The Talent Solution

Yulia Kullanda, Consultant

Retention might have seemed to be a non-issue for most HR managers in the past year: voluntary turnover was at its all-time low. In fact, natural attrition was welcome. However, this is not the case across the board. While the absolute turnover percentage may be low, this does not guarantee that your company will not lose some key employees, or, equally important, that those who stay are loyal and motivated to perform at the level required for your business to succeed. If anything, the post-crisis mass lay-offs have undermined the idea of life-long employment and demonstrated to employees that it is up to them to ensure their life-long employability instead.

While it might be too early to claim this for sure, the labor demand for good people with hot skills and unique experience seems to be rising. This includes top local management and professionals who have the potential to replace (or have already replaced) expats in multinational companies operating in Russia. These are the people with the capability to develop the business activity under conditions of high uncertainty and instability, on the one hand, and high potential growth opportunities of the vast Russian market, on the other.

Although the challenges and issues behind employee retention in Russia may be somewhat different from other countries, there are nonetheless a lot of similarities.

The economic rationale for paying attention to retention is the cost of replacement, both tangible and opportunity cost. In fact, comprehensive research conducted by PwC’s Global HR Solutions practice in the US has shown that for some job-holders with very “hot skills” (a good example will be senior executives with experience of setting up and operating an e-business) the total cost of replacement can go as high as four times their annual salary. This reflects only loss of money, the impact on customer relations is incalculable.

A couple of decades ago, the universal method of retaining talent in the West was to raise salaries. However, throwing money at turnover-related problems is not working anymore. The research mentioned above has demonstrated the following top six considerations in the hierarchy of employee “wants”.