After Cost-Cutting: How to Attract and Retain Talent

by Angie Mak, 15 January 2010

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topics:
Human Capital Management Professional Development

tags:
Generation Y human resources recruitment retention staff development

The CFO Innovation Asia Business Outlook Survey for the first quarter of 2010 has a surprise finding. Attracting and retaining employees is now a top internal issue among Asia’s CFOs.

The 205 respondents were asked to identify and rank the top three internal challenges their company faces. Two issues topped the list: ability to cut costs and reduce supplier spend (ranked first, second or third by 54%) and attracting and retaining qualified employees (48%). Only 30% of the executives surveyed had flagged employee hiring and retention as a top concern in our previous survey last year.

Yet cost-cutting and attracting and retaining qualified talent are antithetical in many ways. Thus this conundrum during these unsettled economic times: How can companies attract and retain talent without spending too much and thus sabotaging cost-cutting initiatives?

Demoralised Workers

A mid-2009 global survey by McKinsey found that staff morale had fallen steeply among all the companies polled. That’s not surprising. The degree of uncertainty stalking the world’s workers in the past year approaches that of the Great Depression. Almost everyone is understandably tense, fragile, worried, and likely to be overworked.

Companies remain under pressure to cut costs and the fastest way of achieving that is by firing people. But as economic stabilisation takes hold and businesses anticipate growth, particularly in Asia, organisations are looking to high performers to help lead them out of the storm and onto the winning side.

The problem is compounded in emerging markets because qualified people, among them finance professionals, are still in short supply. The economic crisis may have eased the shortage a little, but with Asia seemingly back on the growth path, finding and keeping the right talent may become difficult again – and many companies may not yet have the deep pockets to pay top dollar.

Non-cash Motivators

Fortunately, today’s workforce is looking beyond the uninspiring lure of the usual, proverbial carrot — cash-based incentives and stock options. In some instances, they want jobs that challenge, work that stimulates, leadership that motivates, and a better work-life balance.

Numerous studies conclude that for people with satisfactory salaries, certain nonfinancial motivators outweigh the value of extra cash in building long-term employee engagement. This is because many financial rewards are only successful in generating spurts of short-term motivation.

McKinsey’s global survey reveals that the top three non-cash motivators for staff are praise from immediate managers, leadership attention (such as one-on-one discussions) and an opportunity to lead projects or task forces. These incentives are key in making employees feel that their company values them, are concerned about their well-being, and put forth efforts to create career growth opportunities.

“One-on-one meetings between staff and leaders are hugely motivational,” says an HR director from a mining and basic-materials company. That’s because “they make people feel valued during these difficult times.” Similarly, involvement in special projects makes people feel like they are a part of the company’s future.

I especially like the last

Submitted by Anonymous on 18 January 2010 - 11:53pm

I especially like the last section Finders, Keepers, of your article. I want to emphasize that when there has been a forcible change in the top management team for whatever reasons, talent management takes a back seat to damage control and 'replantation'.

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