Employees aren't a company's most valuable asset
Plenty of companies claim that their employees are their most valuable assets. There are a couple of problems with that approach. One is that companies use external recruitment because they haven't figured out how to grow their employees.
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We can be certain that the pace of change will never be this slow again. It is the employees ability to learn, relearn and unlearn that is the company's greatest asset.
An employee will not be with the company in ten years if they haven’t learnt new skills during that time, they’ll leave after three or four years. Thus, it is better to ensure that your greatest asset isn't the employees, it should be the process that develops them.
In most companies, employees are at a certain level and there is no clear path ahead. At least it's unclear what skills they need for each role. If a person quits, there is usually no one ready to step up, and then the company have to recruit from the outside.
If employees are assets, what happens when an employee quits? Did the company lose an asset?
Every time an employee quits, the company needs to find another person who can fill that gap. Someone who should be able to do the right things, fit into the corporate culture, and preferably be able to start working tomorrow.
A difficult and time-consuming task. That's why we put our hope in recruiters who go out and do their magic.
Another problem with employees remaining in the same place all the time is that the company may evolve, leaving employees behind. If the company and its employees grow apart, a recruitment process needs to start to find new blood to bring into the company.
It may sound arrogant to say that employees are not the most important asset, but there are good arguments. Zappos (successful e-retailer) argues that the most important asset they have is their process to develop employees. Klarna (Swedish unicorn) transitioned into a similar way of thinking in 2018.
In Klarna's case, they have divided all roles into about ten different areas of expertise such as Commercial (sales), Engineering and Service Delivery (customer service).
Within each area, a number of skills have been identified. Say you are hired to the sales department with no major experience, but with a drive and willingness to learn more. To become a good seller, you need to be great at building relationships, build trust, and be organised among other things.
In total, you may need to master 30 skills to be a valuable seller at a basic level. If you want to handle bigger deals, you may need 15 extra skills such as strategic thinking and business skills. Personal and professional development then continues through higher levels.
To earn your badge for a certain skill you should demonstrate you actually do the right things consistently, knowing is not enough.
Every time an employee quits, there is a person one step up the ladder who can act as a mentor, and a person behind who is ready to step up and take on greater responsibility. The process made sure of that. No gap, no difficult recruitment, and no risk of picking someone who does not fit into the culture.
The company can focus on recruiting newly graduated people based on personal characteristics such as curiosity, drive, and willingness to step out of their comfort zone. Rather than trying to find someone who has already worked as what they want to recruit.
Roughly it could look like this. There is a pre- and onboarding and then a number of skills grouped into boxes. Replace the names of the steps with whatever floats your boat.
Employees should be free to tackle the skills within each box in whatever order they like. People want to do things in a varying order (and different pace) and find some things more motivating than others. In reality, it might rather look like a jumble with a direction.
It’s clear to employees what they need to do to move forward. Pick a skill within your current box and start practicing. Ambitious people can flourish and quickly gain increased responsibility. Those who doesn't have the same drive can remain at the level they are, but can't expect to climb upwards.
It should also be fine for someone to change tracks, maybe a person starts in sales but finds that the marketing department seems more fun after a few years.
Instead of throwing the poor salesperson out the window and recruit someone new, it’s superior to have someone change tracks. It may not be possible to switch straight from HR to engineering or vice versa without learning the basics yourself, but within reasonable limits.
A sales person changing track.
The company gets to keep a person who already fits in with the corporate culture, and who can bring lots of knowledge from sales to marketing.
As a bonus, this approach means that the company does not run the risk of promoting someone to a manager who has not proven their leadership skills in practice. If you flounder to earn the badge of empathy, you may not be manager material.
Each badge consist of something you need to master, a trait you need to own, or something else the company thinks you need to develop.
To earn the basic level of presentation skills, you may need to check out a TED talk, read a short text and then spend a lot of time creating two brilliant presentations that contain at least 7 of 10 best practices, one hold one for your colleagues and one for a customer (together with an accompanying manager).
Sooner or later all employees leave. What you have left is a well-honed process that makes it easy to fill the gap, and add a new hungry person at the first step of the ladder.
As soon as a competence area is full you stop your recruiting efforts. When a need arises you can focus on getting new people who are passionate about the area they will work in.
We think it makes sense. What do you think?