How different is the game plan to retain CXOs

Since the mindset and intellect of CXOs is very different from that of other employees, a different strategy has to be followed to retain this talent set.

As many say, the cost of losing a CXO is much higher than losing an employee working at the mid-management or lower level. Similarly, the tactics and strategies to retain a CXO will differ from those employed for professionals working at lower levels in the organisational hierarchy.

As the level of maturity and intellect is quite different at various levels, the retention plan also differs. In fact, HR leaders do believe that it is more difficult to retain a CXO than anyone else. “For professionals working at such a high level, the decision to move on is not driven by emotions, but is a very well thought out career strategy,” says Sriharsha Achar, CHRO, Star Health & Allied Insurance Company. “Therefore, retaining CXOs is much more difficult as compared to other professionals,” Achar adds.

What makes retaining a CXO so much of a challenge?

Here, we are not talking about people who may move on just for a measly hike here or there. Many HR leaders that HRKatha spoke to agree that money or compensation is the last thing CXOs would want to move or stay on for. For one, most of them would already be receiving handsome salaries. Therefore, money is not something that would drive a CXO’s decision to switch to a different company. “One cannot simply throw money at these professionals and expect them to stay with you,” says Achar.

“For CXOs, different factors motivate them to look for a change — a better opportunity, a better place to work, a role which has a larger scale and impact, and freedom to do different things”

Raj Raghavan, SVP & head-HR, Indigo

“For CXOs, different factors motivate them to look for a change — a better opportunity, a better place to work, a role which has a larger scale and impact, and freedom to do different things”

Second, when a CXO decides to move out of a company, it is a very well thought out decision based on several factors. Either such people move out to start their own entrepreneurial journey or else they move into a much larger role than the existing one, which makes a larger impact.

Therefore, drivers to retain a CXO are very different from others in an organisation. To understand how one can retain a CXO, one needs to first understand their mindset.

“A key part of any organisation’s talent management strategy is the segmentation part – addressing different needs of uniquely placed Talent across the pyramid,” says Jagjit Singh, HR leader.

What CXOs want

Larger impact: Raj Raghavan, SVP & head-HR, Indigo, shares that when he decided to join Indigo, he was very clear that he wanted to move out of a large MNC to work for an Indian organisation with a larger presence; a place where he can make a larger impact leading the HR function for the entire enterprise. “For CXOs, different factors motivate them to look for a change — a better opportunity, a better place to work, a role which has a larger scale and impact, and freedom to do different things,” shares Raghavan.

Bigger portfolio: Another reason why a CXO would want to move is to avail an opportunity for a much bigger portfolio, or to handle multiple businesses, which gives the person better control.

Challenges: A challenging project can also make a CXO move into another company. For instance, at startups, CXOs and leaders find it challenging to build processes from scratch, rather than work for larger conglomerates where all processes are already in place. Working in a different industry can also seem challenging to CXOs, as it allows them to grow and sharpen their skills further and add more skills to their skillsets. “CXOs like to keep enhancing their skillsets and get better at them,” says Achar.

“CXOs like to keep enhancing their skillsets and get better at them”

Sriharsha Achar, CHRO, Star Health & Allied Insurance Company

Better compensation: On the other hand, professionals at the mid-level or lower, want to switch jobs for higher compensation or other perks such as travel allowance, a company car or accommodation. To retain such people, the current organisation can always look at offering higher compensation or better perks assuming that the talent is a high potential one.

Moreover, finding a replacement for a CXO is much harder, costlier and time consuming as compared to others. For others, companies can still hope to find someone internally to fill the place or somebody from outside.

It is only after analysing the needs and mindsets of the senior-most talent in the organisation, that the strategies to retain the CXOs within a company are formulated.

“The hooks or motivators that you deploy at the CXO level do not happen overnight – the Organisation needs to deploy these in a holistic manner over a period of time,” says Singh. ´ There needs to be a mid to long term engagement plan that Is aimed at addressing the individual’s aspirations – across cash & bonus , long term incentives or stock , individual growth led future roles , investing in to develop & preparing the person for the next role(s) , strategic projects, global roles to challenge them & develop their capability , groom & coach them for the right leadership behaviours that helps them to be successful,” adds Singh.

What organisations can offer

1. Competitive package – First, we need to ensure competitive compensation and offer employee stock options (ESOPs) to all CXOs, so that they can see value in the company. After all, everyone wants to invest in a long-term plan to secure their future. Even startups attract top talent by offering ESOPs. This move keeps companies competitive.

2. Development plan – The top talent requires a clear development plan. A well-designed career path is required so that they know what is next for them. Either larger roles can be designed for these executives or even niche roles which can make a larger impact. This also makes senior executives feel recognised and valued.

Singh further points out that growth is not always vertical. Companies can also look to rotate their CXOs and senior executives into lateral roles too.

“A key part of any organisation’s talent management strategy is the segmentation part – addressing different needs of uniquely placed Talent across the pyramid”

Jagjit Singh, HR leader

3. Challenging projects – Throwing challenging projects at CXOs keeps them engaged at work and negates the issue of stagnation.

4. Relationship with CEO – The manager’s role is crucial when it comes to retaining employees. In case of CXOs, the role of the CEOs, to whom they all report, is vital, irrespective of the size or type of the company. However, the importance of this role increases manifold when it comes to smaller companies or startups. That is because, small enterprises may not have the bandwidth to offer larger portfolios or better impactful roles due to lack of resources or scale of business. “This emotional connect or engagement needs to be built beyond work, inserting time in getting to know the person & his values , the person’s family , stepping in when personal help is needed , co-creating the future as the organisation grows and so on, so that he/she is a partner in progress,” says Singh.

A survey suggests that attrition rates at CXO level are lowest as compared to entry- level roles. This may have multiple reasons. However, having robust talent processes can help organisations retain their top executives, as the cost of losing CXOs is much higher than any other employee.