Leadership building: the art of employee retention

BANGALORE, INDIA: With an economic recovery knocking at the door, many companies still continue with the freeze salary regime, but are investing in leadership development to retain employees and keep their spirits high.

As a part of cost-cutting measure, many companies stopped hikes and promotions for the employees salaries across divisions. While a lot of companies like Infosys, Wipro, TCS, Cognizant have already started giving away hikes, some of the companies that are yet to announce annual hikes are Accenture and IBM.

According to Dr. Tommy Weir, vice president of Leadership Solutions at Kenexa, while the companies are still low on salary increments, they are investing in building team leadership. “A leader has the capacity to keep the team motivated and efficient, even when they are worried about the salary issue,” he said.

According to a recent research by Hay Group Leadership and Talent Practice, which released a list of the world's 20 best companies for leadership a few months back, the best companies noted for their leadership initiatives “not only entered the recession with strong leadership in place, they maintained their commitment to prepare and retain leaders and are highly committed to developing leaders”.

John Larrere, National Director of Hay Group's Leadership and Talent Practice and co-leader of the Best Companies for Leadership Study, said, “For organizations to succeed, they will need to understand what key leadership elements are paramount in driving their organization towards growth. It’s more than just getting people to produce the right outcomes. It’s about getting them to be passionate about their work and grooming them to handle the challenges ahead.”

The list included technology giant IBM, Infosys, Cisco Systems, United Parcel Service, Accenture, HP.

Last year, IBM was ranked No. 1 in Fortune magazine's 'Top Companies for Leaders' for 2009; the only technology company to make it to the top 20. IBM's human resources chief, J. Randall MacDonald, told Fortune that the company spends nearly $700 million a year on leadership skills-building initiatives alone.

Infosys Technologies pioneered this, by not only giving away around 22 per cent hike in last 7-8 months, but also invested heavily in leadership. It has even formed a separate division under it called Infosys Leadership Institute (ILI), a globally recognized institution that grows leaders.