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updated 5:50 PM CDT, Aug 11, 2019
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Engaging talent: Why retention and remuneration is one of the top issues in HR

Engaging talent: Why retention and remuneration is one of the top issues in HR

By Mark Bussin and Rozanne Spavins who can be contacted at

www.21century.co.za &

One of the characteristics of the knowledge economy is the high level of mobility of knowledge workers. This cost, in both financial and non-financial terms, is high. Staff turnover is expensive and finding replacement skills can be a difficult task. It is interesting that according to the Salary Surveys, the salaries for HR professionals responsible for talent retention were rising faster than the salaries in most jobs. The age of knowledge worker is here and with an individual skill base, workers have the intellectual clout to move them to whatever attractive offer that may arise. What challenge then does this leave for the employer?

The definition of "Retain" has two meanings: "to hold or keep in possession" and "to engage the services of". The traditional focus in many HR practices has been to hold or keep rather than to engage a service. High-value employees and hot skills want to be "engaged" and not "kept". Organisations need to shift their thinking and focus what they need to do to help these employees become fully engaged in the organisation. Perhaps the focus then is to engage people for as long as possible, rather than trying to retain them for as long as possible. An innovative retention strategy and an accompanying reward strategy will certainly aid this process.

Part of engaging knowledge workers means providing an environment where skills transferal and knowledge sharing is easily facilitated. After a company brings new employees in the door and has filled all of its hot-skills positions, it still can’t rest: the reality is that someone is going to leave relatively soon. What should be done is to immediately transfer that knowledge – almost the second new employees walk through the door.

So the question then, is what are the remuneration implications for retention strategies? A shift in the organisation mindset may involve some of the following points:

# Pay for contribution rather than job duty adherence or service.

Reward required competence development and application.

# Rely on performance-related pay as a means of conveying messages about organisation values, critical success factors and how people are expected to contribute.

# Include both input (competence) and output (results) in performance reviews.

# Introduce robust broadband pay structures where lateral development, and acquisition and use of competence are rewarded.

# Develop team reward systems which support flexible work practices, multiskilling and team work.

# Introduce gainsharing, profit sharing or any bonus scheme that shares the added value of employee efforts.

# Communicate reward innovations to employees.

# Involve, as far as practical, employees in the design of reward processes.

# Provide training to everyone on the application and implications of the reward policies and practices.

Remuneration based retention strategies are critical, but simply throwing money at the problem will not make retention issues go away in the long term. The focus in retention strategies has shifted from a one-size-fits-all to customisation. Each employee is motivated by different factors depending on their age, status, career goals etc. Therefore, retention strategies must be targeted to individual employees or groups of employees. For example, the table below sets out remuneration preferences based on age group, according to our research:

 

 

18 – 29

30 – 44

45 – 54

55 or older

Base salary

Variable pay

Shares

Medical Aid

Retirement funding

Deferred compensation

1

2

3

5

6

4

2

4

5

1

6

3

1

4

6

5

3

2

2

6

5

3

1

4

 

 

In short, why retention is such an issue for HR is that retaining valued workers helps keep companies successful. When star performers leave, they take their knowledge with them. Organisations need to learn how to competently engage talent to ensure the continual transfer and encoding of knowledge, so that in the event of a knowledge worker leaving, their knowledge is retained by the organisation. Through successful engagement with knowledge employees, a high level of commitment can be achieved during their tenure at the organisation, thus maximizing the return to the employer as well as the employee.

 

Gary Watkins

Gary Watkins

Managing Director

BA LLB

C: +27 (0)82 416 7712

T: +27 (0)10 035 4185 (Office)

F: +27 (0)86 689 7862

Website: www.workinfo.com
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