Even in Hard Times, Retention's Not Easy
Think your top finance talent won't be getting better offers in a weak job market? Think again. Now is the time to redouble efforts to identify and keep them, experts say.
A CFO charged with the grim task of slashing head count might be excused for grasping at a silver lining, such as: "At least our top performers will be here, because in this downturn they won't get other offers." Even if it happens to not be true.
The best talent will always be in demand, in bull or bear markets, talent management experts agree. In fact, the risk of losing vital human capital is high right now, because so many people, even stellar performers, are developing career contingency plans — and once one is in place, there may be a temptation to execute it sooner than later.
That risk is especially acute within finance and accounting departments. They generally have suffered disproportionately few layoffs compared to other areas of companies, because of a talent undersupply that prevailed for years before the current economic crisis set in. That means your cream is craved by others.
To keep your star accountants and money managers, or any valuable employees, communication is key during the tough times. In an October survey of 514 U.S. workers by global public relations firm Weber Shandwick, 71 percent said they felt their company's leadership should be communicating more about current economic problems, and 54 percent had not heard from company leaders at all on the crisis.
Many companies have an instinctive sense that it's better to "wait until the dust settles" before they rearticulate to employees how the company is doing, where it is going, and what that means for those who will be staying on, according to Jeffrey Summer, a principal with PricewaterhouseCoopers' advisory practice. That's an instinct that should be ignored.
"This is a great time to communicate to people about the value proposition of being part of the organization and about the opportunities that exist, even in this environment," says Summer. "That's an effective talent-retention strategy."
It should be done both broadly, with key messages distributed across the employer base, and individually with top performers. Many organizations are being very specific about requiring line-of-business leaders to identify pivotal talent and schedule "touch points" with them to keep them motivated, Summer notes.
The timing for that kind of communication is good around year-end, with many companies starting their annual employee review process. Making stronger links between performance and pay increases — even if they're smaller than in the past — will help retain the most valuable workers.
Companies also might want to stress that poor economic conditions provide employees with reputation-making, long-lasting opportunities.
"In an environment where all ships are rising and there are opportunities everywhere, it's hard to pick the top performers for the future," says Jonathan Schiff, an independent consultant to CFOs and a professor at Fairleigh Dickinson University. "But in the current environment, where success is much harder and innovation is needed, you can more easily surface the talent for the next generation of C-suite people. You should tell them that."
And it's very important that all conversations be candid, including a discussion of the unfortunate effects of a global recession, he adds.
Of course, communication is a two-way street. In order to retain high performers, you've got to listen to them and understand what they desire, says Blythe McGarvie, former CFO of BIC Group and now president of Leadership for International Finance, a corporate finance and leadership consultancy.
McGarvie says she would just come out and ask people: "Do you want more development, to take a course so you can be a better contributor to the company?" If their response was, "I'm so stressed out I can't think about it," she might say, "How about a week off?"
"Address high performers in creative ways," says McGarvie. "It's how you treat them during these stressful periods that creates the stickiness to keep them."
Another way to influence retention is by offering more flexible work options such as telecommuting and flex hours, observes Eric Lesser, associate partner in IBM's human capital management practice, part of the company's Global Business Service Group.
The importance of holding onto such employees goes beyond the direct impact of their work, Lesser adds. When people see someone who is known to be a top performer leave the company, it can be taken as a signal that there are serious underlying problems in the organization, which can lead to morale problems and dilute productivity.
Also, top performers tend to build connections and relationships others come to rely on. "When they leave during a downsizing, it rips holes in the social fabric of the organization, so that people don't know who to call to get an answer to a question or who has good judgment in a particular area," Lesser says.
David McCann is a reporter at CFO.
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