REDUNDANCIES and job losses resulting from the global economic crisis has led some people to believe that there is a glut of talent in the job market.
However, the search for good performers is far from over. Despite the uncertainty, high potential employees are unafraid to strike out for better opportunities.
The direct costs associated with losing an employee range from one to three times his salary.
However, these calculations often fail to factor in the hidden costs of employee turnover, including lost productivity, missed revenues, and intangible repercussions such as reduced morale and diminished company reputation.
While companies tighten their belts during times of change, the need to fill key positions and retain “star performers” remain for many corporations. Star performers are those who are vital to organisational success and whose departure can have serious business consequences.
The best way to retain high performers is to implement a well-planned and coordinated retention strategy that includes the following areas:
1. Selection and orientation
In many instances, employee turnover is due to issues of “chemistry” or “fit”. The selection process is one of the most crucial first steps.
Employers are now adopting the strategy of “hire for traits, train for skill”, bearing in mind that no amount of coaching will correct the errors of recruitment.
By undertaking a thorough strategic analysis to define the core competencies and critical success factors required for a position, a profile of the ideal candidate for recruitment can thus be created for use in the recruitment and selection of the right candidate — one who will not only do well in the job, but will also stay on with the company.
2. Training and career management
Savvy organisations understand that the development of high potentials and the continuous development of current executives’ leadership skills are critical to company-wide success.
Companies have long used executive coaches to build and leverage the strengths of leaders at all levels while helping them navigate obstacles and avoid failures.
Recent research suggests that leaders and executives who receive coaching have improved working relationships with their direct reports, peers and immediate supervisors and experience increases in job satisfaction, team performance and organisational commitment. These benefits help to create bottom-line results and improve operational achievements.
The most effective development programme operates as an interactive process. In this process, the manager and the employee work together closely to identify skill gaps that must be filled, ways to satisfy the professional interests of the employee and develop the competencies that will be needed to ensure the success of both the employee and the business.
Companies that use development effectively as a retention tool recognise that people learn in different ways, so they offer a variety of learning programmes and growth opportunities. These may include classroom-based instruction, self-paced computer-based training or even coaching at more senior levels.
This commitment to career management not only ensures that your employees develop the right skills and competencies, but also sends a strong message to high performers that you want them to stay and are committed to their success.
3. Motivation and compensation
All too often, when companies design their reward systems, they end up relying on the approaches that are most familiar and widely practised, such as financial incentives.
While financial incentives can sometimes work to improve performance, their value as a retention tool has diminished in recent years. The reason: in today’s marketplace, there are too many companies who are willing to match the financial offerings of their competitors to recruit top talent.
There is mounting evidence to suggest that while companies should strive to remain competitive in the pay and benefits they offer, it may not be wise to focus primarily on money when designing a retention strategy.
With high performers in particular, non-financial incentives, especially those that promote feelings of achievement, ownership and involvement, or provide more meaningful work, can be far more critical to retention.
High performers look for increased responsibility and challenge. They tend to participate more than other employees and offer more suggestions for improvement. Enlisting a high performer as a key problem-solver can help strengthen his feelings of engagement and enhance his self-image as a stakeholder.
Your retention strategies will only be successful with buy-in from all levels and a focused approach. Adopting a strategic approach to retention can produce benefits for your business that go beyond meeting the immediate need to reduce turnover.