Years ago, I worked as a selection and recruitment consultant for two ICT companies that provided essentially the same service, and staffed personnel with the same skill levels, but had vastly different organisational cultures.
I realised that although remuneration is the first and most important thing a new hire will see, at the end it is not what keeps them in the organisation. More significantly, the ability to retain skilled personnel and foster a positive workplace culture had a direct impact on the sustainability of the businesses.
It was 1999 on the eve of the millennium and Y2k was a fear in the back of everyone’s minds. The world was coming to a standstill. This created a very high demand for ICT firms to assist organisations to ensure that their IT systems would keep on running when the clock struck twelve on New Year’s Eve.
ICT talent was in high demand, starting with anyone who could code. To cash in on this need, ICT firms did their best to get the right talent, fast. But the way they attracted talent was often very different and I had the benefit to see how the different approaches played out over the long term.
Company A paid extremely high salaries for developers with little to no experience, often paying multiples of market-related salaries. However, it was a high-octane environment that left no prisoners behind.
The owner had a unique management style and selection technique. Frail university graduates would be brought into the office for their interview, and a few minutes later, the four Rottweilers of the owner would swagger in and sniff at the shoes of the now terrified applicant.
Even though you could see that red flags where going in the back of the minds of the applicants, the big salary kept them in their chairs. Once the dogs also gave their sign-off, you got the job.
The management style was equally intimidating. Working hours were, on average, 12 hours a day, six days a week. The concept of work-life-balance did not exist in Company A.
Company B was aspiring to be a smaller South African version of Google in terms of their office culture. They had a designated chill room, darkened to allow for meditation and an on-call yoga instructor. The pool table, snacks and good coffee rounded of the good vibes.
Every Friday afternoon the families of the employees were invited to join in the fun in the chill room. The work-life-balance was duly respected. However, the pay was below market average.
When I consulted to both companies, the bright-eyed applicants would look no further than the big payment package and wanted to join company A, even if it scared them. Not surprisingly, most of the placements would call within 3 months and claim complete meltdown – asking me to help with a new job. Most of them ended up joining company B, without complaining of taking a 50% salary cut in the process.
So, after the energy died down from Y2k, which company survived? Obviously, Company A had to close its doors. The problem was that it did upskill its placements but pushed them so hard that the big salary was not enough to retain them.
The more laid-back management style of Company B allowed them to run a relatively low wage budget while scooping up the disaffected burnt-out ICT specialists looking for a long-term home.
The harsh relationships within Company A also started too filter into its relationships with its clients. Clients started to leave the firm as they became fed up with a negative communication that was the outcome of the harsh management style.
Almost 20 years hence, Company B is still going strong, providing quality service to its clients because of its happy employees. Company B was able to ensure a satisfactory work-life-balance. Company A closed its doors shortly after the turn of the millennium.
Employers would do well to heed the warning that even though it might seem natural to link aggressive strategy with aggressive culture, the experience of Company A proved that it was precisely the harsh environment that led to its own undoing.
If you find yourself asking whether your employees might see you as a Company A, then you need to act fast to make sure you avoid their fate.
Marieke Oberholzer is Head of HR at Agri SA