With the labor market, the stock market and 401(k)s all on the rebound, senior managers who have been hunkered down for five years are now considering their employment options.
To avoid a brain drain, smart companies are reassessing their employee retention strategies for how to retain senior employees. Here are eight top retention strategies for 2014.
Top talent wants top challenges. First, beware of anyone who tries to sell you on a gimmick for retaining top employees. Remember that more than anything else, top talent simply wants to be exercised.
That’s why "taking on responsibility" and "working on challenging tasks" are the career-enhancing opportunities that executives cited most frequently in a survey reported in the Wall Street Journal by Elizabeth Craig, John Kimberly and Peter Cheese.
It’s the money, stupid. Of course, many of us mere mortals are motivated by big financial carrots that can be claimed in a year or five. For senior employees, a competitive salary is only part of the story.
In 2014, the chief forms of deferred compensation for retention of executives are stock options, long term incentive plans (LTIPs), profit sharing with vesting and a 401(k) match with vesting, says Charley Polachi, managing partner at Polachi Access Executive Search in Boston.
What matters to young Boomers and old Xers. Let's face it: Today’s multigenerational workforce differs when it comes to retaining senior employees.
“Executives in their 40s or 50s have been around for a while, and they’re driven by influence and power,” says Angelo Kinicki, a professor at the W. P. Carey School of Business at Arizona State University. “They want to stay in an organization that gives them opportunities to make change."
What matters to Millennials and younger Xers. Younger, fast-rising managers may be looking for more coaching and better preparation for further advancement -- particularly with mastering soft skills.
“Execs in their 30s have often been promoted without having all the skills -- from managing people to interpreting financial statements -- that they might need,” says Kinicki. “What might keep them at their companies is the opportunity to train and to be on projects where they can hone those skills."
Fit the retention tactic to the person. It should come as no surprise that many executives who have made unique contributions to the enterprise will not be enticed by generic efforts aimed at retaining senior employees.
"One-size-fits-all retention packages are usually unsuccessful in persuading a diverse group of key employees to stay. Instead, companies should tailor retention approaches to the mindsets and motivations of specific employees (as well as to the express nature of the changes involved)," says a report by consulting firm McKinsey & Co.
But beware inequity and jealousy. If, in your efforts to retain senior workers, you do offer one executive a customized perk for continued loyalty to the company, don’t expect that her peers won’t be miffed if they learn of it.
“Anytime you individualize, you can create feelings of inequity,” says Kinicki. “So you need to be very careful about it. But in the end, you have to reward those who deserve it, to get them to stay.”
Even for upper management, work/life balance is a draw. More and more, executives who have given up a lot on the personal side to excel in business -- and have earned a measure of financial independence in the process -- want to reclaim some balance in their lives.
That’s why “even at the executive level, workplace flexibility has become a key recruitment tool” and a way to retain older workers, says Katie Bouton, president of Koya Leadership Partners in Newburyport, Mass.
Consider offering sabbaticals. An extended period of paid time off may be the ultimate loyalty-builder for top talent. “Executives who took a sabbatical have told me, 'This is a wonderful perk; the company cares about me as an individual, they want me to have the opportunity to regenerate',” says Frank Faeth, principal at Faeth Consulting in Bronxville, N.Y. “People come back recharged and refocused, and they say they feel more tightly aligned with the company.”
What if the executive uses the time to find a new employer? "If executives who take sabbaticals end up leaving the company, so be it,” says Faeth. “If they believe they'd be happier elsewhere, then it's best for everyone that they move on.”
Even the toughest execs are seeking meaning. As many senior managers seek more balance in their lives, many will also stay with an employer longer if the company connects to its community or otherwise provides meaning beyond the bottom line.
Private enterprises might borrow a page from the non-profit sector, says Bouton. “Non-profits leverage employee engagement with the meaning that senior executives find in the work. At nonprofits, senior executives believe in what they’re doing.”
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