Very timely and thought provoking article: more and more of my clients are looking for alternatives to cash as a retention policy and we’ve used “softer”, more holistic benefits like relocation and language assistance as powerful motivating factors in the past to much success. What I find particularly interesting though, is the notion of engaging the “high potentials” with the acquiring party as it works to define the new organization. Depending on the context of the acquisition, epsecially in cases of divisions going to private environments, this could be a very attractive item for the deal teams to discuss during negotiations.

The above article clearly spells the need of knowing the human resource better at all levels. Its natural and easy to take steps if we know where and what the problem is. At the same time, higher involvement of line managers in strategic planning and decision making should be encouraged to help tailoring of policy and right allocation of budget.

While the article rings true, the hidden gems need not be normal performers. If they are critical, they as well are the key resources, without the fancy titles.

What becomes important is to identify the function of the organization that is stronger, understanding the political dynamics, and the posers versus the performers. Providing clarity to career growth, and the trust in the vision paved are the keys for employee morale.

While money is not a factor, security to employees and visibility to growth drive the retention.

This scenario is very much applicable in the services sector. Something like an IT services company where people are its primary assets, a one-size-fits-all approach will never work. Also, money is not the only motivational factor that helps retain people. There are other softer things that can keep people loyal to the employer and deliver on the ground. The article very well brings out identifying these hidden talents/ contributors and personalized solutions to retain these resources!

My only comment is: managers and directors have to do a better job at knowing the people within their company since people are the biggest resource. What I have learned over my 23-plus years in the Navy is your people will do anything for you if you give the time to know who they are. I know in the corporate world time is a valuable asset and it is hard to get out and meet people but it is vital to organizational effectiveness. While on a ship floating in the middle of the Persian Gulf, I do remember an Admiral showing up at different hours to meet people and it meant the world to everybody on the ship.

I can understand that experience has shown that this kind of “alternative” could be an answer to the problem many companies face during crisis times. It is simple and straight-forward, a very creative way to not lose key-employees to competitors. But I question whether this really would work in practice and ask myself whether big companies are flexible enough to change their retention policies. Usually, top management has a conservative point of view and to make significant changes in policies there should be a great reason for it to do such a thing. I think that many of the top managers would agree that they will see the continuous attention that key players need in the new situation (as the article states) will become a reason to not go for this idea in this prescribed situation.

Therefore, a tailor-made program for companies should be implemented rather than this idea alone, since every company has different needs and employees. I would agree that many of the key-players need tailored incentive programs, both financially and non-financially, but this idea must fit within the company. For example, one company might need an officer that designs, executes, and controls this idea, whereas another company is able to implement these changes by getting a new HR manager. To implement this change, things have to be done differently so in the end the company still would end up losing some people. They then just do not fit because of a change in their job description. In the end a trade-off must be made, but we can agree that giving employees just financial benefits would not do the trick, as the article states neatly.

Interesting—the underlying assumption is that HR and line managers have the ability to execute the distribution of non-financial awards to identified personnel. Company structure usually dictates whether management is empowered to authorize such awards.

I am glad to see the “hidden gems” get attention. They are often underappreciated, not recognized as high potentials, and therefore regarded as dispensable and replaceable. As this article points out, the institutional knowledge and loyalty of the hidden gems often play a vital role in organizations. I have always been an advocate for both the hidden gems and high potentials.

This reading has come just in time when many big companies are facing the challenge of unusually high exodus of key resources. The mantra mentioned here is so logical and obvious that leadership and HR as a team should be able to see through and apply this. Unfortunately though, seems companies are losing some of their most critical resources just because they are not seeing through this ‘mix of financial and non-financial incentive’ holistically to take it to a logical end.

A very thoughtful and innovative approach. In these days when everything is getting disaggregated, dishing out “one size fits all” HR programs proves to be costly, less effective and appreciated, and most importantly, ends up as standard food that no one likes. The heat chart of the probability of an employee leaving is novel.

Until the mid 1950’s it appeared to be generally accepted that human beings did not need motivating but undertook their duties and responsibilities, in return for agreed levels of remuneration, without questioning the orders and instructions of immediate supervisors and managers. Communication, between the most senior management and the workforce, tended to consist of verbal or written instructions which dictated the order and speed of production, the relative importance of orders in the manufacturing processes or, basic procedures for dealing with customers in the service industries.

