By: Maurice Gilbert, Managing Partner of Conselium Executive Search
Because the cost of losing top talent is high, so is the incentive to retain your star performers.
But when competitors are attempting to poach the best of your team, you may find yourself exploring options for keeping people on board — from offering promotions to pumping up job titles to inflating salaries.
Is this the right approach?
Research says no. The link between HR strategies and the bottom line is, historically, tenuous. In fact, a recent study from Towers Watson suggests, in short, that paying executives base salaries above the median rate is a flawed talent management strategy.
The better strategy might be found among the best performing companies. We know all about their higher-than-average total compensation packages for top execs – that is, base salary plus bonuses – indicating that these organizations pay relatively large bonuses.
So, while offering larger base salaries may be an effective tool for attracting talent and even retaining them in the short term, the better driver of long-term performance appears to be in providing larger bonuses and incentives.
Does your firm’s compensation strategy mirror this finding? If not, perhaps a change is in order. Greater profitability could be just around the corner.
Maurice Gilbert is Managing Partner of Conselium Executive Search, which specializes in placing Compliance Officers and Legal Counsel for clients in the U.S., Europe, Latin America and Asia Pacific. Maurice is also CEO of Corporate Compliance Insights, a worldwide publication devoted to governance, risk and compliance issues. Maurice can be reached at email@example.com or firstname.lastname@example.org.Published by Conselium Executive Search, the global leader in compliance search.