Holding your own.

• Author: Gray, Carol Lippert
• Position: Employee retention survey - Includes related articles - Cover Story

Once you've got good people on board, what do you have to do to make them stay?

During a merger, Bruce Abbott, senior vice president at Bank of America, tried to induce a four-person technology support team at the target bank to move to San Francisco to join the finance department of the new parent. None would make a commitment, and Abbott couldn't understand why. When he realized each really enjoyed working with the others and preferred to be treated as part of a unit, rather than as an individual, he sat down with the group and negotiated a four-way employment package. The quartet wound up sharing relocation expenses, moving vans and even temporary housing. And, Abbott says, "They're a great team."

The lesson to be learned, he thinks, is, to retain good people, "You've got to get out of your head and into employees' heads to help them make decisions."

In the five years he's been CFO of Vinyl Plastics in Fond du Lac, Wisc., Richard Blamey has seen one member of the finance department leave the company: a young man who decided to pursue an MBA and become an investment banker. Other employees have revolved out of finance into other areas (one went into MIS, for example, also after obtaining an MBA), but stayed with the firm, which employs over 900 people and has about $202 million in annual sales.

What inspires such loyalty? One factor, Blamey thinks, is the company's lifelong learning policy. "We pay just about anybody to go just about anywhere to study just about anything, from scuba diving to an MBA, with no strings on it," he says. "Three people got MBAs while I've been here."

Retaining top financial talent is, at best, an inexact science. As these anecdotes indicate, there's no one-size-fits-all formula. So, to get a fuller picture of how finance departments retain the best and the brightest, Financial Executive magazine and Watson Wyatt Worldwide recently conducted a survey of over 4,000 CFOs, then several low turnover finance departments, to identify some secrets of retention success.

Seventy percent of survey respondents say their annual turnover rate is less than 10 percent; 7.1 percent indicate zero turnover. "That's a surprising piece of data," says Jamie Hale, regional practice leader in Watson Wyatt's Human Capital Group, "because turnover in general is between 10 and 20 percent and finance is a hot area. It could be the discipline itself; finance people are more stable and risk-adverse versus an area like IT, where people will go to a more exciting opportunity."

Why Do People Leave?

"If you look at this holistically, several factors come into play," says Kenneth Kutcher, CFO of the polyester business of Hoechst formerly known as Trevira. "It's more psychological than tactical. You have to ask, 'What makes individuals make decisions?'"

One perhaps surprising answer is that it isn't always money. Bank of America's Abbott says, "I'm not a believer that money is a motivator, although the absence of money is a dis-incentive. What people want is camaraderie and a feeling that they're being challenged and growing. I don't think people job-hop by nature; something causes them to want to move."

Thus, it's no shock that the most common reason people give for resigning from a finance department, according to over 55 percent of respondents, is "better opportunity elsewhere." Abbott agrees, to a point. "That tends to be why higher-level people move," he says. "Lower-level people tend to leave because of stress and workload" [the third most frequent reason respondents indicate].

The second most prevalent reason employees leave, according to over 12 percent of respondents, is salary and compensation issues; "lack of advancement" and "outside circumstances" tie for fourth place, at 5 percent. In descending order of importance, other factors include a desire to relocate, unhappiness with the corporate culture and personal differences with one's manager or coworkers. Five percent of respondents don't track why people leave; over 6 percent indicate "other" - including poor performance, downsizing and returning to school.

Looking for Longevity

Is it possible to pre-screen for retention? Traditional benchmarks - cultural fit, family stability, a good work ethic, solid employment record and good references - are what most CFOs look for when hiring finance department talent. But are there other indicators to help predict whether a candidate will stay with the company for an extended period?

Watson Wyatt's Hale thinks survey respondents "go beyond the hard data to softer things, like energy level." In other words, they try to...