Does Retaining Good Talent Even Matter?

As a business owner, HR director or department head, it’s something you no doubt think about constantly: how do I find and retain the best talent possible? Even in an unstable economy, there is a premium on good talent and people who can get things done, and managers who care about the long-term health of their companies want to hold on to their best workers. On the other hand, there are many organizations out there which have been around for decades – centuries, even – clearly outlasting key personnel, yet somehow surviving and thriving. This begs the question, then: does retaining good talent matter at all in the long run?

I would argue yes, and here’s why:

1) Good Talent Moves Firms Forward – Let’s face it, most people don’t like working. If given the choice between building cathedrals and watching baseball, I’d bet the lion’s share of people would opt for America’s favorite pastime. However, for the hungry, ambitious & competent people who want to make names for themselves and their companies, doing exceptional work which goes above and beyond what’s asked is not a burden, but an exciting opportunity. High-performance employees are a rare breed, and it is the efforts of these select few – at all organizational levels – which will ultimately point companies in the right direction.

2) Institutional Memory is Short-Term – Employees who start at a new company are taught what they know about “how we do things here” via osmosis through their colleagues. The longer good employees stay, they better they will know not only how the organization functions, but WHY things are done the way they are, which will help transfer that knowledge correctly to newer staff (you are likely aware of the classic study about social acquisition of group responses, better known as the “5 monkeys and a hose” experiment. I think it’s quite powerful).

3) Finding & Training New Staff Stinks – Under no circumstances is it easy to replace good employees. Even with a robust talent pool, there is an unavoidable search & vetting process, negotiation and ramp-up period to get the new staff member where they need to be – expensive, time-consuming, and all while existing staff struggle to cover the workload of the freshly-departed employee.

4) Your Competition Will Ultimately Benefit – High-performance employees are in high demand, and have the skills and wisdom to do their jobs effectively. Lose these employees – especially those who work in specialized areas – and there is a good chance they will wind up working for a direct competitor someday, who will benefit not only from the employees’ cumulative experience and contacts, but intimate knowledge of your company as well.

5) The Alternative is Retaining Bad Talent – Every company has turnover, yet very often there are examples of employees who decide to stay, regardless of the situation (think Milton Waddams, the awkward, red stapler-loving long-term employee from the movie “Office Space”). Without promoting a culture of good talent sticking around, you may soon find yourself surrounded by Miltons.

I think there’s certainly an argument for encouraging turnover among good talent: ideas and enthusiasm are kept fresh, younger employees can enter the organization and work their way up etc. However, in my opinion it’s better to nurture and incentivize your high performers, rather than to lose them – and have to find their replacements to boot.

What are your thoughts about retaining good talent? Does keeping them make a difference long-term?