The war for talent: How to keep your best employees

It’s always an awkward situation, for everyone concerned: a valued employee tenders their resignation, citing the offer of new employment elsewhere. In a desperate attempt to retain the employee, their employer asks what their new package comprises of and then attempts to match or exceed it with a counteroffer.

Occasionally, that awkward conversation turns into a bidding war between the existing and prospective employers. Not only can this have costly implications for the existing employer, but the outcome is rarely successful, whichever way it turns.

By the time the employee has reached the stage of having a genuine offer of employment to consider, their head has been turned and they are, metaphorically at least, already half-way out of the door.

If they do decide to stay, the relationship has often been soured by the experience and colleagues are left questioning the employee’s loyalty and commitment. There can also be resulting friction within a team, if the wayward employee now receives a higher salary than their often more loyal colleagues.

All employers should aim to avoid the situation of a bidding war arising in the first place. In the current war for talent, competition for the relevant skills and experience is at an all-time high.

It is far less costly to retain talent than to have to recruit, induct and train new staff, so employers should be focusing on what it takes to keep their existing workforce happy and engaged, rather than to throw cash at lost causes. Clearly, remuneration will be important to maintaining a satisfied workforce, especially given the rapidly rising cost of living.

Employers would be wise to review benefits packages and benchmark salaries, to ensure that their offering remains competitive, and to consider implementing bonuses and other incentive schemes where these are not already in place.

It’s also worth reviewing existing bonus schemes to ensure they are still in line with the market; even small changes to elements such as the payment date or payments in instalments may make a difference to retention. However, new employers will often agree to signing on bonuses to compensate employees for the loss of a bonus.

It’s not (always) about the money…

There are of course other reasons why people leave their jobs, not just in pursuance of greater financial compensation, and often these reasons can be addressed in a relatively cost-effective way.

Feeling underappreciated and undervalued is a significant reason for job dissatisfaction, compounded at times by a negative, sometimes toxic, working environment. On the other hand, a supportive and respectful culture, clear and open lines of communication, sensitive management, and friendly relationships with team members can be critical to an individual’s decision to remain with their current employer.

Employers should invest in team-building and social events to foster a more cohesive culture, and managers should model respectful and considerate behaviors in their interactions with staff.

Open dialogue should be encouraged, as well as regular opportunities for employees to give and receive feedback. Sometimes, simply saying thank you and recognizing a staff member’s contribution can be incredibly valuable.

Employees also have long memories when it comes to being supported during challenging times. Organizations who offered support to staff facing difficulties during the pandemic have often secured the loyalty of their staff, even when tempted by generous packages elsewhere. In a similar vein, employers should now be considering how they can support staff during the current cost of living crisis.

Employees also value progressive policies that aim to support staff in times of personal need, such as those experiencing the menopause or fertility treatment, or those going through a divorce or bereavement.

Individuals often leave jobs when they feel under-stimulated and desire a new challenge. They also look elsewhere when they lack a clear path for career development and cannot envisage a future in the organization. Again, open communication and regular dialogue with staff are helpful for managers to understand what motivates and engages their staff, and how their career aspirations may be met by the organization.

Employees often place great value on opportunities for training and career development, including additional qualifications, mentoring, secondments, greater responsibility and on-the-job training.

The need for flexibility

Many departing employees cite lack of flexibility and unsustainable working hours. The pandemic has changed the priorities of many of the working population, who now desire greater flexibility in how they organize their day, and more time to spend with family and friends and pursuing outside interests. Many employers have addressed this seismic change by implementing remote or hybrid working arrangements, but for some employees these arrangements do not go far enough.

It is not simply a case of having a flexible working policy, but for flexible working to be actively championed, with senior leadership providing successful examples of flexible working in practice. Part-time workers need to be advocated, not simply tolerated, with equal opportunities for career advancement. Clearly, employers need to identify and address unsustainable working cultures which exact long working hours and high levels of stress.  Employees also leave jobs where working hours are inconsistent, often preferring more stable working arrangements.

Ultimately, an organization’s culture is often the most significant factor in retaining key talent. Employers often articulate their culture as diverse, inclusive and progressive, but many struggle to evidence this.

Employees leave organizations where they do not feel genuinely included; where they feel invisible; and where they cannot relate to senior management; and where their values are not aligned with those of business, especially in relation to environmental and social issues.

To retain staff in the current climate, employers need to make effective inroads into creating a genuinely diverse and inclusive culture, rather than simply paying lip service to current trends and participating in high profile initiatives. It is your staff who live and breathe your culture every day, and they will vote with their feet if that culture is found to be lacking.

As the war for talent intensifies, don’t find yourself in an awkward bidding war for an exiting employee. Take steps now to engage with your workforce and find out what motivates them and engenders their loyalty and commitment.

Encourage open channels of communication, invest in the development of your staff, and foster a supportive, flexible, inclusive and diverse culture. This will be critical not only to retaining existing talent, but also in attracting new talent; ultimately determining which organizations triumph.