Tie up money with performance and results, and bind the team together through affinity initiatives
Companies are now increasingly undertaking “HR Risk Analysis Studies” to determine tipping points with regard to staff disagreements
As companies keenly pursued reducing employees as a first reaction to dwindling business returns by either freezing talent acquisition or letting people leave, the time has come for HR thought leaders to ponder if this is a strategic option or merely manifestation of lacking strategic intent.
A recent study conducted by Synergy Consultants clearly showed that recessionary business cycles in the past were invariably followed by an acute shortage of talented professionals who were able to retain their drive, loyalty and motivation levels. In fact, the study indicated that when frozen opportunities would start to thaw and their shoots gain visibility, the critical talent would seek release from their pent-up resentment towards current employers by evaluating greener pastures. These resentments are born out of seemingly unfair freezes and cuts in salaries, benefits and opportunities.
Thus, the unidirectional approach of companies reducing headcount is letting critical talent slip through their fingers. In most cases, this is because in times of crisis, organizations choose the easier option of flowing with the tide rather that implementing a strategic vision. The HR Function has to realize that a ‘contra opinion born out of conviction’ is as much a necessity of the business as an ‘inclusive’ approach.
Experts believe that many of the companies that manage to survive the current slow-down will start to go under, once business environment starts picking up. This will primarily be due to their “failing the talent test” – inability to deploy the right people with the right skills and understanding at the speed of their competition. The HR in such organizations would have failed twice – once, in being unable to retain talent and the second, in being unable to acquire it fast enough.
Defrosting the thinking process
There is a need for HR to urgently defrost its thinking process and become more analytical about critical talent resources. As organizations start seeing light at the end of the tunnel, HR has to be ready with fully developed Key Talent Matrices that are unique to their organizations. These have to be developed with clearly defined business and functional goals, and in close coordination with top management so as to evolve competitive advantages. And the time to do it is Now.
If companies have to establish competitive edge and emerge effective through the downward spiral band, the key is in identifying the talent that is missing and needs to be recruited and retained through the downturn. It is not as easy as it seems and any complacency would be ill-advised.
Although all-around action on recession-driven redundancies has opened wider choices for selection and the market appears crowded with qualified professionals, many companies maintain that there is still a dearth of really good candidates and that they are offering very generous inducements to get them. This is despite employers seeing higher number of applicants for positions. In fact, the mismatch of expectations is galling.
Therefore, focus for retention has to be on the Superstars of the organizations. These need not be part of the senior management, but the talented and critical top 10-15% whose departure would cause acute pain.
A recent survey of the top executives of major corporations in Europe has revealed that in their view, the Talent Management Strategy of their organizations in the current economic scenario has become much more significant than ever before. It says, “While the market is brimming with candidates, yet the type of people most companies are looking for is still very rare.”
Companies are now increasingly undertaking “HR Risk Analysis Studies” to determine tipping points with regard to staff disagreements. They are realizing the need to evolve more innovative and inclusive processes in order to retain talent without having to play catch-up later. For example, the Indian Auto Industry has in the recent past extensively used many simple and yet safe options that have effectively balanced elements of cost with retention and rewards. As companies compete for star performers, they understand that the best talent rarely quits for monetary benefits alone, and so are experimenting with longer sabbaticals and opportunities for accelerated skill enhancements. Studies indicate that losing any of the top 10% of performers, negatively impacts the productivity of the entire team by 5-10 times.
Therefore, the most critical and essential task for HR practitioners today is to identify their Superstars (the Performers), proactively engage with them in a serious two-way dialogue to understand their concerns as well as their pleasures, what delights and excites them. Also, to intrinsically feel their pain thresholds and work relentlessly to keep them inspired, motivated and working hard. Tie up money with performance and results, and bind this team together through affinity initiatives.
Let’s hope HR stands up for its beliefs and strategies before it’s too late.