Retaining talent in the 21st century
Mercedes Cambón, Regional Director of Human Resources at tech company Sabre in Montevideo, noted that her company, which supports the global travel industry, has seen a shift towards more flexibility in various different ways following of the pandemic. Companies are now freer to headhunt for talent globally and candidates will also have many different options. There is a need to revisit communication, culture and remuneration packages. Generally, companies that are more flexible and will let their employees choose will have an easier time retaining talent.
Johan Lubbe, an employment lawyer at Littler Mendelson in New York and Vice-Chair for Website and Publications for the IBA Global Employment Institute Committee, offered that talent retention is complex and that there is no easy solution: ‘The C-suite must be engaged, otherwise talent is lost.’ Company identity and culture are key. Talent who stay the course will often have been in their current job for some time, they may have been engaged in team sports, they will be likely to look for continued education and a clear path to advancement, as well as a suitable benefit package. Many are also looking to find a position in a company known for good internal communication and use of technology. Covid-19 has changed many things: remote interviewing and onboarding have increased exponentially. Onboarding in a remote context is challenging especially in terms of instilling culture and introducing newcomers to the organisation.
Raquel Flórez, partner at Freshfields Bruckhaus Deringer in Madrid, noted that diversity is an additional challenge in talent relation. There is a need to change the hiring process to address unconscious bias. A particular question in the current situation concerns organisations which cannot work remotely, eg industrial companies.
Enrique Stile, partner at Marval, O’Farrell & Mairal, said that different remuneration and benefits structures are emerging. These tend to be more flexible, as many people are no longer interested in a traditional career. Factoring in the priorities of, eg, employees with young families but also of those at the middle to late stages of their working life, is key. Stock option plans remain very attractive in certain sectors. New companies offering shares subject to an initial public offering have also had success, and in countries where there is high inflation paying in a currency such as USD remains very attractive. In the pandemic many benefits have become less attractive, including cars, fancy offices, gym memberships etc. Many companies are engaging in mental health support efforts, as well as support to families where both are working.
Lubbe noted that remuneration packages will generally differ depending on the industry. After the financial crisis there was, for instance, a view in the financial services industry that remuneration packages should not drive profits inordinately. There has also been an increased focus in that industry on incentive compensation and bonuses. The time of bonus payments is another current topic: among some companies there is a move away from the normal payment timing of February/March, towards quarterly payments. The fact that people move jobs more frequently, often every three to five years, also has an impact on the of structure of remuneration payment and packages. A special challenge is pension plans, particularly in the United States. In developing countries cash compensation is generally much more important. Another general trend is flexibility and teleworking. More flexibility is generally wanted and working from home (WFH) has exploded. The risks that this entail remain unregulated.
Flórez commented that ‘flexibility is the magic word of the moment’. The nine to five office set-up is no longer desired. The pandemic has showed everybody what is possible. There is legislation in the making to safeguard the interest of remote workers. Generally, companies are following different paths; some have concluded that WFH is here to stay for good, others have called their employees back to the office and, again, a third category is allowing for hybrid solutions. According to a recent European Union survey, three-quarters of the respondents wanted to see more WFH long term. The reasons mentioned included work/life balance, the option to live where desired, a reduction in carbon footprint, a reduction of costs of living, additional free time as there is no commuting and the WFH set-up being more efficient/productive for the employee. Downsides include data protection and cyber security and the negative effect on innovation, onboarding/training, monitoring performance and wellbeing. One additional challenge is how to share the cost of the WFH set-up.
Cambón mentioned that one challenge with remote working is how to ensure employees remain engaged in a situation where informal chats are more rare. Companies will have to find an alternative solution, such as using chat functions on digital platforms.