Executive Retention Is Not an HR Problem

By the time an executive resigns, the real opportunity to retain them may already have passed

Years ago, when I was leading our Miami office, the executive responsible for logistics across Latin America walked into my office and unexpectedly handed me his resignation. He was good at his job, well regarded across the organization and, as far as I knew, not actively looking to leave. I remember being genuinely surprised.

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What happened next will probably be familiar to anyone who has led a business. The machinery started moving. HR became involved, conversations became urgent, and we began discussing what we could do to persuade him to stay. We eventually offered him a significant compensation increase, but it wasn't enough.

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His new employer was offering better financial conditions, but also something we could not easily match: a broader role, with responsibility for logistics across both Canada and Latin America. He left.

At the time, I probably thought about the situation largely as the loss of a valuable executive to a better offer. Years later, after researching why internationally mobile executives stay with or leave organizations, I came to see that episode somewhat differently: 

We had responded to his resignation with more money. What we could not offer him at that moment was a bigger future.

This is one of the paradoxes of executive retention. Organizations often become intensely interested in what an executive wants only after that executive has decided to leave. Compensation is reviewed, responsibilities are reconsidered, reporting lines suddenly become negotiable, and career possibilities that had rarely been discussed receive immediate senior management attention.

By then, however, the organization may no longer be competing against another company's compensation package. It may be competing against another version of the executive's future.

Retention starts long before the resignation

In my research on globally mobile executives, perceived career growth emerged as the strongest factor associated with staying, followed by leadership quality. Compensation and location mattered far less than I had expected.

That doesn't mean compensation is irrelevant. My Miami colleague was leaving partly for better financial conditions. But his new position also offered greater scope, greater responsibility and a visible step forward in his career. When we increased his compensation, we addressed one part of the equation. We couldn't address the other.

This distinction matters because organizations frequently treat executive retention as an HR responsibility. And HR certainly has an important role. It can identify critical talent, monitor compensation, facilitate succession and development discussions, and alert leaders when valuable people may be at risk.

But HR cannot manufacture a compelling future for an executive. It cannot create meaningful career growth where the organization or its leaders see none. It cannot compensate indefinitely for poor leadership. And it cannot wait until someone resigns and then recreate, in a matter of days, the conditions that might have persuaded that person to stay over the preceding months or years.

Those conditions are created largely through leadership decisions: who receives greater responsibility, who gets exposure to new parts of the business, whose capabilities are stretched, whose ambitions are understood, and who can see a credible next chapter inside the organization.

From retention intervention to leadership responsibility​

This is why I increasingly think that executive retention is better understood not as a program, but as an outcome of how an organization is led. When a valuable executive resigns, the natural question is:

What can we offer to make this person stay? Sometimes that question works. A counteroffer, a promotion or a change in responsibilities may genuinely address the reason someone was considering leaving.

But often the more important question should have been asked much earlier.

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The moment an executive resigns is when retention becomes an HR problem. The months and years before that are when it was a leadership problem.

Perhaps the best retention conversations, then, are not the urgent ones that take place after a resignation letter appears. They are the quieter conversations leaders have while their best people are still fully engaged, still performing, and perhaps giving no visible indication that they are considering alternatives.

And the question at the center of those conversations is surprisingly simple: Can this executive still see a compelling future here?