Why is it difficult to be a leader today?.

According to all research, especially those from the Croatian Chamber of Economy, the strength of the ICT sector is evident. Currently, the growth of the ICT industry is around 11%.

Naturally, these growth indicators would not exist without a strong increase in the number of employees in the ICT sector. We believe we can all agree that, regarding employee demand, software developers convincingly “lead the way.” Although current research might suggest a decline in demand, this can be attributed to a methodology based on the number of ads on various portals. The truth, however, is that demand is still growing, but the employment paradigm is changing, and with it, the advertising paradigm, where traditional ads no longer have sufficient visibility for the target audience (especially Gen-Z).

Given the continuous demand, a common problem for everyone is definitely the shortage of (adequate) employees in the market, and employee turnover further exacerbates these issues.

A smaller number of companies manage to keep turnover below or around the desirable 5%, while other companies struggle with it, often exceeding well over 10%.

It’s no consolation, but the healthcare sector (public and private) faces a similar problem, where the common denominator is again the shortage of skilled people and their migration.

Employee Turnover and Salary

When we talk about turnover, the question arises: is it all about salary, or is salary the main cause of increased fluctuation?

We can all agree that, thanks to a few companies and portals, developer salaries have become quite public. Something similar was started by “Moj posao” a long time ago, but perhaps it wasn't sufficiently marketed.

In principle, we can consider this a good move, but… On the one hand, companies used this to adjust the salaries of their employees. Or at least they should have. And that’s a good part of the story. On the other hand, we are all prone to external validation (we want to hear that we did something well, that we made a good decision, and ultimately, that we look good). Of course, we will try to use publicly available salary data, again, as a kind of external validation.

But there's one problem. It has been scientifically proven that more intelligent people tend to overestimate their skills and knowledge when performing self-assessment.

The First Step Where the Role of a Leader Becomes Important

However, who will correct us in such “self-assessing” situations? Who will evaluate our actual knowledge? Who can truly assess our seniority? Certainly not ourselves. And this can lead to cognitive dissonance and consequently, resignations. This is the first step where the role of a leader becomes important, assuming that person has indeed developed into a leader.

Can HR departments contribute to reducing turnover? Of course, they can. One of the primary reasons why they are needed can be seen from the company owners themselves. Today, most owners can be divided into those belonging to:

• Generation X – born between 1960 and 1980, and
• Generation Y (Millennials) – born between 1981 and 1995

Both generations, as the majority of employees, have people belonging to Generation Y and Generation Z.

Why is this a problem? Humans are experiential beings, and experience largely shapes us.

Generation X has the experience of the Homeland War, life after it, economic crises… and if nothing else, they learned to wait (for things to get better). Millennials, and especially Generation Z, generally don't have the “waiting experience”; everything is a click away, available now and immediately. Of course, then the question arises as to why they should wait for a better or higher salary.

In psychology, we know the term delayed gratification. Delayed gratification is the ability to postpone an immediate reward in favor of a larger, but later, reward. Similar to a sexual relationship, some are willing to wait longer, and some a little less.

Delayed gratification is much lower in Gen Z than in the rest of the population, which is not surprising at all, given their experience that most things can be had now and immediately.

Here we already see the “differences” between the owners, Gen X, and the employees, Gen Z (and ultimately Millennials). So, owners and/or directors have “learned” to be patient, while employees have not (yet). And they don’t need to. It’s up to HR departments to “reconcile” both sides. They are expected to understand people, and they do it well; in this area, their primary task is to transfer that understanding to leaders. Parallel to training for leaders, and in cooperation with owners, directors, etc., the next thing they had to “sort out” were the so-called hygiene factors.

Herzberg's Two-Factor Theory

When we talk about hygiene factors, we will use Herzberg's two-factor theory, which we will “lean on” Maslow's hierarchy of needs.

Herzberg developed the two-factor theory in 1959, studying some two hundred office employees, and his research aimed to obtain information about which business factors contribute to extreme job satisfaction. He was also interested in which business factors lead to an extreme lack of job satisfaction.

The conclusion of the research was that there must be factors that contribute to a certain satisfaction, and he called them hygiene factors. So, while they won't contribute to high levels of satisfaction, if they are absent, they can lead to high levels of dissatisfaction or a lack of satisfaction.

In addition to hygiene factors, he concluded that there must also be so-called motivating factors which, if present, can cause a large amount of satisfaction. He called them motivators.

Because of these two factors, the theory was named the two-factor theory.

In essence, it's an adaptation of Maslow's hierarchy of needs. It is named after the American psychologist Maslow, who states that “self-actualized people accept themselves and are capable of dealing with their worries, but also of recognizing the needs and desires of other people.”

Therefore, if a company is responsible towards its employees, it has satisfied the so-called hygiene factors. The main hygiene factor is salary, and then there are other benefits that most companies offer.

