Employee Retention Goes Global|
by Andrew Perry
Finding and keeping good people is a global issue. Most countries have lagged behind the United States in terms of the attention devoted to the issue and solving the inherent problems. Other countries have shown some indicators of concern, but were months or years behind the United States in the seriousness of their approach.
Now, that gap is closing. The concern for employee recruitment and retention is rapidly gaining increased interest around the world. Many employers in Canada, for instance, have admitted that they have a problem, with expressions similar to those of their counterparts in the US. Roger and Joyce Herman, Fellows of the Workforce Stability Institute, have spoken throughout Brazil to community-based and industry-based audiences in Curitiba and San Paulo, as well as company-based audiences in San Paulo and Rio de Janerio. And now, there is interesting news from, of all places, India.
India, with its huge population, would not usually be one of the first countries you might think about when considering employee retention problems. Yet, business leaders there are increasingly concerned about retaining qualified workers. Faced with a continuing shortage of trained personnel, the Indian mutual fund industry, for example, is beginning to use employee stock option programs to attract and hold desired employees. In addition to the four mutual funds that have announced plans to institute a stock ownership program, six more mutual funds in India are currently looking at Employee Stock Option Plans (ESOPs) as part of their overall human resource management process, according to a recent report in The Economic Times (September 4, 2000).
Prudential ICICI AMC recently granted its employees--with a minimum service period--an ESOP package with retroactivity from calendar year 1999. The ESOP plan, which has a vesting period of three years, is contingent upon the asset management company achieving business plan goals. As well, the valuation of the options is based on a pre-set formula. "The idea of the ESOP program is to align the individual and corporate goals," said Ajay Srinivasan, who is now Regional Director for Mutual Funds for Prudential Corporation Asia.
At Templeton Asset Management (India), employees are part of a global ESOP program, which gives them stock in the NYSE-listed Franklin Resources. "This multi-option ESOP program is designed to retain our best talent by enhancing their feeling of ownership of the global entity, and is particularly important to us at a time when the industry as a whole is facing an attrition problem," CEO Rajiv Vij said. Templeton's ESOP has a maximum vesting period of three years, and is designed to bring about greater global participation and synergy building. "People are the key asset for us," said Vij.
Where We're Headed
Watch for continuing heightened global interest in retention in the coming months. Note that the time period is months, not years. This shift is happening now. Concern is intensifying. Fellows Roger and Joyce Herman have been invited to speak at a major human resources conference in England in March 2001, specifically because corporate leaders now see that they are on the threshold of the retention problem in the United Kingdom and western Europe. Joyce Gioia will also speak at a strategic human resources conference in Japan in November, addressing this rapidly emerging issue for countries in the Asian rim and beyond. Other conferences are under development in Singapore and Hong Kong.
We've known for a long time that we had to deal with a vice-gripped labor market here in the United States. Now we know we're not the only ones. Keep an eye out to see how this will affect organizations large and small, local and multinational in the coming months. You can be sure we will, too.
Andrew Perry, MFA is a former Managing Editor of The Workforce Stability Alert.
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