Most companies were still privately owned and all decisions made at the higher levels; the boss gave the orders and the workers got on with it. There was limited involvement from supervisors and middle management in the decision-making processes other than to ensure that deadlines were met. People were set targets or output levels to achieve. Little or no interest was paid to the needs or conditions of the workforce and this also applied to the general state and replacement of equipment and machinery; the need for good design; the need for quality control of standards in the manufacturing process; the need to provide quality services; or to meeting the demands and schedules of customers.

Then occupational psychologists began to investigate, possibly in concert with the growing interest in the basic principles of management, the reasons why some companies were better led, more efficient, productive and profitable than others, and why some workforces were more committed than others.

According to the occupational psychologists McGregor, Maslow, and Herzberg, people in organizations, singly and in groups, need stability, security and motivational factors to meet their basic needs; and, for human beings to function to the best of their ability they require recognition by managers to fulfill their obligations, and encouragement and opportunities to progress to gain a measure of self-esteem and contribute through a fair system of remuneration.

Maslow further suggested that until the basic human demands for food, shelter and security are met people cannot progress up the ladder of motivational factors, and that is why any civilized society ensures the provision of basic necessities, education, and training, to encourage people to progress. It is only when people are comfortable in their work and surroundings and comfortable with their colleagues and work-load that they give off their best working individually and as part of a team.

Too many managers, at every level, believe people are motivated solely by monetary reward; pay is not the only motivator and paying different rates and bonuses for the same or similar job smacks of secrecy, causes distrust and does not improve performance. That is why managers must learn what motivates people individually and learn to respond accordingly.

I’d be interested in a similar analysis which deals with making sure that you put off the right workers in times of a downturn. We so often lose good people only to wish they had never gone—can we use a converse of the above without risk or is there another way?

With all the attention that is focused on the customer, clients, process, suppliers, and others, the employee is often overlooked. It is worthwhile to see that there is evidence out there that shows the importance of this human-to-human contact and there are nuances out there that go beyond the numbers and look at more than just potential of productivity when evaluating employees. After all, we are all humans.

This method is a good way of fixing the problem temporarily. But it is not a creative or positive way of fixing the problem. I agree that money is not the only reason for leaving. The people who are in the list of probable attrition is going to change from time to time. We need a creative way of solving the problem. Probably creative way of finding the growth opportunities from time to time. The leaders should focus on continuous improvement in the business and organizational structure to create more and more opportunities.

Moreover, providing financial benefits to the employees should be based on clear and transparent strategies so that all employees are treated equally based on their performance and people should have clarity on why another person got benefitted in terms of money and promotion. In short, we should see this problem as the problem pertaining to organizational growth rather than just an attrition issue.

Very timely article. In fact, the companies who resorted to paycuts during the recession are the ones losing their best talent now in the upturn, while their average performers continue to stick on. The companies which invested in employees’ career development and welfare programs during the tough times, are seeing higher retention of their best talents who are also bringing their friends to join the company. It is true, different folks need different strokes; but it is equally important, different times need differentiated responses.

This rings true with my experience in 30+ years of endeavoring to help people perform at their best. Awareness of non-financial currencies is key, identifying rather than guessing at preferences for each one is key, and embedding this in the ongoing culture is key. Leaving lots of people out may be necessary, but it also forgoes potential performance.

To make this work, leaders really need to take the time to learn what motivates their key employees. This is not an “HR thing”, this is a leadership responsibility.

The segmentation of employees makes sense to do long before major changes are imminent. At that time, an outcome is less likely to be influenced by emotions that arise during major change. It should be a normal practice to hold ‘stay interviews’ as opposed to exit interviews. All said and done, since it is not possible to shield employees against the vagaries of constant and unending organisational changes, it is recommended to conciously create a ‘change savvy organisation’, where, through leadership development, OD interventions, training, etcetera, we create an organisation whose members anticipate, particpate, and embrace new ways and changes. This is what we strive to do.

One more non-financial incentive to add to the mix: go out of your way to tell employees that they are valuable to the firm and that you want them to stay. Be specific and reinforce their skillsets, networks, capabilities, etcetera. In times of stress we go out of our way to tell customers thank you. We often neglect the key employees who help get and retain customers.

