As organizations grapple with their people challenges over the next few years, two overarching themes emerge.

First, some practices never go out of style when it comes to retaining and managing talent. These practices not only stand the test of time, they also apply across generations, across life stages, across every category.

Second, globalization and political, economic and demographic changes have had, and will continue to have, a huge impact on organizations and, consequently, people challenges.

Let’s begin with the tried and true. The cost of losing an employee actually starts long before the individual leaves. It’s the cost associated with disengagement, when passion and energy are no longer invested into the workplace. The fundamental truth is that, while economic realities do play a role, if total compensation (pay and benefits) satisfies one’s requirements, an employee is not likely to leave for this reason alone. The leader makes the difference. Excellent leaders have an uncanny ability to retain and engage their teams even in toxic organizations. Conversely, toxic leaders experience turnover even in the best organizations. What does excellence look like? Quite simply, leaders who do the following:

  • provide clarity around the big picture and expectations, and inspire by their words and actions;
  • genuinely solicit input and put it to use appropriately;
  • take an interest in their teams, coach them to grow and connect them with challenging work;
  • recognize and appreciate those who go above and beyond, and, at the same time, understand the need for personal and work/life balance;
  • recognize that they do not “own” their direct reports; and
  • can be tough when they need to be.

In short, excellent leadership is about unleashing potential in others by using a variety of leadership styles, depending on what the situation requires. Excellent leaders create a sense of team and “stickiness,” which carries disproportionate weight in retention, often counter-balancing a significantly more lucrative job offer.

Given the current volatility, talent management is increasingly more important; 81% of executives in KPMG’s Rethinking Human Resources in a Changing World survey said talent management will serve as a key competitive advantage over the next three years. The cuts that many Canadian organizations made to middle management in the 1980s—coupled with the long tenure of baby boomers—have led to a looming vacuum at the uppermost levels of many organizations. Estimates are that up to 40% of boomers are eligible to retire now or in the near future. The focus from a talent management perspective needs to be increasingly on accelerated development of “high potentials” who can be groomed to step into these roles. The challenge is how to distill required experience into a streamlined process, and it requires the active involvement of senior leaders as coaches, mentors and teachers.

It is clear that leadership in volatile times requires an augmented set of capabilities. Leaders need to be ambidextrous—able to focus on operational excellence while at the same time driving growth through innovations and exploration of new opportunities. Finding and retaining leaders with these capabilities, or the ability to nurture them in others, has led to a whole new war for talent.

Leaders at every level are increasingly empowered to identify needs, make their own hiring decisions, grow their talent—all empowered by mobile apps. They are taking it outside the HR department. Research from Hay Group’s 2013 Best Companies for Leadership indicates that these companies are future-focused, clearly articulate mission critical roles for the future and spend significantly more time developing a strong internal pool of well-developed candidates.

Senior executives spend significant amounts of time understanding needs, where the talent lies in the organization, and in providing coaching—they’re engaged, they’re connected and they’re involved. The Best Companies for Leadership live and breathe the values of collaboration, business discipline, customer centricity and innovation. They are exceptional in providing leaders with opportunities to work outside their comfort zone, exposing them to broader areas of the business to expand their business and global perspectives.

These companies also focus on middle management, as this is a key area for innovation. They use a wider range of experiences to grow ambidextrous skills among middle management through a range of structured programs, outside development, mentorship and coaching. And senior leaders devote significant time managing the future talent of the organization.

Attracting and retaining younger employees may call on a different set of values. While there clearly is a growing sense of desperation in recent graduates that may even overshadow the perceived sense of entitlement of those who came before them, it’s also true that this generation truly is driven by a need for meaning in their work and lives, environmental consciousness and a desire to lead a balanced life.

In recognition of changing values, the best organizations are turning toward a menu approach to benefits, allowing them to be customized to the individual, even offering opportunities for sabbaticals or for volunteerism. Economic needs clearly are part of the equation in terms of attraction and retention, but when it’s no longer a buyer’s market, it’s arguably the other factors that will be a draw.

Andrea Plotnick is national expertise director, organizational effectiveness for Hay Group, based in Toronto. The views expressed are those of the author and not necessarily those of Benefits Canada.

Copyright © 2020 Transcontinental Media G.P. Originally published on benefitscanada.com

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