While the "war for talent" debate rattles on ? will it happen or won´t it ? most of the HR profession agrees that retention is an issue all companies need to tackle. Progressive employers realize the true costs of losing good people, and are leading a sea change in their organization's view of retention. Companies such as Philips Electronics, RBC Financial Group and Welch Allyn are providing internal mobility programs, offering flexible work schedules and promoting internal recruiting to keep top talent. They realize a high-level workforce is not something you just recruit, but something you nurture by finding new ways to help existing employees develop their talents and grow into better positions.
The Grass Is Not Always Greener
"The labor markets we operate in are extremely aggressive and competitive," says Jo Pieters, vice president of global recruitment for Philips. "We have to retain our existing talent because once they step outside, there are 100 competitors waiting to get that talent from you, absorb the knowledge from those people, and use it against you."
Philips, which has 161,000 workers in 60 countries, is an example of the way that companies will have to act to keep their top performers.
In the past, Pieters says, "Employees here used to say that it was easier to find a job at another company than to find a job at another part of Philips." Over the last four years, however, Philips has developed an aggressive internal hiring and mobility program, facilitated by their recruiting technology, which has resulted in a substantial percent of new vacancies being filled from inside the company.
Philips uses Peopleclick RMSTM (Recruitment Management System) to publish every position above blue-collar worker on its internal Career Center site - and mandates the positions must be posted there first unless there is a clear business reason to do otherwise. Even so, Pieters says the Human Resources department has to continually remind employees and hiring managers to go to the online Career Center to find a new challenge or internal talent.
"Managers used to think that the people outside of Philips were generally better than their own people," Pieters says. "It was the grass-is-greener syndrome. We had to let them know about the huge internal talent pool."
Thissuccess also comes from encouraging managers to mentor their staff members´ careers. Philips managers are now required to have a formal discussion with their immediate charges once a year about their short- and long-term career plans. The managers encourage employees to go onto the internal career site, look for positions that interest them and seek out the training necessary for them to qualify for those positions.
The company also acknowledges the touchy political issues that are involved in promoting internal mobility, such as managers being understandably reluctant to let their best performers leave. In the company´s new code of conduct, hiring managers are explicitly prevented from blocking an employee from finding a new job elsewhere in the company. Just as importantly, managers´ performance bonuses are now based partly on how well they develop subordinates.
Managers should be encouraged to not only allow subordinates to move on - managers should be measured on this, and rewarded when subordinates go to other positions that benefit the company as a whole.
Bottom Line Impact
Top companies know that an integrated internal mobility and recruiting program directly benefits the bottom line. In one study, consulting firm Watson Wyatt Worldwide found that companies with the best human capital management practices (of which recruiting and retention excellence make up 14.6 percent) develop twice as much shareholder value as their average competitor.
What´s more, the HR Index notes that the companies in the top 10 percent of human resources management quality fill 61.46 percent of jobs with existing workers. The bottom 10 percent fill only 34.9 percent from within.
Plenty of research shows that employees today are dissatisfied and looking for new opportunities. In a recent online survey, 44 percent of senior HR executives predicted that as many as half of their workers will start looking for new jobs once the economy improves.
"Savvy organizations understand that if competitors can recruit your top performers, they not only gain tremendously in terms of talent, they also damage you significantly," says Allan Schweyer, executive director at the Human Capital Institute.
Implementing a successful internal mobility strategy requires forethought, ingenuityand integration with a solid recruiting program. Many companies post open jobs on a career-focused intranet site. Innovative organizations are taking that idea a step further and posting detailed information about every position that is available at the company, open or not, on both internal and external sites. Employees can peruse these listings to help develop their career plans, and subsequently get training or seek out assignments that will qualify them for the positions they want to grow into.
One Company, Many Careers
RBC Financial Group, Canada's largest bank and one of North America's leading diversified financial services companies, employs over 60,000 people and has realized that a strong internal mobility program also results in more diverse work groups.
A significant number of RBC employees take advantage of the internal mobility program and pursue other career opportunities within the company. In fact, RBC moves more candidates internally than the company recruits externally.
Internal mobility programs of the past were regional and functional based, however, technology has helped change that. Today, RBC uses Peopleclick RMS to post all jobs on its internal career site so employees, regardless of function or region, can view all available jobs and job paths. This promotes the idea of one company, many careers.
Like recruiting, internal mobility requires a company-wide strategy that addresses subtle issues. Currently, RBC is in the throes of moving the company´s internal mobility program to the next level: allowing the company´s recruiters to proactively recruit internal employees.
RBC knows there are some change management issues associated with this new way of moving talent, so the recruitment department coaches and guides managers to understand the organizational benefits of greater accessibility to the company´s talent. Employees who have the opportunity to learn and grow within the organization are more inclined to stay.
How To Keep The Best
Schweyer says companies need to develop a three-prong philosophy to keep their best workers from bolting:
- Identify your critical people, which include both today's A players and those with strong potential. Top performers find it easy to leave a job while most underperforming employees stay because they have no choice. This means organizations will be left with a disengaged and poorly performing workforce while others nurture top performers, develop the mid-level and release poor performers.
- Allow them to fulfill their career aspirations inside your organization. Use recruiting resources already in place, such as an internal career site, to publish all job opportunities so employees can register interest in another position, department or region.
- Don't put up false barriers. Understand that what might be called "poaching", when a manager recruits top talent from a colleague, is a sign of a healthy internal employment market.
The Aging Worker
Human Resources departments should look closely at whether their policies hinder them from maximizing internal talent. Many companies, for instance, lose retiring workers - not just to retirement - but to other employers. This is because retirement plans often require employees to officially retire to get their full benefits, and then they find part-time work elsewhere.
Companies should change these policies and communicate the opportunities that retiring workers have for temporary or part-time positions. The experience and skill these retiring employees possess may be so difficult to replace that employers may want to consider changing policies to give them full benefits for part-time work as an inducement to continue working in some capacity.
For example, Welch Allyn Inc. a leading manufacturer of medical diagnostic devices, has implemented a policy enabling eligible, retirement-aged employees to transition to retirement by working part-time, at least 1,040 hours/year for up to 3 years with full benefits. In addition to standard part-time schedules, this provides employees seasonal adjustments in work schedules.
"The population of prime age workers, those from 25-54, is not growing and the retirement-ready group is increasing," says Jack Boyce, director of staffing solutions for Welch Allyn. "Our industry is very specialized and the older worker population has unique knowledge that we want to retain and share with younger workers. This transition retirement benefit provides flexibility for potential retirees and retains key knowledge and experience while helping to develop the next level."
Another underused talent pool is the contingent or contract workforce. On some occasions, companies have tried to move a successful temporary employee to a full-timeposition only to have them fail a screening or drug test. An easy way to avoid this issue is to require the staffing company to provide this kind of due diligence from the start. Companies can achieve more flexibility - and avoid lawsuits -- by having temporary employees undergo the same assessment as full-timeworkers.
With employee dissatisfaction on the rise and the cost of losing top performers increasing, companies need to make sure they are giving their own employees recruiting priority to maintain a competitive edge. If they don´t, another company will.
Kathy Barton is senior vice president of marketing and product management for Peopleclick, Inc., a leading total workforce acquisition provider for global companies.
