Preventing Brain Drain
Presentation by Jeff Nelson
U.S.- Lithuania Alumni Association
Vilnius, November 12, 2012
Agenda
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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
3
S
• 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
3
S 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 foreignowned 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
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SEB Bank
Barclays Technology Center
Swedbank
Omnitel
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
3
S ’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)
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Be specific, not general.
Focuses on a specific behavior, not on a person or their intentions.
Be sincere and provide it to help.
Describes actions or behavior that the individual can do something
about.
Ask permission to provide feedback.
Ask what he might do differently as a result of the feedback.
Give information closely tied to the event.
Focus on what or how something was done, not why.
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)
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Control your defensiveness.
Listen to understand.
Suspend judgment.
Summarize and reflect what you hear.
Ask questions to clarify.
Ask for examples and stories that illustrate the feedback
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 highpotential; 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 Nelson
Vice President
jnelson@strategicstaff.com
+1202-365-8372
www.strategicstaff.com