This article originally appeared in ShortList on 14 August 2014 at 10:28pm
Equity can be a good tool for retaining high-performing consultants, but agencies should approach it carefully to avoid trapping big billers with "golden handcuffs", according to industry trainer Ross Clennett.
Driving high performance with big monetary incentives, such as equity, can negatively affect the future of a company, Clennett told Shortlist.
"Equity is about the future and [company owners have to ask themselves] is this person going to build the company? And not from a billings point of view but more from, 'is this someone we want as a role model?'" he said.
"If equity is just given as golden handcuffs, and the [high performer] isn't a leader in terms of culture and building others, then it's not a smart move."
Recruitment companies should instead incentivise top performers with status and recognition, he said.
"If high performers are staying for money, they'll leave for money. If money is the only factor, then it's only a matter of time before they leave. Eventually someone will pay them more [than you]," he said.
"Unless you're demonstratively underpaying them, acknowledgement of high performers as important people [in a company], and recognition of their journey from employee to high performer is a key way to incentivise them.
"For example, have a champion of finding people on LinkedIn or a champion of face-to-face networking, and have a video made with them that is posted on the company's intranet. Another [idea] is having an interview with the top biller that unpacks their big-billing desk and is a learning experience for less experienced recruiters.
"That status, acknowledgement and sense of importance around the company [engages them] and doesn't feed their ego in a negative way."
Recruitment company leaders must also spend time understanding what is important to each of their high performers and considering whether it is possible and appropriate to provide this to them, Clennett said.
Common incentives, such as conferences and work holidays, are classic choices for top performers for a reason, he added.
"Aquent's 'Golden Club' is an example of top performers from around the world getting together in a desirable location to share learning, culture building, and recognition and celebration of high performance."
Consistent, clear communication about performance expectations and rewards is key to managing any tension that may arise between top performers and other consultants, said Clennett.
"You have an obligation to explain, in a consistent manner, why somebody is getting preferential treatment and how that person achieved it," he said.
"If there is an agreed time that everyone starts, and you decide the big biller is exempt from that, you have to explain that to the staff. You can't just let it happen."
Monitoring high performers' behaviour more closely is also vital to retaining them, Clennett said.
"The things that suggest engagement, such as timekeeping, contribution in meetings, [and] their initiative, will start to fall away... [and] diva-like behaviour, or a 'star turn', will become more apparent [when a big biller is considering leaving].
"These kinds of things will show up faster than a drop in billing, and money is never the lead indicator."
Recruitment companies also have to find different ways to engage and incentivise big billers who are not interested in becoming leaders, or risk losing them to the competition, Clennett added.
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