Is your retention strategy retaining the right finance talent?
As a leader or manager in finance, you are likely a part of an ever-increasing business focus on employee retention. As the economy continues to turn the corner, retention has become a commonplace KPI used to distinguish great managers from struggling ones, and an on-going and important part of the war on recruiting great talent.
Having people “stay on your team” is an indicator that you’re doing something right – that is for certain – but is your “retention” strategy, retaining the right people? Delivering great retention statistics might get you a clap on the back, but take a closer look; does your strategy retain high-performers, or just everyone?
And, critically, if you find that you are retaining just as many low-performers as high-performers, what effect are you really having on business productivity?
A recent SAP and Oxford Economics study across 27 countries demonstrates exactly this point: that you can have excellent retention strategies but not necessarily have a high-performing business. What is even more of note is that although high performers are generally more satisfied in their jobs, and less likely to leave, than low-performers, the margin between both camps doesn’t really make for comfortable reading. Given that less than 50% of high-performers are satisfied with their jobs, and one in five are looking to leave, it’s clear employee retention strategies have some way to go.
So, what can you do?
Pay more, but in the right way
That old chestnut. Pay some people more and that causes discontent, and don’t pay people more and they leave. I think the point to be made here is that if you do nothing with pay, you’ll lose your high-performers. With an improving market clamouring for great talent, it’s easy to lure someone from a role with much more money, even if money is not their main motivator.
Looking at variable pay in the form of uncapped bonuses seems is the favoured method to retain high-performing talent, whilst also maintaining consistent salary bands. Interestingly, KPMG found that 73% of high-performing companies placed no cap on bonus pay, while 81% of low performing companies capped pay.
Regular job feedback, and do it when you say you will
The study cites this as the second most important factor for high-performers. Regular feedback (which will naturally be positive for high performers) raises satisfaction levels, which in turn raises retention rates. If you have annual, or quarterly, appraisal structure and no regular opportunity for manager subordinate interaction, create a monthly structure, it’ll reap rewards.
Educational learning and development options
High-performers take great satisfaction from the process of learning and crave self-development. Offering developmental opportunities, providing educational part-sponsorship and allowing employees to balance work and study can have a dramatic effect on retention, whilst also up skilling your best talent. Low-performers generally are less likely to avail of these incentives.
Look nationally as well as internationally
One very notable result from the SAP study is that less high-performers are willing to relocate internationally than low-performers. Contrary to the market of even two to three years ago, it seems that companies offering international talent rotation programmes or presenting these as options to high-performers looking for more responsibility, might actually be alienating exactly those people they are trying to target. It’s vital that to compliment international programmes, local options can also be
It’s clear employee retention as a concept is evolving, and critical to that is driving authentic employee engagement. Taking the time to find out what your high-performers want is absolutely essential.
Keep on talking to keep them from walking!
Read more: Willyerd, K.,“What High Performers Want at Work”, HBR
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