RETAINING TALENTS TODAY AND TOMORROW Author 1 Author 2 Email Mobile` Theme Abstra t: In this continuousl& changing contem4orar&

econom&, com4anies ha5e to be able to antici4ate technological inno5ations and to com4ete 6ith other com4anies 6orld6ide. "his need makes im4ortant a com4an&7s abilit& to e5ol5e through its em4lo&ees7 learning and through continuous de5elo4ment. Securing and retaining skilled em4lo&ees 4la&s an im4ortant role in this 4rocess, because em4lo&ees7 kno6ledge and skills are central to com4anies7 abilit& to be economicall& com4etiti5e. %& increasing em4lo&ees7 engagement le5els, organi8ations can e94ect an increase in 4erformance of u4 to /. 4ercentile 4oints and an (2: reduction in em4lo&ees7 4robabilit& of de4arture. "he highl& engaged out4erform the a5erage b& t6o deciles and are dramaticall& less likel& to lea5e the organi8ation. #isionar& C ;s can take acti5e ste4s to 4romote to4 4erformer retention b&< +. =ro5iding Career Ad5ancement ;44ortunities, /. Im4ro5ing ngagement "o Dri5e =roducti5it& and 0. %uilding A =erformance,;riented Culture. A cohesi5e HR and talent management infrastructure is a ke& re>uirement that must not be o5erlooked. ffecti5e e9ecution comes do6n to integration of dis4arate 4rocesses, s&stems, and data. And as our research clearl& indicates, integration 4ro5ides numerous direct business benefits, least of 6hich is to retain &our to4 4erformers so that &ou can effecti5el& e9ecute &our strateg& and gro6 &our business. ?ith trends in com4ensation 4lanning changing as an organi8ation changes its goals and 4riorities, organi8ations 6ith sta&ing 4o6er re>uire a fle9ible, scalable, automated solution in order to retain to4 talent and re6ard to4 4erformers. ?hen an organi8ation can do this effecti5el& and efficientl&, to4 em4lo&ees 6in and so does the organi8ation. !e"#or$s: m4lo&ee Retention, ngagement, Com4ensation, ;44ortunities. Em%lo"ee Rete&tio& "he contem4orar& global economic en5ironment has changed drasticall& and continues to do so. Social de5elo4ments such as continuing globali8ation, technological inno5ation, and gro6ing global com4etition 4lace 4ressure on com4anies and em4hasi8e their need to maintain their com4etiti5e edge @%urke and Ag /..3B, at least in 4art through maintaining the skills of their em4lo&ees. Com4anies ha5e to be able to antici4ate technological inno5ation and be able to com4ete 6ith other com4anies 6orld6ide. "his need makes im4ortant a com4an&7s abilit& to e5ol5e through the continuous learning and de5elo4ment of the em4lo&ees. Ha5ing and retaining skilled em4lo&ees 4la&s an im4ortant role in this 4rocess, because em4lo&ees7 kno6ledge and skills ha5e become the ke& for com4anies to be economicall& com4etiti5e @Hiltro4 +)))B. "herefore, it is im4ortant that em4lo&ers gi5e em4lo&ees the o44ortunit& to de5elo4 and learn @Arnold /..1C %ernsen et al. /..)C Herman /..1B such that the 6orkers maintain their ca4acities as effecti5e em4lo&ees, resist redundanc&, and are retained b& their com4anies. %e&ond these economic 4ressures, com4anies also face some disturbing demogra4hic changes. "he a5erage age of em4lo&ees in ?estern countries is increasing constantl&. In addition, the 6orkers of the so called bab& boom generation are graduall& retiring @%urke and Ag /..3C $rank et al. /..-B. ?ith the retirement of this generation is a significant loss of skills and other ca4acities 6hich are not being easil& re4laced b& sim4l& hiring ne6 em4lo&ees. "he ending of the careers of the bab& boom generation means that com4anies lose com4etence @i.e. kno6ledge, and skillsB, all of 6hich are essential in the current economic en5ironment in 6hich com4anies ha5e to com4ete @Hiltro4 +)))B. : Mr. I. Yabesh Abraham Durairaj, Research Scholar, School of Management, C. Abdul Hakeem College of ngg. ! "ech., #ellore. : Mr. M. Sriram, $irst Year M%A, School of Management, C. Abdul Hakeem College of ngg. ! "ech., #ellore. : &abesh.abraham'gmail.com, sriram().murali'gmail.com : *)+,)(-..)//0/, *)+,))-.)1.2+3 : Human Resource Management

