How to Retain and Motivate Talent Now
When times are tough, motivating people may fall way down the list of a company's priorities; survival comes first. Managers know that the risk of defection is dramatically reduced during a recession. Most staff members are simply relieved not to be part of the latest downsizing, and while top performers have the greatest flexibility to move, they don't want to sell their skills into a down market.
Now that the Great Recession is semi-officially over, though, keeping the best players and inspiring the rest is moving up on any good leader's priority list. Here's one tip: Money is not the answer. Korn/Ferry research shows that money is only one driver in terms of retention when companies pay below-average market rates. Employee engagement is multidimensional, and companies need to be thoughtful when weighing compensation, work-life balance, professional-development programs, and other factors that contribute to overall job satisfaction.
Granted, there is no one-size-fits-all solution to keeping people happy and engaged. But Korn/Ferry Leadership & Talent Consulting has found that there are three things nearly every employer must do:
1. Identify the people you cannot afford to lose.
To do that effectively, you have to know your strategy. If that sentence appears to belabor the obvious, think again: Many companies fail to rethink their strategic assumptions often enough. Companies should review strategy every other year. In the presence of major environmental changes, such as a recession, it should be done more often.
If your last strategic plan was developed before or during the recession, now would be a good time to revisit it. Align your people decisions with your strategic outlook. For example, a company that sees most if its growth coming from abroad should focus on retaining and recruiting executives with global experience and mindsets. Likewise, a business that has an acquisition-based strategy needs to boost its M&A and integration competencies.
The executive who did a good job cutting costs might not be equally effective when you are accelerating into growth. The key is to make sure you are investing in the right people—those who are capable of executing the company's long-term strategy.
2. Differentiate between the great and the good.
Like a championship baseball team, a winning company needs a combination of all-stars and solid performers. To retain the best from both groups, you need to meet their distinctive needs.
The high potentials are primarily driven by challenges that foster their career ambitions. They see themselves as some day running the division, and maybe even the company. Wired differently from solid performers, the high potentials find average tasks boring; they want stretch goals and the opportunity to take charge. Throwing money at them is not going to make them stay; if they foresee the possibility of reaching their goals faster in Company A vs. Company B, they are going to go to Company A.
The correct incentives for them are interesting and challenging positions and a clear shot at advancement. Flexibility in terms of work hours and arrangements—such as ability to take nonpaid leaves, do job-sharing, or work remotely—count heavily, too.
Then there's the majority of your employee population: the solid performers who may never make it to the C su-ite but who keep the trains running on time. This group is motivated primarily by security, loyalty, and a healthy culture that matches their values. They are more apt to seek benefits and incentives related to stability, such as broad, subsidized health coverage and a sponsored education programs.
For the solid performers, the right kind of incentive is one that demonstrates trust and loyalty—for example, long-term incentive plans.
3. Make sure you know your Xs, Ys, and Nets. As in Generation X, Y, and the Net-gens.
Generation X is composed of those born roughly from 1964 to 1972; Gen Y goes from 1972-82. People born after 82 are our Net-geners.
Incentives like job-sharing, flexible work hours, and a sense of challenge are powerful lures for the younger generations, while job security, a high base salary, and robust health-care benefits are more critical for Gen X. The trick is to be able to appeal to the newbies without giving the impression to their slightly older colleagues that the company is bending over backward for the younger generation. It's a difficult balancing act, but the company that figures out how to offer each group what it values will keep more of the people it wants.
What it comes down to—and yes, this is going to sound simplistic—is that you need to know who your people are and what matters most to them. Surveys that ask employees to rank what is most important to them can be low-cost, helpful tools. There's no need to invest in company cars, say, when what your young all-stars really want is a better shot at an overseas assignment and what your older strong performers would prefer is a more generous health plan.
The tough things that companies did to keep going—pay and promotion freezes, pension changes, mandatory furloughs, cuts in recruitment and training budgets—have eroded the bonds between employers and employees. The economic recovery offers an opportunity to restore them and renew a sense of pride and purpose. This isn't a matter of making it up to employees; it's the ultimate competitive advantage.