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.