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HR MATTERS E-TIPS
THIS WEEK'S E-TIP: 5 Ways to Retain Your Top Performers in a Competitive
Market
August 7, 2007, Volume 9, No. 32
Published by Personnel Policy Service, Inc.
"Your Policy and Compliance Experts Since 1972"
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THIS WEEK'S E-TIP: 5 Ways to Retain Your Top Performers in a
Competitive Market
As the job market gets tight, it's critical that you take steps to keep
your
best employees on board. Check the steps below for proven ways to
increase employee satisfaction and reduce turnover. |
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THIS WEEK'S E-TIP: 5 Ways to Retain Your Top Performers in a
Competitive Market
With the talent market tightening up, it's time to refocus your
retention
strategy to make sure you are keeping your most valuable players
on
board.
This effort will help you reduce the risks of losing valuable
institutional
knowledge, keep your teams productive, and reduce turnover. In
addition, it should ensure that your competition is not
snatching up your
top performers.
From the mid-nineties boom to the dot-com bust in the early
2000s,
employee compensation packages have gone from big market share-
based salary increases to meager two-percent annual raises. As
employer revenues begin to climb again, employees are actively
seeking
new opportunities to be better compensated. And, your
competition is
actively recruiting them.
Here are five ways you can improve retention of your top
performers:
- Benchmark your current pay rates
The speed with which the economy has recovered has left
most
companies pay structures behind current market rates. You are
now
faced with the challenge of managing cost responsibly without
losing
your top talent.
You need to level-set pay across the board to make sure your
employees are not tempted to go elsewhere. To do this, first,
research
the pay for all your key positions compared to employers in
your area
and across your industry. Then, second, review your inside pay
structures to ensure internal equity from job to job, and
level to level.
- Modify your merit increases
If you sense you are at risk of losing top performers
immediately, you
might want to plan for merit-based raises before running a
full
compensation audit.
If you are like most companies – regardless of size or
industry – you will
find that 20 percent of your staff accomplishes 80 percent of
the work.
These are the people that are critical for you to retain, and
the ones you
should focus on for your merit pay increases. If you are
planning a cost-
of-living increase for the majority of the organization, at
say 4 percent,
you can then show your best talent how valued they are by
rewarding
them with a much larger increase, like 16 percent.
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- Use bonuses to make up the difference
So, what if your best employees are already at the top of
their pay
ranges? If a promotion or a salary increase is not an option,
allocate
some of your budget to accommodate catch-up bonuses. Your
employees will feel rewarded and valued – and less likely to go
elsewhere.
- Build retention into supervisor's job role
While many people claim to leave a position for more money, it
is often
only one of the issues. Many times employees quit bosses, not the
organization. Make sure you have a structured feedback loop in
place so
supervisors can hear and address concerns. Then, task them with
retention goals and reward them – financially or otherwise – for
hitting
the mark.
- Review your organization's benefits
Salary and bonus pay is only one facet of compensation. If
your pay is in
line with competitive organizations but you're still losing key
players, you
need to review your culture and benefits structure.
Consider implementing flex time, boosting your health care
options,
extending discounted gym memberships or transportation vouchers, or
extending vacation days. A strong benefits program will show your
employees that you care about them as people, not just as workers.
And
that goes a long way.
So, if you have not already adjusted, you need to take the
tightening job
market seriously. Follow the steps outlined above and be proactive
in
making sure you are staying competitive in the talent race. |
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^^^^^^^^^^^^^^^^^^^^^ From Your HR Matters E-Tips Editors
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Information provided in HR Matters E-Tips is researched and reviewed
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