Retaining top talent in these turbulent times remains very high on today’s executive agenda. Equally critical is the need to minimize the crippling effects that key talent departures have on organizations, especially those that rest much of their success on these high output, unique talents. Yet very few firms create and follow through on a retention strategy that really makes a difference. Why is this? And how can organizations "crack the code" on talent retention? Based on recent interviews with a several executives in firms with outstanding reputations for leadership retention, there are several ingredients that, when effectively blended, result in an environment where the very best talent thrives. They raise their own performance bar, often feeling a synergistic relationship with the organization, and are less likely to abandon ship. Key ingredients in the retention of top talent cited by these executives in the know include:
- Culture focused on talent development
- Broadened leader bandwidth
- Effective general manager
- Well-developed retention strategy
- Effective orientation and on-boarding
Culture focused on talent development
I pull my team together for just about every morning to discuss briefly what took place the day before. We often cover highlights and lowlights, recognize combined contributions and review what we need to do better. We refer to these sessions as our morning huddle — whether in person or by conference call. When we break, people are pumped to reinforce our customer-focused atmosphere.
Comments such as these define the benefit of a work climate or culture that focuses on individual and team development. They don’t just talk about it, they live it! Retention is typically very high in organizations where the culture supports team work, individual development, recognition for contributions, and encouragement to perform.
Broadened leader bandwidth
Organizations that enable leaders, through a variety of means, to identify individual needs and respond with a portfolio of styles typically achieve significantly higher levels of retention. One size does not fit all! Top performers need to be treated as exceptions, because they are indeed exceptions. If leaders over rely on their most comfortable style, they’re bound to miss the mark on many occasions. It’s interesting to note that in cases where leaders have the capacity to respond with a number of styles, the total team and organization benefits.
Effective general manager
The factor that seems to have the greatest influence on retention of key talent is the effectiveness of the general manager in creating and maintaining a high performance culture. One executive vice president commented that her most promising general manager has a deep-seated need to raise the bar for each employee just enough so they feel truly stretched all the time. Her leadership cascades down the organization to every contributor to the point where individuals choose to raise their own bars. The signal here is for organizations to both unleash leader capacity and invest in development so leaders can realize extended capabilities.
Well-developed retention strategy
Some organizations have actually created "offices of retention" to elevate the challenge to a higher level. Often a very senior executive is accountable to the CEO for shepherding retention-related efforts and takes the lead. Even without this level of focus, many organizations see significant retention progress with well-developed and communicated retention goals and objectives for the entire organization.
Effective orientation and on-boarding
By my third week with the company I felt totally connected and ready to do battle! By my second month I realized that everything I was told on the way in was accurate. Now, three years into my relationship with the firm I realize that a solid beginning was a key reason for staying.
Comments like these are common in organizations recognizing that effective induction, orientation, and on-boarding have a huge impact on retention. Yet, very few firms treat these early phases with the attention they deserve. This impact is magnified for top talent.
A final observation on "cracking the code"
Organizations should remain in close contact with top talent, being careful to consider adopting retention practices that are truly desirable, and can be effectively managed. Too often firms select more initiatives than they can handle, and more than they need. Firms that have achieved their desired levels of top gun retention know all too well that just around the corner is another lure tempting their most prized possessions.
Sheryl Dawson is an executive partner with Talent Strategies Group, a Division of Career Partners International (CPI), Houston. She has over 25 years experience in talent management, team assessment, leadership development, and career coaching and consulting. She can be reached at firstname.lastname@example.org or (713) 784-3197.
Read more from Dawson: Talent management solutions: How CPI Houston helps companies optimize their bottom lines
A recent Harvard Business Review study revealed that almost 40 percent of a company’s strategy can be diluted due to poor execution. Additionally, estimates attribute up to 70 percent of a company’s operating expense to labor costs and yet only 38 percent of employees are reportedly engaged. With this much at stake, the importance of development activities and alignment of organizational goals with strategy is paramount. In spite of the apparent need for investment in employee development, what remains a challenge for many organizations is the determination of, or perhaps acceptance of, returns associated with investments in development activities.