Thanks for a great article Sabine, Matthew, and Emily. It broadened my scope of what to offer and to whom to offer it.

While changes are taking place, there is uncertainity leading to anxiety among employees. In my experience, some employees—primarily those with low tolerance levels for uncertainity—tend to look for other jobs. On the other hand, few adventurist employees tend to look for growth opportunities in such environment.

The above approach, suggests differential treatment for equally critical staff, i.e. staff in the same level under category “difficulty in replacing this person” as they are placed on different scale, i.e. under “probability of leaving the organization.” It will be interesting to know how employees will feel given the differential treatment in the long term.

The analyses you show are in my view part of the problem, since they focus on the fear of losing. But is that a healthy relationship? Does that not mean that you are making a division between who is expendable and who is not? But such a division in my view destroys the very culture you want to build.

From a sales perspective I understand that one focuses more on the “"don’t lose”-framework, because one will be more successful at selling this. But as we would say in Dutch: aren’t you mopping the floor with the tap wide open?

This article is extremely critical for use by companies in emerging markets in African countries where staff quality retention and quality output sustainability is overridden by internal politics and board governance dominance. Serious chief executives should take note.

During a transition phase—either in the form of mergers and acquisitions or restructuring the organization itself—the dilemma that employees face is about assurance of their authorities and responsibilities, and above all, their own career growth chart in the newly formed organization. Once this is reassured, as rightly quoted in the article, the monetary benefits come secondary. To sail through the transition phase and keep all the sailors intact, an environment of enthusiasm towards the formation and functioning of new organization, as well as a clear definition of authority and responsibility, is the first task to be done.

A good mixture of financial and non-financial incentive plans is fine. But to retain the real and potential talents, it’s also necessary to focus on the overall business environment. Accountability and transparency of applied policy, living with values, being compliant with approved policies and procedures, feeling engaged with the company, honesty and openness of the supervisors will all play a critical role in the retention of key resources.

I think the “difficulty in replacing” analysis is also a valuable input into succession planning.

From my experience as a professional involved in more than 30 M&As in the last 5 years, I personally think that the first step in retaining key employees and managers is understanding that there are 2 main issues: (1) there are key employees in both companies, and employees from the acquiring company could leave as well as employees in the acquired company, (2) every employee and manager can be replaced but we must first retain the knowledge that is in their possession.

Aside that, I think that the criteria of key people includes much more than knowledge (of any kind), therefore each company should create its own list of retention criteria that suits them and conduct an in-depth discussion regarding who is and who isn’t a key employee.

Also, I agree that money is not the name of the game—each individual has his own agenda and motivations, in order to atract someone you need to have a tailor-made proposition, most of the time, each key employee will have a diferent plan from the guy at the next desk.

Sabine, Matt, and Emily: In your work, what differences have you found, if any, in retaining sellers/sales reps? How important are financial retention incentives for this group, in your experience/analysis, relative to those in other job roles?

In this challenging business environment, companies with the strongest strategies on developing and retaining their key talent will have a higher level of success (and profitability). It is important to stay focused on the messages you send your employees—do they feel that their contributions are valued by the company and how are you letting them know? When the business climate (and employment outlook) change, employees who do not feel valued will seek new opportunities.

This article struck a cord with me. We do this everyday at Keyhubs.com, a small start up in Minnesota, USA. We identify key people in any company from trust hubs, key influencers, knowledge hubs, etcetera. We uncover the hidden org chart and help companies be more productive.

Your article just proves what we tell our customers on a daily basis: to first identify the key players in an organization and then make sure that they stay and play the part that they are cut out to play.

This approach is crucial in a world of changing faces! There is a lot more to staff retention than just throwing money around.

Mergers and acquisitions are messy business and they change the lives of everyday people. Everyday people, however, don’t headline the business news.

Only the employees left behind to be assimilated understand the true meaning of a merger. In the initial years, post-merger organizations are never happy places, rarely productive places, and often very difficult places to work. The new employer generally views acquired employees as rogue players, testy and uncooperative; while the acquired employees often feel like outsiders, underappreciated, and abandoned.

As this article wisely addresses, often the everyday people in an organization—long service employees in non-executive positions—possess the information and knowledge about what makes the business successfully work. Post merger, these mid-level employees are frequently and mistakenly overlooked even though they hold many of the most valuable “keys to the kingdom.”