Many may think that the economic pressures resulting from COVID-19 and the resulting retrenchments have made it easier to retain top talent who do not want to risk moving during uncertain times, but this is not necessarily the case.
According to Brian Kropp, Head of HR Research at Gartner, high-performers may look to exit if opportunities are fewer and cutbacks are made. He adds that “high-performers are typically the ones asked to take on more work and responsibilities during such times without any corresponding increase in pay”.
There are various reasons why top talent is at risk at this time:
- High performers know their worth and are inherently drawn to growth and opportunity.
- When retrenchments are taking place, employers will often give more time and energy to this process than areas that are equally important, like employee retention.
- There are companies that use turbulent times as opportunities to poach talent. Employers facing contracting budgets, for example, will often pay more to attract proven performers to protect and get the most out of their investment.
All of this should remind us that, during a time of great change and uncertainty, it is more important than ever to retain your top talent. So, what can we do to address top talent attraction and retention during COVD19 (and after)?
These are a few key principles for you to address when it comes to top talent attraction and retention:
Differentiation is key
Many organisations make the mistake of “spreading the peanut butter too thin”. They try to treat almost all employees as top talent. As a guideline, when considering top talent, the key employees should constitute no more than 5%-10% of the workforce. Each company must agree on what they define as top talent and then stick to that definition. Suggested ways to define top talent include using a performance and potential matrix, or to select the jobs that are defined as key skills for the organisation (e.g. Data Science, Software Engineering, Brand Management) and then pinpoint the best talent in those key skill areas.
Use the Total Reward framework to define the retention levers that you will use
- Guaranteed pay – although most organisations would define a targeted market position of, for example, the 50th percentile, when it comes to top talent the company must be prepared to break out of this mould. Guaranteed pay should not be a distraction for top talent. Their guaranteed pay should be positioned at the upper end of the market so that they are not doubting that the company values them.
- Variable pay – to be competitive your organisation would need to have both short-term and long-term incentive schemes which are competitive within the market and which disproportionally reward top talent. If your average performers are receiving variable payments which are just below those of top talent then your schemes are not working effectively.
- Attraction and Retention bonuses – by definition, most top talent candidates in which your organisation is interested should have a significant “lock-in” in terms of reward. You will find that they are probably due for a sizeable bonus and that their unvested share value is well above market norms. As a hiring company you will need to make sure your offer is attractive, and at the minimum ensure that the candidate is compensated for the STI and LTI which they may forfeit. In addition to competitive STI and LTI offerings, retention bonuses can be very powerful retention instruments.
- Employee wellbeing – employee wellbeing has grown in importance over the years but for some companies, it is still a “nice to have” and leaders are not completely on-board as to the value that this can add to an employee’s life. COVID-19 has massively upped the stakes on employee wellbeing. Many employees feel burned out from grappling with lives altered by COVID-19. They feel pressurised by threats to their job security, pay and benefits. It is critical that organisations provide a well thought through employee wellbeing solution for all employees, and especially for top talent.
Beyond all your physical protection measures, make sure employees know where to find information, guidance and support for mental health. Set up an Employee Assistance Programme (EAP) where employees can reach out to external professionals for support and counselling. Develop in-house channels and hubs to respond promptly to employee questions and concerns.
With employees feeling overwhelmed and anxious, ask people leaders to make themselves available to staff to talk about their fears, answer questions and reassure them about work and personal issues.
The sudden shift to working from home has the potential to de-rail performance. Make sure employees have sufficient infrastructure, flexibility and support to do their job to the best of their ability under the current circumstances. As an example, some organisations have negotiated highly competitive prices for home office data and infrastructure to enable employees to enhance their home working environment.
Don’t expect all employees to be available for 18 hours a day. Leaders should agree with their teams what the core working hours are (eg 9am to 3pm) where everyone is available and then allow for the remainder of the work to be done at times which suits the needs of each household who may be juggling homeschooling, providing additional meals, taking care of those who are self-isolating, and dealing with possible loss of loved ones due to COVID.
Your top talent may be under even greater pressure at this time as the company looks to them to deal with greater complexity and more challenging financial goals. Be deliberate in checking in with the leaders of top talent to see that they are supporting their teams and ensuring that top talent is given the flexibility and support they need to sustain performance.
- Talent development – there is a risk that top talent gets so busy with the delivery that they are not able to grow and develop, both technically and personally. One way of ensuring growth and development is through targeted learning and development interventions. This demonstrates your commitment to nurturing your people’s potential. Development for top talent must be tracked and reported regularly. Senior leadership should own the overall development plan for the top talent pool and ensure that there is alignment with overall organisational needs and the aspirations of the top employees.
- Recognition – during times of crisis, employee recognition often takes a back seat. Managers have ‘more important’ things to get to. Although retrenchments may be taking place, there’s still the same amount of work to be done –and, of course, less staff to lean on. It’s typically the top performers that are asked to close this skills gap. Top talent needs recognition from their peers and their leaders. As much as we can bolster their overall reward, we do need to ensure that they receive the appreciation and affirmation which they deserve.
Employee retention is a critical issue as companies compete for both market share and top talent in a tight economy. The payoff for organisations that focus on employee retention is well worth the time and investment. Increased performance, better productivity, higher employee morale and improved quality of work, not to mention a reduction in turnover, are benefits to your organisation as you navigate the perils of COVID-19.