How to retain your Talented employees?


Dr. A Jagan Mohan Reddy
Associate Professor (HR) & Placement Coordinator
Institute of Public Enterprise
Osmania University Campus, Hyderabad-500 007


The new age economy, with its attendant paradigm shifts in relation to the human capital, in terms of its acquisition, utilization, development and retention, has placed a heavy demand on today's HR professional. Today HR is expected to comprehend, conceptualize, innovate, implement and sustain relevant strategies and contribute effectively towards giving the company its winning edge. With a dynamically changing and volatile demand-supply equation, especially against erratic attrition trends and cutthroat competition no longer restricted to local or regional boundaries, a need for strategizing and putting in place a robust mechanism for attracting and retaining top talent becomes vital for the company's very survival and growth.

The new age workforce comprises mostly of knowledge workers, who are techno-savvy, aware of market realities, are materially focused and have higher propensity to switch jobs. They prefer to experiment and explore new opportunities, are high risk takers with higher aspirations and expectations and generally have a totally different mind-set about job and careers. In an organization employees could be broadly classified into four categories: strugglers and under performers. This constitutes about 1/5th of total human capital at our disposal and these people obviously qualify to be the first candidates for the pink slip.

The other two segments comprise of the 'solid performers' and the 'stars' who are at the higher end of the performance continuum. The former may be relatively lower in their potential as compared with the latter, but contribute immensely to the company's overall performance. We could call this as the 'talent' segment. This is the segment we do not want to lose. We've got to protect this group from the pull of all non-retentive forces and that needs effective retention strategies that have to be kicked into high gear.

Before we discuss the various retention strategies/plans that could be used for retaining the talented employee, lets' quickly look at the factors that have a bearing on talent acquisition and retention.

Factors impacting Talent Acquisition and Retention

The company's brand image crowns the list of the priorities for the job seeker, other important considerations being; the pay package and other pecuniary benefits, the class and quality of people that work in the company, the challenges of the job and attractive of the position and designation, the opportunities for career growth and professional development and the kind of technology, he would be exposed to.

From the company's perspective, its brand equity, philosophy, vision, mission, culture, values and ecology have a direct bearing on talent attraction and retention. Other company-related attributes that impact employee retention include high demand on performance, need for competencies, broader, deeper and diverse job expectations, need for re-skilling and re-deployment, career offerings and growth prospects, goal and role clarity, policies and processes and organizational communication.

Why to manage talent

Skills, knowledge and talents are distinct elements of a person's performance. The distinction among the them is that skills and knowledge can easily be taught, whereas talents cannot. Further, one must never confuse talents with skills and knowledge.

Skills are the capabilities that can be transferred from one person to another. For accountants arithmetic is a skill. Knowledge is of two types: factual – things you know, and experimental – understandings you have picked up along the way. Ask a great accountant when he smiles and he will tell you 'when the books balance'.

A love of precision is not a skill, nor is it knowledge. It is a talent. If one doesn't possess he will never excel as an accountant. So if someone doesn't have this talent as part of his filter, there is very little a manager can do to inject it.

The recipe of success for any knowledge economy organization hinges on its ability to leverage human capital, so as to deliver business results. Employee development and retention plays a pivotal role in their growth. Hence, managing talent in the LPG era, where cutting edge being provided by HR, has assumed added importance.

It is slowly drawing on the minds of HR professional that it is easier to get good people but it is very difficult to retain them. Then the next question arises as to what are the challenges for HR in this regard.

What are the challenges that HR professionals or top management face in managing talent. First quite often in their bid to attract talent HR oversells the organization to the new recruit. It is easy to recruit good talent  but very difficult to retain them especially if the foundation of the relationship has been based on misrepresentation of the truth. The new recruitee feels cheated, and thus sowing the seeds of self-centeredness.

The next challenge for both HR and the employee is to ensure that there is clarity in the communication of roles and responsibilities. However, quite often roles are defined but not the performance parameters. Without proper techniques and clearly defined parameters, measuring performance will remain subjective, often based on likes and dislikes of the seniors measuring the performance.

Finally, having ill-structured compensation packets. For instance, an organization matching the new recruits last drawn salary in the previous organization which results in two colleagues in the same grade, performing similar job drawing widly, disproportionate salaries.

Not withstanding the above listed and other challenges it's everybody's knowledge that in the knowledge economy an organizations ability to attract and retain talent is sine-quo-non for success. We are all aware that while it is easier to get good people it is very difficult to retain them. So the retention strategies have to be viewed holistically against the total systemic framework of "talent"  the "company" and the 'environment'. Attrition and retention should be seen as reciprocal phenomena, which have an inverse relationship with each other. Recruitment and needs for downsizing must also be considered in conjunction. An understanding of the inherent considerations of an individual who wishes to join a company and continue to stay, and potential compulsions, which push him away, would help.