Com4anies e94ect that the 4ro4ortional rise in the ageing 4o4ulation 6ill lead to a global com4etition for the Dbest7 em4lo&ees. "his Dcom4etition7 6ill be the most intense in the search for Chief 9ecuti5e ;fficers @C ;B @Conner /...C Har5e& and Riche& /..+B. C ;s are considered b& some to be the most im4ortant assets of a com4an&. "he fact that the majorit& of the current C ;s belong to the bab& boom generation means that a shortage in the near future is highl& likel&. Com4anies 6ith 4olicies that are future oriented and strategic might be a6are of this 4roblem and can take action to address it. $or instance, the& ma& de5elo4 4ractices to identif&, select, de5elo4, and retain 4romising em4lo&ees in order to ensure the 4resence of necessar& skilled 6orkers 6ho can secure the >ualit& and >uantit& of the goods or ser5ices the& 4ro5ide, and 6ho can maintain their com4etiti5e ad5antage. "hese com4anies ma& also focus on em4lo&ees 6ith high 4otential 6ho might ha5e the abilit& to take on a higher @e9ecuti5eB function in the future @Dries and =e4ermans /..(C =e4ermans et al. /..0B. "he increasing global com4etition for the Dbest7 em4lo&ees brought about b& the shortfall in ne6 6orkforce entrants in man& ad5anced industrial economies makes essential com4anies7 abilit& to ensure that their em4lo&ees 6ill kee4 on 6orking for them in order to maintain their com4etiti5e ad5antage. Ho6e5er, a large, and 4erha4s gro6ing, number of em4lo&ees no6ada&s do not 6ant a traditional career 6ithin one com4an& @%urke and Ag /..3B. Conse>uentl&, the& are less lo&al and more o44ortunistic than 6orkers in the 4ast @%urke and Ag /..3C Hiltro4 +)))B. According to numbers 4ro5ided b& SD?or9, a large %elgian human resource and 4a&roll com4an&, in /..2 there 6as an em4lo&ee turno5er rate of a44ro9imatel& +2.-3: in %elgium. $or em4lo&ees &ounger than /1 &ears, the em4lo&ee turno5er rate 6as 0): @SD ?or9 /..(B. "his statistic illustrates the fact that the em4lo&ees of the Dne67 generation at 6ork do not ha5eE6ant a traditional career 6ithin the same com4an& to the same e9tent as their older colleagues, and 4ossibl& ha5e a greater choice in 4ursuing careers across com4anies. It follo6s that com4anies no6 ha5e to make increasing efforts to retain their skilled em4lo&ees. Fosing such em4lo&ees means a loss of in5estment in that em4lo&ee and that a ne6 em4lo&ee has to be recruited and trained. Moreo5er, 6hen skilled em4lo&ees lea5e a com4an&, the& can take a lot of kno6,ho6 6ith them, and thus the com4an& is at risk of losing confidential information to com4etitors @$rank et al. /..-C ?alker /..+B. Se'e& (a tors that a& e&ha& e em%lo"ee rete&tio&: @iB Com4ensation and a44reciation for the 6ork 4erformed, @iiB =ro5ision of challenging 6ork, @iiiB Chances to be 4romoted and to learn, @i5B In5itational atmos4here 6ithin the organi8ation, @5B =ositi5e relations 6ith colleagues, @5iB A health& balance bet6een the 4rofessional and 4ersonal life, and @5iiB Good communications. E&)a)eme&t is riti al (or %er(orma& e a&$ rete&tio&* %& increasing em4lo&ees7 engagement le5els, organi8ations can e94ect an increase in 4erformance of u4 to /. 4ercentile 4oints and an (2: reduction in em4lo&ees7 4robabilit& of de4arture. "he highl& engaged out4erform the a5erage b& t6o deciles and are dramaticall& less likel& to lea5e the organi8ation. +o usi&) o& riti al le'era)e %oi&ts to reate a&$ sustai& a hi)h e&)a)eme&t #or,(or e: Prioritizing engagement driven business risk Return on engagement 4ractices re>uires a link bet6een engagement and business outcomes. ;rgani8ations should rel& on economics and business strateg& 6hen determining 6hom to engage and ho6 to engage them in su44ort of business outcomes. Engaging key contributors ;rgani8ations must target in5estments to those indi5iduals 6ho contribute the most to the business, 6hile reali8ing that these 4eo4le are not all high 4erformers or high 4otentials as the& ha5e been traditionall& defined. Targeting drivers of engagement %efore an& 4roacti5e organi8ation le5el engagement strateg& 6ill succeed, organi8ation must first identif& and remo5e the dri5ers of disengagement, man& of 6hich are in5isible to traditional methods of deduction, such as em4lo&ee engagement sur5e&s.