Coming from a position with direct financial responsibility with a laser focus on clearly measurable ROI to a talent management consulting role, I have observed that the focus is often on process rather than results. It’s understandable that CEOs and leaders with P&L responsibility struggle with justifications in which clearly stated expectations for outcomes are absent or fuzzy.
Most leaders accept that employee development has value, but determining how much and what programs requires some effort. To assist in establishing value of development activities, the investment required, as well as the methodology to employ, considering the following three areas proves useful:
- Business need
- Development requirements
- Desired business result
Defining the business need
Defining the business need should begin with clarity around the organization’s goals and what skills, competencies or behavioral changes are necessary to meet those goals. While on the surface this may sound simplistic, assumption is the enemy here. A thorough identification and assessment of what skill sets reside within the targeted group or employee is required to reduce risk and improve organizational engagement toward stated goals. This can often be accomplished through the mining of information available in the HRIS/LMS system, utilization of assessments, and the application of knowledge transfer mapping strategies.
Defining development requirements
Once the business need is clearly defined and competencies identified, a plan outlining methodologies and deliverables can be designed to address the development requirements or gaps. Key questions that should be addressed include:
- How will the change in required skills, competencies, behaviors be achieved? Options may include traditional training, coaching, mentoring, or blended approaches.
- When are the assimilation of these skill sets required?
- How will the outcomes be measured?
Development of human capital is a complex endeavor, with differing needs among employees. While training offers an organization the opportunity to "roll out" learning to multiple assets at one time, each employee will assimilate skills based upon their personal experience and capabilities as well as work/assignment opportunities. Another consideration often overlooked, is that the more senior the level of responsibility, the greater the requirement placed upon emotional intelligence in addition to "technical" competencies. These realities expose the limits of traditional training in improving leadership competency. Coaching and mentoring provide the opportunity to raise self awareness and encourage individual accountability to achieve growth initiatives. Continual improvement in leadership effectiveness attributable to coaching interventions may be satisfactorily quantified by attention to specificity of expectations and measured outcomes.
Defining desired business result
After clearly defining the business need and the development requirements, defining what changes in business results can be anticipated due to the development activities is essential to effective measurement of the return on investment. Estimating improvements in productivity, sales, customer retention, etc., can be specifically anticipated, forecast and measured to further quantify and validate the business value of development activities within your organization. The proposed investment balanced against the anticipated outcomes will then provide leaders who have financial responsibility a quantifiable method of weighing the value of development against other investment opportunities.
Identifying delivery options
Following approval of the development initiative, the selection of talent management resources (internal or external) for delivery will determine its success or failure. The organizations and individuals who provide the training and coaching services should be vetted as rigorously as you would a prospective employee. In this process, it’s helpful to determine:
- What are their qualifications as an executive coach? As a trainer, facilitator, etc. (depending on application)?Degrees, certifications, etc.?
- What is the scope of their business experience? Their services?
- What type of project or area of expertise best defines them?
- Can they provide the necessary resources locally/nationally?
- What references can they provide?
Development initiatives are often considered expendable due to more immediate, and seemingly concrete, issues associated with near term performance; however, when 70 percent of operating cost is associated with labor and statistics report that only 38 percent of the workforce is highly engaged, to ignore the need is to risk collision with the unseen iceberg just below the surface. Our responsibility as leaders, regardless of functional responsibility, is to understand and clearly quantify the investment opportunities that will result in the greatest return for our stakeholders.
Matt Williams is the director of executive coaching and leadership development at Talent Strategies Group, a Division of Career Partners International (CPI), Houston. A certified executive coach, Williams has over 25 years in corporate roles including 10 years as president and CEO of a medical technology company. For more information visit www.talentstrategiesgroup.net or call (713) 784-3197.
 Harvard Business Review, Turning Great Strategy into Great Performance, Markins & Steele
Many businesses that put hiring on hold during the recession are now prepared to retool their top talent. Organizations that are prospering in what is the new economy recognize that a sharp, experienced team is critical to success.
