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Are you doing the right things to keep your top performers? More flexibility and career management will help

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Special programs aimed at retaining top performers could be obsolete, according to a study of more than 3000 exit interviews, which found these employees leave mostly for the same reasons as everybody else.

Seven of the top 10 reasons for leaving were the same for “top performers” when compared with “the rest”, research by The Interview Group found.

The main reasons for leaving, cited by both groups, included “no appropriate opportunities available for career advancement”, “inadequate fixed pay or performance bonuses” and “not enough challenge or stretch in the job”.

Top performers, however, were around half as likely to leave due to poor management or leadership, while excessive commute time and inadequate flexibility were among the reasons they more commonly gave for leaving, the report says. 

This was possibly because around 43 per cent of top performers worked between 50 and 60 hours per week, compared to 24 per cent of others.

“It is possible that commute times exacerbate the issue of long working hours for these people,” according to the research report Top performers. “Related to this, they are also more likely to leave due to a lack of flexibility in hours or location of work.”

Recognising your best

The Interview Group’s research paper compared top performing employees to average employees using 3623 exit interviews conducted mostly in Australia over a five-year period (2009-2014) across a range of industries.

The employees were rated according to the rating scales used in each organisation, with top performers making up two per cent of the total sample.

Top performers were seen as valuable, difficult to replace and harder working. Past research by McKinsey & Co. has found managers believe they contribute anywhere from 40 per cent to 69 per cent more to a business than average performers, the report notes. More recent research has found the top five per cent of performers produce 26 per cent of total output.

Along the same lines, The Interview Group’s research found they were more likely than average performers to be in high-impact roles, roles that were difficult to fill, or be considered key individuals.

They were also the easiest to lose. Even in tough economic times they found it easier than others to secure new work. In the Interview Group’s research, top-performer departures were always initiated by the employee.

Top performers were also much more likely to be approached directly by their new employer, and less likely to use online recruitment sites, the report says. However recruiters didn’t appear to recognise their potential, as they were equally likely to be approached by a recruiter when compared to others.

Employees hired through a graduate program were much less likely to be top performers, as only four per cent of top performers were hired this way versus 14 per cent of others.

Fewer top performers were on formal performance management (2.5 per cent versus 6.5 per cent of others) although the report noted it was interesting top performers were in these programs at all.

“This possibly reflects a common pattern of classifying as Top Performers those who perform well on task-related KPIs, despite poor performance on people or culture related factors,” the report’s author Lenore Lambert says. “Increasingly organisations are holding people to account for both.”

Gender did not affect the likelihood of being a top performer, and there was no evidence of cultural bias. The study also found no correlation between top performers and internal versus external hires.

Flight risk

The report identified two groups of high performers most commonly leaving their employers. Top performers with two-to-three years’ tenure in their current role, and those between the ages of 31 and 40, were much more likely to depart than other workers in the same situation.

Conversely, there were no departing top performers aged 46-50, suggesting this age group turns over relatively rarely.

Top performers were much more likely to resign while on parental leave, leave of absence or secondment, and they were twice as likely to leave to start their own business, and twice as likely to leave for full-time parenthood, the report says. 

But they were much less likely than the rest to leave without another job to go to (1.3% compared to 14%) and were half as likely to leave for full-time study.

They were half as likely to leave due to poor management or leadership by a direct manager or indirect manager, and tended to rate their direct manager more highly on every single competency.

“These differences suggest that either managers are putting more effort into managing Top Performers well, or Top Performers are easier to manage, requiring less skill on the part of managers,” Lambert says.

Employers appeared not to be adequately recognising their strengths. Top performers were no more likely than others to go to a more senior role. They were less likely to receive more money in their new role and more likely to receive the same or less in their new role when compared to average performers.

They were also often not considered high-potential employees, with 16 per cent of top performers considered to have “medium” potential.

But the report says the most surprising finding was how similar departure reasons were between top performers and the rest. 

“This suggests that special programs for Top Performers are unnecessary,” Lambert says. “Employers simply need to execute well the processes that matter, such as career management, competitive merit based pay systems and effective recruitment processes.” 

Convincing them to stay

Among the top performers, 85 per cent reported receiving some effort to get them to stay before they resigned, compared to 57 per cent of the others.

But the report says employers don’t seem to realise there is still an opportunity to get them back on board after they have resigned, with 27 per cent indicating they could have been convinced to stay after resignation, compared to 13 per cent before resignation. 

“It is possible that they want to avoid being seen as a ‘squeaky wheel’ or as a ‘high maintenance’ employee and would rather use their very real employment-market attractiveness as the catalyst for discussion with their employer,” the report says. “This approach is also more likely to lead to immediate action rather than having to rely on promises for the future.”

Request the research paper here.

 

First published: 19th June 2014

Source: HR Daily