 Building a high engagement culture "he three essential com4onents of engagement culture< connection, contribution and credibilit&. A high engagement culture needs reliable mechanisms to ensure em4lo&ees are consistentl& e94eriencing all three of these elements. Three thi&)s to retai& to% %er(ormers: 1. Provide Career Advancement Opportunities: Hnsur4risingl&, (-: of HR and business leaders belie5e that 4ro5iding career ad5ancement o44ortunities to to4 4erforming em4lo&ees is the most im4actful 6a& to retain them. Yet onl& -0: of organi8ations ha5e 4ut in 4lace a s&stematic 4rocess for em4lo&ee de5elo4ment, 6hich indicates a rather serious disconnect. Fearning 4aths and s4ecific courses can be established for em4lo&ees to facilitate their career gro6th. %& 4ro5iding the 4ro4er tools to em4lo&ees, C ;s can take a more acti5e role in reducing high 4erformer flight 6hile 4romoting gro6th and engagement.

2. mprove Engagement to !rive Productivity: %usiness leaders are more fre>uentl&

recogni8ing the im4ortance of an engaged 6orkforce and its 4otential to dri5e business 4erformance and im4act the bottom line. ngaged em4lo&ees are 4eo4le that are highl& moti5ated and 5ested in the success of their organi8ations and are 6illing to make an e9tra, discretionar& effort in their dail& 6ork. 9tensi5e research o5er the 4ast decade re5eals that an engaged 6orkforce im4acts business 4erformance, and ultimatel&, shareholder 5alue. =ut sim4l&, com4anies 6ith higher 4ercentages of engaged em4lo&ees 4erform better than their industr& 4eers. "hese com4anies ha5e< %etter financial 4erformance

Higher em4lo&ee retention Increased customer satisfaction Higher 4roducti5it&

>uall& interesting, financial anal&sts ha5e taken notice. $or instance, an e>uities re4ort focused on a large international bank cited that em4lo&ee engagement scores are highl& correlated 6ith shareholder returns. Retaining to4 4erformers also 4ro5ides significant and tangible cost sa5ings @re4lacement costs range from +..,+1.: of a de4arting em4lo&ee7s salar&B.

