Executive Corner This is a fortnightly column featuring leaders in the executive search industry Hold on to your talent By Marc-Yannick Ceyton Expert advice can help in devising effective retention strategies Companies with a high level of employee commitment will consistently outperform others. Productivity is better, costs associated with staff turnover are lower, and plans for expansion can be made in the knowledge that managers familiar with the organisation will be on hand to implement them. However, in today's buoyant job market, many firms are having to direct renewed attention to devising strategies to hold on to their high-calibre executives. They realise that business growth depends on having effective retention policies, which entail providing a challenging work environment and opportunities for personal development. Retaining executive talent is not always about money. It is also about working relationships, mutual respect, providing an environment where individuals can keep learning, and showing appreciation. Sometimes, in the quest for manufacturing targets, sales gains or financial objectives, top managers can lose sight of the importance of a word of praise or a pat on the back. Simple as it may seem, this type of engagement on a personal level makes a big difference and goes a long way to fostering company loyalty. That is something Raymond Lo, director of Envision Human Capital Advisory Services Limited, has long recognised. With over 15 years' experience in the field, he helps employers with specific systems and strategies to retain their most valued executives. "There is a strong link between the management's policies and the organisation's ability to retain executives," he says. Usually, the first thing he addresses is the need to improve dialogue and open up channels of communication. "Paramount to staff retention is communication," Mr Lo explains, noting that this requires continuous discourse between the top management, senior executives and all other levels of employee. Although many companies think of themselves as good communicators, most focus groups reveal that even key executives are often unclear about expectations, priorities and the company's long-term direction. Once Mr Lo can start to clarify these issues, he knows he is making progress. Paramount to staff retention is communication Reasonable pay A second factor to consider is whether compensation and benefit packages are fair. Most executives have a good idea of what people in similar positions earn and it is unrealistic for employers to expect loyalty without paying commensurate levels. They have at their disposal a choice of perks and benefits, in some cases including stock options, which can be used to encourage loyalty and to reward at the same time. Mr Lo also points out that, with memories of the Asian economic crisis still fresh, few executives feel as secure in their jobs as they would have a few years ago. To allay these underlying concerns, he suggests that companies should explore a "reciprocal impact model" that outlines how both organisation and individual employees can work towards mutual goals. "We like to understand the company's mission and then go backwards in the human capital chain," he says. Such advisory services are catching on in Hong Kong, but are still more common in the US, where they are used by a wide variety of clients. In order to get the most out of the service, companies are generally advised to set up internal focus groups. These allow employees at all levels to express concerns and grievances to an independent third party. Mr Lo explains that this approach works best because employers are involved in the process rather than just receiving a memo. In his role as consultant, he will take everything into account before suggesting new strategies for the line management to implement. Performance measures He often discovers that salary levels among executives are "haphazard and discretionary, based on favours and camaraderie". To overcome this problem, he recommends implementing a compensation system linked to measures of performance. Adopting this also enables an employer to communicate a clear vision and outline expectations across the board. Executives can easily understand priorities, targets and rewards. These must be achievable and regularly monitored by the company and the consultant. While some degree of staff turnover is inevitable in every enterprise, the effects are usually adverse. Whenever someone leaves, there is a loss of continuity and the hunt for a replacement must begin. Of course, some recruitment agencies make it their business to try and tempt executives with alternative offers. That will not stop, but it takes lot to persuade an executive to move if they are satisfied with their prospects and the way an employer treats them. Compared to the average length of time that executives in other Asian countries spend with a single employer, Hong Kong is well behind in terms of loyalty. This might be put down to an entrepreneurial instinct but, overall, both employers and workers are coming to appreciate that an approach which values progress based on stability has great merit. Retention and development polices are therefore sure to become a focus for many more companies as the battle for talent unfolds. Defining characteristics of a retention culture Pre-recruitment strategies to ensure the best possible fit Steps to help the leaders solidify their position Management accountable for developing talent Updated retention and training strategies A clear outline for succession planning Formalised mentoring and career development programmes Taken from Career Times 30 June 2005 Your comments are welcome at [email protected]