COMMENTARY: Retaining Talent In Companies

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Full article: http://www.inc.com/nancy-mobley/2011-human-resources-small-business-outlook_2.html

USA – Sixty-nine percent of respondents reported that business conditions in 2010 showed an improvement over 2009 and 78% predict that 2011 will be even better.  So, the good news is, we’re moving in the right direction.  The question now is, what does this mean for employers and their relationship with their employees?

First and foremost on many employees’ minds is their pay… Do you have a rewards and recognition program?  Is it effective in showing the value of your employees?

As businesses turn the corner, recruiting will become a key initiative for many companies in 2011.  The survey found that 58% of companies have plans to add to staff and a whopping 93% plan to either retain or increase staffing levels… Being sensitive to the assimilation of new hires will set both them and the company up for success.  As with any new hires, you’ll want to make sure they’re properly trained in the specifics of their job and their department, but also the mission, values and strategic direction of the company.

Good news for small businesses in Northeast USA – after a period of trying times in 2008 and 2009, it would seem that the economic prospects for small businesses on the New England coast are finally looking up in 2011.

Retaining talent in the company is one of the toughest tasks of any HR or management executive, because good talent can’t be confined. Other HR managers and headhunters will hear about any rare talent sequestered in stifling companies, and if that talent is stolen, it might critically damage the growth of a company.

This is especially true in Singapore’s competitive industries, such as in the banking and financial sectors, where oligopolies fight for market share viciously, the labour market is small and in demand, and good consistent talent is all that differentiates one bank from the others.

Hence it is important that the talent is appropriately rewarded – with recognition in the form of monetary compensation or increased reputation and power. But while this can be easily achieved in large companies such as banks and airline companies, for most small-medium enterprises, it can be rather difficult to implement a performance appraisal system to distribute the rewards fairly.

More so, if there is an increase in staff as the business conditions improve and the business grows. It will become increasingly difficult to keep the new and old staff happy by compensating them equitably across the board. What are the criteria for rewards: e.g. established loyalty to the company, key performance indicators?

Criteria can be determined by a strategic information system, which would nail down the strengths and weaknesses of each employee, and allow bosses to tailor a suitable rewards system, with top tiers employees can realistically work towards with effort and training.

This will motivate them to make up for shortfalls and work harder towards attainable goals. Employees become clear on what is in it for them if they work hard and raise the profile of the company, and nothing generates loyalty better than if the employees feel that they have a vested interest in its success.

Small businesses work differently from large corporations, in the way that talent matters more to them, and yet these talents are also more likely to leave for greener grass: friendlier working conditions, bigger offices, better employee benefits, and more money, all of which such small businesses might be unable to provide.

Thus to prevent poaching, small businesses need to start being competitive in terms of providing a healthy working environment. They may not have the big rewards of big companies, but good software can easily make up for it by making top-tier performance easily attainable and hassle-free. By implementing a good performance appraisal system, employee benefits programme and resource setups, companies can make employees feel welcome, wanted and motivated.

As a HR manager, how would you retain your talent? And finally, is there already some human resource software or performance appraisal system being used in your company to distribute such performance-based rewards fairly? Share your thoughts with us!