However, after the hygiene factors are satisfied, it is equally important to satisfy the motivating or intrinsic factors, and here we return to the role of the leader in both creating employee satisfaction and reducing turnover.

Examples of motivating factors, or intrinsic factors:

• challenging work,
• achievement and success,
• responsibility,
• opportunity for development,
• constructive feedback,
• recognition and advancement…

All these are reasons why we mention Herzberg's theory in the context of retaining employees and reducing “turnover” in our companies.

In this intrinsic part, owners, directors, etc., who belong to millennials, have a slight advantage because they themselves are quite similar to Gen Z; mainly these are younger companies with newer technologies that definitely offer more challenging work. However, in such companies, it is generally easier to retain an employee.

Problems can arise when owners/directors fail to understand that their role is strategic and that they will have to translate their strategy into tactical goals, which they will then pass down to their leaders, who will operationalize them and give them to their team. In such a “distribution,” the most important thing is that each employee will have their purpose and goal, will feel part of something, and will be able to answer the question that always troubles them: “Where do I fit in here?” This will, in turn, motivate them.

Why is it difficult to be a leader today?

On the one hand, today's leaders face a situation of a lack of qualified employees and an increasing workload. On the other hand, existing employees, due to a desire for external validation, prefer job hopping over a career.

Where to start?

If someone asked us today what skills a good manager must have, we could easily list several, from organizing to time management… but what skills must a leader have?

Today's structured society, structured education, and life based on Google and Outlook calendars have killed emotional intelligence in us, just as they have creativity. Ultimately, we concluded that it's easier and simpler to live if we are less emotionally intelligent.

And that, emotional intelligence, is precisely what every leader should possess above all else. Self-awareness. Personal motivation. Empathy. Social skills…

That's what creates cohesive teams; that's what creates trust and loyalty.

Often, when asked, “What's wrong with you?”, you'll get the answer, “Nothing.” How to distinguish a genuine “nothing” from “I'm dying of sadness, worry, etc. – nothing is wrong” is something we are not taught anywhere in school. Some people might have a more developed sense of their colleagues', associates', friends' well-being, but most will not.

When we think about people, their behavior, reactions… we usually do so based on some specific experience and a certain individual, and the conclusion we reached probably doesn't even apply to that person, let alone being universal. This is simply because every person is “a world unto themselves.” While some openly show emotions, others “openly” hide them.

Due to all that has been said, we must re-learn how to talk (forget texting and similar things), learn to listen, and learn to understand. Our way of life has simply untaught us these things.

And that's why…

Leadership is a Choice, Not a Status

To justify this subheading, we will give an example from recent history. Namely, Captain William Swenson was awarded the Congressional Medal of Honor for his actions in Afghanistan on September 8, 2009. He received the award for bravely rescuing his comrades from crossfire. However, the reason we bring him up as an example is this: A camera was mounted on the head of one of the paramedics. That same camera captured the moment Captain Swenson pulled his wounded comrade, laid him on a stretcher, and kissed him on the cheek. It was a reflection of true care and devotion.

The question arises: who are these people? Where do they come from? Are they better people, and thus attracted to the concept of serving others?

The answer to this question is simple: the environment is what makes them better people. And let's not forget that humans are “environmental beings.” If the environment is good and supportive in that sense, we can all behave and act that way, just like Captain Swenson.

The team leader-the leader-is responsible for creating an environment where someone else will always unconditionally help get the job done on time and with as few errors as possible.

The only person responsible for how warm or cold the team atmosphere will be, whether productivity will be good or bad, how self-actualized people will be or not… is precisely that leader.

Throughout life, we experience many changes-physical, psychological, emotional… we “grow up” our entire lives, in the truest sense of the word.

When we talk about growing up, in any sense of the word, we must remember that this also happens to the employees on our team.

Also, as leaders encountering this, perhaps for the first time, we must be aware that until recently, as experts, we were “in charge.” However, a leader's job is not primarily to be “in charge” but to ensure that their main job is to care for the people who are “in our charge.”

Generally in life, a crucial relationship in all aspects is the “relationship of trust.” We trust our partners, friends, various producers of goods and services… We must also have a relationship of trust with our team members.

However, we cannot simply come to them and say, “Trust me” or “Cooperate!”

Why doesn't that work? The answer is simple: because it involves feelings. When feelings are involved, commands don't work. We won't fall in love with someone “at the click of a button,” and even less will we trust someone at that same “click.”

Often, in employee satisfaction surveys for a particular employer, we will find the criterion of safety (of the job).

The moment the condition of security in the company is met, and we also feel secure alongside our leader, the natural reaction that arises is trust and a desire for cooperation. Ultimately, it’s also a desire to stay and belong to the team.