How Companies Can Build Up Their Defenses Against Talent Raids
November 4, 2016 – Hunt Scanlon’s recently concluded co-branded talent raiding study with Marlin Hawk uncovered some revealing truths. But the most surprising result: the apparent lack of defensive people strategies at U.S. companies. A full quarter of American businesses are experiencing a marked increase in talent raids at the C-suite level, yet more than half (54 percent) are woefully unprepared to combat the problem head on.
In the following interview, Marlin Hawk’s chief innovation officer, Mark Oppenheimer, walks us through why American companies are subjected to large-scale poaching and gives some top-drawer recommendations on how to effectively deal with the problem.
Nearly 400 leading CHROs and top talent acquisition leaders took part in the report, one of the first to explore this unique and expanding dilemma in an age when not recruitment, but engagement, succession planning and retention rule supreme.
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Mark, our co-branded report on talent raiding was quite revealing. What surprised you the most?
What surprised me the most was not the prevalence of talent raids, but how unprepared the majority of companies are to counteract them. Given the amount of time, effort and financial investment put into finding and hiring key executives, I would expect employers to think carefully about building the optimum environment to retain their most valuable people. And as you know, that sentiment seems to have been top-of-mind and pervasive among our vast group of survey respondents. The fact that almost 60 percent of companies have no formal talent retention strategy in place is quite alarming, especially since many market commentators expect that demand for outstanding talent will soon outstrip supply.
What are some of the leading reasons why American companies aren’t finding ways to better defend their top talent. And is this just an ‘American’ problem?
You can never have a watertight plan to prevent talent from leaving. From time to time it’s going to happen. It’s human nature and, I think, therein lies the problem. Many companies know how to deal with the tangible issues. They identify their top talent, conduct compensation benchmark studies, ensure that the executive team is competitively compensated, tie them in with long-term incentive plans and put non-compete contracts in place. But dealing with talent is very different from financial assets or intellectual property. Companies do not tackle the soft issues that are equally important to people, especially with the Millennial generation. This is not just an American problem, I would proffer. I suspect that the same applies globally, as the U.S. is more sophisticated in its HR than many other regions of the world. Perhaps this ought to be our next survey — looking at talent raiding from a global perspective.
Talent As a Strategic Enabler
Mark, how can search firms assist companies in building up their defenses against talent raiding when recruiters themselves are oftentimes seen as the leading culprits luring top talent away?
That’s a good question! It has occurred to me that, as executive search consultants pontificating about talent retention, some might perceive us as hypocritical. It’s a fair and valid point. But we genuinely want to protect the great hires we make for our clients. That’s why we make such a big deal about preparing to onboard candidates and integrating them post placement. In our role, we talk to a broad range of candidates and gain valuable insights into why people want to stay with their current company or move on. We can’t work miracles, but we can bring our insights to the table and partner with clients in developing strategies to maximise executive talent retention.
Is talent retention going to become the primary focus of CHROs and talent acquisition professionals in the future, as opposed to recruiting?
Going forward, yes. It’s going to figure more strongly in a CHRO’s agenda. The scope of the CHRO role is vast and many have now taken on heads of talent acquisition to handle the talent management aspect of HR. It stands to reason that talent acquisition should also embrace talent retention and that, while recruiting will always be one of the key pillars of HR, there will be more of a balance in the future. We have already seen this happen, to a degree, over the past five years with an increase in employee engagement activities. Retention is really an extension of that drive to create the perfect working environment for staff at all levels.
Give us some of your top recommendations that companies can take away from our report.
The CHRO is traditionally a people’s person. In a way, it’s about going back to basics and wearing the psychiatrist’s hat, understanding the less tangible things that drive people and make them stick with the same tribe. You have to make your company a great place to work, a club that people want to be part of. Then you have to put some process around it to ensure that retention ‘best practice’ becomes part of your corporate fabric. But here’s my top two recommendations: First, keep an ear to the ground to spot executives who may be susceptible to poaching. Disaffection may be caused by someone’s role being impacted by a merger or organizational restructuring, or by their budget being cut or a project resulting in an unsuccessful conclusion through no fault of their own. Be vigilant and acknowledge such obstacles, letting the affected executive know that you are aware and care – show them a positive outcome to alleviate the situation. Second, provide a regular forum for key executives to vent frustrations. Top senior performers can still benefit from mentoring, preferably from someone at a similar level who can be objective, such as the CHRO or a non-executive director. It may be that an executive feels that promises are not being fulfilled, or that time consuming projects are derailing achievement of objectives. Early identification of a problem provides an opportunity for resolution before it becomes too late.
Mark, what’s the opportunity ahead for search firms and corporate talent acquisition professionals? Might there be a tightening partnership among them in the years ahead which could address the massive talent retention problem we’re witnessing today?
I believe that leadership advisory firms can work hand-in-hand with clients on a broader range of talent management issues. If clients are willing to let us in, we can work as an extension to the HR function, bringing an external perspective that adds real value and developing practices and processes that help lock in the people you most want to stay. As I have said, we all have to accept that while more effort can be made to hold on to key executives, talent will at some point leave and natural evolution will also create gaps. There’s an obvious opportunity to partner with search firms for succession planning, building a shadow board across each senior position, with coaching and upskilling to fast track potential replacements. In tandem, search firms can develop an external pool of talent as a contingency plan, lining up high caliber leaders with the potential to replace key executives. There may be a few unethical search firms out there who, given the chance, would poach an executive as soon as they had received payment for placing them. But most are not like that and place great importance on long-term relationships built on trust and complementary expertise.
Contributed by Scott A. Scanlon, Editor-in-Chief, Hunt Scanlon Media
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