How to Retain Key Talent after Bonus Season?
March and April are the lucrative months for employees due to the bonus season. However, this period often causes headaches among the HR due to the large number of resignations after the bonus payout. In order to prevent employees from walking out of the door with the bonus, HR needs to rethink how best to retain especially key talent after the bonus season.
"Applying Remedies to the Diagnosis" – Addressing the Career Aspirations of Key Talent
1. Transform External Entrepreneurship into Internal Startup
Employees in different career stages have different career aspirations; they have different expectation on how company fulfill their needs. For those key talents who have substantial industry experience, the idea of entrepreneurship may naturally take root in minds when they have accumulated professional networks and channels.
To retain these talents, companies need to transform this mindset of entrepreneurship into “start-up from within”. The company provides employees with favorable environment, startup capital and other resources on the one hand, and employees still get paid to reduce the risk of running a startup.
In the high tech sector, Google has applied this “start-up from within” concept which allows engineers to develop projects of interest within “20% of the working time.” In recent years, the rise of internet companies has also led to a talent drain in the financial services industry to start their own business. “Startup from within” will not only achieve the startup dreams of the key talent, but also create new growth engines for the company. Apart from providing resources, the company should also strengthen the interest alignment between the company and the employees as well as deepen delegation so as to achieve a win-win situation.
2. Use Long-term Incentives to Promote "Partnership"
Apart from providing favourable conditions for internal startup, long-term incentive plays a critical role in interest alignment. It enables co-sharing of business outcomes and risks; the plan can include key performance indicators which are linked to project milestones. Long-term incentives can promote the concept of "partnership" and interest alignment, transform employees into owner of the company, which in turn facilitate retention.
"Applying Remedies to the Diagnosis " - Strike a Balance between Supply and Demand for General Employees
As general employees are usually equipped with the “wage earners” attitude, HR needs to fully understand the diverse needs of employees which includes the financial, career and personal aspects.
1. Pay Competitiveness and “Pay for Performance”
In this competitive labor market, a lack of competitive compensation packages or unfair bonus payout can drive an employee away. It is essential for HR to understand the compensation and incentive strategies of their peers and devise proactive retention strategies. Besides, widening performance and pay differentiation and strengthening their linkages can improve staff motivation and thus retention.
2. "Golden Handcuff"
A few years ago, HSBC increased the mortgage percentage of the staff housing loan program to 100%, and lowered the interest rates. This was the most classic case of “golden handcuff ” as employees will have to think twice whether they can afford losing such benefit after resignation. The long-term nature of mortgage loan will substantially increase staff retention in the long run.
Tencent also provided interest-free housing loans and upgraded the maximum loan amount for employees purchasing their first homes in the first tier cities in China. The influence of the company gently penetrates into the daily lives of employees.
3. Charting the Blueprint of Career Path
In addition to meeting the financial needs of employees, the company also needs to address the career needs. For example, the company could provide a clear career blueprint, possible opportunities and career paths to employees so that they know how to develop and advance within the company. During the performance review, HR and line managers can understand employees’ career goals and motivations and work with them to design customized career paths.
4. Striking Work-life Balance
Overtime work has nowadays become a norm rather than exception. This may cause retention issues if the work-life balance is upset. Companies can consider applying flexible working hours and holiday, provide support for staff and families, etc. Actually, companies will benefit from the balance due to a more efficient and productive workforce. JP Morgan implemented the "Pencils Down" initiative to encourage all staff including managing director all the way to analysts to take time off on weekends to reduce work pressure.
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