Every year, companies spend billions of dollars in aggregate recruiting and interviewing. Why? Because human capital is arguably the single greatest enabler of business strategy and companies want to make sure they’re hiring the best talent out there. So why is it that once those employers get that talent, they don’t work as hard to keep their people around?
The costs of losing top talent are measured far beyond recruiting time and expense. The loss of key management can have an adverse impact on market competitiveness, capital raising, investor perceptions, and achievement of growth targets as well as negative effects on morale and potential disruption to normal operations while the recruitment process plays out.
The better an employee is, the more options he or she has. And every day, rival companies are working hard to lure the best people away, a trend likely to grow as demand for outstanding talent outstrips supply.
No organization would let an intruder walk off uncontested with financial assets or intellectual property. Yet, when it comes to defending talent, most companies are ill-prepared.
A global leadership advisory firm, Marlin Hawk, recently surveyed 400 top human resource officers. Over 40% of responding HR experts said that their company had no formal retention strategy in place, while 54% said their company is unprepared to identify those top performers who are vulnerable to talent raids.
Stay ahead of paradigm shifts
Near- and long-term success of an organization increasingly depends on its ability to attract the right talent and achieve high levels of employee engagement, loyalty, and trust which results in better retention. While there is no ‘panacea” for retention of top talent, there are several ways an organization can cut down on its cost of turnover and, importantly, hold onto valuable management talent.
Start the retention process at hiring
When interviewing a candidate, it’s crucial to assess if their behavioral skills, values, and motivators align with your organization’s future. Hiring candidates who fit your culture is a critical driver to improving retention.
Keep compensation competitive
Talented candidates expect that the new role will include a competitive compensation package. According to the 2017 report on employer brands by Randstad, salary and benefits were handily the most important reason a candidate chooses an employer. Organizations must keep pace with the competition in compensation. Conducting compensation benchmark studies and ensuring appropriate compensation to key executives are important to fend off unsolicited approaches to lure away top talent.
Address evolving expectations for benefits
Candidates also look for a strong mix of perks and benefits, with such elements as an attractive retirement program, health insurance, tuition reimbursement, generous vacation policies, and comprehensive relocation packages.
To keep today’s top performers satisfied, organizations need to keep their finger on the pulse of what benefits really matter to their employees. A recent article in Harvard Business Review indicated that benefits that promote work-life balance such as flexible hours, more paid vacation, and work-from-home options are highly valued by employees.
But, paradoxically, what attracts an executive to an employer today may not always be the reasons for them to stay. Competitive money and benefits won’t keep employees from seeking a job elsewhere.
Focus on employee engagement to improve retention
Recent research shows a major disconnect between how executives and workers view their workplace.
The decision to be drawn away from a current employer usually doesn’t hinge on money. In the Randstad study, they found that 47% of highly-educated employees consider a limited career path as the most important factor in leaving their employer. Other factors that often trigger dissatisfaction with a current employer include dislike of a new boss, disagreement with new organizational strategy, and an inability to drive sustainable change.
A winning approach to retention
So how does an organization hold onto its best and brightest? What’s the magic formula for motivating top performers – and at the same time creating an environment that helps turn average performers into superstars?
Leaders of the best organizations seek to define the organizational culture – the values, beliefs and guiding principles that help every member of the organization do his or her job. Call it “culture” or “brand,” but this unique expression of the organization’s distinctive character goes far beyond policies and procedures and systems. It embodies the spirit of the organization – the ethos of the group that helps everyone know what to do and how to do it, regardless of what any manual or policy guide says.
The best organizations effectively mentor, lead, and motivate top performers. Often, they want a continuing opportunity for professional achievement and the personal satisfaction that comes with it. They want to be challenged, and to be given the chance to use their skills and experience to do more than the routine tasks. They want to improve and make things work better, and to deliver more. They also want the recognition that comes with accomplishment. They want to feel that what they do matters, and to see some recognition of the value they add to the organization and for all its stakeholders.
As team leads or executives, ask yourselves if you and your company are providing the following for your people:
It’s not an easy formula. But the best organizations somehow manage to do it. They know it’s not enough to lure top talent in. You’ve got to work to keep them around.