Preventing Brain DrainPresentation by Jeff Nelson

U.S.- Lithuania Alumni Association

Vilnius, November 12, 2012

Agenda

• Introduction

• Lithuania’s Brain Drain Dilemma

• Advantages of Lithuania

• Policy & Reform

• What is your people strategy?

• Practical Ideas for Employee Retention (what really works: saying ‘thank you’)

Jeff Nelson

• Vice President, S3 and General Director of S3 International (Richmond, VA)

• Internship at U.S.- Baltic Foundation (1989)

• Visit to Vilnius: ISM, Marine Corps Ball, U.S.- Lithuania Alumni Association, Invest Lithuania

About S3

•Global provider of business and IT services, including staff recruitment and training.

•Industries: Financial Services, Energy, Insurance, Healthcare, and Public Sector

•Founded by Cindy Pasky (CEO); 21 years of profitable growth; 2011 revenue $220M; 7th largest diversity firm in industry.

•2,000+ consultants employed world-wide

About S3 International• Key Fact: S3 International (S3I) has placed more

than 1,800 FTE resources for clients in Lithuania in 2008-2012

• Established in 1999, headquarters in Vilnius; opened offices in London in 2004.

• S3I named “Most Productive Service Company” in the Baltic States (2010)

• S3I recruiting engine: Czech Republic, Poland, Latvia, Belarus, Ukraine, Germany, Sweden, Denmark, Finland, Spain and the UK. S3I has organized “job fairs” in Copenhagen, London, and Chicago (2013).

• Pre-2004: recruited Lithuanians for clients abroad.

Success Stories in Lithuania

• Financial Center of Excellence

U.S. financial services company

550 positions in regulatory compliance, finance and call center within 12 months (2011); now 650+ FTE

• IT Network Engineering Center

UK/Global Retail & Commercial Bank

450 roles for IT engineers within 12 months (2009-2010); 750+ FTE in 18 months; now 850+ FTE

• Shared Services Center / Scandinavia

Leading Global IT Services Company

185 roles in multi-lingual IT and support (2008-2009)

Lithuania’s Brain Drain Dilemma

• In Lithuania, emigration increasing AND immigration decreasing

• Where are they going? UK (33%), Ireland (14 %) Belarus (9 % ), U.S. (8 %), Germany (6 %), Spain (6%), Russia (5%)

• Why? Jobs

Source: Social Report 2009-10, Ministry of Social Security and Labour

Lithuania’s Brain Drain Dilemma

• Government pays for education; highly skilled leave for better pay in UK, Ireland.

• Brain Drain Rankings:

Lithuania’s position 54 out of 183

• Scale of 1 (worst) to 7 (best): LT = 2.7

– Source: World Economic Forum, Global Competitiveness Report 2012-13

You Are Not Alone

• 1 in 8 New Zealanders say they plan to leave the country in the next year

• Bahrain, a financial center, is losing talent to Abu Dhabi (Standard Chartered HQ)

• Average wait time for an educated Indian worked to receive a U.S. (non H1-B) work visa: 70 years (source: Washington Post)

• Global Issue & Getting More Competitive

Michigan: Labor Challenges• Population Decrease:

– 109,000 in 2010– 25% down in Detroit,

6.17% of college grads

(highest in U.S.) since ‘01– 10.2% unemployment

• Where do they go? – Illinois (17.73%)– California (10.67%)– New York (8.21%)

• Top 3 Reasons:– Could not find a job– Cultural/social activities - Urban area

• Leadership: New Governor plans include recruiting immigrant entrepreneurs (33% of high-tech start-ups in Michigan have at least one immigrant founder)

Sources: www.michiganfuture.org, Lansing State Journal

Lithuania: Bright Spots

• Country “doing the right thing” and the world is starting to notice…

• Global companies are discovering world-class talent (Lithuania is now on global talent map)

• New Success Stories:– Western Union (650+ new jobs)– Barclays (800+ new jobs) – 3rd anniversary today– Computer Sciences Corporation (185 jobs)

• Career path for Lithuanians -- at home

• Opportunity to leverage knowledge, business operations and expert foreign talent into Lithuania

• “Lithuania has a story to tell…”

More Bright Spots

• Average GDP Growth 1995-2011: 4.5% (9.8% prior to crisis)

• Ranked 27 of 183 countries for ease of doing business (World Bank, 2012)

• First in the world Competitiveness in Literacy

• First in world of females in workforce

• Fourth in EU of graduates in population

Why We Love Lithuania

• Work ethic: Lithuanian employees tend to be loyal to employers, including foreign-owned companies. Being a stable foreign investor in Lithuania and offering a career in a global organization has been an advantage for hiring and retaining employees.

• Languages: English and other foreign language knowledge

Labor Market: Barriers to Growth

• Clients and employees say these factors make Lithuania less competitive:– Employer/employee relationship not balanced– Long termination notice, limited dismissal statutes– Absence of independent contractors– Excessive holiday/vacation obligations

– Absence of skilled worker visa program• Makes Lithuanian companies less flexible, less willing to

hire, and global companies less likely to invest in Lithuania

Reform the Labor Code:7 Recommendations

• Shorten termination notice periods• Ease restrictions and severance limits on dismissal of

employees• Add flexibility to statutory reasons for termination• Ease burden of evidence on employers for reasons for

termination• Loosen collective agreement restrictions• Make employees who challenge dismissal pay a (fair)

fee (to discourage frivolous claims)• Authorize skilled foreign worker program

Elephant in the Room

• Reach secondary students earlier, or “get the brains before they drain”

• Two Questions for “Kaimas Kid”

• Vilnius University Informatics 2012:

700 seats vs. 500 students

National Policy

• Committed to growth; need policy that evolves on line of growth creation.

