Attracting new talent is just part of the equation. Here’s how to keep those employees.

When you lose a valued employee, you lose more than just the skills she brings to her role and the cost of finding and training a replacement. You also pay a penalty in terms of overall morale, employee loyalty, and customer relationships. A talent-retention strategy can help you reduce costs while enhancing many of the qualities that make your business attractive not only to employees but to customers as well. Here’s how:

• Think strategically about retention. A strategic approach to employee retention isn’t simply about making everyone happy at all costs, explains Sue Hengel, executive vice president, organizational effectiveness at Regions Bank. Rather, she notes, “it is a process of identifying which roles—and which individuals—are truly contributing to the organization at a level that requires some extra effort, attention, and intervention before you take a chance of losing somebody.” Every employee is valuable, she adds, but there are some who might be harder to replace either because of their skills, experience, or relationship with customers, or because few similar candidates are available on the open market.
• Take a talent inventory. Hengel suggests starting with a comprehensive inventory of the talent you already have in house. “Depending on the size of the company, you might want to focus on the top ten to 15 percent of your organization,” she says. For each, create a talent profile that includes experience and skill set, performance assessment, alignment with company values, and individual career aspirations. This profile, compared to the job market, should help you determine the retention risk of each individual and also provide a pool of internal candidates when positions open up.
• Measure employee engagement. “There is a very strong correlation between the level of engagement and performance of an organization,” Hengel explains. For that reason, you should survey your team at least annually to determine engagement levels and areas for improvement. Such a survey would ask employees how well they understand what is expected of them, how well the company equips them to perform to the best of their abilities, and how connected they feel to the overall goals and values of the company. “Humans need to connect; we need to make meaning,” Hengel argues. “It is very important to us that the work we do matters.”
• Put it all together. Simply through the process of asking what your employees are looking for from the company, whether through broad surveys or detailed profiles of key contributors, you can determine next steps. Top among your priorities should be creating clear career paths for high potentials and stretch opportunities for those thirsting for additional challenges and responsibilities. Flexibility in work conditions also ranks high among employees’ desires, though that must always be balanced with the needs of the organization. “If you set expectations and define values for people, they can use their good judgment to make decisions within those parameters,” Hengel notes.

One final point: Talent retention is critical, but never at the expense of performance or quality. In fact, a strong employee retention strategy will set the bar high for every employee while giving them the tools they need to reach and even surpass expectations.