Munich Economic Summit
5 th June 2008
Bosco Novák
Brain Drain – The Need for Retaining Talent
As we usually say, there are two sides to a coin. In this case, 
there are actually three sides to the coin:
Retention, Attraction – and Engagement.
We cannot discuss the overall topic of “Brain Drain” without including Engagement. In a globally recognized study, Towers Perrin presented very clear findings regarding the link between attracting and keeping employees and their behaviour and organizational performance.
NSN is the merger of the telecom infrastructure business of Nokia and Siemens. We have our heritage and hence, our heart and soul in Europe. One third of our employees are in Finland and Germany, and another 20% in other European countries. However, of the next 2 billion people who will be connected to the internet and the communications world, 90% will come from China, India, Indonesia, Russia and Brazil.
Our main focus is on Engagement, i.e. understanding and influencing the emotional and rational link to our company. High performing companies have an engagement index of over 70 which is 10-15 points higher than the average company. Towers Perrin actually present “Country Engagement Indices” and frightenly, the highest proportion of highly engaged employees are seen in Mexico and Brazil with 40% and 31% respectively, whereas the Western European countries show results of only 10-15% of employees being highly engaged. What is more worrying is that the level of Disengagement in Europe is around 15-20% - or in other words: One out of five people feel emotionally detached. We can easily talk and measure the retention of the workforce in our countries but what’s the purpose if they don’t care.
In NSN, we have just concluded our first Engagement survey for the 60.000 employees. After one year of operation it is important to us that we understand the underlying dynamics in our company and that we can use this as a dialogue platform with our employees.
There are 3 main drivers for Engagement and Retention and I claim that these can be equally adopted for countries or regions. By the way, interestingly, these
drivers came out very consistently across the globe. I only have to make one caveat, i.e. NSN has a high proportion of knowledge workers.
1. Innovation
By far, Innovation is the strongest driver for Retention and Engagement. This is not at all about working on the leading edge technology or creating patents. It is entirely a question of company culture. Is entrepreneurial spirit supported? Does the leadership of our company actively engage in finding new ways to do business, new operating models, innovative processes? Are employees encouraged to contribute to innovation across the enterprise and finally, is there a reward system for successful innovation?
You can also take it from the other side: Stagnation is the biggest driver of attrition and disengagement
2. Personal Growth
The opportunity for personal growth is the second underlying factor for Retention. Continuous learning, competence development and having the opportunity to move across the organization are highly valued. I am looking forward to the discussion later on about the potential conflict between the need for stability and commitment, i.e. the longing for “No change” versus this driver of positive change, both on a personal as well as organization level.
Clearly, personal growth is strongly connected to the growth of the company. Having a vision and strategy for the future and communicating this clearly across the organization is important. This actually links directly into the third strong driver of Engagement, which is
3. Leadership
In a world of constant change and ambiguity with equally many opportunities and risks, leadership makes the difference. Here, I want to emphasize only one aspect of leadership: Leaders need to provide a secure base for their employees. A secure base which allows us to move forward and to explore, to experiment and to invest – and at the same time know that we have a strong backing behind us.
I believe, in this respect, Countries and their governments are not different from enterprises.
At the end of this introductory statement, please allow me to make two additional statements regarding the overall theme, which is “Brain Drain – the need for Retaining Talent”
a) For me, the expression “Talent” is used in a much too restrictive way, emphasizing age, or rather youth, and emphasizing the intellectual capabilities. In NSN, we have postulated that “Everybody is a Talent”. Now it
is our responsibility as leaders and as employees to identify each person’s individual talent and grow them.
b) Does the challenge “Brain Drain” really exist in today’s networked world? I know of course that in history, a lot people left countries like Ireland, Poland and Russia. But you could have also said this about India in the 80s and 90s of the last century. Today, nobody looks at India a country where Brain Drain is an issue. On the contrary, there is a lot of attraction for people going to India, both those who left 20 years ago as well as many others. The internet has brought all of us so close to each other and it makes the question of “where the brain is” less important. We rather need to discuss whether we really understand all the opportunities which are just opening for us.