• National programs designed to attract talent home (Ministries of Economy, Foreign Affairs, Social Security & Labor)

• Invest Lithuania “Junior Professionals Program” (20)

• Universities: Nordic language initiative (30)• New Government: New Policy?• Your role: Churches of Vilnius

Best Employers in Lithuania

1. SEB Bank

2. Barclays Technology Center

3. Swedbank

4. Omnitel

5.TEO LT

Source: Verslos Zinios

What is your people strategy?

• How will you prevent Lithuanians from leaving? Create jobs and growth

• What is your UK strategy?

• What is your Scandinavia strategy?

• What is your India strategy?

• What is your skilled foreign worker plan?

• Vision of Vilnius: Copenhagen/leveraging East

S3’s People Strategy

• “3-4-5” (great compensation plan)• S3 Club: Hawaii• High expectations + space/support (freedom) =

Results• Management creates opportunity, team

executes• Acknowledge investment of employees, give

credit• Charity and community involvement

Informal Survey of Lithuanian

• Rate (1-5) importance:– Professional Opportunity 1 (tie)– Sense of Achieving Results 1 (tie)– Compensation 3– Work/Life balance 4– Length of commute 5

Two Kinds of Employees

• Stability Seekers & Career Path Achievers (High-Fliers)

• Which ones are which on your team?

• Listen and seek to understand what motivates each type: and provide it

• What do they want:– Structure, or– Freedom and career path

Retention/Recognition Programs

• Philosophy/Culture• Need formal program• More important to show you care about and

appreciate employees• Simple: say ‘thank you’• “Recognition is something a manager should be

doing all the time; it is a running dialogue with people.” Ron Zemke, editor Training magazine

Formal Retention Programs

• Performance reviews, annual bonuses/pay increases

• Employee retention: Step One is recruitment• 360-Degree Assessments followed by training

and development plan• Zappos offers new employees $3000 to quit

after they finish the company training• Cygna Group has “Take the Rest of the Day Off”

reward when employees finish a big project

Day-to-Day Recognition

• Give credit to employees, make them feel appreciated.• Fact: Praise and personal gestures by managers

motivate employees.• Marriott Marquis Hotel in New York City asked 400

housekeepers how management could better recognize them, top response: Have managers use our names.

• Ratio of feedback should be four-to-one positive to negative.

• One manager at Disney starts meetings by polling group for “3 things that are going well”

Non-Cash Recognition

• Research: most preferred award is personalized, “spur of the moment” recognition from direct supervisor for specific work

• Managers can:– Walk around office each morning until

acknowledge at least 5 things done well– Write thank you notes

• Capital One: puts styrofoam cake above employee cubicles during month of birthday

Low Cost Rewards

• Gift certificates for dinner

• Holiday/birthday cards

• “Hall of Fame” or employee of month board with photos

• Gym bags, coffee mugs

Cash & The Top Ten

• There’s nothing wrong with a cash award, but then its spent. Small gestures – a plaque, a parking spot – can be just as effective.

• Best Ways to Reward (by Michael Leboeuf):

1.Money 6. Advancement

2.Recognition 7. Freedom

3.Time Off 8. Personal growth

4.Share of profits 9. Fun

5.Favorite work 10. Prizes

Feedback (or fail)

• Study of 20,000 employees during exit interviews listed #1 reason for leaving jobs was “poor supervisory behavior”

• Source: “The Happy Employee” by Julia McGovern

• Smart managers need to be good at giving AND taking feedback

How to Give Feedback (Susan Heathfield)

1. Be specific, not general.

2. Focuses on a specific behavior, not on a person or their intentions.

3. Be sincere and provide it to help.

4. Describes actions or behavior that the individual can do something about.

5. Ask permission to provide feedback.

6. Ask what he might do differently as a result of the feedback.

7. Give information closely tied to the event.

8. Focus on what or how something was done, not why.

9. Make sure the other person understood what you said by using a feedback loop.

10. Be as consistent as possible.

How to Take Feedback (with grace)

1. Control your defensiveness.

2. Listen to understand.

3. Suspend judgment.

4. Summarize and reflect what you hear.

5. Ask questions to clarify.

6. Ask for examples and stories that illustrate the feedback

7. Just because a person gives you feedback, doesn't mean their feedback is right.

8. Be approachable.

9. Check with others to determine the reliability of the feedback.

10. Only you have the right and the ability to decide what to do with the feedback.

Jeff’s Management Tool-Kit

• 3 questions to employees– What are you doing here?– How are you doing?– What is in it for me?

• 3 questions on minds of every employee– Trust, care, best

• 3 qualities of good work culture– Achievement, equity, comaraderie

Client Examples

• Western Union: Employee Day and pie

• Barclays: E-lessons on IT skills/jobs to 5000 secondary students

• Client:– 1st Assessment Forum: identified 60 high-

potential; within 3 months 30% promoted

Internships & Advocates

• Need to reach students earlier

• Employees as “Advocates”

• Create Internship Programs with Universities

Takeaways

• Lithuania has a positive story to tell, and we all have to do our part to prevent brain drain…be part of the solution

• Say ‘Thank You’…praise and personal gestures motivate employees

• Be creative with your employee recognition/retention

• Start/experiment with internships

Your Business, Technology, and Community Partner

Celebrating 22 Years!

Jeff NelsonVice President

jnelson@strategicstaff.com+1202-365-8372

www.strategicstaff.com