Recruiting and retaining key personnel
The ability to attract and retain key employees, particularly at mid-senior management level, has never been more important.
Employees are a critical factor in whether a business will flourish or fail. Ensuring you can keep your business staffed with the right people is therefore an important objective, but one which is becoming increasingly challenging in an age of candidate shortages and talent gaps across many sectors. In that context, the ability to attract and retain key employees, particularly at mid-senior management level, has never been more important.
Build a culture employees will buy into and value
Fostering the right culture and values is important in order to attract and retain the best candidates. We have all heard the horror stories of the negative cultures of some employers which, if we were looking to move, would have put us off. Equally, if we were working in those businesses, it may well have made us want to leave. Identifying values that employees can buy into and then setting your recruitment strategy and personnel policies to reflect them can make a powerful difference to the appeal of your business both to its existing and prospective employees. However, your values and policies aren’t going to be effective unless you communicate them clearly, so we would always recommend a carefully drafted staff handbook that is easily accessible to staff in the office or online.
Recruitment as a tool for retention
Retention starts with recruitment. It sounds simple, but in a sparse candidate market it is easy to make a hasty decision when faced with limited choice, but that can often be counterproductive. Presenting a distorted picture of the reality of the role in order to “sell the dream” to a candidate, sets up potential for the candidate to become disillusioned when they discover the reality doesn’t live up to their high expectations once they have taken the role. Exceptionally talented candidates will have options, and you will be back at square one if they leave, so there is considerable benefit in being transparent. Another mistake that is easy to make is failing to take into account the importance of actively seeking a candidate likely to stay the course. Strong ability and experience should be a given at a mid/senior level, but important indicators of retention long-term are often overlooked, such as a stable employment history and interests beyond their professional career that demonstrate an ability to stick with causes the candidate cares about. A consistent, thorough and structured recruitment process should assist you to identify these traits.
Identify key personnel
Knowing which roles are critical to the business will help you target your recruitment and retention strategies appropriately. The influencing factors may include high performance, unique or niche roles that may be difficult to replace, or roles that are of importance to a particular project or growth stage of the business. Your future plans for the business may also influence this, for instance if you are looking to take investment or market the business for sale, you may want to retain a stable management team that can be both an attractive feature to an investor/buyer and also help transition the investment / sale. Identifying the key personnel will allow you to target your investment in recruitment and retention efficiently and effectively.
While having a competitive remuneration package is an important factor when seeking to attract and retain talent, there are a wealth of other factors that may motivate an individual, such as their career progression plans, their work/life balance and their work environment. Identifying the factors that motivate key personnel and satisfying them can give you the edge and can be a particularly strong factor in retaining employees where you are not able to offer top-of-market remuneration. We would recommend the use of short surveys and regular review meetings to help you identify motivations and ensure they are satisfied. Empowering employees with a voice in this way can also create respect and engagement, another positive indication for retaining the employee, but that will only be the case where you are seen to take action in response to the results. Slow or no reaction is likely to have the opposite effect and unsettle the employee.
Identify potential reasons for leaving
Once you have recruited the right people, the focus shifts to minimising the risk of them leaving. Keeping staff motivated and focussed so that they remain engaged and productive is key, so looking ahead to the risks that may disrupt that will help you identify where you need to target strategies.
High performing employees will be attractive to others and will likely be approached regularly by recruiters, so remaining competitive as an employer is key. Remuneration will likely be a factor, so it will be important to regularly review salary and benefit packages to ensure they are at least market-standard, or if not, that you offer alternatives such as desirable workplace features, remote working options, and family-friendly policies. Also consider whether you can add variable elements to remuneration such as bonuses that may motivate an employee not to leave during the bonus year if they would forfeit a bonus as a result. Having a structured development programme tailored to the individual is often perceived by the employee as an investment in them which, in turn, breeds loyalty and so is also a worthwhile investment.
Change in circumstances:
Employees’ personal circumstances can change in a variety of ways that mean their role with you may no longer be as attractive to them as it once was, but there are usually measures you can put in place to limit the chances of this triggering an exit. Generous family-friendly policies are likely to be valued by key employees with families or caring responsibilities who may otherwise go off in search of those packages with other employers. In recent times we have also seen that the lockdowns and other impacts of the COVID-19 Pandemic have caused many people to revaluate their living arrangements, with some looking to move out of town or closer to family. This could mean a move away from your workplace to somewhere that would not be a convenient commute. Introducing flexible, remote and hybrid working arrangements is likely to mean that you will retain these employees even if they won’t be physically present in the workplace every day, but you will need to consider how your record the arrangements in order to ensure that you retain the required discretion to call them into the workplace when required and discharge your health and safety obligations, so clear terms in contracts of employment and policies are recommended.
A difficulty in the relationship between colleagues can cause resentments that may ultimately escalate to trigger an exit. Having clear policies in place addressing issues like discrimination, dignity, and respect can assist in creating a culture in which those issues are less likely to occur and if you put in place a clear and accessible grievance procedure to provide a mechanism for employee concerns to be considered, you reduce the chances of things escalating. At a senior level, investing in the relationships between key personnel such as social events and away days is also likely to pay off, as will improving employee resilience through providing access to an employee assistance programme or management and resilience training.
Carrot v Stick
Carrot and stick motivators have their place, but which approach works best in the context of employee retention? Commonly, senior employees will be subject to lengthy notice periods and restrictions on their post-termination activities which are obviously potentially negative consequences if they seek to leave as they could be effectively frozen out of the market for a period. In our view this approach is not likely to be very productive in terms of retention. If an employee has made the decision to leave, they are likely to be prepared to either wait out their notice period or employ tactics to avoid it such as becoming unproductive or even worse, disruptive in the workplace or simply refusing to turn up to work. Post-termination restrictions serve a useful purpose in limiting an employee’s ability to divert business or employees after they leave employment (and we would recommend them for senior employees for that reason) but they are unlikely to be an effective retention tool. While such restrictions may cause potential leavers to think twice, if that is the only thing keeping them in the business, it’s not likely they are going to be particularly engaged going forward.
In our experience rewarding the positive behaviour of remaining in employment is the more effective retention tactic. Traditional rewards like a competitive salary, career progression, and training and development opportunities are important, but you can also get creative by putting place a retention bonus that is paid out after a defined period which could be set by reference to a particular important project or a sensitive growth period for the business, or a share option scheme that may offer a strong financial incentive not to leave and also generate loyalty by making the employee feel more (literally) invested in the business.
If you require further assistance on the matter, please contact our Employment law solicitors.