1

Total Package & Audits

BenchmarkingAnd Surveys

RewardOnline

Payscales

Role Profiles and Job Evaluation

Role Profiles and Job Evaluation

Performance Management

WorkflowTalent & Career

ManagementL.T.I.

S.T.I.

H.R. and Remuneration Strategy

Employee Value Proposition / Retention

2

ttracting and Retaining Top Talent

3

Sources

Reuters

Department of Home Affairs

Business Report

Goldfields

Wits Business School

4

2

5

Globally, the average time

that CEO’s remain with

one company for

6

10

7

The number of Gold

Mining firms in South

Africa, compared to the

1,600 in China

8

40 - 70%

9

% of global leaders

eligible for retirement

within the next 5 years

10

346

11

The number of Engineers

and Artisans that Eskom

lost last year

12

15 - 20, 000

13

The predicted

shortfall of qualified

artisans in South

Africa by 2010.

14

>20, 000

15

The number of South

Africans who attended this

years Australian emigration

expo.

16

35, 000

17

The number of positions

which cannot be filled from

within the country because

of the current skills

shortage.

18

+/- 150, 000

19

The number of people working

in the Financial Sector in South

Africa. At any one time there

are more financial sector job

vacancies worldwide than this.

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4, 000, 000

21

Shortfall of qualified

medical practitioners

worldwide

22

$2, 400, 000,000,000

23

Value of active

construction projects in

the Gulf Co-Operation

Council Countries

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IncentivesAttraction

and Retention

Strategy &Policy

Strategy &Policy

Great Organisations

• Sustain performance

• Engage employees

· Define themselves in the market

Effective Individuals

• Are focused and disciplined

• Are trustworthy

• Possess judgement• Are proactive

Inspired Leaders

• Engender trust

· Clarify purpose

· Unleash talent

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efinition and ontext

“Retain” has two meanings: “to hold or keep in possession”

and “to engage the services of”

The traditional focus in many HR practices has been to hold or

keep rather than to engage a service. High-value employees

and hot skills want to be “engaged” and not “kept”.

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urrent rends

Turnover increasing exponentially (as high as 23% in some industry sectors)

Retention focus shifting from guaranteed remuneration and short term incentives to training and development,

recognition and long term incentives

Targeted approach still the norm

Majority of organisations target the median overall and upper quartile for Hot Skills and High Fliers

Performance linked remuneration becoming more popular/increase in formal performance management

systems (defensible differentiation)

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An increasing number of organisations are offering Long Term Incentives to employees below middle

management in an attempt to attract or retain them

A large number of organisations are paying premiums to various skill categories/job families. Ranges btw 7.5 –

40% (usually dependant on scarcity of skill)

Remuneration more effective at retaining Top to Senior Management. Below senior mgmt, recognition and personal development are becoming increasingly

important

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Yet . . . . . . .

Only 28% of organisations in a recent survey including some of the top

organisations in SA have a formal retention policy/ strategy in place, the majority of which have only implemented this since

2005

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HE EFFECTIVENESS OF PAY IN RETAINING TALENT

• The majority of organisations still use pay as their primary retention vehicle

• The number one reason in Exit Interviews for employees leaving organisations is “for more money”

FLAWED LOGIC

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etention hallenges

1. Offering individualised retention deals to some while still recognising the “B players”

2. Managers not being able to manage staff (usually due to lack of people skills training)

3. Work-Life-Balance options not always practicable

4. Volatility of employment market (scarce skills)

5. Affordability

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ew rends

1. Informal reward and recognition2. Flexible benefits where appropriate3. Talent management strategies4. Sign-on bonuses/loans5. Work from home policies6. Succession planning and knowledge sharing policies7. Tailoring retention options to the employee profiles of the

organisation (profile-fit reward models)8. Above average voluntary benefits to create niche

environment

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ey success factors

1. Involve employees – survey/focus groups2. Communication, Communication, Communication3. Holistic approach but focus on “burning platforms” and

“quick wins”4. Identification of Hot Skills needs to be signed off at

executive level. Foolproof process5. Create higher level of understanding w.r.t. value

employees receive6. Detailed Implementation Plan7. Be seen to be doing something

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ho should qualify?

• “Hot skill” positions in the market

• Turnover – staff attrition• Hiring Cycle

Attraction and retention strategies often target specific roles within an organisation. This enables organisations to attract and

retain key talent critical to the organisational competency.

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ritical kills

Critical for an organisation to sustain business objectives

Essential for business continuity

35

carce kills

Supply and demand of skill

Changes over time

Y2K

36

igh liers

Identifying consistently outstanding performers

Respect of peers in their field

37

In identifying needs, the following questions could serve as a template:

• What are the hot skills that are critical to the organisation?• Who possesses those skills?• What is important to the people who have those skills?• What is needed to continuously develop and transfer

those skills?

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urnover

• Southern Africa norm is around 13% (UK -18% / US – 11%)• Engineering 23%• Professional Services 18%

• High turnover – usually a targeted approach

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urnover

• High turnover – usually a targeted approach

2%

40

iring ycle

Good indicator of attraction and retention requirements

72 to 87 days for hot skills

Remove roadblocks if longer

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ompetitive emuneration

• Ticket to the game and to get on the playing field• Remuneration policy quartile?• Must be market-related to prevent it from becoming a

dissatisfier• Anecdotal remarks like “better pay elsewhere” can be

factually dealt withREMEMBER

Obviously, paying competitive rates is critical, but simply throwing money at the problem will not make it go away in the long term.

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lexibility

Ranking by age group

18 – 29 30 – 44 45 – 54 55 or older

Base salary 1 2 1 2

Variable pay 2 4 4 6

Shares 3 5 6 5

Medical aid 5 1 5 3

Retirement funding 6 6 3 1

Deferred compensation 4 3 2 4

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emuneration ptions Market Stance Hot skills treatment Restraint of trade payments Sign-on bonuses/Retention bonuses Sign-on loans Extended pension arrangements Flexibility Short-term incentives Long-term incentives Deferred compensation Rolling or banking of incentives earned

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lternatives to cash

• Alternative (flexible) working arrangements Compressed work week Flexi-time Job sharing Part-time work Flexi-place

• Sabbatical Leave

• Voluntary benefits

• Psychological Contracts

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sychological ontract

From To

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Managers Role in Engagement

© The Corporate Executive Board Company

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The EVP—A Key to Attraction and CommitmentThe EVP drives attraction and commitment in the labour market

Attraction Benefits Commitment BenefitsEVP Attributes

EVP DefinedThe set of attributes that the labour market and employees perceive as

the value they gain through employment in the organisation

Increased Access to TalentOrganisations with competitive EVPs are able to increase their

access to candidates on the labour market by 50%

Lower New-Hire Compensation Premiums

Improving EVP attractiveness reduces new-hire compensation

premiums by up to 50%

Increased Employee Commitment

Organisations with competitive EVPs are able to improve new-hire commitment (performance

and retention) by up to 29%

Three Organisational Barriers to a Competitive EVP

Most EVPs are not aligned with candidate and employee

preferences

Employees do not find the EVP delivered effectively

EVPs are not differentiated from labour market

competitors

© The Corporate Executive Board Company

1 32

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The focus in retention strategies has shifted from a one-size-fits-all to customisation. Each employee is motivated by different

factors. Therefore, retention strategies must be targeted to individual employees or

groups of employees

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THANK YOUfor this opportunity

to be with you