Talent Retention Core Ingredients: A recipe for Chief People Officers only?

When we talk about attracting and retaining talent, we hear myriad voices proposing winning strategies and guaranteed tools for success. Talent is the key to business performance, so it’s no surprise that everyone has an opinion on how to recruit and keep the best people.

Attracting and retaining talent is a major concern for companies, whether large or small, local or international, public or independently owned. Doing so requires intelligent talent management. But, if we have learned anything over the last few turbulent years – which were beset by crisis but also deeply transformative – it’s that there is no single right way to ensure talent wants to join and remain with a company.

Rather than a master key, there are a number of core ingredients for successful talent attraction and retention, and various ways to combine them. As with so many things in both life and business, we need to try a formula, maybe get it wrong, keep what works, reset, and try again. Only then will we find the right recipe for our people.

A formula for success

The first ingredient is the conviction that talent is a crucial part of the company’s strategy, and a strategic asset. That it’s the backbone of the organisation and not the exclusive property of the people function. All leaders in the organisation must be committed to optimising talent retention and improving their own management skills to do so. Just as wider business criteria have become embedded in the day-to-day work of human resources leaders, so talent is now a core part of the CEO’s agenda. Acknowledging the importance of talent is a statement of intent.

The second ingredient is the creation of a specialised talent attraction and retention team within the HR function. This team must be an intrinsic part of the organisation, working at all levels and empowered to influence decision making and respond to the business’s talent requirements. Expertise in the lifecycle of talent and its vagaries gives these teams a holistic view of how the business can attract and retain the best people. A dedicated talent team is a common denominator across many high performing organisations.

Equally important is the third ingredient: corporate values. The culture of an organisation – founded in its values and its purpose – is its soul. And it is absolutely crucial to the talent strategy. Shared values attract talent, and living those values will ultimately be what retains it. These values and unified sense of purpose shape the organisational structure and reputation of the company, both internally and externally.

In a recent Heidrick & Struggles report, Aligning Culture with the Bottom Line , we found that companies with culture-minded CEOs enjoy superior financial performance to those with less focus on culture development. In addition, 82% of CEOs participating in the study said that culture had become a key priority for them over the last three years. Corporate culture, however intangible or deeply embedded a component of the company, is a fundamental part of its performance.

Remuneration, understood broadly, is the fourth ingredient of a successful talent attraction and retention strategy. Leaders need to be aware that they are no longer competing just within their own industry for the best people. As a result, purely financial compensation packages are no longer sufficiently competitive. Flexible working, internal equity, and social benefits with a direct impact on employee wellbeing and mental health are some of the crucial tools now wielded by the people management function. These tools, employed in appropriate combinations, have transformed traditional remuneration schemes, and are absolutely essential for the development and integration of talent in a modern organisation.

Diversity, equity and inclusion make up the fifth ingredient of the overall people strategy. A company’s DEI policy is one of the most influential factors in the battle for in-demand talent, especially female or under-represented talent. People management must be closely and systemically linked to DEI policies if the organisation is serious about attracting and retaining the best candidates.

Career development is the sixth ingredient that can be employed by HR departments. Lack of internal opportunities has been highlighted as one of the main reasons why employees leave an organisation. A clear path to advancement within the company is therefore crucial to employee engagement.

Investing in and prioritising resources such as internal appraisals, development plans, succession planning and coaching creates a culture of professional growth that keeps talent motivated to remain within the organisation.

In the end, however, should these talent retention tools prove ineffective, we must resort to the final ingredient: letting go. When this situation occurs, we must ask ourselves whether the talent was a good fit for our business, and accept that when people leave, opportunities open up for new external or internal talent to be discovered.

Talent strategies for the future

This recipe for successful talent attraction and retention in today’s organisations leads us to a reflection on the future. The war for talent is harder to win today than ever before because of the uncertainties we all face.

Some sectors are more affected than others by talent churn, and disruptive new players in the form of large technology groups, funds, and venture capital firms have entered the field, changing the rules of the game and forcing us to reformulate some of our paradigms.

Solid strategies put in place now, however, will both ease the current challenges and be the pillars on which our future talent policies are built. We must be willing to combine and recombine our ingredients, to make mistakes, to reinvent ourselves, always with the aim of taking care of our talent in order to meet the needs of the entire organisation.