Attracting and retaining talent was seen as the top HR challenge in 2007 and 2008. As the economy continues to slowdown some have begun to wonder about the impact of a sluggish economy on the talent war.

In my experience the war for talent actually increases under tough economic conditions. As average and low performers dig in to ride out the economic lull, top talent – those still able to turn a profit under tighter conditions – become more sought after than ever before.

So what strategies can be adopted to retain your key talent in a downturn?

1. Identify performers (top and bottom)

Before you can actively retain your talent, you first need to be able to accurately identify it and that means you need a successful performance management system. If your system is successful it should allow you to analyse your workforce based on three key questions.

• What are the key performance drivers in your company?
• What is the importance of each section of the workforce?
• Who are the most valued performers in each group?

Your performance metrics should allow you to identify the top 10 per cent and the bottom 10 per cent of your workforce. In turn, this helps to develop strategies for managing both groups.

2. Make room for future stars

By building reward systems that are closely tied to business performance, your talent will be measured and rewarded based directly on the contribution they’ve made to the business.

3. Focus on coaching and leadership

Studies have proven that investing in mentoring and coaching programs for top talent is an effective retention tool.

4. Review remuneration

This is the time to align pay with performance management. It is important to examine the percentage difference in pay between your top and bottom performers. Assess your short and long term incentive plans to see if your current remuneration framework reflects the value your top talent brings to your business.

5. Inform and engage

Use communication to inform and engage your employees, particularly in an environment where they may be concerned about their future with your company.
As remuneration budgets become tighter it is important to remember that boosting intangible rewards and ensuring that top talent is challenged and acknowledged is likely to be the best strategy for running a successful business and retaining your talent in a slower economy.

Pam Slattery, Sydney
pslattery@moorestephens.com.au