3. Build a Performance"Oriented Culture: =rograms that align em4lo&ees7 com4ensation I

merit increases, bonuses, long,term incenti5es I to their 4erformance ha5e 4ro5en to be 5er& effecti5e in dri5ing actual 4erformance. ;ften called 4a&,for,4erformance @=-=B, the conce4t is to build a culture of to4 4erformers b& aligning goals, 4erformance, and re6ards across an entire organi8ation. Moti5ating, re6arding, and retaining to4 4erformers is a ke& business objecti5e for an& com4an& that seeks to successfull& maintain or e9ceed gro6th e94ectations. %est,in,class organi8ations focus on a 4erformance,dri5en re6ards s&stem that com4ensates indi5idual contributors directl& 4ro4ortionate to 6hat the& achie5e and 6hat the& contribute to the bottom,line. "he challenge lies in effecti5el& aligning em4lo&ee goals 6ith organi8ational objecti5es, automating 4erformance management 4rocesses, and linking them 6ith com4le9 com4ensation 4olicies or time,based incenti5e 4lans at an enter4rise le5el. ?ith a 6ell,designed 4a&,for,4erformance s&stem, em4lo&ees at all le5els of the organi8ation more clearl& understand 6hat the& need to do to su44ort o5erall com4an& objecti5es. "he 6orkforce becomes more accountable I 6hich is increasingl& im4ortant these da&s I and can see the im4act of their contributions. -a" (or -er(orma& e -la&&i&): A 6ell,defined com4ensation 4lanning 4rocess should include< Com4an& strateg& and business goals =erformance rating information Internal job descri4tions and roles Com4arati5e market data Internal salar& and range targets

%e&ond the standard com4ensation 4lanning 4rocess, 4a&,for,4erformance re>uires com4anies to determine the ans6ers to and set rules based u4on the follo6ing< ?hat factors 6ill 4a& for 4erformance is based u4onJ o Goal Achie5ementJ o "arget Achie5ementJ o Aon,>uantitati5e measuresJ o m4lo&ee ratingsJ ?ill incenti5e 4a& be scaled to the le5el of achie5ementJ ?ill incenti5e 4a& be different based on different 4ositions and tiers 6ithin the com4an&J ?ill the 4a& be deli5ered at an& 4articular times of the &earJ ?ill there be 4enalties for not meeting targetsJ ?ill there be a 4rotocol for dis4uting or asking >uestions about 4a& for 4erformanceJ

The key technology components re#uired to enable P$P% are& 1* Performance 'anagement: Automates and o4timi8es 4erformance 4rocesses and aligns em4lo&ee de5elo4ment and goals 6ith cor4orate objecti5es. =erformance Management enables organi8ations to 4lan efforts in su44ort of organi8ational goals and strategic initiati5es, and to e5aluate outcomes, 4erformance, and core com4etencies. 2* Compensation 'anagement: Sim4lifies 4lanning, modeling, budgeting, and e9ecution of com4ensation 4olicies. Com4ensation Management enables organi8ations to de5elo4 and a44l& consistent com4ensation 4lans to all em4lo&ees. .* ncentive Compensation: Moti5ates em4lo&ees and manages total financial re6ards 6ithin an organi8ation. Incenti5e Com4ensation streamlines incenti5e 4olic& administration and 4ro5ides long,term 4lanning for both market,based and 4erformance,based 4lans, as 6ell as 5ariable 4a& fle9ibilit& for indi5iduals, teams, sales, or e9ecuti5es.

/* (eporting and Auditing: =ro5ides accessible and secure cross,functional com4liance re4orts and audit trails of all transactions related to com4ensation and 4erformance. Re4orting and Auditing aggregates ke& information to facilitate timel& decision making. 0o& lusio&: "o summari8e, 5isionar& C ;s can take acti5e ste4s to 4romote to4 4erformer retention b&< =ro5iding Career Ad5ancement ;44ortunities Im4ro5ing ngagement "o Dri5e =roducti5it& %uilding A =erformance,;riented Culture A cohesi5e HR and talent management infrastructure is a ke& re>uirement that must not be o5erlooked. ffecti5e e9ecution comes do6n to integration of dis4arate 4rocesses, s&stems, and data. And as our research clearl& indicates, integration 4ro5ides numerous direct business benefits, least of 6hich is to retain &our to4 4erformers so that &ou can effecti5el& e9ecute &our strateg& and gro6 &our business. ?ith trends in com4ensation 4lanning changing as an organi8ation changes its goals and 4riorities, organi8ations 6ith sta&ing 4o6er re>uire a fle9ible, scalable, automated solution in order to retain to4 talent and re6ard to4 4erformers. ?hen an organi8ation can do this effecti5el& and efficientl&, to4 em4lo&ees 6in and so does the organi8ation. Re(ere& e: K"he C ;7s Guide to "o4 =erformer Retention nsuring You Ha5e the Right "alent to 9ecute ! Gro6L, htt4<EE666.sumtotals&stems.com, accessed on -th $ebruar&, /.+/. KRetaining "alent 6ith Com4ensation Management "rends in m4lo&ee Com4ensationL htt4<EE666.sumtotals&stems.com, accessed on -th $ebruar&, /.+/. KDri5ing =erformance and Retention through m4lo&ee ngagementL htt4<EE666.llo&dmorgan.com, accessed on -th $ebruar&, /.+/. 5a M&ndt ! $ili4 Doch& ! Ma&a Michielsen ! %astiaan Moe&aert, K m4lo&ee Retention< ;rganisational and =ersonal =ers4ecti5esL, #ocations and Fearning @/..)B /<+)1I/+1

