Post recession planning: Talent retention and compensation.
October 26, 2009
Excessive executive compensation on Wall Street has been making headline news for well over a year reaching a controversial crescendo with the recently announced caps for seven CEOs by the US administration's compensation regulator. However, those seven giants should not be allowed to dwarf issues that affect the larger business community particularly when it comes to post-recession planning.
One consequence of the severity of the recession has been a surfeit of talent across industries looking for opportunities as few, if any, employers were hiring. That may change sooner than later as this survey by Intuit, a provider of payroll services finds that "that (of) nearly half of small business owners surveyed, 44 percent, are planning to hire new employees within the next 12 months. At the same time, many small business owners believe that benefits are key to attracting new hires but are finding them difficult to afford." Interesting findings of that survey include the fact that family and friends of current employees make for good new hires as well as that long term relationships with employees matter.
The foregoing findings may seem intuitive to most but a counter-intuitive suggestion to retain executives comes from an article in the Wall Street Journal which advances the notion that "the best way to keep them (employees) from leaving is to prepare them to do just that." The article notes that "in tough economic times like these, retention becomes less of a priority for many companies as they focus on more-immediate business concerns. But companies that neglect this issue during a downturn may be in for a nasty surprise just as things start looking up: Historically, there is a significant increase in the number of executives leaving their companies as market conditions improve and more job opportunities open up."
The Journal article suggests "giving executives opportunities to take on greater responsibility, broaden their skills and cultivate a network of relationships with their peers. These are the things that executives we have surveyed consistently say they want most from their jobs." While that may give executives more "marketability" research has apparently shown that "executives intend to stay longest with those companies that offer the greatest opportunities to enhance their employability. On balance, a company will keep more talent by helping its executives grow than it would by denying them these opportunities." An added bonus is that those employees contribute more to the firm while still there.
That much of the above is applicable to hotel companies can be inferred from an example from the industry. The article cites an instance where "a marketing executive with little experience in hotel operations completed a training assignment in the operations division. To help her get up to speed quickly, she was assigned both senior and peer mentors. Moreover, she wasn't the only one who benefited from the experience. During her assignment, she shared some of her marketing knowledge with her colleagues in operations, by suggesting ways to attract more customers."
An article in a similar vein appeared in Forbes magazine as well which concludes, somewhat darkly, by noting that 'retention will be a major concern as we begin to emerge from the darkness. Employees are like elephants: They watch, and they remember. They know how they were treated in the bad times, and how their fallen colleagues were treated, too. They form long-lasting impressions of their employers."
The upshot of it all, in a good sense, is that many commentators are discussing a positively better employment scenario that appears to herald the end of the great recession. Than can only be good for both employees and employers.