LONDON, United Kingdom — By 2020 millennials will make up the largest generational cohort in the workforce. To attract and retain the best of this new generation of talent, companies must tailor their HR practices to meet their preferences, and those of their Gen-Z successors, both of which place greater emphasis on career development opportunities than financial reward or other compensation benefits — a break from previous generations.
In a survey of over 2600 fashion professionals, conducted by BoF in 2017, only 59 percent of employees say they are satisfied with opportunities for training and development, while only 57 percent are satisfied with the levels of transparency around career progression within the company. This should be a key focus for employers looking to attract and retain top talent.
As millennials begin to dominate the workforce, how well companies can develop their employees — enabling them to learn new skills and empowering them to gain new experiences on diverse career paths — has become a key battleground in the war for talent. This is especially true in the people-focused fashion industry, due to the competitive advantage the best talent can create.
“In fashion, technological barriers are not high compared with other industries, so it’s people that make the difference,” said Marco Bizzarri, the chief executive of Gucci, in an interview with BoF in 2016, having just met with almost 4,000 employees within three months of joining the company. “Alessandro Michele had been with the company for 12 years, working for an aesthetic that is totally different to the one he is presenting today. Promoting Alessandro showed people there are possibilities for everyone,” he continued.
Decoupling Development With Management
However creating development opportunities and attractive career paths for every single employee is a challenging task, especially when many of the career trajectories that underpin the fashion industry fail to reflect the preferences of today’s talent pool. Decoupling an individual’s career progression from traditional markers of increased responsibility, such as managing other people (a skill which may not be so readily needed by digital or creative talents), can enable businesses to promote and develop employees in more diverse and novel ways. This includes further specialisation in a specific field, or through relocation into a different arm of the business.
Indeed, in a global world, international companies have the benefit of appealing to the experience-oriented nature of millennial and Gen-Z employees. Both cohorts are more open to international travel and more attracted to building their career around the world than their predecessors. Of 500 US college graduates surveyed by Graebel and Cite Research in 2017, 81 percent are interested in working in another country and 75 percent said they were more likely to accept a job offer if a company offers work-abroad opportunities.
The fashion workforce considers itself to be highly capable of this kind of collaboration. Of 2,600 individuals surveyed, 91 percent believe they are able to create collaborative teams within their workplace and 86 percent believe they can form effective cross-functional relationships. Companies that can harness that flexibility through cross functional project teams and career paths which do not require linear progression in one department, are better able to deploy their employees’ skills and retain talent.
The Increasing Importance of Leaders
As development becomes the most important measure current and prospective employees look to in assessing the attractiveness of a company as an employer, the significance of managers and leaders is increasing. According to BoF’s survey, millennial and Ge-Z cohorts believe managers should be expected to provide a forum and the tools for their personal and professional development while they are at work.
Discussing Gucci’s company culture, Bizzarri told BoF, “You need to rely on the leaders and the managers to foster internal talents, but we try to create a path that will help bring people around those leaders — and always make sure that they are in direct communication. For me, it’s key that the talents who want to emerge are able to get the opportunities. We give possibilities to the people who have ambition — we’re very open to the idea of employee mobility across functions and geographies.”
Technology is already assisting leaders in identifying deserving talent and promoting it to a well matched role. Today, many of the most innovative practices in leadership and development stem from data analysis, through which managers can motivate their staff by tracking the positive impact of their individual output, making individual performance much more measurable.
Similarly, Galeries Lafayette uses a simple but effective strategy to motivate its workforce — linking individual output to business impact. As a result, employees’ career trajectories are plotted in relation to their greatest skills. “My manager sees my potential and develops different tasks — pushing me to new professional directions so that my expertise increases,” a marketing manager employed by the company told BoF.
However, that experience is far from universal. Only 68 percent of surveyed fashion employees believe that their managers are truly interested in their professional development. Although the investment and time required to rethink recruiting and training able managers is significant, the risks and potential costs associated with inaction are growing. Only 65 percent of fashion professionals expect to remain at their company for longer than two years and 35 percent expect to leave within a year.
Associated turnover costs costs could materially impact the bottom line at some companies. The American Centre for Progress, a public policy research and advocacy organisation founded by John Podesta, who previously worked for the Clinton and Obama administrations, estimates that the cost of replacing and retraining a skilled salaried worked could be as high as 213 percent of their salary.
Providing attractive career development opportunities is the undoubtedly the best way to retain talent and avoid high turnover costs. BoF’s survey shows that the correlation between satisfaction with career development and employee retention is stronger than the correlation between satisfaction with pay and employee retention.
If you develop them, they will stay.
This content was originally published here.