Tips for Retaining Top Talent
Financing was a key area for organisational competitive advantage for retaining talent before the GFC ten years ago. For directors the challenges appear to be around the management of human capital and the fight for talent. As directors become more in-tune, it is inevitable that boards will seek human resource information with the same degree of integrity as that expected of financial information. Systems and processes will become vital in establishing data that enables boards to proactively manage human capital – real people!
The US experience after the GFC-driven downturn provided the “canary” for Australian directors. The thought of a W-shaped global growth pattern and the emergence of potential downturns in Australia only heighten the need for directors to become focused on retaining top talent.
Recent reports have indicated that nearly 50% of US workers are dissatisfied with their jobs. While the largest group of unhappy workers seems to be the under-25’s, the sheer number of unhappy employees is quite troubling. Amid the signs of improving labour markets and employment rates, this news should be downright disturbing to business owners, directors and managers. Now is the time to prepare to help prevent the loss of talented people who may “jump ship” when the opportunity is right – for them.
Studies have shown that only companies that change their management approach survive for more than 18 months post a recession. If you want your company to survive a recovery, it must embrace change and find new approaches that reflect the new business and cultural environment.
As it relates to HR, there are few new approaches to measuring business performance and employee engagement.
Some emerging measurement strategies include measuring employee productivity in ways such as sales per employee and value-added per employee, as well as measuring employees’ understanding of their contribution to business performance.
Identifying, cultivating and adopting more appropriate measures for top talent can be the key to recovery and long term growth. But how will you know who your most talented and productive individuals are? And, how will you know if they already have one foot out of the door?
By examining and analysing human resources from a more holistic perspective and seeing employees as talent capital, rather than mere workers. Companies can do more to retain and nurture talent and ensure a mutually beneficial future for employees and the company.
The role of directors in assessing and monitoring resources beneath C-level executives has never been so critical.
Why Retention Matters
There may be a number of people your organisation you may not be sorry to see go. Valuable others may be on the fence however. Retaining team members critical to business processes and continuity is critical. Ironically, these most valuable professionals (MVP’s) may not be the “usual suspects” – certainly the C-level suite is important, but there may also be key individuals among the ranks whose experience, knowledge, charisma, vision and wisdom are vital to progress.
Identifying these MVP’s and keeping them on your team is important beyond the parameters of human resources. So much of a company’s success, its value to customers and its potential for growth reside within its people. Keeping your most talented team members on your side – fully engaged – helps to retain:
• Institutional Memory – the how and the why of your operations, history, client values and methodologies. Change rarely happens in a vacuum and understanding the historical context for changes maintains a foundation for growth.
• Relationships – with customers and other employees. Particularly where cross-departmental collaboration is concerned, internal relationships can be vital for optimising performance and knowing who to turn to get things done.
• Knowledge base – the technical skills, operational expertise and experience of team members. When this is lost, so too is the opportunity to leverage this inherent knowledge across the organisation.
• Investment – in your employees as valuable human capital. If you’ve invested education, skills building and professional development for an employee, the return on investment is gone the minute he/she walks out the door.
Changing Human ‘Resources’ Perspectives
Chief among the reasons most employees give for leaving a position is the lack of perceived investment on the part of the company in employees. They feel neglected regarding training and skills development. The importance of lifestyle has also begun to play a major role in employee satisfaction. Workers want a job that supports their lifestyle, not one that consumes it.
People are seeking a greater sense of purpose and meaning in their work. This is not just confined to the US. This is especially true of under 40’s. They seek more fulfilment and enjoyment from their jobs in lieu of loyalty, security and a lifetime commitment.
To prepare for the future, employers must devise better ways to accommodate this desire and to cultivate and harness the incredible creativity, skill and insight inherent in their employees and retain it for future success. To do so, requires a paradigm shift in the way an organisation perceives its employees – at all levels.
The fundamental distinction between human resources and human capital is the idea of consumption versus investment. Even the term human “resources” denotes a finite commodity – something that is diminished or consumed through its use, much like coal, timber or oil. This concept is exactly what most employees today are seeking to avoid.
On the other hand, “capital” is invested, nurtured and pays dividends in the form of a return on that investment. Capital generates additional wealth.
Think of employees as human capital – something in which you invest and that pays dividends. You can look beyond output and production to determine their real value to the organisation, based not just on skills and accomplishments, but also the inherent contribution they make to the culture of the company and the motivation they bring to the job, their colleagues and the workplace.
Likewise, this perspective will change the way employees view themselves and their roles within the organisation. As something to be valued, nurtured and cultivated for the future, and having an effect on the success of the business rather than expended in the name of progress.
Making the Investment
While employees understandably want compensation equal to their skills and effort, they also want to feel invested in. To retain top talent, knowledge, engagement, loyalty and commitment, companies should:
• Training, beyond skills development. Include more indirect programs such as communications, motivation, time management, problem solving, team building and other areas applicable to everyone in the organisation
• Assessment, not only of employees’ skills, but also competencies to help uncover unique aspects of each individual’s abilities and character that brought to bear more effectively in the workplace
• Job duty and performance mapping to determine the exact skills, competencies, qualifications and attributes required for each job role to be successful
• Competency matching to ensure the right employees are in the best position for their competency and skill levels. Some employees may feel dissatisfied not because of the employer or the salary, but because they’re simply not in the position best suited for them. Matching required competencies of the position to the competency profile of the employee tends to result in high-performing, motivated and satisfied employees
• Career path and succession planning, which serves the best interest of the employees and the employer. A fine balance that could and should work. Career-path planning helps employees feel the company is concerned about their future. This can dramatically improve their level of job satisfaction. Likewise, succession planning helps the company prepare for ascension, attrition and vacancies by having the right talent in place and ready to go. To ensure the continuity of strategic objectives
• Comprehensive talent-management tools that can integrate all of these functions. From HR and training to career and succession planning to measuring and understanding the performance effect on business success. Within a single cross-functional platform. An integrated solution makes it easy and economical to manage the diverse yet interconnected needs of an effective human capital-management strategy. Without a massive upheaval in process, exorbitant capital expenditure or a lengthy and complicated roll out. Also any such program must include a sophisticated, but transparent, agenda for knowledge capture and transfer
Every Internal Function Touches Another
The days of looking at HR, payroll, sales etc, as individual silos are behind us. With a perspective backed by integrated tools, employers and employees can achieve the level of success, satisfaction and fulfilment required. Even amid an uncertain future.
Evaluating, nurturing and measuring the effect of talent is an absolute necessity. To truly reduce the risk of losing your most valuable human capital.
To do so requires the right set of tools. Tools that can expand human capital management beyond the traditional set of HR and training functions. To integrate career path and succession planning. Plus training and skills, competency and motivational assessment. Crucially for all this to happen requires inspired leadership and the right mindset.
One can only wonder how many of your most valuable and talent employees already have one foot out the door.
And, you may never know what you’re missing until they’re gone.