On Thursday, the U.S. Supreme Court is expected to rule on the challenges to the health care reform law. We will have plenty to say about the implications of that ruling for employers once it has been issued.
In the meantime, let's turn our attention to the issue of employee retention. In our last post, we talked about the challenges employers face in retaining key talent as the economy and job market recover. However, it is important to realize that talent retention starts well before an employee gets a job offer from another organization.
Identify your key talent. A recent WorldatWork study of 526 companies found that 60% of the organizations reported that they identify key talent in some way, either formally or informally, and 53% have a definition of key talent. The majority of companies define key talent as employees who are top performers, have high potential or are in critical jobs. Although some companies undoubtedly follow an informal, I-know-it-when-I-see-it approach to identifying key talent, identifying talent is more likely to be effective when companies define specific criteria and have a formal process for evaluating, managing and developing these individuals.
Make sure total package is competitive. Although the WorldatWork survey found that better pay is the number one reason why key talent leaves an employer, these individuals are also looking for better promotional opportunities, fairer pay practices, and more challenging and satisfying work and work environments. Employers that do not pay attention to the total package they offer key talent could find that they are not providing what these individuals want and expect. In many cases, this means paying employees above market levels for their position and experience. In the Internet age, it is easier than ever for employees to evaluate a company's pay and benefits package and learn about the work environment. It is important that current and potential employees find good news when they go looking for information.
Provide flexibility. Allowing key talent to take advantage of flexible hours or telecommuting is one of the most effective ways to retain this talent, according to the WorldatWork study. In many cases, key employees motivate themselves and focus on getting the work done rather than getting to the office at a specific time. Once key employees earn the privilege, companies can give key talent some leeway in how they work and when and where.
Be strategic. If there are employees the company needs to keep, it is important to be aggressive in finding ways to keep them. A recent Towers Watson study of 180 companies from 19 countries found that some companies are more successful at retaining top talent during mergers and acquisitions because they begin the retention process early and don't rely solely on money. These companies also clearly identify who they want to retain during due diligence or transaction negotiations. By contrast, companies that are less successful at retaining talent don't ask employees to sign retention agreements until after the deal closes. The companies with high retention rates also use retention bonuses and personal outreach by managers and leaders to convince people to stay.
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