WHEN a senior executive resigns, an organisation must first establish how detrimental this really is for the company’s future.

The senior management team is intrinsic to the identity and running of a business, but changes at the top can sometimes be beneficial.

At the same time, attempting to retain an executive who has a strong desire to leave is generally counter-productive.

However, if a senior executive has valued qualities and persuading him to stay would not compromise his commitment to the company, a business may encourage him to reconsider his initial decision.

Establishing the primary motivation behind the resignation is not only a crucial part of this process, it can also help to prevent similar instances occurring again in future.

Recruitment specialist Robert Walters’ research team found a number of different reasons why an individual may resign and not all of them are obvious and clear-cut. Although this is not an exhaustive list, these include:

* Progression opportunities,

* New challenges,

* Remuneration,

* Importance of communication,

* Company direction,

* Dilution of company brand,

* Company support, and

* Personal circumstances.

Bringing these issues together into an overall “checklist” can help you to address key business problems and minimise the risk of senior executives leaving your company.

Today’s article will discuss the first three issues:

Progression opportunities

Opportunities for self-development and progression, rather than money, are often the key factor behind a senior executive’s decision to move on.

Inevitably, successful individuals get to a point where they feel ready to embrace a bigger role with greater accountability.

Commonly, businesses assign these executives responsibility for extra divisions, recent acquisitions or unique “one-off” or special projects in an attempt to satisfy their ambitions.

However, some executives may have grander ideas. Instead, they may be looking for a move to a larger company, which operates internationally, or to progress to a more senior position with increased responsibility.

Gaining experience with a public-listed company and then working for a FTSE 250 and possibly a FTSE 100 company, is important to many senior executives.

While businesses can offer promotions and more responsibility, it can be difficult for them to meet such high ambitions.

New challenges

A company that functions efficiently and smoothly may have one unwelcome problem: key executives may grow disillusioned with doing the same tasks day-in and day-out.

Without new short- or long-term challenges, there is a strong possibility that an executive may seek new challenges outside of the business.

This is a fairly predictable scenario if the executive was initially hired as a “problem solver”.

When there really are no clear new challenges available, companies and senior executives often agree that parting ways is the best outcome for both sides in these situations.

Remuneration

Senior executives sometimes cite unsatisfactory remuneration as the prime motivation for moving on.

The first challenge for the business is to establish that the reason is genuine, as it is often used as a smokescreen for the other issues discussed here.

If it is, organisations can take a number of approaches —depending on the executive’s individual preferences — to boost overall compensation packages without impacting the company’s day-to-day budget.

Executives may be prepared to accept a package incorporating a lower basic salary with potential for a much larger performance-related bonus.

In some cases, improved share options or long-term incentive plans (LTIPs) linked to performance objectives may also appeal.

As an example, Robert Walters’ executive search division recently spoke to an executive who decided to stay with his existing employer after being offered an equity package that he had not anticipated would be available.