Further, retention strategies should be designed such that the retentive forces are maximized and the debilitating forces minimized. Retention strategies should not be orchestrated in isolation but must from part of the overall strategies for strengthening the pull on the talent, which in fact include sourcing, staffing and development strategies in addition.

A robust sourcing strategy is crucial to the exercise since the type of people one selects should not only fit into the job in terms of skill set but should match the company culture in terms of attitude, personality and commitment. An effective selection process ensures the entry of the right kind of people into the organization, with the desired loyalty and sense of belonging that goes a long way in restricting attrition in the long run.

What needs to be done

The first step for individual companies is to develop detailed profiles of the kind of people they are after by analyzing the job profiles, career paths, background and experience of their current high performers. Once we know what we are looking for, there are a number of routes we can take. Some get what they need largely through acquisitions, which is fine if acquisitions are an intrinsic part of corporate strategy. Some "outsource" by picking up people they believe are better trained elsewhere. Those who can attract the best college graduates and excel at early development, "insource", instead.

Secondly, aggressive development strategies complement the retention strategies in a big way. Providing opportunities to the employee for both professional and career growth and giving the due priority to this important activity makes the company's position in the market for talent attractive and compelling. Well –articulated strategies in the context of sourcing and development augument the retention strategies in crafting a powerful employee value proposition that remains central to the problem of attraction and retention of top talent.

Thirdly, the ability to define, develop and deliver a winning employee value proposition should be at the core of all retention strategies particularly for large companies facing challenges from a multitude of smaller companies as employers. The lure of the latter in terms of excitement, flexibility, impact (a big fish in a small pond) reward and even equity ownership has to be countered with a stronger proposition bolstered by the former's magnitude of impact (big fish in a big pool), depth (vast resources to take risks and to support big decisions) and variety (large spectrum of expertise and experience to be shared).

All retention strategies must be built around a compelling, distinctive and exiting employee value propostion. Further, these strategies must cover three distinct yet overlapping domains; cultural, transformational and transactional. So, let us dwell upon the cultural aspects as relevant to the issues under construction.

a. Culture is somewhat like "the operating system" of the organization. It drives the organization and its actions. It guides how employees think, act and feel. It is dynamic and fluid, and it is never static. Some aspects of culture are visible and tangible and others are intangible and unconscious. Some of the most visible expressions include the architecture and décor, the clothing people wear, the organizational processes and structures, and the rituals, symbols and celebrations.

Essentially organizational culture is seen in two broad dimensions. The hard dimensions relate to the functional, technical and control aspects, while the soft aspects deal with inspiration, emotion, energy, enthusiasm, collaboration and camaraderie, openness, sense of belonging, etc. A culture that is open, trusting, nurturing, authentic as well as empowering tends to attract and retain top talent.

b. Transformational strategies
that impact retention in good measure encompass mentoring, coaching, counselling, competency and performance development programs, retraining, re-skilling, re-deployment and job rotation, challenging assignments, job enrichment and above all promotion of a knowledge building and knowledge sharing culture.

c. Transactional innovative, dynamic and competitive compensation strategies, various welfare initiatives, social and community activities, workload balancing, effective work-life integration, reward and recognition, establishment of good communication and feedback network, etc, form the transactional strategies. Anti poaching measures may also find their place in this category. Although technology based defences against an aggressive e-recruiter like various e-security mechanism work for sometime, the real potent measures are inherent in enhanced job satisfaction and strengthened relationships within the organization.

In order to be able to orchestrate and implement effective retention strategies, the first step should be to understand the scope of the retention problem that is unique to one's organization. The target group, which is crucial to the company's operations and success, should be identified and the strategies are directed appropriately. It is a paradox that the companies which invest heavily in recruitment and development and make a good job at that, are prone to more risk of poaching. A sound sensing and tracking system to assess the volume and causes of attrition by performance level could be useful. The ability to identify good performers, who are prone to leave for any job or management related issues and timely intervention to address these issues could be effective.


Creating and delivering a great employee value proposition is clearly the best way to retain the people. This would encompass building and sustaining a compelling brand image with an appealing culture and inspiring values, tailored to the talent segment that one seeks to attract and retain, offering great jobs and career opportunities, building an effective learning framework, investing in work place infrastructure, moving on poor performers, instituting effective reward and recognition programs, putting in place innovative compensation schemes. But most importantly, when the organization is successfully able to convey the message that it cares for employees, retention works best.

Dr. A Jagan Mohan Reddy
Associate Professor (HR) & Placement Coordinator
Institute of Public Enterprise
Osmania University Campus, Hyderabad-500 007

Source: E-mail May 29, 2006


Back to Articles 1-99 / Back to Articles 100-199 / 200 onwards / Faculty Column Main Page


Important Note :
Site Best Viewed in Internet
Explorer in 1024x768 pixels
Browser text size: Medium