Retention measures at Hi-tech companies|
By Phanos Pitiris
Across industries, increasing the organizationís level of professionalism, instituting an objective performance appraisal system, and ensuring a match between responsibility and authority are the three
most-used techniques to improve retention. Nevertheless, hi-tech companies, such as information technology and telecom companies, focus their efforts on three more techniques: increasing employee satisfaction, designing competitive compensation packages, and involving employees in the decision-making process.
Hi-tech companies differ from other industries in also one other aspect. High potential attrition-rates and the growing demand for trained information technology professionals provide a strong motivation for companies operating in this sector to not just meet, but also exceed the desired levels of retention measures.
The Retention Action Plan
In these competitive times, the specific measures to improve an organizationís retention record range from career counseling workshops to team-building exercises. Of course, the exact nature of initiatives to be used is a function of the industry in which the company operates, and the level of management at which the initiative is targeted.
However, the ideal practices remain constant across manufacturing, marketing, services and hi-tech companies: career-counseling and job-enrichment exercises at the junior level; promoting from within and training at the middle level; team-building exercises and welfare initiatives at the senior level; and culture-building and empowerment at the top level.
Whereas hi-tech companies use the same techniques as companies operating in other industries do, the number of companies in that sector utilizing those techniques is far higher. These companies rate team-building efforts, culture-building, career-counseling, and designing best-in-industry compensation-packages important at the junior level; promoting from within, instituting objective appraisal systems, and team- and culture-building at the middle level; designing better compensation packages, and helping employees grow into leaders at the senior level; and empowering employees, and sharing the organizational vision with them at the top level.
Across levels, compensation, and vision sharing seem to be more critical to the retention plans of hi-tech
companies compared to those operating in other industries. According to research, whereas 77 per cent of information technology and telecom companies believe that sharing the organizationís vision with their junior-level employees will help them keep their employees, only 16 per cent of the manufacturing companies do. The corresponding figure for services and marketing companies are 35 and 17 per cent.
The best organizations recognize that retention techniques that will work best for them depend on the dynamics of the industry of which they operate, and the level of management at which they wish to focus their efforts. These organizations tie their retention strategies to suit their employees at various levels of the organization. Often, recognizing the individuality of employees is the best retention strategy. The human capital is the major intangible asset a company can use to improve its performance. It can achieve that by hiring and retaining the best people, and motivating them to deliver their best.
Leading companies adopt more than one technique to create an internal environment that will retain their employees. The most popular retention-oriented initiatives include:
Increasing the organizationís level of professionalism - Employees leave companies where intra-organizational interactions are unstructured, and decisions made are driven more by personal prejudice rather than professional consideration. By adopting systems that introduce an element of objectivity into its internal operations, a company can create a better workplace.
Moving from family to professional management - In most family-managed organizations, professional managers leave because they cannot see themselves holding key positions, or functioning with the level of independence that their designations merit. By inducting professionals into senior management positions and empowering them to do their job, a company can lower its attrition-rate.
Performance Management System - The employees you want in your team actually welcome performance management systems. Nevertheless, those employees like to know how, when, and by whom their performance is going to be measured. An appraisal process that lists objective and measurable criteria for performance appraisal removes the uncertainty in the minds of employees that their superiors can rate their performance in any way they want.
Involving employees in the decision-making process - People like to work for organizations where their opinions count. The higher an employee's involvement in decision-making, the higher the organizationís retention-level. A participative decision-making process is good, employee empowerment, better.
Ensuring a match between authority and accountability - Most companies fall into the trap of holding an employee accountable for a specific activity without empowering him/her with the authority to perform it well. Often, the situation is exacerbated by the fact they vest another employee with the same authority, but do not hold him/her accountable!
Measuring employee satisfaction - Obsessed with catering to the demands of their external customers, companies ignore their internal customers. Periodic employee satisfaction surveys can highlight the potential flash points, and enable the company to take corrective measures./li>
Achieving a match between individual and organizational goals - Many companies fall into the trap of expecting their employees to subsume their individual objectives before the organizational one. This can be a catalyst for employees to leave. The best companies achieve a balance between the two.
Designing a competitive compensation package - Money is not a motivator, but it is an effective de-motivator. While organizations that pay best-in-industry salaries may find themselves unable to use that fact to motivate their employees, those that do not could find their best employees leaving.
Increasing organizational transparency - People do not like to work in black-box like organizations, where information is rationed out on a need-to-know basis. They prefer a transparent organization that is willing to share every aspect of its functioning with its employees.
Promoting employees from within - A company that constantly fills vacancies by hiring from outside is certain to face retention problems. Employees who have the right stuff and realize they are unlikely to be promoted to fill the vacancies will leave the organization. Growing your own when possible is a sound retention strategy.
Helping employees acquire new skills - As the job-profiles and desired skills-sets for a particular job change, companies may feel the need to hire employees with new skills, or retrain their existing employees. Companies that choose to do the latter will find it easier to retain their people since the training signals that the organization values their contribution, and is willing to invest in upgrading their skills.
Offering stock options - Employee Stock Option Plans (ESOP) are a sign that the organization recognizes the role of the individual in its performance, and is willing to share the benefits with him/her.
Focusing on welfare measures - Employees are not just warm bodies. They are individuals with families and lives of their own outside the workplace. Organizations that recognize this, and help employees achieve a better balance between life and work are likely to face fewer problems than those that do not.
Phanos Pitiris, is the Chairman of the Board at HCS Human Capital Solutions Ltd. Among others, he is the General Manager of Athena High Technology Incubator Ltd., participates on the investment committee of Infinity II, a $64 million venture capital fund and is a member of the Institute of Electrical and Electronics Engineers, the American Management Association, EBN, IASP and NBIA He is also an alumnus of the European Venture Capital Association.