Retaining & Engaging Product Teams

For the past few years, you may have noticed that the product talent market has been in a bit of a lull. It is what we call a ‘slow’ market for product talent – where supply of those looking for a job in product management outstrips demand from organisations for the role. This trend has followed the overall slowing of the global economy since 2022. Product talent has been impacted by the double whammy of demand side reductions in hiring as organisations plan for more uncertain growth and oversupply due to an uptick in redundancies in certain areas.

This slow market comes right on the heels of a ‘hot’ market from about mid-2020 to 2022 where demand by organisations shifting to digital and technology products and channels drove a surge in product hiring. On the plus side, this growth surge funded the set-up of a large number of digital product teams and contributed to many people entering the product for the first time. On the downside it led to a bit of a salary and hiring bubble for product roles (hence the redundancies).

Anyone who was a people manager at the time can attest to just how hard it was to attract and retain good product people in a hot market. But while it may seem like we have some breathing room in the current slow market we should be careful of a false sense of security. Ultimately how we behave in a slow market will impact our product talent retention in a hot market.

In fact we see many product leaders find it harder to make talent investments in a slow market where cost cutting and hiring freezes means organisations are less focused on their people. In a market like this, people managers need to look for practical ways to future-proof product talent while acknowledging what we maybe can’t control (e.g., pay). In order to do this, we need to understand how some commonly used terms – engagement, capability and retention – play together to impact our teams in the good times and the bad.

Retention, Engagement & Capability

So let’s start by defining each of these terms and how they relate:

• Engagement: The level of enthusiasm people have towards their work and workplace. Broadly these can be reflected in their motivation to not only complete their work but go above and beyond their role expectations (discretionary effort). Most organisations get their best results from engaged employees who are willing to put in their intellectual and emotional best, which is usually not covered in a job description.
• Capability: The level of ability of an individual to perform their role to an expected standard. Broadly this covers whether or not the person has the necessary skills and behaviours to perform the role successfully.

Retention: The ability of an organisation to keep employees from leaving. Employees may leave voluntarily or involuntarily due to for instance performance or behavioural issues. This has meant that regrettable attrition may be a more relevant measure, which only measures voluntary departures that the organisation would have preferred to retain.

Generally you can think of retention as a mix of both engagement and capability with an extra ingredient sprinkled in – personal life goals. We have very little control over this last ingredient, which is why focusing on capability and engagement is the best way to impact retention while understanding the alignment of the individual’s personal life goals with the organisation’s goals through open manager-led conversation.

The interesting thing is even if you have high retention, you can still have low engagement and capability. This is especially true in a slow talent market where the movement of talent may be suppressed. This (and not retention) is the true danger of a slow market – a team filled with disengaged or low capability team members.

So how do engagement and capability relate? Ideally everyone in our teams will be high capability and engagement, but in reality we all have a mix of engagement and capability levels in our team. A good way to visualise this is below:

It is obvious what to do in at least two of these quadrants. We want to retain team members with high capability & engagement and exit team members with low capability & engagement. But in most teams we will likely have many more team members in the two ‘opportunity’ areas than in these more clear cut areas. This is where the talent opportunity lies – so what do we do here?

For high engagement, low capability team members, supporting their development is likely to pay returns as long as they are also engaged by learning. This is why it is so important to hire for the potential to learn. If however, learning is a disincentive, they may eventually end up disengaged and need to be exited. There is only so long people with low capability in a role can struggle, try and fail. It is essential therefore that we are careful to give the right level of challenge that allows people to learn and succeed within a reasonable timeframe.

For low engagement, high capability team members, motivation is key. There is a large potential in increasing the engagement of this group as they already have the capabilities needed to succeed. Re-engaging these individuals in a slow market, will be essential to retaining them in a hot market where their capability is in demand. However, depending on the reason for disengagement, this may be more or less within our control to impact. A simple model can help us understand what may be the reason for disengagement in this cohort.

Impact Engagement By Impacting Motivation

A useful model to understand factors that can maintain and increase engagement is the Herzberg Two-Factor model. This model looks at employee engagement through two lenses – motivation & hygiene factors:

Motivating factors help to increase job satisfaction and motivation and hence engagement. Whereas the absence of hygiene factors increase job dissatisfaction and demotivation. That is, these each operate in opposite directions. Purely providing more pay (hygiene factor) will not increase motivation and engagement, but not providing enough pay will increase dissatisfaction.

The good news is that most of the factors in the motivation area do not require huge organisational investments (unlike pay increases or changes to organisational policy). The great news is that while we as people managers may not have the ability to impact all of the hygiene factors, we can improve many if not all of the motivation factors.

By working with our team to understand how work can be made more meaningful and challenging, by creating growth & advancement opportunities and by recognising work well done, we can make meaningful impacts to team motivation. This can help us not only harness the low engagement opportunity in our team but also retain team members that are already engaged by maintaining their high engagement.

Engagement, not retention, is the biggest risk in a slow market and if we can effectively harness motivation to drive engagement during slow times this will set us up retain our best and brightest product people when the market picks up again.