3 Strategies for Retaining Your Top Talent
January 17, 2024 – Even at companies making significant workforce reductions, leaders are increasingly concerned about retaining the best. Most companies are already becoming acutely aware that if someone leaves, someone better won’t necessarily come along, and that they may not have the leaders they need as conditions change. Good leaders have their choice of roles, making it easy for those seeking a change to move, according to a recent report from Heidrick & Struggles’ Ed Manfre, Jonathan McBride, and Sharon Sands. The report explain that workforces at every level, including leadership, comprise more and more people who were hired after the beginning of 2020 and so have had little chance to build connection to their company in traditional ways.
Among leaders, according to a recent survey Heidrick conducted, 76 percent said they were very or entirely open to changing companies in the next three years. “The talent market as a whole is more dynamic and less anchored than most leaders have experienced,” the report found. “And all this is happening in the context of hybrid working, which is forcing companies to experiment with new ways to maintain engagement and retention. It’s no wonder most companies can’t articulate a winning retention strategy.”
But companies that become net exporters of great talent are at risk of falling into an insidious, lasting leadership deficit, according to the Heidrick report. “Others, however, are taking steps to treat their leadership pipeline as a strategic asset, bolstering it, even in the face of cost-cutting, with efforts to improve executive retention, leadership development, and succession planning,” the study said. “Even retention alone may seem daunting, but some companies are finding new ways to tackle it by focusing on a few specific points in the employee experience, areas where retention has never been of much interest before.”
Heidrick also explains that companies are thinking about retention starting in the hiring process; focusing on culture and connection during onboarding; and seeing offboarding as part of retention, too. The Chicago-based firm has also seen that starting with one or two crucial groups, such as high potentials, helps make the challenge more approachable. Based on what we’re seeing, Heidrick recommends trying something new today—it’s better than tomorrow.
1. Starting at Hiring.
Unlike any other strategic asset, leadership pipelines are most often managed piecemeal, with hiring separated from management, promotion criteria not linked to broader succession plans, and learning opportunities not driven by assessments of leaders’ capabilities against strategic needs, the Heidrick report explained. The firm points to hiring decisions, for example, are often based almost entirely on skills and references, which are necessary but not sufficient. “When companies do seek to learn more about leaders’ approach to culture, purpose, and engagement during the hiring process, and focus on hiring those who are likeliest to engage with and thrive in the company’s culture, the results on retention can be striking,” the report said.
Related: Retaining Your Employees During Challenging Times
One global professional services firm, for example, explicitly recruits on values, not skills. “People tend not to last long if they aren’t aligned with the culture,” Heidrick said. “If a company’s purpose is not personally inspiring, for example, or at the very least something an employee feels ethically comfortable contributing to, they will not view the company as more than a paycheck—and may be tempted to move on at the first offer of higher compensation.” At this firm, this approach certainly results in not hiring some employees who could be valuable, but it has a very positive effect on retention. We have seen that even when people are in a job they don’t like or don’t fit anymore, they don’t want to leave the people and the firm. Because this firm gets to know most of its people so well, it also often has an edge in implementing change, since it can align leaders to new initiatives and start development early so leaders will be ready, according the Heidrick report.
Top Practices for Retaining Senior Talent
The past few years have shifted the landscape of work in many ways. Many people were forced into remote work as both employees and employers had to adjust very quickly to new workplace environments. For some, they saw the incredible benefits and opportunities that it brought, including no commute time, more work/life integration like breakfast or lunch with family, or being able to get to those after school activities more readily, according to a recent report from StevenDouglas’ Beth Weir. “Even just living at a slower pace and being more mindful of sleep and exercise was an unexpected but arguably necessary benefit for some,” she said. “Person-to-person connection and collaboration was missing and created some real challenges within teams. This dynamic was the case for not only me, but many of the people I represent.”
“A fast-moving consumer goods company rethought its hiring process to solve a long-standing retention problem: its headquarters were in a city many people didn’t want to live in long term,” the Heidrick report said. “Several years ago, its leaders began to bring potential executives who had made it reasonably far into the recruiting process—and their families—to the city for a weekend. The company made an effort to show off the city, and leaders could assess how engaged both the potential executive and their families were. This has proved to be an effective way to manage a competitive recruiting weakness and has notably increased the company’s retention rate.”
2. Focusing Onboarding on Connection.
Onboarding is often seen largely as a scheduling exercise to prepare a new leader to add value in a very short time. But some past Heidrick studies have shown specifically that feeling like one has friends across the company has a positive effect on retention. As physical offices have less of a role than ever in many executives’ working lives, virtual networks have become paramount. But in many companies, new hires are left on their own to build internal networks. In addition, Heidrick research has shown that inclusive teams, those that create a sense of belonging, are seen as higher performing and contributing more to organizational performance.
Heidrick points to one technology company that is addressing this by actively helping new executives create a network as part of onboarding, ensuring that managers suggest people across the organization to get to know based on personal interests and professional backgrounds as well as immediate job performance needs. The company also builds in meaningful time for new executives to make these connections while they are getting up to speed rather than expecting very early, job-specific accomplishments.
Another shift in some leading managers’ and companies’ approaches to onboarding is to make it continuous, according the Heidrick report. “Rather than assuming everything is OK once a new person has a network, some companies arrange for a peer or a member of the management team to check in every six months or so,” the firm says. “This approach can lead to more open conversations than if a hiring manager or line leader checks in and can help avoid surprises. At one company we’re familiar with that didn’t do this, for example, a very senior leader in a core function was engaged in a strategic decision-making meeting one day and quit the next. More generally, we are hearing more and more stories of senior executives resigning without giving their current employers time or room to react.”
On the other hand, Heidrick explains that open conversations with peers or other leaders about overall engagement and the possibility of staying or leaving creates a sense of psychological safety and preempts the common fear of discussing the subject. When such conversations also include discussions of executives’ future options at the current company—either as part of a formal succession planning process or informally—that can also help keep wavering executives engaged by alerting them to possibilities they may not have been aware of.
3. Seeing Offboarding as Retention Too.
Heidrick & Struggles have also seen companies effectively if counterintuitively, use offboarding processes to maintain a sense of connection and belonging. The report notes that people often assume when they leave an organization that a bridge has been burned, by them or by the organization. But that doesn’t have to be true. “Some companies run active alumni programs through which they stay in touch with former employees regularly, hosting social and learning gatherings,” Heidrick said. “Others focus on finding people who are leaving—whether by choice or through redundancies—opportunities somewhere in the corporate ecosystem, such as with a vendor or supplier. Those relationships tend to create short-term performance benefits, because of shared knowledge, as well as longer-term goodwill. At some companies, managers are expected to call high performers who have left every six months or so in order to stay in touch and see how things are going; not infrequently, they find that people who have left aren’t as happy as they expected to be.”
Heidrick explains that all of these approaches can begin conversations about people returning, which may have the biggest retention benefit of all: people have seen that the grass really isn’t greener elsewhere. “Even at companies making significant workforce reductions, leaders are increasingly concerned about retaining the best,” the search firm said. “The most forward-looking are beginning to value their leadership pipeline as highly as any other strategic asset. It’s tricky to retain leaders in today’s dynamic environment when many are loosely connected. But thinking about who will stay when they hire, building connections from the beginning, and maintaining connections after people leave are three places to start.”
Related: How to Attract, Build, Retain & Engage Your Workforce Today
Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Executive Editor; Lily Fauver, Senior Editor – Hunt Scanlon Media
