Make offers, but not in money terms

Derek Goh
Executive Chairman
Serial System

AS AN HR best practice, we implement the exit interview for staff planning to quit. This will give us good feedback on the reasons for quitting and improve our HR policy and practices. Not all quitters are leaving for more pay. Some move on for a change of environment or a career switch or to take a break. When an employee is critical to the organisational growth and profitability, then it is logical to make a counter-offer, especially in the current tight labour market.

A pay rise is not the ideal way to retain quitters as we may not want to set a precedent for more quitters demanding pay increments. Often, greater job satisfaction and motivation will keep the staff happily working for the organisation. Thus, annual corporate recognition will boost staff morale as well as raise the corporate and employee profile.

Another form of HR retention is to grant sabbaticals to deserving staff to recharge themselves so that they can return to the organisation fully energised and committed.

An overseas posting is another good change of scene for staff to rejuvenate themselves and yet remain gainfully employed.

Fong Loo Fern
Managing Director
CYC The Custom Shop

IN GOOD times or bad, loyal and capable staff are hard to come by. When times are hard, like the economic downturn of 1998, the relationship is tested on the part of the employer. Many companies took the easier way out by retrenching staff. That was not so long ago. Times have changed and the economy has posted several consecutive years of good growth. But people's memories of those hard times are well etched while new job entrants do not have any recollection of it. Employers like us recognise that the tide has turned and getting the right staff is becoming increasingly challenging and expensive.

As an employer running my own business, I have to be mindful just how much I can afford to put aside for staff salaries without severely affecting profitability. Yes, I would consider making a counter-offer to an employee who wants to quit - but not always in the form of higher salaries.

We are all creatures governed by emotions and needs. While money could be a main factor, sometimes there are other factors like more flexible hours, a better work environment, recognition or simply the opportunity to work in a different job function.

It is important to get to the root cause of the resignation. From experience, if all the employee values is a higher salary, I would let him go. It is just too stressful and time-consuming to have to go through the process of "bargaining" each time the employee is lured by a higher salary from another company. I think what is important for businesses is to build a culture that is people-oriented and which encourages personal development, loyalty and a shared vision.

Always keep them motivated

Joel G. Momberger
Managing Director
Informatica S-E Asia, Divisional Headquarters, Asia Pacific

TALENT management programmes have gained importance in sectors like IT, retail, banking and financial services which witness high levels of employee turnover. Informatica believes that employee retention is of utmost importance as each individual brings a unique set of skills to the organisation. This is especially so in the IT sector where talent is already rare and people with requisite skills and experience are difficult to find.

While monetary compensation such as salary, perks and stock options are a given, it is the intangible benefits like a career roadmap and healthy work environment which determine whether one will seek out greener pastures. Counter-offers are usually not an effective solution to talent retention. Employers need to understand that employees want attention, interaction with bosses, performance incentives and clear direction on exactly what is expected of them. These are the basic needs of employees at all levels and it gives them the reason to stick around.

Sam Yap S G
Group Executive Chairman
Cherie Hearts Group Int'l

AT CHERIE Hearts, we believe that the best option is to prevent such a situation from happening in the first place. It is always better to spend some effort retaining a good employee than to let him go and seek another one. The costs associated with rehiring and retraining new employees are often high, if not higher than retaining current ones.

We recognise that employees today, especially the younger ones, have high aspirations and are constantly seeking opportunities to achieve them. Hence, we seek to provide our employees with these opportunities, through challenging job assignments, promotion prospects, good work-life balance, etc. Of course, remuneration plays a part as well, so we offer competitive pay packages that are in line with the industry.

Having said that, in exit interviews, we do check with employees to see if we can match their needs, other than financially. A horizontal move may be deemed necessary in order to retain them.

Leonard Tan
Managing Director
Diethelm Singapore

WITH a raging talent war in the market these days, addressing the issue of employee retention is an urgent across-the-board business concern. The yearly expense to an organisation of replacing a good employee (including replacement, training and lost performance costs) can range from a couple of months of the employee's salary to even his annual salary. Turnover of talented employees also erodes morale among those who stay and quite likely harms customer retention.

The challenge today is not just about retaining good talented people, but more importantly, about fully engaging them. It is about capturing their hearts and minds at each stage of their careers. To be fully engaged requires emotional involvement in the work.

If an employee who has proven to be an asset to the organisation reaches the point of quitting, understand his core reasons for doing so. There is usually no real mystery for his disengagement; the common factors include a lack of challenge, uninteresting work, limited career growth, restricted development opportunities, a bad boss, lousy colleagues, and the perception of unfair pay. Whether or not to make a counter-offer, as well as how far to go, depends on the reason(s) for the employee's intention to quit, the company's ability to meet his demands, the company's alternative(s) if the employee does leave and very importantly, the message that will be sent to the good talented employees who are still fully engaged. Smart retention goals, therefore, need to be established. It is true that we often have to compete on compensation and benefits, but we really win on culture, learning and development.

The speed and intensity of change today requires all managers to be responsible for the retention of their staff and to be alert to problems that can be fixed. Retention must be part of the organisation's DNA. Recognise managers who keep good employees, ie, anyone at any level who brings value to the organisation.

Reciprocity is fundamental. Employees are investors in the organisation and expect a return on their service investment. Employees' engagement, commitment and loyalty are a result of being challenged, developed, appreciated, heard and respected. Thus, check in with your talented employees often. Build learning relationships in all directions and hold all partners responsible for the success. Train intelligently continuously and create a development culture.

Of course, it's often said, too, that people don't leave the organisation; they leave the boss. So yes, be aware that people are always watching and assessing us and our actions as leaders. We need to walk our talk.

