Employee Retention: The Secret According to Apple

employee retention, employee satisfaction, apple

 

One of the hottest industries right now is tech.  Engineers, coders, and developers in California’s Silicon Valley are in high demand with median annual salaries at $105,000.  Companies like Apple, Google, Adobe, Intuit, and Lucas Films are struggling to keep up as companies cherry pick from one another increasing competition and inflating salary and employee perks in the war for talent.  These highly skills and sought after candidates are what I call the Knowledge Class.

Technology Jobs & Keeping Employees

By 2015, 60% of the jobs being created will require a specialized skill held by only 20% of the workforce with Silicon Valley companies smack dab in the middle of a talent gap.  Demand will be high for the Knowledge Class, thus continuing to drive salaries up with no signs of an end.  In 2005 a group of Silicon Valley executives allegedly created a solution.  A recent lawsuit filed claims that Steve Jobs and Apple orchestrated hiring pacts with key competitors for talent.  Meaning that Apple wouldn’t steal employees from Google, and they would do the same.   The recruiting cold calls to employees who work at the agreed upon organizations would stop and companies not candidates would dictate the market keeping wages artificially low by preventing bidding wars for the best employees.

Reminds me of how gas prices fluctuate.  As demand in the summer increases, so do prices.  If production increases and the supply outpaces the demand, prices will remain low.  By creating a cartel, these multi-billion dollar companies were able to control the talent ebbs and flows of the market.  Except there’s one little problem, agreements like this pose a little problem.  Mainly, they are against the law.

When a group of companies or an individual organization conspires to control and dictate the market it potentially violates antitrust laws by entering into secret anti-poaching agreements.  It’s the reason that the FTC gets their hands involved in large acquisitions.  If one company controls and dictates the marketplace, then free enterprise doesn’t really exist.

Keeping Employees Happy: Three Solutions for Employee Retention

The secret to employee retention isn’t anti-poaching agreements and secret pacts.  There really are three solutions:

  • Treat Your Employees Well.  Meaning pay them what they are worth.  Provide them with benefits that are customized to their individual needs holding onto your best talent using all means necessary.  And by all means necessary I mean conversations, empowerment, and development.  Involve your employee in the process.  Let them drive their own career, and when it’s time to leave, let them go.
  • Hire Free Agents.  If an employee model isn’t successful, consider bringing on free agents and contract labor to fill gaps.  Benefits are no longer an issue and hourly rates dictate the marketplace.  Free agents make their own rules working on more of a project basis instead of as an employee and often times will sign an non-disclosure agreement as well as a non-compete for long term and well-compensated contracts.
  • Provide Employee Training.  Invest in your employees by providing them training, development, and education in exchange for increased opportunities.  Consider offering incentives like paid tuition for those employees who make the investment to continue their education in a specialized field like engineering technology while they work for you.  The Army provides an excellent model for this through their Green to Gold Program where enlisted soldiers attend college to return to the Army as officers.

Guerrilla and other rogue recruiting tactics can be effective.  I’ve filled my share of positions through cold calls, shopping for associates, and other unconventional methods, but these only offer a short-term solutions for the market or industry where highly skills and qualified employees are in high demand.  Of course, I’m not Apple.  The secret to employee retention isn’t through corporate pacts or anti-poaching agreements, it’s through long-term succession planning and identifying talent gaps.  Tactics like Apple’s offer a short-term solution in the war for talent and employee retention.

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Jessica Miller-Merrell

Jessica Miller-Merrell

Jessica Miller-Merrell (@jmillermerrell) is a workplace change agent, author and consultant focused on human resources and talent acquisition living in Austin, TX. Recognized by Forbes as a top 50 social media influencer and is a global speaker. She’s the founder of Workology, a workplace HR resource and host of the Workology Podcast.

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Comments

  1. This cartel building that huge companies have is not just illegal. It’s so non ethical that it chills my heart.

    We are talking about amazing employees there whose ideas will bring those companies so much money that every cent they invest in their payments will pay off very fast. It’s not like Apple and Google have low income or should worry about their survival.

    • Donna,

      The law may not agree with you. A recent case was filed against the companies I mentioned because of their anti-poaching pact. Then again, California is a whole different animal when it comes to employment law. We shall have to wait and see.

      Thank you for the comment.

      JMM

  2. Interesting, but no surprise about the agreement between Apple and Google. I imagine this goes on more than many people know it. The majority of CEOs at large organizations are good buddies with each other. With that comes deals and unwritten agreements made at cocktail parties.

    Jessica–I absolutely agree your solutions. I would also add basic communication between bosses and employees as another way to help retention. The good bosses have regular performance and career conversations with their people. They are aware of the warning signs to watch for if people are unhappy.

    I wonder what other companies have got into trouble with anti-poaching agreements? I bet the social media boom has caused some interesting ones.

  3. So it’s a problem when companies work together to keep wages low, but not a problem when employees create artificial bidding wars to drive their salaries up?

    How about giving credit to Apple to doing what it must to protect its ability to claim: “Designed in Cupertino”?

    This story isn’t as simple as it looks.

    • Jason,

      Thanks for the comment. Last time I checked, Apple announced their 2012 Q1 earnings at$46.33 billion. $46.44 billion. They are the big fish and that individual job seeker who is looking to increase their salary by $15,000 or $25,000 is small potatoes. My suggestion would be for them to build a training program for new developers or those who are interested in the space. Living Social has just started doing this which is very smart and helps to build the talent pipeline by also increasing supply which will in effect lower the overall salaries when looking at economies of scale.

      This story is not as simple, and it won’t ever be I fear. But that is what makes this industry what it is, right?

      JMM

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