Universal Music Group's Secret to Retaining Top Talent
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Talent today has many choices. Highly talented people can choose where they work—whether a large organization or startup, flat or hierarchical—and also how they work—whether full time or contract, in-office or remote. Employees don’t need companies as much as companies need talented people.
Given the above, retention remains one of the biggest challenges for any company. What used to be considered job-hopping—changing companies every two or three years—is now considered highly marketable. Whereas working many years for one company used to represent stability and commitment, it now shows stagnation. Organizations that want to attract and hold onto their top employees have to focus on employee well-being to create an environment where people are proud to work and feel valued.
As chief people and inclusion officer for Universal Music Group (UMG), I focus on the following three essentials to ensure employee well-being.
1. Put Employees at the Center of the Relationship
In the past, employees evaluated a job by how prestigious the company was, how much money they earned, how big their office was, and how many people reported to them. The company was at the center of the employer-employee relationship, and employees were expected to faithfully devote their time.
Today, we see the exact opposite. Rather than prestige, today’s employee value proposition is all about well-being—and when a company emphasizes well-being, the result is great work. A company’s success is entirely predicated on an employee’s willingness to give you greatness. Only those organizations that can elicit greatness from their employees will win. Almost all of my work as the chief human resources officer of the NBA, and today at UMG, has been about how to extract that greatness by improving employee well-being. You can’t do that without putting employees in the center.
My very first action at UMG was to change the title of my role from chief human resources officer to chief people and inclusion officer. It’s more than a title change—it’s a philosophical and cultural change, as well as a symbol of UMG’s migration toward an employee-centric organization. We are responsible for creating an inclusive work environment, so that everybody can offer their greatest contributions.
We are beginning a series of programming focused on employee experiences. We believe that everyday work interactions affect personal well-being, so we want to make sure those interactions are positive and joyful. We’re asking:
- What do one-on-one interactions feel and look like?
- How do we address abrasive interactions? Why are they destructive to productivity and engagement in the organization?
- How can we measure leaders by the experiences they create?
Positive employee experiences result in greater productivity, higher retention rates, and better financial results, but we also introduce better health to our employees—a sure sign we’re centering them in our organization.
For example, within two weeks of starting at UMG, I found out that people were using only half of their vacation allotment across the company. People were saying, "I don’t have time. I can’t travel because of COVID, so I’m not taking vacation. Instead, I’m working 24/7."
But the well-being of our employees is too important to allow for that potential burnout. So, our leadership team decided to close the office the day before the election and the day before Thanksgiving, and we gave everyone two weeks off for the Christmas holiday.
2. Understand What Constitutes a Meaningful Work Environment
Once you focus on employees, you can anticipate the questions they are asking themselves when deciding whether they want to remain in your organization.
Am I proud of the company I work for? Employees should be eager to tell others what values the company stands for, how it exemplifies those values in the community, and how it positively contributes to the causes it values around the world.
Am I proud of the people I work with? When we are surrounded by people who challenge us to be better, we feel proud to be around those people. If not, it becomes harder to go to work every day. Being proud of the people you work with is just as important as being proud of the company itself.
Am I proud of the work that I get to do? Employees should feel like they are delivering some higher-order purpose, that they are elevating both themselves and society in some way. For example, I work in the music industry because I am passionate about music. I grew up in a musical family and have seen just how powerful music is and how it can bring joy to so many people. UMG allows me to contribute to bringing joy to society at large.
Am I proud of the value that I give and get? Employees want to feel that the time and effort they give to a company constitute more than just a financial transaction. At the end of the day, they want to know that the company cares about them as a person.
3. Strive for Employee Commitment Rather Than Mere Compliance
There is a difference between compliance and commitment. If companies fail to create a meaningful work environment, they risk failing to have their employees truly engage with their work. Companies can tell people what to do and how to do it, even controlling their rewards based on their performance. As a result, employees will typically follow the rules, but they will give you nothing more than the minimum.
When employees are at the center of the organization, feel proud of the work they do, and feel valued by their company, they will commit themselves to their work and to the success of the company and their teammates.
As we move into the future, HR teams need to appreciate their position and responsibilities. When I give speeches to other organizations, I tell the audience that the chief human resources executive is the second most powerful person in the company, after only the CEO. Why? Because HR establishes the relationship that the employee has with the organization. HR has a tremendous amount of influence on the leaders that reinforce that relationship, selects the people that work for the company, and creates the experience—positive or negative—that they have. Ultimately, companies are in the business of attracting and retaining talent. Without the commitment of top talent, any strategy will fall apart.
Hear more from Eric Hutcherson in this episode of the Talent Economy Podcast.