Retaining top talent part 1
"The Renewed Challenge that really should never have gone away"
There is little doubt that financing was a key area for organisational competitive advantage before the global financial crisis (GFC). For directors, the challenges now appear to be around the management of human capital and the fight for talent in organisations. As directors become more in tune with this, 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 9/11 and after the GFC-driven downturn provides 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 focussed 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 “Generation Me” crowd, 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 recession. If you want your company to survive the 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
While there may be a number of people your company may not be sorry to see go, valuable others may be on the fence. 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 retail:
- Insitutional memory - the how and why of your operations, history, client values and methodologies.
- Relationships - with customers and other employees. Particularly where cross-departmental collaboration.
- Knowledge base - the technical skills, operational expertise and experience of team members.
- 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 done the minute he/she walks out the door.
Next week Part 2 of Retaining Top Talents, Paul goes through how you can retain top talent and knowledge while maintaining employee engagement, loyalty and commitment.
This article was written for Netregistry by Paul Smith, CEO at Carnegie Management Group. Carnegie Management Group provides executive mentoring, transition managers and facilitators for Australian businesses of all sizes.