Engage, retain, regain…that is the question…or is it the answer…?
No organization wants to lose its best performers. Yet not all top performers pose the same risk should they leave. Retaining employees effectively involves understanding the risk each potential leaver represents, and addressing them individually. Here are some ways to do that:
Prioritize. During his tenure as CEO of General Electric, Jack Welch popularized the practice of forced-ranking, where employees were rated as “1”, “2”, or “3” players, with the 1’s being rewarded with bonuses and the 3’s being terminated. While this performance management technique remains controversial, the idea of prioritizing potential leavers remains salient among some HR directors. Yet prioritizing simply by level of performance is a subjective and unreliable way to determine which employees most deserve attention. Potential leavers should be prioritized according to the total risk the employee’s leaving presents: cost to replace, mission criticality of the role, reduced short-term productivity, and organization performance impact. Such a profile presents a holistic view of the employee’s value to the organization, using more objective, quantitative information.
Understand long-term vs short-term incentives. People come to work every day for more reasons than to earn a paycheck. While HR professionals understand this well, they tend to treat employee dissatisfaction as something that can be addressed with cash. The research consensus indicates this is a short-term fix, and one that might be effective perhaps only once or twice, in cases of adequate performance but temporary dissatisfaction. Employees desiring to remain with an organization need longer-term payoffs: recognition, respect, opportunities to develop their careers, engaging coworkers, and challenging assignments. Most have little cost impact, but require conscientious effort by HR professionals to carry them out.
Engagement is a good but not perfect measure. Some employees in highly competitive industries leave simply as a part of job market churn. Others, particularly those with specialized skills, are concerned that the volatile job market might present career impediments, so it is safer to move to another job and diversify skills rather than remain in the same job and risk being laid off, then underemployed later. Both may be highly engaged but nevertheless intend to leave the organization. HR professionals should use engagement measures cautiously, and not as single indicator of an employee’s likelihood of leaving.
Understand who can do the most damage. Not all employees who leave the company represent the same potential negative impact. Many talented employees might choose to become contractors or consultants, perhaps to achieve greater work-life balance or to enjoy more autonomy. Such leavers represent a lower risk to the company, especially those who become contracting partners or join the company’s ecosystem. According to a 2012 Strategic Management Journal article, those who can do the most damage are the entrepreneurs–those who are likely to start their own companies or join startup in direct competition with the company they left. In many cases, they have spotted a gap in the market, yet leave in frustration that their former company failed to take their ideas for addressing this gap seriously.
Would love to hear your insight and experience on how you identify the risk each potential leaver represents.
Also feel free to listen to the recorded webinar, Retention Readiness: Strategies for Keeping and Developing Your Top Performers where Dr. Robin Lissak and Jeff Schwartz, Senior Partners at Deloitte Consulting discuss a wide range of strategies and practices to attract and retain top talent.