When companies have a star performer in their team, they have struck gold! Top talent is a rare commodity, which means that must either be head-hunted or businesses should hold onto them. People aren’t staying in jobs for 20 years anymore; rather they move every three to five years for professional growth and development. This ongoing talent flux is expensive for companies, especially when it comes to top talent. Research estimates that replacing a competent employee costs a company 150% of the employee’s annual remuneration. When it comes to top talent, the figure shoots up to 400% which is a substantial amount of money!
Often companies believe that financial rewards and incentives ensure that talent is retained. This belief system might have worked well in the past, but it is a semi-outdated business model which is evident with the Millennials (born between 1980 and 2000) and Generation Zs (born from 2000 onwards) who are entering the work space.
There are many models and opinions that unravel the question “How companies can retain top talent”, but Martin Seligman’s PERMA model keeps it simple and to the point, and it’s an easy acronym to remember.
- Positive emotions: Employees want to be fulfilled, accomplished and have job satisfaction. A positive and pleasant workspace directly impacts on goal attainment, performance, creativity and productivity.
- Engagement: The willingness to become one with your job and deliver excellent work. These things are having choice over your job design and duties, experiencing regular flow moments flow (state of absorption) applying your natural strengths and receiving continuous feedback and support.
- Relationships: Employees want to have a sense of belonging within the team as well as identify with the company’s culture and values. Experiencing positive interconnections between individuals that build trust, respect and shared care for each other and the company. Feeling appreciated and being recognized for their work is very important.
- Meaning: Connecting to the company’s vision and purpose and getting a sense that their work has a much higher purpose that serves others. Understanding the value of their work far beyond the financial reward.
- Accomplishment: Being given the necessary resources and freedom to make decisions, and receiving support and encouragement to be innovative to reach their optimal potential.
While we often focus on growing and developing employees’ skills and abilities, companies often overlook their well-being. Retaining talent means combining the head and heart, balancing the cognitive, affective and social mechanisms into one.