Tuesday, August 17, 2010

Employee Retention - Getting it right

Changing times needs different strategies to engage and retain key employees. Organizations adopt different approach towards managing talent and working towards improving deliverables for business profitability. 

Mckinsey study shows that too many companies approach the retention of key employees during disruptive periods of organizational change by throwing financial incentives at senior executives, star performers, or other “rainmakers.”The money is rarely well spent. Many of the recipients would have stayed put anyway; others have concerns that money alone can’t address. Moreover, by focusing exclusively on high fliers, companies often overlook those “normal” performers who are nonetheless critical for the success of any change effort.

Some of the key observations are:

Find the “hidden gems”

Once HR and line managers have generated a thoughtful and more inclusive list of key players (usually 30 to 45 percent of all employees), they can begin to prioritize groups and individuals for targeted retention measures— 5 to 10 percent of the workforce.

The key is to view each employee through two lenses: first, the impact his or her departure would have on the business, given the focus of the change effort and his or her role in it; and second, the probability that the employee in question might leave.

Mind set matters

One-size-fits-all retention packages are usually unsuccessful in persuading a diverse group of key employees to stay. Instead, companies should tailor retention approaches to the mind-sets and motivations of specific employees (as well as to the express nature of the changes involved).

Retention is about more than money

Executives mustn’t view employee retention as a one-off exercise where it’s sufficient to get the incentives packages right. Rather, best practice approaches build on continuous attention and timely communication every step of the way to help employees make sense of the uncertainty inherent in organizational change.

Ultimately, what many employees want most of all is clarity about their future with the company. Creating that clarity requires significant hands-on effort from managers, including the ongoing work of tracking progress so that companies can quickly intervene when problems arise.

Targeting retention measures at the right people using a tailored mix of financial and nonfinancial incentives is crucial for managing organizational transitions that achieve long term business success; it’s also likely to save money.

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Friday, April 09, 2010

7 Talent Management Practices to Help You Survive a Downturn

Guest Post by Sean Conrad

To weather an economic downturn, companies need to focus on their core business and strengths, reduce unnecessary costs and be more efficient. Here are 7 talent management practices every company should implement to get the most out of their workforce.

1. Align Goals and Track Everyone's Progress

You need to make sure that every employee's goals are aligned with organizational goals. You also need to regularly monitor progress on goals so you can take corrective action as required. Finally, you need to be able to quickly and effectively communicate any change in focus, priorities or tactics. Your talent management system should allow you to quickly communicate changes that impact organizational goals to everyone who has a linked individual goal.

2. Conduct Regular Employee Reviews to Keep Employee Performance On Track

Employee performance reviews give employees an opportunity to talk with their manager about what they are doing well, areas for improvement, skill gaps, career plans, goals, competencies, development needs and more. It's one of the most effective ways to keep performance on track.

They also help managers and HR identify low performers and take action to improve their performance, so the company can get the most out of all its resources.

Finally, employee reviews make it easier for managers and HR to make critical decisions about workforce restructuring and right-sizing if/when needed. By providing a history of employee performance they allow managers and HR to accurately identify high and low performers and employees with critical knowledge/experience/skills.

3. Provide Ongoing Feedback to Maximize Performance

Ongoing feedback helps everyone maximize their performance. It allows for quick corrective action, so managers and employees can address any issues while they are still small. To formalize this process, you might want to do quarterly or semi-annual reviews instead of just annual ones.

4. Invest in Performance-Based Development

Make sure you're getting value from your investment in employee development. Start from your employees' performance appraisals and use them to identify skill gaps, so you can be sure you're offering the right, targeted learning activities. You should also consider which competencies are key to your organization's success and target training to build strength in these. Finally, you should always measure the change in employee performance ratings that results from a learning intervention to make sure your training is effective.

5. Identify and Reward High Performing Employees

Knowing who your high performing and high potential employees are is always critical. While you may not be able to reward them with salary increases, bonuses or other monetary rewards during an economic downturn, you can still demonstrate your organizational commitment to them and recognize their contributions through other means. These are the employees you can't afford to loose; make sure you're acknowledging their performance and potential.

6. Have a Succession Plan

Your organization needs to be prepared to replace people in critical roles at all times. It's even more vital in a downturn, when a vacant leadership position or shortage of a critical skill could cripple your organization. A talent pool based succession plan helps your organization to identify the critical skills and competencies it needs to succeed over the long term, not just the leadership roles it may need to fill. It then helps you identify and groom your high-performing and high-potential employees to fill these needs when they arise.

7. Be as Efficient as Possible

In an economic downturn, no organization can afford inefficient processes. Systems that automate your talent management processes make these processes more efficient and cost effective. Many companies realize a return on their investment in talent management software in the very first year – often enough to more than cover the cost of the new system. They also usually see an increase the quality and value of their processes, typically resulting in higher employee satisfaction and engagement.

Sean Conrad is a Senior Product Analyst at Halogen Software, one of the leading providers of talent management solutions. He can be reached at sconrad@halogensoftware.com

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