Western Cape Business News

Send  Share  RSS  Twitter  09 Feb 2010

MANAGEMENT: How To Lock In Talent


Recent Western Cape Business News

The ongoing shortage of executive and specialist talent has forced a number of companies to get tough and incorporate extended notice periods into their employment contracts as a way of managing staff tenure and transitions when top people resign

So says Madge Gibson, a partner at Cape Town-based Jack Hammer Executive Headhunters, who says that organisations are increasingly making three-month notice periods standard policy for specialists and executives, in an effort to safeguard their businesses.

She says there are two main reasons behind long notice periods; one, to be used as a deterrent against competitors looking to poach key staff; and two, to protect their own interests by buying themselves valuable time should they need to replace critical personnel. 

The best employees are always hard to find and despite the high unemployment figures in South Africa, there remains a shortage of certain skills.

We’ve noticed an increasing trend towards long notice periods of late, she says, with some extending to six months.

Safe guarding in-house talent is largely motivated by a fear of ‘skills losses’ and the impact that will bring to the organisation; not to mention the difficulty faced in sourcing a suitable replacement.

On average it takes a minimum of three months for an executive search firm to secure a suitable replacement.

Gibson says that while the three month notice period is used as an overall deterrent,  once a key member of staff resigns – especially when they are planning to join a competitor – it is usually in the company’s best interests to let the person leave immediately.

The reality is that once an employee has made the decision to leave, they’ve already moved on emotionally, which can be harmful in several respects, including affecting the morale of colleagues and impacting relationships with clients. So this is the time to restrict access to sensitive corporate information and limit the negative impact on co-workers

When someone leaves immediately they are often put on ‘gardening leave’ – which means they are not required in the office, but are still obligated to their current employer and cannot commence new employment until completion of the notice period. In a sense, this is a cooling off period.

The longer notice period can also be used to manage a complicated transition of duties, or in some cases, to devise a strategy to reverse the decision of the departing employee, either through a financial counter offer or by internal restructuring, providing the employee with greater responsibilities or status.

Whatever the motivation, the extended notice period has become a contentious way of locking talented people into their jobs, with pro’s and con’s for both the employer and the employee.

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