“Retaining talents = retaining wealth”. Talent is the most important asset of an enterprise, but it is also the asset with the lowest loyalty. I believe that many company owners have tried very hard to find suitable talents, but when the hired one just starts to get familiar with the job, he/she gets another offer. Then everything has to start from the beginning again.

Whether it is a society, a government, or an enterprise, being able to recruit talents is the key to long-term development. It is hard to find suitable talents, and it is even more difficult to retain talents. What methods should be used to retain talents? Raise salaries? Promotion? More challenging jobs? Or, should we retain talents?

Trends in the human resources market

The fact that it is more and more difficult to retain talents is correlated to changes in the overall environment. When work is professional-oriented, and the value of knowhow continues to increase, it is easier to bring these from company to company. Employees are no longer loyal to a specific company, but to their profession. As long as there is professional knowledge and skills, and such knowledge and skills are lacking in the market, it will be more difficult for the company to retain the employee.

On the other hand, slashers are the new force in the current market. There are a lot of young people who are more inclined to be a slasher than to work for a specific company. Even young people with a fixed salary job will do some part-time freelance jobs that they are interested in in their spare time. They take part-time jobs not solely to make more money like the previous generation, but for their own interests and career development.

Both salary and sincerity count

Whether employees are willing to stay with a company, the most important key is the formulation of Performance Measurement!

The design of the performance measurement system must comply with the “principle of fairness”. The so-called “principle of fairness” means that employees will expect to get something in return after paying effort in the work. These returns do not only refer to fixed wages, because fixed wages (or even double-pay) are considered the hygiene factors nowadays. Outstanding employees should get their due rewards (or even rewards better than the employee’s expectations). These rewards can be related to money (year-end bonus) or non-monetary rewards, such as more challenging work, opportunities to participate in decision-making, good working environment, education and training, etc. These non-monetary rewards can meet the higher-level needs of employees.

So which is more important? Monetary or non-monetary factors? I think Hong Kong people are very realistic. Why not both? Monetary and non-monetary rewards are equally important. The two factors should be multiplied rather than added. The more balanced between these two, the better outcome would be.

Difficulties faced by SMEs

However, the difficulty faced by many SMEs is that they do not have enough resources to offer good salary and benefits, so they have to rely on other non-monetary rewards, such as improving employee engagement or giving employees a sense of accomplishment, which can at least slow down employee turnover. However, if a reasonable salary level is not offered, it will not be possible to retain employees in the long run. This is the inherent weakness of SMEs.

The following are 5 suggestions to help SMEs retain talents:

1. Establish a fair and systematic division of labor, and performance assessment system
2. Establish and implement the talent training plan, such that the employees have a clear direction of career development in the company
3. Re-organize the manpower structure and improve the benefits of key employees
4. Create a strong corporate culture and enhance employees’ sense of belonging
5. Heads of important departments need to cultivate capable successors

HR management in the post-pandemic era

The three-year epidemic has completely changed the working styles of global talents. We can find out how popular the hybrid work model (that combines remote and office work) is in Cisco’s “Workforce Of The Future” survey. In order to understand the expectations of office workers for their employers, Cisco commissioned a research organization to interview more than 14,000 employees in the Asia-Pacific region in 2021. The results showed that 87% of Hong Kong wage earners strongly agree with the company’s adoption of a hybrid work model.

Whether SME owners like it or not, hybrid work has evolved as a new trend in the workplace. Of course, employee management under hybrid work, say how to improve productivity and maintain team spirit is another issue. This is also a topic we often explore with our SME clients.