Retaining Top Talent: Slow down - The headhunter's looking
Retaining top performers is core to talent management. The difficulties talent managers face in successfully carrying out this activity is made clear by new research carried out on more than 11,000 staff in the Swiss banking sector. The research, carried out by Alain Salamin from Lausanne and Peter Horn from Arizona, found that the very highest performers had a greater turnover rate than did their colleagues one level down in performance terms. The explanation is that the highest performers were given accelerated promotion and this alerted the market-place to these people's talents. They are promptly head-hunted.
One way considered by the researchers to counter this effect is to disguise talented incumbents by greatly simplifying the layers of job titles. A high performer would keep the same job title but be rewarded with a salary increase. In effect, the recommendation is for broad-banding. Of course, the problem the talent manager faces is the natural desire of ambitious and talented people to inflate their job titles along with their salary.
One way considered by the researchers to counter this effect is to disguise talented incumbents by greatly simplifying the layers of job titles. A high performer would keep the same job title but be rewarded with a salary increase. In effect, the recommendation is for broad-banding. Of course, the problem the talent manager faces is the natural desire of ambitious and talented people to inflate their job titles along with their salary.
Another tactic to try and retain the best people and stop them being pulled away by alternative offers is to pay large bonuses. The Swiss research showed that bonuses reduce the turnover of the highest performers to a level that is in line with their slightly less high performing colleagues. Indeed the research amply illustrated the power of bonuses for good and ill. Large bonuses helped keep high performers. On the other hand, the absence of a bonus was found to result in every single high performer quitting over the five-year period of the study.
How Can Human Assets Help?
The research clearly illustrates the importance of being extremely well-informed before implementing retention tactics. These might easily and perversely be a recipe for losing people. From our vantage point as experts in talent management, we strongly recommend considering all the options to retain people and then determining how these can be combined in a package that will work best for your talent with their particular needs and values. What is problematic with and what works well with Swiss bankers might not generalise to your staff. Through our interviews and surveys, we pinpoint the needs of your people and how well they think you are doing in meeting their needs. We also find out about their career plans and can help you avoid pitfalls such as promoting people so rapidly that they get pulled away by your competitors. Of course, this is not an easy area but we hope we can guide you through the complexity to reach a successful retention strategy.
Our overall approach to talent management is published in Charles Woodruffes book Winning the talent war: A strategic approach to attracting, developing and retaining the best people (Wiley, 1999), as well as subsequent journal articles, e.g., To have and to hold: getting your organisation onto talented people's CV's. Training Journal, May 2003.
If you would like to find out more, please contact our consultants on +44(0)20 7434 2122 or by email at enquiries@humanassets.co.uk
Newsletter: February 2006