Even amid a job market that is seeing increasing layoffs, we all know that filling executive and senior-level positions in your organization is no simple task. After you’ve made a substantial investment of time and money to bring leaders on board, you want these new hires to really dig in and help drive the long-term success of your organization. The last thing you want is for your new hires to get recruited out by another organization.
The reality is that it’s increasingly difficult to retain executive talent. A recent PwC study found that turnover in the C-Suite is a growing issue. At the 2,500 largest global companies, the median tenure of a chief executive was just five years, while turnover climbed to a record high in 2018. The tenure is even shorter for other C-suite roles.
Regardless of the position and industry, tenure really matters. In fact, experts from the Workforce Sciences Institute published research earlier this year in the Harvard Business Review examining the impacts of employee tenure. They found that while age has no statistically significant effect on performance, tenure does. While the positive effects of tenure vary from organization to organization, well-managed tenure can return greater-than-average value to an employer. And when it comes to leaders, the research found that the tenure of leaders and managers positively impacted the financial performance of the units they led.
The bottom line of the findings is that “organizations create economic value and competitive advantage by facilitating the accumulation of employee tenure.”
In my many years of placing and coaching executives, I’ve seen new hires who have stayed for decades and others who have departed after just a few months on the job. Here are five key questions to consider that can help increase the likelihood you’ll hire and retain “right fit” talent.
While no job description is ever perfect, an executive who is recruited to focus on strategy but is doing day-to-day operational or tactical work instead likely won’t stick around. Taking the time to accurately capture job responsibilities and expectations in the job description goes a long way toward getting the right person for the job.
One of the easiest ways for another company to recruit your new hire is to offer better pay and benefits. Do the work to make sure your salary is as competitive as possible, and avoid “lowballing” a candidate to save a few bucks. Benefits, particularly healthcare and retirement, are increasingly important to candidates and can help anchor an employee to the company. More and more, we’re finding that candidates are interested in “non-traditional” benefits. Flexible schedules, remote work options, access to tax and financial planning professionals, health and wellness offerings, and executive coaching are all benefits that employees are seeking.
Job interviews are so much more than checking qualifications. Interviews are also about compatibility assessments. More specifically, interviews should assess if a candidate’s values, attitudes, and behaviors align with the company’s. A word of warning: don’t confuse a culture fit with organizational homogeneity; diversity matters.
A strategic mistake many companies make is limiting onboarding to just those initial start-up transactions, like completing paperwork and getting a laptop. In fact, recent research found that employers are falling short when it comes to onboarding new employees. New hires indicate that their onboarding did not adequately cover two key areas employees need to be successful: building relationships (71 percent) and understanding organizational culture (62 percent). Onboarding is especially important for your senior leaders, particularly when it comes to building strong relationships and deep connections within the organization. Companies are wise to think bigger; help executives network across the organization, provide mentors, and offer coaching.
Don’t wait until an executive leaves to really listen to their feedback. Instead, regularly conduct stay interviews with your leaders. These one-on-one conversations can tease out what’s working and what needs change. In addition to gathering actionable information, stay interviews can help leaders feel more connected, committed, motivated, and appreciated if you’re proactively seeking their views and listening. Despite this, a 2022 survey found that only 27 percent of HR decisionmakers say they use stay interviews to help improve retention. Clearly, that needs to change.
Bill Stratton is a Managing Director at the Washington, D.C. office of Stanton Chase and represents the firm on the AESC’s North America Diversity Council. Bill brings more than two decades of executive search experience to Stanton Chase. His knowledge and experience include consumer products and services, healthcare, industrial, and diversity.
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