Dora Hoan
Group CEO
Best World International

AMONG the top reasons for quitting a job is better compensation. Understandably, a job more than anything is for bringing home a good pay cheque, and essential talent must be justly rewarded. Another foremost reason is perceived lack of opportunity for advancement within the organisation.

Quite simply, talented employees driven by professional success and status may grow discouraged when there is not an apparent plan by the superiors for their professional development. When better opportunities knock, they often won't wait around for a chance to advance in their current company if they do not see it as attainable in the near term.

Must we enter a counter-offer situation? When a valuable employee resigns, the company's reaction will depend on many variables. A counter-offer may encourage an employee to stay but an employer will be better off determining in advance how to make work engaging and fulfilling for a good employee.

Poul Lorentzen
Vice-President
Dematic S-E Asia

IN DEMATIC, we strive to keep employees motivated and committed rather than resort to counter-measures when they want to leave the company. The logistics industry in South-east Asia is relatively small and often faces competition between companies for senior, experienced and talented individuals.

Our goal is to build a dedicated and skilled knowledge-based workforce which adds value to our customers through an understanding of their needs. The culture in Dematic S-E A, therefore, seeks to groom budding talent and breed staff loyalty through a balanced system of continuous reviews, recognition and rewards. Thus, we aim for employees to grow with us in the long run as an alternative to job switching at the next available opportunity.

We believe the best strategy to address staff retention is by investing in our staff through creating a conducive working environment, skills improvement and welfare. Good staff are the ultimate source of competitive advantage and a crucial asset for the long-term growth of any company.

Saw Phaik Hwa
CEO
SMRT

A DECISION to leave is never made on a whim. Thus, rather than react to departures, I believe organisations should focus on putting in place a good people strategy. This means offering staff a compelling future, investing in human capital development, creating a positive work environment and rewarding staff for their contribution.

While it is painful to lose good, capable people, it helps that at SMRT, we have in place talent development and succession planning that prepares the next generation of leaders for the helm. With our strong people policy, we have also had staff return to the fold, bringing with them new perspectives and a greater sense of loyalty and belonging to SMRT.

George Wong
Managing Director, Asean
BEA Systems

A COUNTER-OFFER should not be a means to an end. Instead of proposing extra benefits such as monetary compensation, a company should understand the motive of an employee who wants to quit. More often than not, the situation can be managed by simply getting a better understanding of the employee's expectations. At BEA, we make sure our employees are constantly motivated to ensure job satisfaction. Retaining employees is an ongoing process with well-thought through HR measures. Work-life balance, flexible work structures and clear career paths are just  some of the ways that ensure employees' commitment to the company and mitigate the risks of losing valuable colleagues.

Pay if the person is worth it

Joey Chang
Chief Executive Officer/Founder
AXS Infocomm

YES, I would make a counter-offer, especially if that person is worth it, and has proven over time that he deserves to be pursued by both sides.

I have done it a number of times, and have a 50 per cent success rate. Most times, we lose the staff due to the fact that they are joining a new industry or taking on a different role. It usually starts by trying to understand where the failure is. Is it a pull or push factor? When deciding on a counter-offer, many considerations will come into play. For example, the reaction of other staff, affordability, cost of replacement, loss of time, etc.  

But the cardinal rule is that at no time must the company be held to ransom, or the employee appear to be indispensable. If that is compromised, no matter how painful, I will not proceed with the counter-offer.

Often, the offer will be in monetary terms. Other methods would be to try and meet the expectations for career development and advancement. Seldom will I use perks like cars or clubs memberships.  

Na Boon Chong
Director - Consulting, South-east Asia
Aon Consulting (Singapore)

I WOULD make a counter-offer if I have satisfied myself that money is the issue and the employee is a valued contributor. When we stretch employees by exposing them to challenging work and rapid learning on a sustained basis, sometimes we may not have kept compensation in pace with their development. While money is a hygiene factor, it is also an issue of fairness, recognition and sense of achievement. It would certainly have been better if compensation is planned, proactive and well-communicated. That has to go in tandem with the ability to value employee contribution and then compensate individuals accordingly.

When the counter-offer doesn't work, I would make it clear that the door is always open for a valued contributor. People often return to good companies with even more commitment, having seen the outside world and concluded that the pasture is not necessarily greener. I would also ask for a personal referral of someone who would fit in with our firm, which usually turns out to be a better choice.

Thomas Ting
Managing Director
TJ Systems (S)

WHEN an employee decides to leave the company, it is for a combination of reasons and we should identify the true reasons before any counter-offer is made. We do make a counter-offer based on how critical his role is, and business needs. In the current tight labour market we have to bite the bullet to keep talented employees in critical roles, such as the financial controller, for instance.

But money is not always the best solution as it can lead to lower morale among other employees and send the wrong message that the best way to get a pay increase is to quit. Also, retaining staff by making counter-offers is mostly a short-term tactic and not a long-term solution.

Ng Kong Yeam
Group Executive Chairman
Sino-America Tours Corporation

WHEN an employee in my company submits a letter of resignation, I normally call him for a chat and find out the reason for his resignation. The first question I ask is: "Is money the main satisfier?" The second question is: "Are you getting a new position at a very much higher salary, and if so, how much."

The answer will help me decide if I should make a counter-offer. Undoubtedly, people do leave for a better deal, especially when the new package contains a large signing bonus and plenty of stock options. It's often just too much to resist.

To keep my staff, I take good care of them as well as, if not better than other companies in my industry. Money is important, but if our culture meets the needs of our employees, money alone is unlikely to make them leave.