A quarter of U.S. businesses are experiencing a marked increase in talent raids at the C-suite level, yet most are unprepared to combat this “poaching” of their most capable people.
This is among the key findings of a talent retention survey of nearly 400 human resources professionals conducted recently by Marlin Hawk, a global leadership advisory firm focused on next-generation talent, and Hunt Scanlon Media, the most widely referenced source of information on human capital. Specifically, 54 percent of all responding HR experts indicated that their company either has no plan to ward off poachers or, if it does, they’re unaware of it. And of those professionals whose companies had a strategy in place, only 39 percent were satisfied with it.
“What our survey demonstrates is a disconcerting lack of attentiveness on the part of many businesses to what is a growing problem,” comments Marlin Hawk Chief Commercial & Innovation Officer Mark Oppenheimer. “No organization would let an intruder stroll in uncontested and walk off with its financial assets or intellectual property. But when it comes to defending talent, the figurative gates seem to be wide open. It’s a huge mistake that can have an adverse impact on readiness to compete, growth targets, and share price.”
Recent headlines indicate that such companies as Goldman Sachs, Netflix, Audi, Fox, and Tesla all have been victimized by a competitor plucking away some of their most talented leaders. Typically, there’s an initial approach, followed by an enticing offer, and then a crucial executive is whisked away. It happens everywhere, in all manner of businesses.
The Marlin Hawk/Hunt Scanlon talent retention survey – which collected information from companies in sectors that include financial services, technology, retail/consumer goods, healthcare, government, and industrial/manufacturing – indicates that a miniscule 4 percent of all respondents believe talents raids have been on the decline during the past two years. Yet, despite this information, only 47 percent of those companies whose human resources professionals responded have a definitive plan in place to identify vulnerable talent.
“Talent” is among the most valuable resources any organization possesses … and when it’s taken away, the loss has serious ramifications. In fact, Oppenheimer asserts that talent is now the single greatest enabler of business strategy. Yet, when it comes to keeping track of employees’ comings and goings, just 38 percent of respondents indicated they were satisfied with the quality of their company’s data on attrition rates.
“The survey results are particularly significant because of the breadth of our outreach,” adds Hunt Scanlon Media Chief Executive Scott Scanlon. “We gathered input from chief human resources officers, human resources VPs and managers, as well as executive search consultants and researchers, so the information we collected has the weight of being from the entire HR and search community, rather than from one segment or corner. That makes the findings even more alarming in that so few barriers exist to deter those who would poach crucial talent.”
While the survey’s results speak to a very specific problem at many companies, the experts at both Marlin Hawk and Hunt Scanlon suggest that it’s a resolvable one. The answer, quite simply, is to take appropriate steps, without delay.
“It starts with identifying top talent – and taking care to look beyond the obvious,” says Oppenheimer, who is based in New York. “From there, conduct benchmark studies to ensure they’re being appropriately compensated, and tie them in with long-term incentive packages. The key is providing them a tangible stake in the organization’s ongoing and future success.”
Scanlon notes that many companies are overly focused on providing sufficient financial compensation, yet aren’t sufficiently attuned to other factors that are extremely important to top employees.
“Particularly with Milennials, build a team of like-minded individuals with a strong culture and shared values,” Scanlon explains. “Even at the highest levels, people are more inclined to stay when they know their contributions are recognized and appreciated, and they are given an increasing degree of responsibility. It sounds counter-intuitive, but by increasing an executive’s employability elsewhere, you can make them more likely to stay and better equipped to add value.”
Other recommendations are identifying dissatisfied executives who may be more susceptible to poaching, and then taking visible, direct steps to alleviate their concerns, while also providing regular forums for them to express concerns and vent frustrations. Of course, from time to time, key talent will leave. At such times, a robust succession plan – with a listing of potential replacements and a plan for mentoring – can be invaluable.
Once a key team member departs, particularly as the result of being poached, there are several things to always do. And there are several more never to do.
“If someone was a top-level talent, you want to let them leave on good terms, and then you want to maintain contact,” Scanlon says. “After all, they may eventually return, and bring with them additional skills they’ve acquired in the interim. Also, take care to shore up remaining members of the team who are most directly impacted by the departure. Keep them informed, supervised, motivated, and on track – because they are suddenly much more susceptible to poaching.”
Marlin Hawk strongly recommends that a departing employee be encouraged to be transparent about why they decided to leave.
“The last thing you should do is isolate them or treat them as a pariah – that’s a dreadful mistake,” Oppenheimer says. “Instead, find out their genuine reasons for moving on and then use this vital information as a way to prevent future losses. Occasionally, by showing that you’re truly interested and concerned, you can convince them to stay. I’ve seen it happen.”
Despite the growing importance of retaining key executive talent, only 14 percent of respondents utilize an external advisory partner to help devise retention strategies.
“That’s a missed opportunity,” Scanlon concludes. “There are many innovative advisory firms out there whose expertise in enhancing retention can mitigate the risk of losing top executives to poachers.”