Why We Gave Up a Star Employee to a Top Customer, and Why You Should, Too
Attracting and retaining top talent has always been an indispensable practice to ensure business success. However, as organizations have found themselves facing the largest talent shortage of the past decade, talent retention has taken on more importance than ever.
At our software outsourcing company, intive, we’ve felt the squeeze harder than others. IT staff such as developers and programmers are among the hardest positions to fill.
Nevertheless, we’ve actually found that under certain circumstances, huge benefits ensue from letting your team members fly the coop. Back in 2014, our former COO permanently left intive (with our blessing) to head up a project for one of our most promising customers.
At his new company, our (former) COO started in full-time as a project manager -- and the move has proven to be a major advantage.
We knew that having our best and brightest employee work for our customer would help that company grow -- and we saw huge upsides for everyone involved. But permanently sacrificing one of your employees to a customer isn’t an opportunity you can offer to everyone. So, when should you consider giving up one of your employees to become an employee of your customer, and why?
It strengthens the business relationship.
Today, there is an increasing need to be close to your customers and foster an environment of trust. In fact, one report by the consulting firm Walker predicted that, by 2020, customer experience would be a more important brand differentiator than both product and price. Accordingly, companies need to ensure close communication and tight engagement with their customers to help them achieve their goals.
For us, encouraging our former COO to take on a major role at a customer company has accomplished just that. “Close business relationships are more important than ever, and my moving from intive-FDV to DropCar has, if anything, made our relationship stronger,” said Leandro Larroulet, who is now that company's CIO. “Because I still work with the same team in the same office at intive-FDV, we can all leverage our established relationships to easily communicate based on an underlying trust from years working together.”
Even if the employee who makes the move doesn't stay in the same office, the two companies involved can still build a similar level of trust and provide exceptional customer experience. Though most of our clients are based in other countries, we continue to be able to cement relationships by making communication a matter of culture and habit. The same practices apply to the case of an employee leaving to work with a customer.
In order to maintain a strong level of trust, company leaders can take frequent trips to visit their former employees at their new roles, setting aside time to talk business -- and to catch up over a beer. Additionally, they can schedule formal meetings on a daily or weekly basis to better understand and react to customer needs. Ultimately, this scenario boils down to the employee who's moved always being available and attentive. And for the sending company, there’s another big incentive: It will get things done faster and build loyalty.
It helps both companies grow together.
If you adopt this strategy, your customers aren't the only ones who'll see the benefit -- you will, too. According to some estimates, up to 80 percent of all business partnerships fail. However, when they are successful, they can drive big revenue. For example, over 40 percent of pharmaceutical giant Ipsen’s revenue is said to be based on the alliances it has established.
Under our arrangement, we avoid most of the primary issues with business partnerships, including differences in culture, incompatible objectives and lack of executive commitment. Our former COO knows our team well and can reach out to any of the partners with ease to resolve issues that arise. As such, our companies have been able to build on each other’s success, to reach new heights.
By suggesting that a star employee join your customer’s team and by leveraging the implicit trust between the two organizations, that organization's success becomes your success. “The implicit trust between our companies has been fundamental to our continued success,” confirmed Larroulet.
“As our business needs have expanded, we’ve been able to rely on my old company to get the job done. At the same time, they’ve been able to rely on us as a loyal customer.” Essentially, under this type of arrangement, it becomes a tag team effort where each company plays a supporting role for the other.
It encourages employees to grow and succeed.
While company success is important, so too is personal success. And for employees, this doesn’t always mean a pay raise. In fact, one survey found that outside of monetary benefits and other incentives, over a quarter of the employees it polled who were looking for a new job were searching for better career-advancement opportunities.
Accordingly, companies should take it upon themselves to help their employees achieve the personal and professional advancement they desire. “For me, personally, the transition was a professional move for my career as much as it was a great business opportunity. When I recognized this, there was no reason for me to turn down the offer,” Larroulet told me. And there was no reason for us to deny him the opportunity either. When an employee has worked so hard for you, it doesn’t make sense to limit him in his career. A customer’s company might be able to offer a better salary or more exciting opportunities for an individual to grow.
After all, companies that don’t support employee growth run the risk of low employee engagement and performance. Thus, companies can benefit from building a relationship of trust not only with their clients, but also with their employees. And there are many benefits to doing so: A Gallup study showed that companies in the highest quartile of employee engagement saw 17 percent higher productivity, 20 percent higher sales and 21 percent higher profitability.
There are a number of benefits for employees who don’t switch companies, too. In our case, for example, our former COO has continued working with the same team at our organization, making that partnership an easy one because the other company didn’t need to adapt to new management styles and methodologies.
But is it for you?
The talent shortage is real, and we aren’t suggesting that you start giving up all of the best talent in your organization to your customers. Lower-level employees who are essential for the day-to-day operations of your company shouldn’t be candidates for this arrangement. In contrast, transferring a single key role can sometimes be a strong catalyst for joint business growth.
Still, this isn’t something that should happen regularly. Key roles like that of our former COO are undoubtedly valuable and difficult to replace, but if there are clear benefits for all parties -- your company, your customer and the employee himself or herself -- the move could be worth it.
When considering this type of arrangement, however, it’s crucial to agree with the client and the employee that it’s the best move for both you and them. In order to succeed, your company must also be flexible and open-minded when dealing with these negotiations.
Companies pour tons of money into talent acquisition and retention, so the idea of giving up your employees -- especially the most important ones -- might seem a losing proposition. However, in our experience, doing just that, we’ve actually been able to help ourselves, our customers and our employees grow.
In Europe, a similar concept has emerged called “employee sharing,” whereby multiple businesses draw up a contract to be jointly responsible for one employee. This, however, differs from our recommendation in that we suggest an employee formally end his or her contractual obligations with the original company. With customer experience emerging as a key business differentiator, completely giving up a star employee to work with your customer might just be what’s needed to stand out and push your business to the next level.