The Link Between Talent & Internal Ownership Transition
Selling work is at the heart of establishing an AE firm. After all, if you cannot successfully sell work, then there is nothing for an architect or engineer to do. Similarly, once a firm is established, the heart of internal ownership transition is the attraction, development, and retention of key talent to lead the firm in the future.
If your exit strategy is to sell the firm internally, intentionally integrating a sustainable approach to leadership and ownership transition into your culture is a must.
Employee Attraction Starts with Your Employer Brand
Firms work diligently to build a brand that improves the odds of selecting them over the competition. However, how many have worked equally hard to develop an employer brand? Who you are as a firm attracts potential hires and can elevate you as an employer of choice. In short, an employer brand is your reputation as an employer. According to Glassdoor, “95% of candidates identify a company’s reputation as a key consideration when exploring new career opportunities.” A focus on employer brand has become more important due to the increased difficulty in finding talent. If you haven’t given the employer brand much thought, its impact on ownership transition success may be the motivator to start.
Many firms hand off anything talent-related to the Human Resources department or the principal-in-charge of human resources.
While HR is undoubtedly a significant contributor, that may not be enough.
Human resources can establish compensation strategies, work policies, benefits, recruit talent, and measure engagement to stay with or ahead of the competition. But human resources is rarely involved in the day-to-day experience of an engineer or architect. Instead, a day in the life of an engineer or architect is driven by the leaders and colleagues with whom they interact. Additional sources of impact include the type of projects assigned, markets chosen to practice in, opportunities to learn and grow, and the firm’s values, mission, vision, attitudes, and characteristics.
Employer brand is everyone’s responsibility, not just human resources. Therefore, the effort of creating it, living it day-to-day, cultivating, and maintaining it with the high regard it deserves falls on many shoulders within a firm.
Employee Development Cannot be Left to Chance.
I believe that architects and engineers are life-long learners. Having a degree and license in hand is only the beginning; the learning never stops. Technological changes alone are coming at us fast and shifting the skills needed for continued success, as is the wave of retiring Baby Boomers (approximately 57 to 75 years old) and the unfortunate “brain drain” that goes with them.
The multiple generations currently working in our firms crave more learning and development than ever before. According to LinkedIn’s 2019 Workplace Learning Report: “94% percent of employees say that they would stay at a company longer if it simply invested in helping them learn.” Yet, our focus on deadlines and production often results in insufficient investment in talent development.
Talent development must go beyond the projects, deadlines, and activities that fill a firm’s day. To have a clearer view of where you stand, ask yourself these questions:
- What opportunities have you created to help your employees thrive?
- Are you stuck in the generational belief that learning through the “school of hard knocks” was good enough for you, so it should be good enough for everyone?
- Do you see generational differences as negatives or opportunities, and are you open to learning from each other?
Today, middle managers are a combination of a few Baby Boomers (57 to 75 years old), some Generation X (41 to 56 years old), and even more Generation Y/Millennials (25 to 40 years old), and the preferred method of learning is different for each one. For example, Boomers are more likely to enjoy a classroom learning style with in-class participation; Generation X is more likely to enjoy self-directed learning on their own schedule. Millennials want highly personalized and on-demand (self-directed) learning. Integrating the different learning styles with the demand makes employee development much more complex than in the past. To retain and develop future owners, employee development must be elevated in importance and considered an investment in the future, not more overhead.
Talent Retention is at the Heart of Internal Ownership Transition
The leading edge of Millennials is now 40 years old, and they are reported to be the highest-educated generation with unheard-of levels of student debt. In addition, many have delayed homeownership, are caring for elderly parents, and even navigating healthcare insurance for their families. All these challenges can leave Millennials feeling “behind” financially, which negatively impacts internal ownership transition since these are the most likely buyers.
Retaining talent for the future depends on our ability to understand the generational makeup of our firms.
Rather than simply disregarding or dismissing the challenges of a multi-generational workforce, whether due to stereotypical beliefs or other labels, it’s essential to educate our leaders and discuss generational differences. Understanding each other helps us view our differences as strengths that can improve overall firm culture and the employer brand. Taking a strategic approach to the generations that will be future leaders and owners of your firm can set you on a path for a successful transition.
Creating a culture that integrates talent strategies with future internal transition goals is essential for success. Watch my colleagues and me as we discuss key aspects in preparing for internal ownership transition in this complimentary on-demand webinar Internal Ownership Transition: Plan with a Purpose.