While an employee who is an average performer rarely considers leaving his or her job during a difficult economic period, high-potential employees do, according to research by Sirota Survey Intelligence.
The firm has found that the actions taken by employers during a recession can start a process that unintentionally devalues employees (by seeing them as costs to be controlled, rather than assets to be valued). For example, many companies will centralize decision-making, control information, reduce entrepreneurial risk-taking, and reduce (or eliminate) discretionary rewards--and this makes it more likely that high performers will defect.
“Programs for high-potential employees often seek to involve them in the strategic decision-making, challenge their abilities, develop/advance them quickly, and recognize/reward them generously,” said Douglas Klein, President of Sirota. “The business choices many companies make when responding to a recession can frustrate all of those goals.”
Sirota has come up with 8 steps employers should take to retain high-potential employees without alienating the rest of the workforce.
- Don't stop focusing on their career development needs. Even in a tough economy, high-potential employees have other opportunities. Consider developing a retention strategy for these employees that includes a strong career development focus. Give them special projects and make sure they are taking advantage of training and development opportunities.
- Re-emphasize corporate values and ethics. “These employees want to believe that the company stands for something special, distinctive” Klein said. “During difficult periods, savvy employees pay close attention to their leaders to see whether the business' short-term needs are balanced against longer-term company and people values.”
- Be transparent. These employees are the future leaders of the company, so share as much information as possible with them, for example by inviting them to select briefings with top management. This kind of behavior shows trust. The alternative is leaving them feeling uninvolved and susceptible to outside offers.
- Continue to reinforce their need for camaraderie. “High-potential employees (HIPOs) enjoy being recognized, and want to work with other HIPOs,” Klein said. “A major concern of these employees is whether or not the company is able to both attract and retain top talent, so working with like-minded employees sharpens that perception.”
- Do more than just cut costs. High performers are keenly aware of organizational inefficiencies and poor strategy execution; a bad economy only exacerbates these feelings. Cutting costs is a tactic; HIPO's want to be assured that the leadership is focusing on the longer-term.
- Involve them in the solutions. “HIPO's want to make a difference,” Klein said. “They are seeking ‘partnership' situations where they can contribute. Put them in charge of ad hoc teams focused on addressing some of the more difficult problems facing the company.”
- Show them they are valued. “With economic rewards often curtailed, it becomes even more important for these employees to feel valued,” Klein said. “Failure to treat them as such will create a resentment that can contribute to their leaving.”
- Address compensation concerns. While these HIPO's do understand what difficult times mean, they also want to ensure that it is still in their interests to stay. Companies need to think creatively about what these employees consider rewarding (e.g., deferred rewards, accelerated advancement opportunities), and dialog with them on these issues.