Cappelli also suggests that his research is applicable to industries and regions beyond financial services in the New York area. There is no evidence that the financial services sector experiences more job-hopping than other industries, he says.
As for executive education programs, they may have the effect of increasing willingness to search for positions elsewhere, the researchers found. Again, it’s a reflection of changes that have taken place in corporations over the past 20 years. “There is a perception, especially with respect to executive MBA programs, that people who sign up are going to leave their company once the program is completed,” Cappelli says. “But I think the reality is that people who go into those programs are investing a lot of their own time and energy; they are self-identifying that they want to do more in their companies – get promoted, work on different types of projects, etc – all ambitions that one would expect companies to encourage.”
But many companies’ in-house talent development functions no longer exist due primarily to cutbacks, Cappelli states. “The person who makes the decision as to whether you can participate in an executive education program is now your local manager – his budget and his decision. Yet he has no interest in your long-term development in the company because that development is likely to take you out of his division. So you complete an executive education course and are ready to do something bigger, but it’s not going to happen. It’s a mistake on the part of the management – it’s classic sub-optimisation – making sense for the local manager but not for the company as a whole. In that context, you can see why people who have spent considerable effort advancing their skills and knowledge want to job search outside the company.”
Given today’s unsettled economy, what can companies do to keep executives from job searching? The answer seems obvious, Cappelli says: Develop your own talent internally and give your employees opportunities for advancement inside rather than outside the organisation.
But he isn’t exactly optimistic these things will happen. “If anything, companies these days are more inclined to hire from outside, cut faster during restructuring, and be brutal when it comes to layoffs. All of these things decrease employee loyalty.”
