Companies that survived last year aren't just looking to weather another year, they are focusing on taking action to thrive in the rest of 2010 and beyond. To implement this strategy change, companies must take steps to not only retain their top executives, but make the decision to recruit and upgrade their existing talent.
When owners think of a total compensation package, they shouldn’t just think of base and bonus. They should re-evaluate whether the structures and processes are in place to take full advantage of the talents and capabilities of their top performers. They should also contemplate which intangibles they can offer to make employees happy and provide them with the peace of mind that they are advancing their careers.
Over the past 12 months, a trend has developed toward increasing communication between executive teams and employees, and getting everyone involved in the business so they feel that they have an impact on what is going on in their company. For example, many companies assigned high-potential employees to participate in cross-functional projects that contained executive-level visibility. Other companies randomly invited certain employees to join C-suite private company meetings. Another tactic involved developing more depart-mental and one-on-one meetings. These examples help to increase employee morale and enable employees to feel more involved in decision-making. From a professional standpoint, even though these ideas do not tie directly to compensation, they go a long way toward retention.
Hiring processes continue to be re-evaluated. Companies are cautious about not exceeding their financial budget for new hires. How do they plan to stay within budget? More compensation plans include incentives tied to both individual and company performance, giving employees the opportunity to make more money and share in the growth of the company.
Last year, many executives worked harder for less money and feel they now deserve to be repositioned financially to be compensated for their sacrifices.
This year, owners must prepare for the fact that some of their executives may explore job opportunities outside of their company. Statistics indicate that 50 to 60 percent of executives are deter-mined to make a move when they feel the economy has rebounded.
Key steps to take to retain and incentivize top talent: First and foremost, companies should identify their top performers. Then, determine what the marketplace is paying for those same positions in other companies. Identify companies of similar revenue and employee count and determine where you stand as it relates to that benchmark.
If your company is paying below the mean, you should seriously consider increasing cash compensation to those identified as top performers. If you are paying what the market dictates, your business leaders need to communicate this fact with your employee base to ensure retention.
Total cash compensation either remained status quo or decreased for many employees last year. As a result, to retain executives, companies should consider other ways of compensating them. Three such ways are offering an extra week of vacation, paying more of the executives’ health benefits or pro-viding spontaneous spot bonuses to reward solid performance and production.
Companies should consider offering professional development perks that will demonstrate commitment to their workforce. Offering in-house classes and training, or tuition reimbursement are very effective ways to reward and benefit top-performing executives.
Successful companies in 2010 and beyond will be those that continue to be proactive in involving their workforce, creating strong teams and leadership.
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