Six Things Every CAE Should Do to Retain the Best Internal Audit Talent
October 21, 2013
The global economy continues to improve, and there's plenty of evidence that organizations are investing in stronger risk management and internal control infrastructure, including internal audit functions. In fact, early indications are that almost one-third of U.S. Fortune 500 companies plan to add new internal audit staff positions in 2014.
As hard as it may be for CAEs to attract the right talent, recruitment will not be the most significant personnel challenge. It's convincing the best and brightest internal audit stars to stay with the department when there are attractive opportunities to transition into a business unit or a service firm.
I learned early in my tenure as a CAE that retaining the best internal audit talent required a continuous effort on my part and those of the managers who worked for me. Some of the strategies I deployed to retain talented staff came through trial and error. However, I had the advantage of being guided by my own experiences. After all, I first joined an internal audit department at 21 years old, and as a restless 20-something (yes — today's millennials didn't invent restless ambition), I changed internal audit roles several times in the early years of my career.
So, as a CAE, I constantly reminded myself of the reasons I had changed internal audit roles in the genesis of my career, and I tried to address the things that had caused me to pull up stakes and seek out other opportunities. In the end, I focused on six things that I needed to do every day to retain the best and brightest members of my internal audit staff:
- Challenge internal auditors with new opportunities at every turn. Never forget that your most talented staff members will grow bored with routine assignments. The best and brightest must be constantly challenged and afforded an opportunity to grow. I left an early internal audit assignment and accepted one with a lower grade/title simply because I didn't feel challenged.
- Acknowledge outstanding performers. Don't be afraid to "play favorites" when it comes to your best performers. Acknowledge their accomplishments privately as well as publicly though awards and more prestigious assignments. Striving to acknowledge every member of staff equally will do little to motivate marginal performers, and will demotivate the best performers or worse yet, drive them away.
- Showcase your best performers and afford them the exposure they deserve. I was fortunate in my career not to have too many bosses who "hogged the limelight" when it came to the work that I or my colleagues had accomplished. The best CAEs for whom I worked made a point of taking me with them when it came time to discuss the results of an audit with senior officials. In fact, they routinely invited me to be part of audit committee meetings when one of my audit reports was being reviewed.
- Reward performance not only through acknowledgement, but through tangible means as well. Never forget that you are in steep competition for the very best talent. As much as a member of your team may value working for you and your organization, promise of a substantial salary increase will often prove too tempting. I left one of my first internal audit jobs simply because there was too much money being offered by the next one. On top of that, I didn't feel like the CAE had even tried to match the difference.
- Support your auditors during the face of adversity. As I have written often, there are times when internal audit engagements will turn contentious. The degree to which the CAE supports his or her staff during such episodes will likely have a direct bearing on how loyal the staff remains to the CAE down the road. Even if the staff has made a mistake or handled a situation badly, there are usually exit strategies short of throwing the staff under the bus with management. I recall making the difficult decision to leave my third internal audit assignment because my timid CAE sat on a potentially contentious draft audit report for more than six months rather than releasing it for management comment. That was a mistake that I vowed never to make when I was hired back to take his place less than four years later.
- Invest in your staff like they are your most valuable asset — because they are. In one of my early internal audit assignments, I was hired as an internal auditor trainee (a formal three-year program that the organization used to develop future talent). The young man who preceded me in the program had been denied the opportunity for much of the formal training prescribed by the program, and was not happy. The CAE had learned a valuable lesson, and made sure that I had the opportunity to attend all of the training programs I needed/wanted. I grew to love the assignment and the profession and have stayed in it for 38 years. To the best of my knowledge, my predecessor left the profession less than two years after he finished the development program and never spent another day as an internal auditor.
As with any HR challenges, there are no magic formulas for success in retaining the best and brightest talent. However, failing to challenge, acknowledge, showcase, reward, support, and invest in your staff will dramatically increase their flight risks. These are lessons I learned in my own career, and that I later used effectively as a CAE. I welcome your ideas on this important topic.