A recent Society for Human Resources survey showed that 38% of hiring managers saw an uptick in turnover in 2004, and many expect even greater levels in 2005. With retention of top employees climbing the list of corporate concerns, BusinessWeek B-Schools Editor Jennifer Merritt and Management Editor Louis Lavelle talked to companies that have made headway in keeping their best performers. Here's a look at some of their strategies:
Texas Instruments: Four years ago, TI (TXN) reorganized its management strategies around what it calls the 6 Talent Doctrines, designed to help in three main areas: talent acquisition, engaging and developing talent, and talent retention. Nurturing and keeping top employees is part of a manager's job and is used as criteria for performance reviews.
TI provides its managers and other leaders with training in engaging employees. Managers at TI "re-recruit" their best people all the time -- regularly checking in to make sure employees are being challenged, helping them develop in their jobs, and exposing them to other opportunities that might better use their skills. And if someone is ready for something new, managers have the power to help that person find other opportunities at the company.
"These talent doctrines weren't developed by HR," says Steve Lyle, TI's director of worldwide staffing. "They were initiated by the leadership of the company. To ensure excellence in the technology industry and specifically in semiconductors, you really need to be sure you have the best and brightest." Even in a down economy, he says such strategies are important, because top engineers are hard to find. The result of all of these efforts: some units at TI have zero turnover in a 12-month period.
Yahoo!: Execs believe that the most important factor in retaining employees is for workers to feel they're doing something they're interested in and that makes a difference. To that end, Yahoo (YHOO) began a leadership program for its managers, emphasizing retention and mentorship, a few years ago.
And in 2002 it rolled out a revamped compensation strategy. Moving away from its egalitarian methods, Yahoo moved to a performance-based system, says Libby Sartain, senior vice-president for human resources. That means more incentive compensation, differential base pay, and options with different vesting. That system, along with the emphasis on retention and mentorship, has helped Yahoo identify the people it wants to keep and make sure those workers are getting the type of guidance and nurturing that will keep them at Yahoo, even if competitors come calling.
Goldman Sachs: "We have to make sure our employees know that staying with Goldman Sachs (GS) is about more than just the money. We want people to really understand and have confidence that they have a long-term career at the firm," says Edie Hunt, managing director and global head of recruiting, training, and development.
Goldman has made it easier for employees to explore new opportunities within the organization without revealing it to their managers. It has also beefed up training, offering modules on leadership and career development alongside those designed to increase knowledge of the firm's products and business lines. Upward of 80% of its faculty are senior executives at Goldman.
Also, the bank is individualizing compensation more and offering programs that give high-potential employees increased exposure to and attention from top management.
Marriott: To make sure new employees are a good fit from Day One, Marriott International (MAR) periodically identifies its top performers and surveys them to find out what makes them tick. Then it uses the information to determine which job applicants have similar personality traits.