“Companies are looking for opportunities to take their businesses to the next level, and that includes upgrading executive talent,” says Tyler Ridgeway, director for the Human Capital Resources Group at Kreischer Miller. “They are evaluating their key players. Who are the executives they can’t afford to lose, and who are the ‘B’ and C’ players that they can upgrade?”
Leading executives have also been affected by persistently high unemployment rates. There are plenty of experienced leaders who are in transition. Some have sold their companies and haven’t yet settled into their next business role. Others left corporations to seek different work cultures.
So the good news for companies positioned to hire executives is that the crop of talent is rich, and those people, too, are looking for the right match.
“They want work that has meaning,” says Ridgeway. “They want to make an impact on a company’s future success.”
Smart Business spoke with Ridgeway about what top executives are seeking in a position, and how companies can implement creative strategies to attract top-notch talent.
What do top executives in transition seek in a new leadership position today?
The game has changed in the last five years, and executives are focused on much more than compensation. They are equally interested in a company’s vision and the ethics of its management team.
They’re looking for inspirational leadership, a strong moral compass. They want to make a difference and they want to make an impact on the company’s growth. We’re also seeing executives potentially take lateral compensation roles if adequate bonuses and incentive compensation are negotiated. Executives for hire are looking closely at companies to be sure they can present a compelling strategy and platform for growth.
How does a company attract interest from experienced top talent?
Companies that have success recruiting the best executive talent use creative strategies to build a strong applicant pool before making their selection. First, reach out to the trusted advisers who know your company best. This includes retained search consultants, bankers, accountants, attorneys and other members of an advisory board.
Talk to these individuals about potential gaps in your business: What expertise is lacking? What functions in the business require more attention or oversight? Essentially, what are those missing pieces? These discussions can help you seriously consider what job functions new talent could fill.
At the same time, tap into social media and utilize resources such as LinkedIn to grow your connections. Social media is not only helpful for finding talent but for getting referrals and accelerating the interview process. Tools such as LinkedIn allow you to develop more trust in candidates and can help you gain a deeper understanding of their experience and their connections.
How has the interview process changed?
The interview process in this market has stretched into a longer course. In some cases, the process slows because of business issues that must first be addressed. However, companies also recognize the ramifications of hiring the wrong person. They want to get it right the first time, so there is greater scrutiny and more screening involved.
For instance, a business might ask a candidate applying for a chief financial officer position to write a business plan for what he or she aims to accomplish in the first six months of employment.
Another option some businesses explore is hiring interim executives to fill roles, often with the potential of transitioning into a salaried, full-time position at the company.
How can hiring an interim executive benefit a business looking to fill gaps?
Interim assignments are a very effective mechanism for companies that want to attract solid talent, and the type of positions that can be filled on a temporary basis extends beyond the accounting functions that were once typical. Now, companies are posting interim assignments in the areas of finance, technology, operations and marketing.
The way these arrangements often work is that a business owner hires an executive to manage a specific project. By bringing the person inside, the owner gains a sense of how the executive performs. Does this person mesh with the company culture? In some cases, a project expands into an open position, and the owner can feel confident hiring an executive who has been tested.
The challenge with this type of employment is that you are limiting your pool of candidates largely to those who are not currently employed. But the benefits of an interim hire include the ability to fully realize what skill gaps the company needs to fill and to potentially reduce the hiring cycle.
The key to attaining top talent in today’s market is to think beyond traditional hiring means and keep your options open. Connect with trusted advisers and use tools such as social media to help validate decisions.
Tyler Ridgeway is director of the Human Capital Resources Group at Kreischer Miller. Reach him at email@example.com or (215) 441-4600.
Maybe you’ve noticed that there are some members of your team who aren’t quite living up to their potential. Have you taken the time to figure out why, or whether these people should even be in these roles within your organization? To compound the problem, perhaps your top performers are starting to look restless.
