How can I retain talented workers in a tight labor market?
Human Resources mentor Rudy Karsan responds: Organizations that address the following four issues are much more effective in retaining talented employees:
Identify and recognize employees who are talented. This recognition is well received if done on a one-on-one basis. People appreciate when their talent is recognized. This method helps keep them from calling headhunters or looking through want ads.
Compensate fairly. Organizations that have fair compensation practices succeed in retaining talented employees. You do not have to overpay talented employees, nor do you have to make compensation the most important value of the organization. Fairness in terms of equity, based on market conditions, results in long-term retention of talent. When individuals are compensated unfairly, it is inevitable that you will lose people. This applies at both ends of the compensation spectrum. Underpaid employees leave very quickly. Employees that are being paid too much create stress on the organization that will need to be corrected in a future year -- at which point turnover is inevitable.
Paint an engaging company vision, and show employees how they benefit from that vision. It is very important that the employee's contribution and reward in relation to the overall vision of the organization are clear. Just having a clear company vision without showing the benefits of that vision to the employee is a fairly common mistake.
Give regular feedback. Feedback and the recognition of excelling and growing talent are very powerful retention tools. Data shows that regular dialogue on performance issues is a major contributor to employee retention.