Having a good reputation as an employer and a highly committed workforce can deliver significant competitive advantage
Companies have today realised the value of satisfied employees as profit centers rather than cost centers
As acquiring best talent remains a challenge, companies must realize that candidates are no longer impressed by hefty pay packages.
Post economic downturn, the Indian and global business environment has changed profoundly. Asia, though not yet the world’s largest economy, has increasingly become the fulcrum of change for global businesses with India as one of its most potential growth markets. As Indian companies globalize, operating in a competitive business environment, the ‘war for talent’ is intensifying with greater emphasis being paid to talent acquisition and retention.
Talent attraction and acquisition approach has undergone a change in last 18-24 months. Organizations are focusing to get the right talent and are adopting stringent screening process by introducing talent and assessment mechanisms. Companies are also adopting innovative tools and mediums like e-recruitment, social media and corporate websites to increase their reach. At the same time, they are using different interviewing techniques such as competency-based behavioral or case studies to assess job candidates, in short, ‘a round hole for a round peg’. Organizations are also looking at new ways of structuring the overall compensation by taking into account bonus, incentives, stock options, et al, to motivate and retain talent.
On the candidate side, job seekers are evaluating organization’s credibility and stability. The basic question that the candidates are asking to potential employers is ’What’s in it for me?’ They expect exposure to the cutting edge technology / business processes and not just compensation. Candidates are also evaluating organizations on the learning and development programs they offer.
Challenge of Talent Retention
The economy is changing the way business is conducted, and it will change the way organizations recruit, select, develop, manage, retain and compensate knowledge workers who lead companies in future. Learning and development is becoming a differentiator between employers in this fiercely competitive market. Both from talent retention perspective as well as bridging the skill-gap challenge, organizations are looking at ‘learning and development’ as an important strategic tool. Some are focusing on strengthening their in-house capability and some are looking at combination of both internal and external partnerships. Organizations are looking at various avenues for employees at various levels such as sponsored education, external part time programmes, vocational training, et al.
Companies are also adopting means like stock options, rewards and recognition programs and to recognize the contribution made by employees. ‘Job enrichment’ of employees is another major consideration for companies. Organizations today are using the technique of ‘job rotation’ to help employees work in various functions in the company. The employees are encouraged to work from various geographies in the country as well as overseas where the company has offices. This kind of job rotation plays a pivotal role in retaining employees as this gives them diverse experience. The employees are encouraged to be part of various committees, attend seminars, et al, in order to address the issues of monotony and stagnation at work.
Compensation Not Enough
Candidates today are not only looking at the compensation offered to them by the company, but also the stability of the organization they are joining. Having a good reputation as an employer and a highly committed workforce can deliver significant competitive advantage. Positioning one’s organization as ’employer of choice‘will become a necessity in times to come. For organizations to attract, retain and develop talent, they need to be consistent in their communication strategy both with existing as well as prospective employees. They need to communicate the uniqueness of their offerings be it technology, compensation, cultural diversity or HR policies. Employer branding helps in building loyalty amongst existing employees as well as attracting the right talent.
With the economy back on an upswing and the job markets buoyant again, firms are gearing themselves towards retaining and investing in the right people, at the right time and at the right cost. In the post-recessionary environment, employees have become more cautious and increasingly concerned about various factors when joining a company. While salary and compensation still remain the top motivators, learning and development, policies on work-life balance, rewards and recognition programmes, systems and processes, timely appraisals, et al, have also assumed equal importance impacting employee motivation and satisfaction. Employee morale is also greatly influenced by open, transparent communication at all levels. In addition, companies have today realized the value of satisfied employees as profit centers rather than cost centers contributing to the bottom line of any company. Employees should feel like they are an intrinsic part of the organization and that their involvement and participation is imperative to the success of the business.
Sanjay Modi is Managing Director - India / SEA / Middle East, monster.com