Money won’t always do the trick for talented employees. In part one of a two-part series, we look at retention strategies that will help managers keep the top performers happy.
The time and cost to a company to replace employees who have resigned can become crippling if the retention rate keeps going in the wrong direction.
Research done by several international research bodies indicates that the cost of having to replace an employee could be as much as 400% of the annual salary if the position requires a highly skilled person. Many companies can also attest to the fact that they lose more competent people to resignations than they do to firing incompetent people.
Renate Scherrer, MD at JvR Consulting Psychologists, says talented people are more mobile, and are more in demand. Therefore, it is important to have a strategy in place to keep them. A company’s retention strategy should be similar to succession planning – it is about the ability to objectively identify the people you want to invest in.
In an article published in the Harvard Business Review, Peter Cappelli, the George W Taylor professor of management studies at the Wharton School in Philadelphia, says the “old goal” of minimising overall employee turnover must change. “It must be about the ability to influence who leaves and when,” wrote Cappelli.
However, retention strategies in South Africa are based to a large degree on a “top-down hierarchical management structure”, says Cobus Oosthuizen, executive director at motivational and mentoring firm LifeXchange.
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22 November 2018