limit the scope of this article to the “work” domain – otherwise, we could go on forever (Hall did write an entire book about this issue, remember).
With regard to the work domain, Hall found that skilled employee turnover doubled in the four years leading up to the Great Recession, and has really only slowed as a result of that recession, though it shows signs of speeding up again. Customer defection rose 30 percent in a similar period.
From the early ‘90s to 2003, CEO turnover more than doubled, skyrocketing by 170 percent. Shareholders are swift to sever ties with companies as well: shareholder churn for public companies has jumped from 21 percent in the ‘80s to 250 percent today.
In the “work” domain overall, the FFR index is up 347 percent.
“The math is compelling,” Hall says. “It isn’t just a little bit worse: it is significantly worse.”
In “This Land of Strangers,” Hall analyzes the four key causes for this relationship crisis, and he notes that it has largely been accidental. “No one started out 50 years ago to say, ‘Let’s see how many relationships we can blow apart,’” he says. “Each of these causes, they are great new developments that in fact have made life much better, but they’ve had unintended consequences.”
Of the four causes, Hall believes technology is the biggest driving factor. “I can’t make a broad blanket statement, but essentially, technology has given us the choice to unbundle the gathering of information from the interaction with people,” he says.
Thanks to social media, people are no longer required to interact with one another to obtain information – even personal information. “Most of those people [who use social media] actually speak as frequently or more frequently by phone or face-to-face with others, but there’s a significant portion of those people who have replaced human interaction with interaction via technology.”
According to the Kaiser Family Foundation, the average 8-18 year-old spends 7 hours and 38 minutes a day using entertainment media. And think about how we communicate at work: if we interact with colleagues at all, it’s usually via corporate social networks and email. Many telecommuters, a rapidly growing portion of the workforce, may not even interact with coworkers at all beyond the occasional email or chat client.
The Rise of the Faceless Corporate Behemoth
Who owns the company you work for? Have you ever met the CEO? Heck, how often do you talk to your own boss?
In a world of massive corporate entities, a globalized economy, and banks deemed “too big to fail,” many of us work for sprawling, multinational companies where, surrounded by hundreds – if not thousands – of colleagues, we still feel totally disconnected from the organization we work for.
“Scale — getting bigger — makes us more efficient in the short run,” Hall says. “But in the long run, getting larger has a detrimental effect typically on relationships.”
Perhaps that’s why millennials have by-and-large decided they want to work for themselves, rather than for large corporations. Why trudge to a job everyday where even your cubicle mates don’t seem to know your name?
We can’t simply smash the system, Hall says. We can’t simply scale down: some tasks can only be accomplished by these large-scale multinationals. “We need stronger relationships, more personalized kinds of relationships, more interactive and experiential working circumstances, but we talk about that at the same time that organizations are growing bigger,” Hall says. “So there is really a collision course between the kinds of organizations we need to do some of the big jobs and being the employer of choice and providing a place where workers actually want to work.”
There is a disconnect between what the economy needs (large corporations) and what individual employees who power these corporations need (intimacy, strong relationships, engagement). But if these necessary organizations cannot attract top talent, they cannot continue to operate. Hall says large companies will have to change the way they recruit from now on – it’s no longer about salaries or ladder-climbing opportunities.
To recruit and retain talent, large organizations need to take a look at the kind of culture and environment they offer employees. Are they good at engagement? Do they offer a place where employees can build strong relationships and feel connected to their work and their company?
“Instead of working in rows, can we get in circles? Can I be a part of the team and feel like I make a difference or I can make a difference, as opposed to a mindless, faceless individual?” Hall asks.
“The larger we get, the smaller we’re going to have to act,” Hall says. To do so, companies will have to practice what Hall calls “relational leadership.”
Creating Relational Leadership
Hall describes relational leadership as a different, more-relationship centric way for CEOs and executives to lead. The goal is to make people feel like they matter, like they’re engaged, and like they can make a difference.
This isn’t some wishy-washy utopian ideal: it’s a serious, achievable style of leadership, one that takes serious work. “I was a CEO for over 20 years. It’s hard to do,” Hall says of implementing relational leadership.
Hard or not, relational leadership is doable, according to Hall. In fact, relational leadership forms the backbone of the three key steps that Hall says all companies must take if they wish to create an engaging culture in this disengaged economy:
1. Treat relationships as the most valuable strategic priority: Hall notes that doing so “bumps up against” short-term shareholder value – it’s not necessarily going to make next quarter’s numbers look good. Organizations will have to make some trade-offs when strategically prioritizing relationships, and they will have to do some reprogramming. “We’re going to have to train not just our executives and our culture, but even our shareholders, about what it means to truly build relationship infrastructure and a relationship culture that can innovate and produce long-term results,” Hall says.
2. Create relationship scale: Building relationship scale means structuring companies structuring to create more integration and togetherness, rather than separate, discrete units. “Relationship scale is different from asking, ‘What’s the most efficient way to do it?’” Hall says. “Relationship scale says, ‘What’s the way that will create the most productive relationships?’ That’s not the same as what will cost us the least in the short run.”
3. Implement Relational Leadership: This type of leadership takes every opportunity it can to build productive engagement instead of compliance. From contact with employees to incentive programs to performance appraisal, the goal of relational leadership is to build an organization that “brings sufficient purpose” to the work that employees do, thereby drawing out their best work.
It is in every organization’s best interests to create an engaged workforce, as committed employees give 57 percent more effort and are 87 percent less likely to resign, on average. “So it turns out that this soft thing called ‘engagement,’ if we can have leadership and build a culture where we truly engage people … it in essence expands the size of our workforce significantly,” Hall says.
Hall warns that companies cannot sit around and wait anymore: it’s time to get serious about engagement and relationship building at work. “Sooner or later, we’re going to get far enough out of this recession that we’re going to be in a competitive employee recruiting marketplace, and the brand – the engagement brand, the brand by which we engage our employees – is going to be really crucial,” he says.