CEOs should not presume that the turbulent economy dissuades top talent from pursuing their career goals. Smart leaders are proactively developing strategies to motivate and retain their top performers no matter what the economic signals are, says Nancie Whitehouse, founder of the talent acquisition consulting firm Whitehouse Advisors.
“The risk of defection is significantly lower during a recession, but competitors will still try to entice top performers,” she said. “In fact, challenging as it is to attract great talent, it can be even more difficult to retain them.” And that goes for heady times as well.
Harvard professor Michael Watkins recently commented on the forces that stand to pull many valuable leaders away from their current jobs. “There is tremendous pent-up demand for new opportunities and advancement among high-potential leaders,” he said. In the end, the responsibility for keeping those top players from departing rests with the individual at the top of the organization’s pyramid. “Ultimately, the CEO is accountable for retention and the company’s commitment to keeping its star performers,” said Ms. Whitehouse.
A Heavy Cost
Why go to great lengths to keep top talent, and what is the potential risk of not having a retention strategy? Ms. Whitehouse points to the 2009 ExecuNet/Finnegan Mackenzie Executive Retention Report, which said that the true price of losing top management talent is revealed not only through the cost of replacing a key leader but also in the potential loss of unit productivity, lower morale and higher rates of disengagement among disenfranchised subordinates to the respected individual who left.
“In addition, it jeopardizes valued client and vendor relationships, plus the loss of that individual’s institutional knowledge,” said Ms. Whitehouse. “Research has shown that when a high performer leaves, the cost of recruiting, onboarding and reeducating a replacement may range from 70 to 200 percent of that individual’s annual salary.”
Recognition Matters for High Performers
In this brand new episode of ‘Talent Talks,’ we delve into what top performers want most from their companies and how those organizations can best retain their employees for long term. Our host Andrew Mitchell is joined by Nancie Whitehouse, founder of Whitehouse Advisors. “Understanding why people leave is important,” said Ms. Whitehouse. “But it’s not about the money anymore. Rather, it is more about employees wanting to receive recognition and benefits rather than a raise in pay.”
What do top performers really want from their companies? It may surprise many, but money is rarely the most important reason for executives deciding to stay with their employers, said Ms. Whitehouse. “While compensation is important to everyone, it is actually a short-term motivator in the absence of other factors,” she said.
“High performers want to work for strong managers who set clear and realistic expectations and enforce a personal development plan with which the individual perceives he or she can be successful,” said Ms. Whitehouse. She referenced Jay Conger, the Henry Kravis Research Professor of Leadership Studies at Claremont McKenna College and author of ‘The Practice of Leadership: Developing the Next Generation of Leaders,’ who said: “The largest predictor of whether someone will stay with a company is their satisfaction with their immediate boss.”
In fact, daily communication with one’s manager may be the most significant factor influencing employee productivity, morale and retention. “Top performers welcome direct, constructive feedback and ongoing discussions about their goals and aspirations,” said Ms. Whitehouse.
Individual recognition and direct praise for valuable contributions are also strong motivators for high performers. “Acknowledgement and appreciation for those who have delivered results above and beyond expectations will inspire them to reach higher goals,” said Ms. Whitehouse. “Be specific in addressing the particular achievement and how it benefitted the organization.”
Top talent further requires consistent and clear communication to know that they are vital to the company and to understand their personal contribution to the bottom line. “A regular, open dialogue that solicits their opinions and allows them to provide input on important decisions will make them feel like they are part of company’s core,” said Ms. Whitehouse. “The best leaders are good listeners and appreciate constructive feedback from top performers.”
How to Attract and Keep Talent from Jumping Ship
Finding ways to attract the right, talented employees for their organizations remains a major concern and a challenge for the world’s human resources professionals. But today, with the economy making it easier for many employees to land another job, HR departments are also worrying about how to keep …
It is critical to feed top talent’s hunger for knowledge by offering them new and more complex projects and to provide them with tools for learning and professional development. “This sends a message that you believe in and trust your stars to take on more accountability and that you are committed to their growth over the long term,” said Ms. Whitehouse. “Your high performers crave challenge and the opportunity for advancement.”
It also helps to surround them with more of their own. Stars, said Ms. Whitehouse, want to work with people who will stimulate their thinking and push them to higher achievements. “As they see more high potentials being developed by and recruited to your leadership team, their natural sense of competition will drive them to perform even better,” she said.
Companies should promote a high-performance culture that aligns goals, performance and rewards across the whole company. “Create an environment where poor people management is unacceptable,” said Ms. Whitehouse. “Once you have mastered the art of managing a high performer, get ready for the next challenge: retaining the stars of the multi-generational workforce.”
The American workplace is undergoing significant change. What it ultimately becomes remains an open question. Ms. Whitehouse cited a recent report in Harvard Business Review that defined the five generations poised to work together for the first time:
- Traditionalists, born prior to 1946
- Baby Boomers, born between 1946 and 1964
- Gen Xers, born between 1965 and 1976
- Millennials (or Gen Yers), born between 1977 and 1997
- Gen 2020s, born after 1997
“We have yet to understand the paradigm shifts that will occur over the next 10 years, as the Gen Xers and Gen Yers inherit the senior management ranks from the Baby Boomers,” she said. “What we do know is that each group has its own set of values, ethics and work expectations. Ask each generation what they want from their career and you might get radically different answers. The way you recruit and retain them will likely be just as different.”
5 Ways to Improve Employee Retention
Of all the challenges that come with running a business, one that often goes overlooked is employee retention, this according to a report by MJS Executive Search. Hiring managers and CEOs often consider getting the right people in the door to be the most crucial aspect of talent management, but the truth is that …
As the economy continues to show strength, high performers are closely watching their senior leaders. Lack of career advancement or recognition will be ample cause for increased flight risk from many companies, said Ms. Whitehouse. “But when the CEO champions a strong company retention strategy,” she said, “top talent becomes a powerful competitive advantage.”
Prior to her role as principal at Stamford, Conn-based Whitehouse Advisors, Ms. Whitehouse was director of search strategies for General Atlantic, vice president at Huntington Group, vice president at Norman Broadbent and an associate at Korn Ferry.
Andrew W. Mitchell, Managing Editor
Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Managing Editor; Stephen Sawicki, Managing Editor; and Will Schatz, Managing Editor – Hunt Scanlon Media. Original post here.