So-called core employees include not only those professionals who are technically excellent and have special skills, but also outstanding marketing personnel. Their performance rankings are usually in the top 10% among employees, holding positions such as managers and general managers. The company expects these employees to play a key role in the next 1-2 years. If core employees leave, the loss to the enterprise is about 1-2 times the employee's annual salary.
This has troubled the CEO and HR. But in the uncertain year of 2012, the combination of retaining people through compensation, career, and emotions is not as effective as before. Faced with this new situation, what can you use to retain your "golden employees"? Please see this issue's special feature.
"Customization" to retain core employees
After the Spring Festival, the boss of a private enterprise in Wenzhou finally sighed with relief. The sales director accepted the generous retention conditions offered by the company, including promotion, salary increase, and relocation, and was ready to take up the position of vice president of sales.
After the Spring Festival, the atmosphere in the human resources market gradually became active and subtle. In addition to old methods like retaining people through career development, treatment, and even emotions, some companies began to "tailor-made" conditions for their core employees.
Core employees control core resources
The resources in the hands of core employees are difficult for enterprises to protect through legal means.
Ben has worked for nearly ten years in an American-funded industrial manufacturing company in Shanghai and has been at the manager level for three years. With a master's degree from a prestigious university and strong professional abilities, there are fewer than twenty people in the company with qualifications comparable to his. Moreover, he is familiar with the company's culture and processes, having served clients for many years and being highly recognized. He holds many supplier resources and can always quickly find the right person to solve any product issues. Currently, most of the company's employees have less than five years of experience, and many newcomers have been trained by Ben himself.
Ben calculated that moving to a smaller company would offer more opportunities for promotion, better than waiting in this large company, and many private enterprises have the potential to go public in the future.
The director immediately took action, inviting Ben for a private dinner and drink, opening up sincerely. Even saying touching words like "no one else can help me except you." The director promised Ben a raise and promotion.
Li Fang, president of Yuanzhuo Enterprise Management Consulting Co., Ltd., told reporters from China Business News that talents who have worked in a company for more than 5 years, in the same industry for more than 7 years, and hold certain positions, are considered core employees of the company, playing a pillar role.
The loss of core employees will first hit the company's morale, causing a domino effect of resignations. The resignation of a director often leads to a group of subordinates following suit. In terms of resources, the loss to the enterprise is even more severe. A senior executive of an American cosmetics company complained that a former technical director joined a local daily chemical enterprise a few years ago and quickly launched a "copycat" flagship product almost identical to the original company's.
When business personnel switch to competitors, they often take customers with them. These resources in the hands of core employees are difficult for enterprises to protect through legal means.
Inter-industry mobility trend is on the rise
Many core employees from traditional industries choose to work in similar or closely related other industries, continuing to leverage their past work experience.
A survey by 51job found that starting from the fourth quarter of 2011, companies began to invest a lot of effort into retaining core employees. Different from before, inter-industry mobility phenomena increased significantly in 2012. Many core employees from traditional industries chose to work in similar or closely related other industries, continuing to leverage their past work experience.
For example, recently, some commercial real estate companies have valued many talents from the retail industry, even digging out entire teams. The reason lies in the fact that an important task for commercial real estate companies now is recruitment and dealing with retail enterprises, and retail industry workers are experts in this area.
Li Fang said that for many private enterprises, the founders and the first generation of the family are approaching retirement age. Some well-performing companies are also attempting to go public. The equity incentive system after the IPO will have a certain appeal to professional managers. However, simply increasing salaries and bonuses to retain people is becoming increasingly difficult for enterprises to bear. Some industries in China have reached a stage where they must upgrade and eliminate outdated practices; without innovation, they cannot prevent talent loss.
Feng Lijuan, chief human resources expert at 51job, said that in response to various pressures, some mature companies have already foreseen the critical role of core employees and each year determine a strictly confidential "core employee list" with very limited numbers. They focus on training and strengthening connections with them. Senior executives frequently talk to core employees, sometimes as often as once a month.
When companies try to retain core employees, they will also budget costs. One guiding principle of the company is: never be willing to pay too much cost. Because once a raise and promotion is given to one employee, it will set a precedent, and future employee demands will become higher and higher. Usually, in a company, direct supervisors have a certain amount of authority to increase salaries. Meanwhile, the company's HR spends most of their time and energy eating and chatting with employees, sometimes even chatting with the families of employees.
Non-career factors leading to job-hopping are becoming evident
Understanding the phased goals of employees and various family factors surrounding their lives is becoming an important factor for companies to consider when retaining employees.
The aforementioned private enterprise in Wenzhou is a leading company in the machinery manufacturing industry. The sales director is in his thirties, with remarkable performance but unmarried. His hometown is in a province in central China, making it difficult for him as an outsider to find a suitable marriage partner in Wenzhou. Coupled with high housing prices in Wenzhou and the difficulty of understanding the local dialect, he has struggled to integrate into local life and considered leaving.
The company founder personally talked heart-to-heart with the director and quickly decided to promote him to vice president while transferring his workplace to a branch factory of the company in Jiangsu Province. It is much easier to start a family in Jiangsu, so the director gladly accepted this arrangement.
Li Fang said that reasons for core employees leaving, apart from the usual considerations of salary and position, geographical location is now becoming an important factor. Surveys show that the weaker the radiation power of a city, the weaker its attraction to talent. Many talents value whether the working location can provide satisfactory family living conditions.
"Companies should look deeper into how much the pursuits of these people align with the needs of the company, and how differences can be resolved," said Guo Xin, president of科锐International. Studies show that retaining "hearts and minds" is no longer as simple as focusing solely on personal career growth and living factors. Understanding the phased goals of employees and various family factors surrounding their lives is becoming an important factor for companies to consider when retaining employees.