In today’s episode we continued on the topic of employee retention through the importance of peer groups and compensation as it pertains to retention. Peer groups are critical for your executives to be apart of as they give that executive access to other executives to use as a sounding board. We also revisited compensation as it pertains to retention.
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Podcast Transcription – S1:E14
| Speaker_1: | 00:02 | Get ready for your weekly dose of talent strategies and tactics from industry leaders to help you attract, select and retain your top talent. You’re listening to Inside Executive Search with Steve Yakesh and Scott Peterson. |
| Speaker_2: | 00:31 | Hello and welcome to the Inside Executive Search podcast. My name is Steve Yakesh and this show is for business owners, board members and executives exploring strategies and tactics to attract, select and retain the very best. If you are not feeling 100% confident that you have a plan to attract the very best, keep listening, this podcast will help you get there. That said I am welcoming in Mr. Scott Peterson from Versique Search. |
| Speaker_3: | 00:55 | Good to be back again this week, Steve, as we dive a little bit deeper into retention. |
| Speaker_2: | 01:00 | Yeah, so our last podcast we reviewed a couple retention topics, including alignment and job, culture and career along with onboarding and orientation. So, this week you are going to provide your guidance, wisdom, and expertise for the listeners on the importance of peer executive groups along with revisiting executive compensation as it specifically pertains to retention. |
| Speaker_3: | 01:33 | Right Everything that we’re going to talk about just is going to help make that retention process a much more robust at your organization. |
| Speaker_2: | 01:41 | Perfect! What do you want to start with compensation or peer groups first? No, let’s go compensation. All right. Compensation it is. So, we put together a strong compensation package and going back to episode maybe three, four or five, I forget exactly which one it was, but yeah, your base, you got your annual, you got your long term incentive, equity perks. We will walk through that. So, we got them, we landed our candidate. Yup. So, he or she is happy, and they accepted our offer. Talk to us around the importance of compensation from a retention standpoint. |
| Speaker_3: | 02:18 | Yeah, so you don’t want to ignore the compensation component ongoing. Now is that something you’re going to worry about in the first 30 days. No, probably not, but it’s something that you have to always be cognizant of and making sure that you’re looking at what your competitors are doing in the marketplace or the competitors adding something unique to their total rewards for their executives. Sure. Usually this is a human resource compensation side of the organization that’s looking at this, but make sure you’re on top of that. But in addition to that, what if in six months, the executive that you brought in has scope change and what they’re responsible for. Sure. Instead of having these five responsibilities, now they have seven or eight, does that mean that they should have additional compensation, additional equity, those sorts of things? Well, the answer is maybe, but let’s make sure that we’re addressing that with the, with the executive because what you want to avoid is you giv |
| Speaker_2: | 03:33 | No I think that makes a ton of sense and like you said, you don’t have to, probably not even in the first year, but maybe that executive really surprises you and they take on that much more. I think you do have to revisit it and candidly, if you don’t, you just build up their responsibility. Well you’re building up their resume for others to get a key executive that’s even bigger and broader and if they’re bringing them into their organization, they’re probably going to be offering to them a larger compensation package. So not that you have to match it, right, but you have to acknowledge the additional scope credits. |
| Speaker_3: | 04:11 | Be Aware of the situation. Again, it may not be a planned event. Think about the executive level in your peer group would have one or two executives leave the organization and you know, those are what they manage or what they had to deal with internally has to be dealt by somebody and that might just fall to this new person that came on board. So just be cognizant of it, be aware of it, and address it head on versus letting the executive sort of just think about it and not thinking that no one’s paying attention in the process. |
| Speaker_2: | 04:46 | So is it fair to say just maybe some key gates or milestones, obviously revisit it on an annual basis or if there’s a significant scope of responsibility increase and/or key changes within the organization. Those are probably three good reminders or gates to say, Hey, I should revisit this and take a look. Absolutely. And I’m just making sure you’re aligned on those processes and making sure you bake that review into your company. Perfect. All right, so can we move on to peer groups or anything else? We need to talk compensation wise? |
| Speaker_3: | 05:25 | No, I think compensation along with our first episode and the touching points here. |
| Speaker_2: | 05:31 | Yeah I think we’ve hit that one pretty good. Perfect. All right, so executive peer groups, what are they and why are they important when it comes to retention? |
| Speaker_3: | 05:42 | Yeah so think about when you drop a new executive into your company, you certainly have your peers within your organization. Let’s say you’re a CFO and you drop into the company you also find it very difficult. Who are you going to talk to about CFO type issues? If you don’t have an outside peer group that can give you some of that sounding board? Hey, we’re running into this situation at our company, it’s a financing issue. We’re trying to raise capital to do an expansion. What have you done? CFO peer group, right, and so encouraging those executive to go find an outside peer group of like kind of company’s size complexity to again to be able to use them as sounding board. That goes across every executive level, whether it’s the head of human resources, CFO, CEO and there’s a ton of different groups you can get involved with. Some are larger than others and some are more in depth and get together on a more regular basis, but something that you should encourage that executive as they’ |
| Speaker_2: | 06:36 | Yeah, I know here in the local market, we have like allied executives and I know they’re very good about getting you into the right group, whether it’s a key leader group. So, CFOs and other key functional leaders are all in one group and then there’s also kind of that CEO business owner groups and they do a good job and, and you know, some of the national firms like a Vistage I think has the same. I know they have the same type of programs as well, but I think another benefit is just to, you know, have that network of people not only on your key leader to use your CFO example, but you’re learning in those peer groups, you’re learning about other businesses and other issues that they’re having outside of your scope of responsibility. |
| Speaker_3: | 07:33 | Or you can bring more value back to your organization because you’re getting, think about it as a little mini MBA, a team that you’re winning because they’ve got how many years of experience that they can help bring to you, but you bring to them as well. So, it’s just something that again, provides a retention tool, they get questions answered. They don’t get frustrated because they’re not allowed to go do this out of the organization. Right. They need to be encouraged to do it. They need to be given time to do it and as part of the whole process of retention, I think it’s especially critical if the company’s made a decision to hire just stay with your CFO example. |
| Speaker_3: | 08:17 | This is their first time as a CFO. So, they’ve made the stretch from a controller or VP of finance into a CFO. I mean, now you’re really arming them with the background for them to be successful in these peer groups and, also bubble them up to kind of a finance executive on your board of directors. You pair them up with that person, you pair them up with a peer group, you’re probably going to have a success in the role. But then, you know, as we’re talking retention, right? Yeah. I mean, when you get, when you take that first roll into the new executive position, you only know what you know and you’re talented. Otherwise it wouldn’t have gotten the position, but to be able to arm yourself with a team of people that you can go to and network with and bounce ideas off of, I think is critical. |
| Speaker_2: | 09:08 | Absolutely. Well, cool. Next week, we will be talking about, recognition and rewards and importance of work life balance, and it’s not just for that staff level. Executives need that balance too. Right, so that’ll be our topics for our next podcast. So as always, if you need to get ahold of Scott check him out on either LinkedIn or Versique.com and if you liked the podcast, we’d love for you to subscribe to it and you can find it on all of our, all the major podcasts channels, or there’s a link on the executive leadership tab in on Versique.com. |
| Speaker_2: | 09:47 | All right, well thanks Scott. We will talk next week. |
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