With signs of economic recovery starting to appear, it is more important than ever to manage the retention of key talent, says Chris Hardy

Most business leaders state that their biggest concern about recovering from the current recession is having the skills and capabilities in their organisations to take advantage of the opportunities to grow. So the question is; what must businesses do to retain their key people now that there is talk in the air of 'green shoots of economic recovery'?

We have studied the current research and spoken to a number of key people to find out. Whether you have or haven't been through a recession before, there has never been anything quite like the current period of economic turbulence.

One of the many unforeseen twists has been the innovative responses from both employers and employees that have not been seen in previous periods of economic downturn. Some companies have been pursuing alternative strategies to crude redundancies and instead have been reducing salaries, working hours and bonuses, while simultaneously, seeking opportunities to engage their key talent with new development opportunities, project work and leadership assignments.

The current economic situation is such uncharted territory that, whilst talk of recovery may be encouraging, widely differing opinions exist about its timing, strength and duration. Indeed, few observers are willing to predict whether it will be a V, a U or even a W curve, let alone how strong the recovery will be. Increased economic activity is usually accompanied by higher attrition as employees seek new opportunities. 

However, what is very clear from our research is that those employees who have been nurtured and cared for during these tough times are much more likely to remain with their existing employer than leave. As the saying goes, individuals join companies and leave managers, so there has never been a more important moment than now to ensure staff are supported and developed by effective managers and leaders.

I asked a multinational client how his organisation was coping with the challenging environment. He replied that they were 'flat lining:' in other words, there was little career development, reward or personal growth opportunities being presented to staff. Not surprisingly, this organization should expect to see many of its employees dusting off their CVs and talking to headhunters. 

A recent survey showed that 20% of High Potentials have been looking to leave their organisation of their own accord during the Recession.  This led Harvard Business Review to comment that managers who think that the economy has given them a free pass on attrition may need to think again.

On a more positive note, this could be an organisation's 'Epiphany' moment, prompting it to ask: Do we accept the situation or do something constructive about it?

More progressive organisations are becoming more aware of the long known fact that financial reward comes further down the list of factors that make people want to leave or disengage.

An Executive Coaching colleague refers to people's 'Psychic Income'; the need for social acceptance, self-esteem and self-realisation that is not met through compensation alone. Making people feel genuinely valued and able to continue to learn or grow increases the likelihood that they will stay with their organisation. I frequently ask people to describe their career bests. Typically, they will use terms like "it was hard work"; "we worked long hours"; "I felt part of a team"; "I learned a lot"; "it was meaningful work"; "I felt valued by my boss."

It is now widely accepted that Talent Management is, or should be, the single most important item on an HR Director's agenda. Everything else is operational and transactional which, whilst important, should not form part of HR's strategic agenda, and so should rightly be automated or outsourced.

Retention is a key component of the talent management spectrum [Acquisition-Development-Retention] and is a much-misunderstood area that is often badly handled.

Fortunately, it is never too late to implement an effective retention strategy and prevent a potential exodus of critical talent. Top management should consider these key aspects:

Employee engagement: Creating an environment that engages employees for the long term. This attachment relationship is durable and constant, and links the employee to their company by common values and by the way in which the company responds to the needs of the employee.

Place employees' needs and expectations at the centre of the company's long-term agenda in order to ensure the professional satisfaction of the employee and create a trusted relationship. In this stable relationship, the employee stays in the company by personal choice based on free will and considered decision.

The time to implement the strategy, which should identify disengaged employees and motivate the engaged ones, is not when employees express the first signs of disengagement.

The retention management system includes an element of seduction, drawing the employee to the company brand, so should actually be timed with recruitment, induction and day-to-day management.

At the same time, it is useful to understand that retention is not: a remuneration policy; forcing an individual to stay; a means to keep an employee for life; a way to keep all your employees; nor a method to automatically inspire loyalty