New Study Finds Problems in Keeping the Top Talent 18/5/00 The Internet and the new knowledge economy have created further pressures on companies to retain top talent. According to an international study from Korn/Ferry International, an executive search firm, and the University of Southern California's Centre for Effective Organisations at the Marshall School of Business, companies are finding ways to forge new psychological contracts between employee and employer. The report, "Strategies for the Knowledge Economy: From Rhetoric to Reality," attempts to define knowledge management challenges and identify the current success of global firms in generating, retaining and leveraging knowledge. The study identified key strategies for creating a new psychological contract that will motivate employees and increase their commitment to the company. These include: Ensuring that employees understand the company's strategy for the future. Employees want to work for a company that will be a leader in its industry and that will continue to provide interesting work. Sharing the skills that will be needed in the future and working with employees to help them gain these new competencies so they feel they have more stake in the company's success. Adopting a broad view of training and development, including visits with customers, suppliers and partner companies. Employees find this type of development more stimulating and helpful than structured on-the-job training. Tying reward policies closely to the business performance of the team or company. Allowing the majority of employees to share in the wealth they create had a positive impact on retention in the large companies that were studied, as well as start-ups where this practice is more common. The study was based on in-depth research with 10 leading technology-intensive companies operating across a range of sectors in North America, Europe and Asia. The research included analysis of a survey completed by more than 4,500 scientists, engineers and managers; interviews and focus groups with more than 500 business and technical leaders; and written documentation of the knowledge management, human resource practices and performance of these 10 companies.