Talent Retention

Talent Retention is the ability of an organization to lower its talent turnover – the cycle of people leaving and being hired – by establishing specific systems or incentives. The most immediate incentives are financial ones, but as it appears, they are not the most effective.

This is not only based on a financial transaction, but on establishing a relationship of trust and mutual respect between the individual and the organization.

As such, a solid strategy must be wide enough to account for different personality types, and sufficiently integrated with coachingtalent acquisition and talent development to increase the chances that the most valuable talents are brought in, brought to their potential and maintained within the organization to provide the intended benefits to the organization, its culture and its performance.

Talent Retention in Practice

Your strategy should not be limited to a few specific interventions. Talent retention is in fact very close to organizational culture, and because of this it needs to account for a range of mechanisms that reflect the pervasiveness of the specific culture of an organization in every activity.

Because of this, talent retention can be considered as a few core tasks, but it should also account for peripheral ones – that is any task that have a high impact potential. These include, for example, talent acquisition and talent development, as their effects are also felt in this context.

If you want to go this way, here are a few elements to consider.

Core elements of a talent retention strategy


An incentive system is meant to motivate or reward a person working within an organization. Depending on the organizational culture and the line of work, different incentives can have different effects, and this is the fundamental aspect to consider in a talent retention perspective.

For example, if a company operates in a highly innovative environment and rewards innovative breakthroughs or insights for a new product or customer segment, incentives should also reflect that aspect. If instead incentives are distributed based on profit, that would create an incoherence between incentive and culture, and break the motivation and trust of someone whose task has been to provide new learning insights.

As for the incentives per se, financial ones are the most immediate ones to think of, however research has showed that non-monetary ones (e.g. working from home 1-2 days a week, possibility to pursue personal projects, easing someone’s work-life balance…) have much stronger effects. Providing this type of incentives creates trust and a personal relationship between people and the organization: financial incentives are common to everyone, specific non-monetary incentives are proper only to your organization.

Career development possibilities

Internal career development possibilities are a strong source of commitment and trust from a person’s side towards an organization. In a classic pyramid hierarchy the perspective has always been up-or-out. If there was no open position above you, you had to wait until one freed up.

It’s easy to see how detrimental this approach is: if going up was not an option, the only option left was leaving. If instead a company lays down plans for promoting people, or transitioning them to a separate role – by restructuring, opening new units, bundling units up or creating matrix structures, for example – people will see and perceive more possibilities of personal and professional growth within the company, which would create a strong talent retention effect.

Organizational Culture awareness and fit

Organizational culture is a key issue not only for talent retention, but also for talent management as a whole. A company’s culture (or cultures, there may be more belonging to different units) is there, whether it is planned and guided or not. Because of this, it is felt and observed in people’s behaviours and work.

Anyone, of course, wants to stay where they feel they belong, and vice versa. In our perspective, then, you must not only be aware of what culture or cultures exist within your company, but you should also be able to coherently communicate it to people and make sure that the fit is maintained over time. This is usually achieved by ensuring an open and transparent internal communication system – between departments and across layers of hierarchy – and by showing coherence in culture – i.e. everyone is expected to adhere to specific values, even top management.

Leadership quality

You have probably read this sentence before: “people don’t quit jobs, people quit their leaders”. It’s debatable how much this is true, but a few things are certain:

  • people will leave a company if they don’t see a cultural fit
  • someone’s leader is one of their main contact points to the culture of the overall organization.

So if that is true, it may also be true that people will leave companies if their manager are not coherent enough with the organizational culture or are not able to transmit it well enough. In this sense, then, talent retention also links to how well leaders are able to interact and communicate with their team and with upper management.

Leadership development though should not be just limited to ensuring the leader is a skilled communicator of culture. Studies (Covella 2017) have also showed how positive interactions between people and their leader have a strong effect on work engagement and talent retention. In other words, training leaders on soft skills will also contribute to retaining talent.