Are You Doing Enough to Retain High Potentials?

According to the 2013 Gallup “State of the American Workforce” report, 70 percent of American workers are not engaged or are actively disengaged and emotionally disconnected from their workplaces. Gallup estimates this costs the U.S. between $450 billion and $550 billion annually in lost productivity.

The study states: “While keeping employees happy or satisfied is a worthy goal that can help build a more positive workplace, simply measuring workers’ satisfaction or happiness levels is insufficient to create sustainable change, retain top performers and positively affect the bottom line. Satisfied or happy employees are not necessarily engaged. Engaged employees have well-defined roles in the organization, make strong contributions, are actively connected to their larger team and organization, and are continuously progressing.”

Companies are taking extra effort to ensure that high-potential, high-performing employees progress via sourcing, screening, performance management and succession planning techniques.

Retention Starts Before Hiring

It may sound counterintuitive, but companies should view retention as part of the hiring process. If an offer has been extended and rejected, as long as the compensation and benefits were in line with competitive offers, this should be considered a retention failure.

To build an effective retention strategy, companies need an effective sourcing and screening approach that considers the steps professionals take when they’re considering a job or career change. Candidates reassess their skills, goals and interests; search for positions on job boards and company websites; network with their professional peers; and research industries with high demand. With this insight, companies can design a sourcing strategy that keeps their brand visible and attractive to top talent.

From a sourcing standpoint, a best practice is to address the key challenges job seekers face, such as obtaining inside information about a position and company, gaining insight into the hiring manager’s priorities and obtaining feedback on their candidacy during the job search process.

Job descriptions are typically too high-level and generic, or they list every desired attribute and skill sought in an ideal candidate. Access to information and insight helps to mitigate potential mismatch issues and can be achieved through a specific job description, weighting job requirements, and dialogue between the candidate and the hiring manager. Many organizations go beyond this to craft an employee value proposition, or EVP, which helps to ensure they locate the best candidates.

The following are several key factors that professionals look for and that are typically incorporated into an EVP:

• Career development and advancement: Candidates are not only looking for the initial job, but the one that follows. If companies provide that opportunity, their retention likely will improve.

• Compensation: Compensation is a heavily weighted factor in any hire. It needs to be market-competitive and should articulate performance incentives.

• Work-life balance: When searching for jobs, professionals attempt to gain some equilibrium between work and life by considering commute and location. Other considerations include telecommuting and flextime policies.

Another part of the sourcing process is candidate screening. Hiring the wrong person can drain productivity, morale, customer satisfaction and even competitive advantage in the marketplace. According to a 2013 CareerBuilder survey, 24 percent of U.S. employers estimate that a single bad hire cost them more than $50,000.

Screening is the seal of approval that validates both employer and prospect perspectives and sets the stage for long-term retention and success. Key elements of a quality screening process include:

• An in-person interview: This provides many nonverbal insights into how well a candidate may perform within an organization. Cues such as eye contact, facial expressions, posture, gestures and how a candidate handles special boundaries can only be gauged in a face-to-face format.

• A technical assessment: This assesses proficiency for a specific skill, confirms a skill highlighted in a resume and identifies where a candidate lacks competence.

• Reference checks: When performed correctly, references offer practical points of view on how a job candidate has performed in the past and how he or she may fare in the open position. Potential weaknesses in the process include failing to specify success criteria and accepting references from candidates’ peers and friends instead of supervisors.

A well-conceived screening process can provide insights into team dynamics, performance criteria, training and development opportunities, personality or work style of manager and candidate, insights on available and attainable career paths as well as work-life balance.

Continually Manage Performance

Since organizational success is driven by employee performance, companies need formal processes related to setting performance expectations and providing quality feedback after a hire has been made. Attributes of a successful performance management program include:

• Management defines the objectives, skills and behaviors that are most important to organizational success and aligns these attributes with clear performance expectations.

• Expectations are documented and communicated to each employee, providing defined goals to work toward.

• Feedback is prioritized as a critical aspect of every manager’s job, and managers are held accountable for giving explicit, thoughtful feedback to their employees throughout the year. Employees can feel confused if significant feedback is presented only annually or semiannually. Managers must build feedback into the operating rhythm of their work weeks.

• Feedback is direct, face-to-face and specific. Managers come prepared to cite specific behavioral examples of performance and tie the conversation back to defined goals and expectations.

• Discussions are two-way. Performance feedback must be both given by, as well as received by, managers. Two-way feedback can be an invaluable tool with which to create a high-performance environment, as it can help eliminate misconceptions and build trust.

• Outcomes and actions are defined. By continually refining and identifying “next-level” high-performance behaviors, employees understand their organizational path.

Tie Progression to Succession Planning

Succession management is one of the most important programs to ensure high-potential, high-performing employee retention.

Consider the following data points from AMA Enterprise, a division of the American Management Association, in which 2012 and 2013 reports indicate:

• One in three employers expect turnover to rise at their organization in 2013.

• Two-thirds of U.S. employers are concerned about gaps in their organization’s management ranks.

• A survey of 300 senior managers and executives indicated about 38 percent keep their high-potential selection criteria secret.

Succession management provides a well-defined program that includes identification of high-potential employees and encourages discussions of career pathing in tandem with plans for business continuity. Recommendations to develop an effective succession management program include:

• Ensure program depth and accountability. Those responsible for the program must be held accountable for ensuring it extends beyond senior management to key line-level positions. Leaders should ensure high-potential employees are intimately involved in the process to help groom them for the next step in their careers, and to provide a clear picture of future career opportunities.

• Examine the approach. Traditionally, more mature succession management programs use a position-based plan which relies on identifying key positions within the organization, then identifying high-potential individuals to move into those roles. This approach requires upfront knowledge of, and agreement on, the definition of a key position. A pool-based plan focuses on identifying high-potential individuals first, and then moves them into key leadership positions as their professional goals and business needs dictate. Both approaches require careful planning and organizational focus.

• Define the criteria. If the criteria for high-performers are not clearly defined, the program will suffer from misconceptions that favoritism and office politics are the main influencers in succession management. Without this guidance, the organization may struggle to identify the true top performers, and employees may believe the program is too subjective or politically driven.

• Communicate the program. Organizations should communicate the purpose of and the principles for the succession management program, define the criteria for high-potential employees and outline career path opportunities. Organizations also should promote the program as part of external recruiting efforts. This demonstrates to current and future employees that the organization is committed to their success, and it provides clear opportunities for long-term career growth, thereby improving retention of high-potential talent.

• Review the program. Organizations should review their succession management programs annually to take into account new skills and competencies employees have developed as well as changing strategic business needs. This way, succession management remains in sync with both the organization’s current skills inventory and how it must evolve to be successful in the future.

By evaluating an organizational approach to retention through the four elements of sourcing, screening, performance management and succession planning, organizations can identify future leaders, build a pipeline of high-potential talent, gain insight into their employees’ career goals and combat turnover. Meanwhile, employees receive a clearly defined path for advancement that includes criteria for success, which promotes greater feelings of satisfaction, higher levels of engagement and increased productivity.

Marshall Oldham is director of recruiting at TEKsystems, an IT staffing and talent management services company. He can be reached at editor@talentmgt.com.