Face it; we have all taken top performers for granted at times. It does not mean you are inconsiderate; it means you are human. However, the post-pandemic corporate migration I have predicted is now upon us. Work-from-home (WFH), flexible work arrangements, and virtual solutions are shifting the market for top talent. A qualified CPA can efficiently work for a firm in Wyoming while living on her boat in Florida. For many jobs, location is no longer the barrier as in the past. A recent survey revealed that 25% of employees are considering an employment change. Yes, that includes your best people.
[Golden handcuffs (1976) are compensation and benefits that encourage highly compensated employees to remain within a company instead of moving to the next company. Golden handcuffs are frequently used for jobs that require rare and specialized skills or in a "tight labor market," where jobs are more common than workers. In any case, although they are costly, they are usually less expensive than the cost to replace a particular employee.]
Many leaders are about to have a rude awakening as crucial team members announce a move to another opportunity. You and your leadership team must develop a strategy to mitigate the migration threat for your business. Having a plan alone will not stop the impact on your business; however, it will provide you with some action steps to reduce the cost of losing and replacing critical members of your team.
Following are some questions to consider. What is the financial impact of losing Mary (top sales representative)? How long will it take to replace Edward (operations manager)? How many months will it take for the next candidate to become proficient? What happens if the subsequent two key replacements do not work out? One-fourth of your crucial team is at risk of a changing employment market. Make no mistake; other companies are hunting for your best people now. As this trend builds momentum (we are beginning), pressure will intensify to keep the talent you depend on for success. You cannot rely on hope alone. What can you do about it?
First, make sure your key people know how important and appreciated they are to you and the team. All humans need to feel appreciated. Everyone wants to feel important. This emotion is the golden handcuff that leaders often neglect. It is in your power to make people feel the positive energy about being on your team.
The next golden handcuff is long-term learning and development. Supporting the pursuit of and paying for degrees and advanced education is a powerful retention tool. I am working with an intelligent executive who recently enrolled his senior leadership team in my fifteen-month advanced leadership development program. When the training challenges participants to become better in their chosen field, it is less likely that another job offer will seduce them from his team. His key people are likely to remain in a role that makes them better for the future.
Let us pause for a moment. Golden handcuffs are not for all employees. Typically, they are for the following people on your team:
We need to pause here a moment. Making additional benefits and opportunities to all employees is not a golden handcuff. It is your job to make your crucial talent feel like the exception on your team. You must make them feel special. The counter-argument is that others will feel left out. Ignore this thinking. Special treatment is for top performers. Not all employees deserve special treatment. You can dilute the impact of the benefit by including mediocre or poor performers. It backfires when top performers feel treated like others on your team. Ignore the risk mongers (typically from human resources or legal) and stand firm on your decision to dissect the benefits for your team. The risk is legitimate yet minimal, and the reward is great.
Following is a list of other golden handcuffs. Without a deeper understanding of your business, I am not endorsing any of these for your company. A comprehensive strategy must accompany the golden handcuffs you select to employ. These are merely to give you ideas to consider what will work best for your team.
One of the most effective golden handcuffs mentioned above is the milestone bonus. In other words, when an employee reaches certain milestones in the future, they are compensated for the achievement. These need to be thought out to ensure they achieve the impact you desire. I recommend a tiered approach that reaches as far into the future as makes sense. When employees see realistic milestones in their future, it is more challenging to get lured away. Be assured; if they are looking to make the jump from your team, other innovative companies may be offering them something similar to entice them to leap.
Too many companies keep succession plans in the dark. They are afraid to make a long-term commitment to key members. This practice is myopic and fool-hearty. They will not commit to top-performers yet expect top performers to stay.
Most importantly, it would help if you had a talent retention strategy. Just like any process in your business, you must be deliberate about what you do. Leaving talent management up to chance makes you vulnerable to an aggressive market. The pandemic has made people reconsider current jobs, and WFH has dislodged long-term employees from the grip you had before. Employees are looking for the next stage in a career. You must determine if the next phase will be with your company.