- Executive retention is one of the most important topics that face construction employers. Below are 16 practical strategies to retaining construction executive talent:
- Hire the right person.
Good executive retention planning begins with the hiring process. Contractors should hire the best executives that they can afford. These hires should be based on skill, attitude and general “fit” within the firm”s needs and values. Hiring based on common values and attitudes supports long-term retention and stronger commitment from new hires. - Provide a formal orientation program and establish realistic expectations.
The first few weeks of employment for a newly hired executive is the most critical time to lay the groundwork for long-term employee commitment, and for helping the new hire to become successful. Demonstrating employer commitment to a new hire’s success early on fosters trust and commitment from the new hire. - Provide training, education, and development.
The benefits of executive training and education usually far outweigh the costs. The more an executive feels that he or she can develop and grow within their firm, the more likely they are to stay. - Make rewards and recognition count.
Every executive wants to feel valued, necessary and important to their employer, while playing a vital role in their employer’s success. Employers should reward and recognize their executives at every opportunity. Rewards should be immediate and personal, and should parallel the significance of the accomplishment. Even the smallest tokens of appreciation (such as gift certificates, thank you notes and acknowledgments in the employer newsletter) often carry tremendous impact with executive retention. - Build trustworthy and loyal relationships with staff.
Construction employers should not only teach their executives how to be good leaders and managers, but also how to build loyal and trustworthy relationships with their direct reports. Most relationships can be dramatically improved by simply improving communication, being a better listener, and becoming more available. - Promote a company culture of participation.
Construction firms should establish a corporate culture that promotes employee participation and empowerment. Whenever possible, executives should be invited to help solve employer problems. This shared approach creates deep ownership in the firm’s success, and communicates that the employer trusts and values the executive’s opinion. - Offer equity and ownership.
The most loyal employee is one with ownership in the firm. A strong employee stock plan often cuts employee turnover up to one half. Stock ownership is a good way to encourage executives to focus on the firm’s success -not just their own. It offers an alternative for compensating high achievers when cash is not available, and provides an effective “golden handcuff.” - Create career challenges and promote from within.
Executives often leave their employers in order to pursue greater and more meaningful career challenges. Employers should customize each executive’s career path based on the executive’s ability, desires, and input. Employers should also have a policy of promoting from within to reward loyalty and long- term commitment to the firm. - Pay market wages or better.
Once executives reach an acceptable income level, money moves down the list of priorities. However, compensation consistently weighs heavily when it comes to keeping executives. Compensation programs should be continually reviewed and redeveloped in order to remain competitive with the marketplace. - Deferred bonus payment, restricted stock.
Bonus pay can sometimes be the largest part of an executive’s compensation. Many employers will stretch bonus payments out over several years as a retention method or golden handcuff. Discretionary bonus pay and restricted stock offerings can sometimes be structured so that if an executive prematurely leaves, the remaining bonus or vesting is subject to forfeiture. - Improve perks and benefits.
Perks and benefits are often highly regarded and valued by executives. Perks don’t have to cost a great deal of money. The message they send to an executive can mean increased loyalty and reduced turnover. Perks (such as tuition reimbursement) can help executives grow as professionals, and supplement their need for career challenge. - Improve communication.
The number one reason for workplace conflict is typically a result of faulty communication, such as an unclear definition of what’s required. Executives want to understand what’s expected of them, and to receive honest and direct feedback. They also want to be heard and to know where they stand at all times. - Create a flexible work environment.
Executives look for a work place that allows for individual expression, and meets their unique needs as individuals. By allowing executives to design and define their work area, and the opportunity to telecommute and work from home rather than the office at times, employers will usually have a more productive and satisfied executive. - Consider employment contracts.
Employment contracts are often used to cement verbal agreements concerning an executive’s pay and responsibilities, but they are also effective tools at forging executive partnerships and alliances with the employer to reduce turnover. Although an employment contract is unlikely to keep an executive who wants to leave, it can significantly inhibit the departure process, deflect recruiters, and diminish the pondering of outside career opportunities during the contract term. Employment contracts can also cause recruiters and prospective employers to hesitate or withdraw their pursuit of an executive if they believe that there might be litigation associated with a hire. - Conduct retention surveys with direct reports.
Fortunately it is relatively easy to get the facts behind most turnovers. The best and simplest solution to developing a retention strategy is to have managers regularly ask their direct reports why they stay and what would cause them to leave. Even conducting an anonymous employee survey can predict when and why certain employees may be thinking about leaving the firm. - Make executive retention a strategic priority, and follow through.
To make executive retention effective, it must begin with a commitment from the highest levels of leadership, and include all management personnel. It must also become a strategic priority for the firm, and include specific practices and accountability. Executive retention programs typically involve conducting a turnover cost analysis, researching why key people are leaving and have left, monitoring why new hires have joined and remain, evaluating results, preparing a report with specific recommendations for change, and turning recommendations into actions and policy.
- Hire the right person.
“The article above was written by construction recruiter Frederick Hornberger, CPC, president of Hornberger Management Company in Wilmington, Delaware (www.hmc.com), a construction recruiter specializing in senior level, executive search.“