1* Em%lo"ee rete&tio&: Ha5ing and retaining skilled em4lo&ees 4la&s an im4ortant role in this 4rocess, because em4lo&ees7 kno6ledge and skills ha5e become the ke& for com4anies to be economicall& com4etiti5e According to numbers 4ro5ided b& SD?or9, a large %elgian human resource and 4a&roll com4an&, in /..2 there 6as an em4lo&ee turno5er rate of a44ro9imatel& +2.-3: in %elgium. $or em4lo&ees &ounger than /1 &ears, the em4lo&ee turno5er rate 6as 0): @SD ?or9 /..(B. 2* Se'e& (a tors that a& e&ha& e em%lo"ee rete&tio&: N Com4ensation and a44reciation for the 6ork 4erformed, N =ro5ision of challenging 6ork, N Chances to be 4romoted and to learn, N In5itational atmos4here 6ithin the organi8ation, N =ositi5e relations 6ith colleagues, N A health& balance bet6een the 4rofessional and 4ersonal life, and N Good communications. .*E&)a)eme&t results i&1 /. 4er cent increase in =erformance (2 4ercent decrease in em4lo&ees 4robable de4arture Highl& engaged out4erform the a5erage b& t6o deciles /*+o usi&) o& riti al le'era)e %oi&ts to reate a&$ sustai& a hi)h e&)a)eme&t #or,(or e Prioritizing engagement driven business risk Engaging key contributors Targeting drivers of engagement Building a high engagement culture

2*

Three thi&)s to retai& to% %er(ormers Provide Career Advancement Opportunities Improve Engagement to rive Productivity Build a Performance!Oriented Culture

3*-a" (or -er(orma& e -la&&i&) ?hat factors 6ill 4a& for 4erformance is based u4onJ Goal Achie5ementJ "arget Achie5ementJ Aon,>uantitati5e measuresJ m4lo&ee ratingsJ ?ill incenti5e 4a& be scaled to the le5el of achie5ementJ ?ill incenti5e 4a& be different based on different 4ositions and tiers 6ithin the com4an&J ?ill the 4a& be deli5ered at an& 4articular times of the &earJ ?ill there be 4enalties for not meeting targetsJ ?ill there be a 4rotocol for dis4uting or asking >uestions about 4a& for 4erformanceJ 4*The ,e" te h&olo)" om%o&e&ts re5uire$ to e&able -/-6 are1 Performance "anagement Compensation "anagement Incentive Compensation #eporting and Auditing 7*0o& lusio& "o summari8e, 5isionar& C ;s can take acti5e ste4s to 4romote to4 4erformer retention b&< =ro5iding Career Ad5ancement ;44ortunities Im4ro5ing ngagement "o Dri5e =roducti5it& %uilding A =erformance,;riented Culture ?ith trends in com4ensation 4lanning changing as an organi8ation changes its goals and 4riorities, organi8ations 6ith sta&ing 4o6er re>uire a fle9ible, scalable, automated solution in order to retain to4 talent and re6ard to4 4erformers.