If you’ve been delaying the task of getting your team in top-performance shape because you don’t know where to begin, the time to take action is now.
“Talent optimization is so important today because businesses and the economy are starting to recover, and now business leaders are challenged by a new concern: talent,” says Meghan Bilardo, director of Organizational Strategy and Assessment at Corporate College. “No longer are they cost-cutting and trying to survive; they’re really looking to innovate and grow, and that takes a new strategy and approach to talent.”
Smart Business learned more from Bilardo about what it takes to win the talent war in a make-it-or-break-it business climate.
Why is talent optimization so important?
To win this year and beyond, organizations need skilled and engaged employees. They can either build the talent that they have on their team through education, coaching and assessment processes, or they can work to recruit talent away from competitors. It’s so important this year — and especially with supervisory and mid-level managers — that people can innovate and that they have opportunities to develop and advance within an organization. Managers must understand their employees’ capacity for new and emerging skill sets in order to help the business reach its objectives.
What are the consequences businesses face by not paying attention to this?
Companies that are limited to the old hierarchical structures are becoming dinosaurs. We’re in a business environment that is more skills-based than ever and we know that talent drives performance. One piece of the puzzle is that organizations don’t understand where their talent lies, what people’s capabilities are, and what they need people to be able to do differently for their organization to win. Organizations must integrate talent optimization into their strategic planning process.
Another piece of the puzzle is the selection process, which includes everything from identifying the critical roles needed to meet business objectives, sourcing candidates and then hiring them. Many organizations do not have the processes and tools in place to be able to make that selection, so, again, they miss out on an opportunity to win.
How can businesses improve their hiring processes so they’re bringing in the right talent?
Begin with the end in mind. What are the organizational goals for this year? What skills, attributes and knowledge do your candidates need to have to meet and exceed those goals? Ensure that your job descriptions are up to date and accurately depict the tasks and responsibilities of each role. Job descriptions should clearly define what a person needs to do to achieve those goals.
Once you’ve identified qualified candidates, another best practice is using testing and pre-employment assessment tools. Using an assessment tool with high validity means that it’s got a greater predictor of success for certain roles, and would also be legally defensible since you’re using it for selection. The goal is to match a candidate’s capabilities with an organizational need. Assessment tools can help you identify knowledge or ability to apply skills, as well as analyzing and problem-solving abilities.
The next piece to focus on is the employment experience. Organizations need to develop a brand for what type of employer they are. Are they an employer of choice? Do the most skilled and talented people want to work there? With a strong brand you can attract talent from the competition and decrease your time to fill open positions.
Once hired, it is essential to orient new hires to your organization so they can hit the ground running. Managers have a responsibility during the first 90 days to educate, support and check in with new employees.
How will talent optimization help businesses attract and retain top talent?
It relates back to your employment brand. If you are known for setting clear expectations, coaching employees, rewarding high performance, encouraging professional development and delivering bottom line results, the most skilled employees in the market will want to work with you. The best employee talent base is always learning, so businesses must understand what their people need to learn, why they need to learn it and the ROI in terms of increased performance and employee retention. Alignment with training companies and community colleges that offer curriculum and courses is a very important component as well. The entire skill acquisition learning space is evolving very quickly, and if businesses don’t understand this then they’re going to have difficulty in being agile and responsive to the market.
Most companies will burn out talent, as if they’re disposable. The companies that are going to win are those that feed their talent and give them what they need to realize personal, social and economic gain through their organization. That soon becomes the reason a talented person wants to work there: they know that they’re going to have an opportunity to grow continuously and to do new work over time. Those are the kinds of things talented people are going to be looking for when they’re deciding where to work, and they also drive employee engagement. When engaged, employees go above and beyond, which of course leads to improved financial performance for the organization.
Having a good talent optimization system doesn’t mean you’re always going to win, but not having one means you don’t have a chance.
Meghan Bilardo is the director of Organizational Strategy and Assessment at Corporate College. Reach her at (216) 987-2800 or firstname.lastname@example.org.