"Changing the Employment Standard"
No More Paying Your Dues to Get Ahead

Brent Longnecker, Executive VP/Human Capital Services

Resources Connection

All companies, including emerging companies, are victims of a new employment phenomenon sweeping the world that is changing the corporate employment standard of "paying your dues." Given the high cost of attracting, training and retaining employees, companies must face this new employment standard with their eyes wide open.

It's well known that highly talented employees can become quickly frustrated with the tenure and seniority-based reward and recognition plans of the past. Today, the highly talented are finding that they can be recognized and rewarded in a new way.

The new equity compensation model, where a 25-year-old can become a multimillionaire virtually overnight, is becoming the new standard against which all other employment opportunities are being measured. Even though only a small portion of new emerging businesses ever succeed, the perception that all are successful has overtaken reality and, in its path, the employment model of yesterday is being trampled.

It's because of this change to highly leveraged equity compensation packages that the attraction and retention issues facing today's leaders are more complex than ever. Shortages of talent are placing a large constraint on corporate growth, requiring business leaders to evaluate alternatives to acquire talent. Leaders have to make hiring decisions that are in the best interest of the company and its shareholders for both the short- and long-term. As a result, decisions centered around whether to hire a consultant, outsource a function, utilize a project professional and/or hire a permanent employee are more crucial than ever before.

Once the talent has been hired, retaining the talent becomes the next challenge. Reward and recognition programs are one of the best human resources tools used to retain top people. If individuals feel valued for their contributions and are adequately rewarded, they will be more inclined to stay at an organization for the long-term. The ability to attract and retain employees has bottom-line impact, increasing an organization's ability to achieve a sound Return on Investment (ROI) on its "human capital investment."

As you review your reward and recognition plans to evaluate their effectiveness, keep in mind:

1. Base pay is not the only reward and recognition element of significance to professionals. Annual bonuses, flexible hours, good benefits, stock options and a good working environment can have an enormous impact on overall program effectiveness.

2. Incentive plans, both short- and long-term, should be designed to motivate desired behaviors, which will provide a positive return to shareholders. Incentive plans, if not designed correctly, can create an additional administrative and financial burden on the organization while motivating behavior that is detrimental to the goals of the organization. Using an expert in the compensation field to either draft an incentive plan or review an existing one is money well-invested.

3. Don't forget training and performance management. Focus on critical human resources issues other than just an employee's financial concerns. Training and performance management (where performance feedback is received on a regular basis) is as critical as having a competitive pay package. In addition, outlining career path strategies (both the traditional way into management and the non-management track whereby employees are rewarded for their technical prowess) can prove valuable as well.

4. Culture matters. Recognition and reward programs should be interwoven with and should support the desired corporate culture. Even emerging industries have to be a good place to work. Empirical evidence has shown us for years that "money isn't everything!"

There are an incredible amount of strategic and tactical activities that go into successfully attracting, motivating and retaining the type of top talent needed in today's competitive environment. It is a miracle that today's leaders can maintain a semblance of sanity. With the new employment phenomenon "sucking out" talent like an enormous black hole, it should come as no surprise that most of today's leaders sleep with their eyes wide open!

(Brent Longnecker, CCP, CBP, has more than 17 years of experience in the analysis, design, and implementation of innovative performance, productivity enhancement, and cost savings programs. Resources Connection is a project-based professional services firm specializing in accounting/finance, information technology, and human resources. Resources employs over 1250 employees and project professionals and has 37 offices in major U.S. cities and global offices in Canada, Taipei, Hong Kong and New Zealand.)

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