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
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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