The companies that survived 2009 aren’t just looking to weather another year. Instead, many are deciding to take action and lay the groundwork to thrive in 2010 and beyond.
To prepare for this strategy change, companies must take steps not only to retain their top executives but also make the decision to recruit and upgrade their existing talent pool, says Tyler Ridgeway, director, and leader of the Human Capital Resources and Executive Search practice at Kreischer Miller.
“When owners think of a total compensation package in 2010, they shouldn’t just think of base and bonus,” Ridgeway says. “They should also contemplate which intangibles they can offer employees to provide them with the peace of mind that they are advancing their careers.”
Smart Business spoke with Ridgeway about how businesses could consider enhancing compensation structures and team-building techniques, and have a positive effect on the retention of top-performing executives.
How have companies’ hiring and compensation practices shifted in the last year?
Retention moved ahead of recruiting in 2009. Much of the focus from an executive compensation standpoint shifted internally; instead of lateral hiring, many companies tried to do more work with fewer people. As a result, many in the work force knew, at least throughout 2009, that they probably weren’t going to earn much from a bonus or raise standpoint.
Most executives were happy to have a job and knew they had to take a team approach; they realized the need to focus not only on being a strong individual performer but also a strong team player to help their company survive and remain competitive.
Companies followed the ideal that they were not going to exceed their financial budget for a new hire. They knew that they could find executive talent that possessed all of their desired skills and abilities and hire them at lower compensation levels.
In 2009, if a newly hired executive desired more in terms of cash compensation, many companies tied incentives to both individual and company performance. These executives were given the potential to make more money, but they had to share in the risk with the company and prove that they earned it.
In 2009, there was also a trend toward getting the entire employee base exposed to and engaged in company initiatives so everyone felt like they had a bigger impact on what was going on in the company. For example, many companies assigned high-potential employees to participate in cross-functional projects that provided executive-level visibility.
Other companies randomly invited certain employees to join C Suite private company meetings. Another tactic involved developing more departmental and one-on-one meetings.
These examples increased employee morale and enabled employees to feel more involved in decision making. From a professional standpoint, even though these tactics did not tie into compensation, they went a long way toward retention.
The successful companies in 2009 were the ones that were proactive in trying to get their work force more excited about the team focus and company as a whole.
