When a senior executive resigns, an organisation must first establish how detrimental the loss of the individual is to the organisation. Establishing the primary motivations behind the resignation is not only a crucial part of this process; it can also help to prevent similar instances occurring in future.
There are various reasons why senior executives resign. Here we consider some of these issues and discuss solutions to help you address key business problems.
Progression Opportunities
From our experience, opportunities for self development and progression, rather than money, are often the key factor behind a senior executive’s decision to move on.
Inevitably, successful individuals get to a point where they feel ready to embrace a bigger role with a larger remit and greater accountability. Commonly, businesses assign these executives responsibility for extra divisions, recent acquisitions or unique ‘one-off’ or special projects in an attempt to satisfy their ambitions.
New Challenges
A company that functions efficiently and smoothly may have one unwelcome problem: key executives may grow disillusioned with doing the same tasks. Without new short or long-term challenges, there is a strong possibility that an executive may seek new challenges outside of the business. When there really are no clear new challenges available, companies and senior executives often agree that parting ways is the best outcome for both sides in these situations.
Remuneration
Where remuneration is concerned, organisations can take a number of approaches – depending on the executive’s individual preferences – to boost overall compensation packages without impacting the company’s day-to-day budget. Executives may be prepared to accept packages incorporating a lower basic salary with potential for a much larger performance-related bonus. In some cases, improved share options or long-term incentive plans linked to performance objectives may also appeal.
The Importance of Communication
Clear and consistent communication between the senior management team ensures senior executives are fully involved within a business. Without this, senior executives are likely to feel excluded and undervalued. By involving them in key decision-making and valuing their opinions, employers are more likely to make senior executives feel part of the senior management team and businesses are more likely to retain them.
Company Direction
In an increasingly competitive marketplace, businesses are under constant pressure to re-evaluate their strategy and direction. This might create difficulties for executives with differing beliefs to the rest of the company to justify remaining with the business. In these circumstances, effective communication between executives and management can ensure both parties are fully aware of the facts before either makes a rash decision.
Where senior managers are not prepared to reconsider their decision to leave, the business does not need to suffer. Most organisations are realistic to know that the best executives are ambitious and are likely to seek new challenges in time. Employers that prepare for these circumstances and put contingency plans in place are unlikely to experience too much disruption when senior staff leaves.
For more information on market and recruitment trends within the HR sector, please contact Joanne and her HR team at (65) 6228 0200.
by Joanne Chua
Manager, Human Resources and Supply Chain divisions
Robert Walters
joanne.chua@robertwalters.com.sg
+65 6228 0292 / +65 6228 5335
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