Your Company’s Most Valuable Asset
Your company’s most valuable asset is ….Your People, Your Top Talent = Human Capital
According to the US Bureau of Labor Statistics, the 500 largest US companies expect to lose 50 percent of their senior management in the next five years.
Attracting and retaining top talent can make a significant and immediate impact on your company’s organizational and financial performance. In this article we discuss how you can attract and retain your top talent. Who better to speak on this topic then the founder of Turning Point Executive Search Firm, Ken Schmitt. Ken has been placing mid and senior-level professionals for 13 years. A native of San Diego, Ken prides himself on approaching each engagement from a holistic perspective, taking into account his client’s tactical, strategic and cultural needs.
SUSIE: How can a company distinguish itself in a highly commoditized and competitive market?
KEN: Well there is a theme we use with our clients, we call it their “employment branding” – the brand of your company as an employer. In other words determine what you have to offer as a company, as an employer in order to attract and retain top talent?
To start ask yourself:
1. What kind of company are we? (defines culture)
2. Where can we find talent that is aligned with our employment brand?
SUSIE: How is retaining top talent connected to the beginning of the recruitment process?
KEN: One of the silver linings of this recession has been the creation of receptivity and willingness to network. Because of increased networking in the past few years, when top talent in your company leaves it will most likely become well known. There is no better way to attract great people than to keep your existing top talent.
Retaining talent is absolutely connected to the recruitment process and because of that I always recommend to my clients that they develop an employee referral program. The average number of interviews per hire is 15 to 18 when the candidate comes from an external source, and only 8 to 1 from an internal referral. Some social media sites are helping companies to take advantage of this trend. For example, companies can post open position on LinkedIn and then make an announcement to all employees and let them know. This new tool creates a general sense of internal collaboration by encouraging employees to make connections based on profiles that will be a good fit and it sets the expectation among your dept heads that they can and should help with recruiting.
By offering a small bonus of $250 or $500 for an employee referral your company can save a lot of time and money. And consider the fact that the tenure of employees who are hired through referrals is much greater than those hired through external sources. In my experience the highest degrees of quality and loyalty come from employee referrals.
SUSIE: Many companies do not have a handle on the actual reasons why employees stay, as well as the actual reasons why they depart. Do you have clients who are surprised when A players leave?
KEN: For many of these companies the first time they are aware of the “issue” is when the exit interview occurs. In my experience it’s mostly because the employee was never given a formal review and there was limited manager-employee engagement. Employees need to believe in the vision, see the company’s strategic direction and know they have a part in the big picture. During this recession there seemed to be a lack of communication, fewer informal and formal performance reviews were given, and many companies were running in survival mode. Employee engagement was not even on their radar screen.
SUSIE: What is the main reason that top talent leaves an organization?
KEN: We hear from employed professionals all the time who are ready to make a change, and 9 times out of 10 the reason is a lack of communication. Retention of top talent is all about communication.
Here are 3 Reasons Why Top Talent Will Leave:
1. lack of communication with managers (inaccessible or unavailable)
2. lack of challenge in terms of time management (people spread too thin)
3. an inability to expand their knowledge and skills
SUSIE: What does it cost a company when a talented employee defects to the competition?
KEN: As a crude estimate, replacing an employee costs the equivalent of 100% – 150% of annual compensation when you factor in the time required by HR, the hiring managers, the training, the IT department’s need to create new accounts and passwords and the ramp up time.
SUSIE: In a recent poll conducted by The Gallup Management Group only 30% of U.S. employees are fully engaged in their jobs. So what can a company do to create employee engagement and loyalty?
KEN: Ensuring employees are motivated and engaged can increase productivity and profitability while also reducing employee attrition. So sit down with your top talent on a frequent basis and keep them in the loop, let them know they are valued and appreciated. It’s a matter of keeping your top talent engaged, making sure your company’s goals are aligned with the employee’s vision. Find out what their professional and personal goals are? Ask, how can the company support them?
KEN: As everyone knows, the job market has certainly been challenged over the past 3 years. However, the market appears to be improving somewhat quickly for specialized skills. I actually just saw a billboard saying “we’re hiring.” I have not seen that kind of advertising in recent years. In the recruiting industry it has been difficult to find top talent for many of the newly created positions that are popping up. For example, one of the today’s “in demand” skills “process improvement.”
SUSIE: Companies of all sizes are fighting a war for talent that continually challenges them to rethink and refine “talent management” tactics. As the talent shortage heightens, what is your advice for companies wishing to retain their top talent and build cultures of loyalty?
KEN: My advice is to do these 3 things on a consistent basis with your top employees.
1. Take the time to sit down for a formal review. Talk about their goals and ask what they’re looking to accomplish in the next 12 months, 1 year, 2 years. And ask, “how can I support you?”
2. Frequently communicate with your employees and let them know they are a part of the long term vision.
3. Encourage your key players to use creativity. (i.e. Google & Intuit require 5-10% of employee time be committed to pure innovation in order to spawn new ideas for products, service, processes)
SUSIE: Your talent processes are only as good as your visibility into the metrics. So what talent management strategies are available for a company so they can measure, analyze and optimize top talent?
KEN: The number one strategy is to be pro-active from the beginning. Here are 4 other strategies:
1. Leadership support – If your company is trying to make a shift in culture or implement a talent management system the tone at the top must be consistent with the message from HR.
2. Annual company surveys – Consider implementing something similar to WD40. They conduct a comprehensive, anonymous survey asking about each employee’s level of engagement, proving to their employees that they are they willing to receive honest and genuine employee feedback.
2. Track hiring sources – Where are they coming from, how long are they staying with the company – break the numbers down by resources.
4. Understand value – HR tends to be the biggest supporter of this mindset. Spend the time ensuring the other departments understand the value, time and cost of losing and hiring top talent.
Today’s businesses are more dependent than ever before on top talent to innovate and provide services that differentiate a company from its fierce competitors. In other words, corporations are reliant upon their human capital to survive and thrive.
According to Ken, in the short term, recruitment and retention of top talent can be tackled by improving communication and building loyalty. Making employees feel trusted and appreciated, involving them in development, recognizing their ideas and contributions, and providing the training and mentoring they need to advance with your company will significantly impact on your organizational and financial performance. Share Your Knowledge: Will your company make the investment to attract and retain your top talent?
To learn more about Ken Schmitt and Turning Point Executive Search Firm please visit him at www.turningpointsearch.net
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Filed under: Attract A-Talent · Tags: attract top talent, employee referral program, employment branding, employment engagement, human capital, ken schmitt, loyalty, retain top talent, susie japs, talented employee, top talent, war for talent