Archive for the ‘Employee Retention’ Category
For those businesses just about ready to hit the reset button and pick up where you left off in 2007, STOP! This is not your grandfather’s workplace anymore.
Once upon a time, work was about getting a paycheck – a way to put food on the table and a roof over your family’s head. Health care benefits, vacation pay, and other perks were exceptions not the rule. Sundays were a day off to rest, pray, and recoup for next week’s work. That changed with the formation of guilds and later labor unions, when the process of representation for the workers began in the hopes of achieving fair wages and reasonable work schedules.
But thanks to a recession and a world marketplace where dramatic change occurs in months not decades, the definition of work and what constitutes quality of life has been indelibly altered. Welcome to Talent Management 2011!
Recruitment and retention strategies that were considered best practices and highly competitive just a few years ago are now ineffective and even detrimental. New pressures coming from aging demographics, globalization, and technology are turning workplaces upside down and inside out. In fact, it’s even hard to tell anymore who is working when and where. Many traditional workplaces of the past are gone – caput. Others have gone virtual, invisible to the passerby but very real in terms of productivity and profitability. And for the first time in history, four generations are working side by side all but killing one-size-fits-all recruitment and retention strategies.
All these changes – both gradual and dramatic – have converged to put many companies at risk for losing their top talent. New and innovative talent strategies must be put in place to position companies for success.
Executives confirmed this need to change in a recent Deloitte survey and white paper titled Talent Edge 2020. Forty-one percent of executives said “competing for talent” was a top concern, followed by developing leaders and succession planning (38%), and retaining employees at all levels (37%). Severe talent shortages are expected over the next year in Research & Development (34%), executive leadership (25%), and sales (19%). Even positions like customer service and marketing are expected to be tough to fill positions with severe shortages, 19 percent and 16 percent respectively, expected by executives.
The executives and senior talent managers who participated in this survey clearly recognize the importance of developing a strategy to retain key employees. Over the next twelve months, nearly seven in ten executives surveyed (68%) reported they have a high (39%) or very high (29%) level of concern about retaining critical talent. Another six in ten (64%) have a high (40%) or very high (24%) fear of losing high-potential talent and leadership.
The problem is most of the companies surveyed, by their own admission, are not doing a very good job of holding onto key employees. Worse, many do not even have a clear understanding about what factors are driving voluntary turnover at their organizations. With a return to some economic normalcy and the well-documented skills shortage among applicants, the need to recruit for new openings will be hard enough without having to replace the home-grown talent pipeline.
While the white paper highlighted numerous best practices, one stood out: “Companies differentiate themselves by culture, compensation and future opportunities…and deploy different strategies to appeal to different generations.”
The executives broke down their most effective retention initiatives as follows (each generation listed by priority rank):
Veterans (over age 65)
- Additional bonuses or financial incentives (25%)
- Additional benefits (health and pensions) (24%)
- Flexible work arrangements (20%) - Corporate social responsibility (20%)
Baby Boomers (ages 45-64)
- Additional benefits (health and pensions) (26%)
- Additional bonuses or financial incentives (23%)
- Additional compensation (21%) – Strong leadership/organizational support (21%)
Generation X (ages 30-44)
- Additional bonuses or financial incentives (21%)
- Additional compensation (19%) – Strong leadership/organizational support (19%)
- Customized/individualized career planning (18%) – Succession planning (18%)
Generation Y (under age 30)
- Company culture (21%)
- Flexible work arrangements (20%)
- New training programs (19%) - Support and recognition from supervisors or managers (19%)
Recruitment and retention of critical talent is sure to stay on the radar of executives for years to come as shortages and losses of skilled workers deepen. As a result, an effective talent management program becomes a much sought-after competitive advantage as less than one company in five participating in the Talent Edge 2020 survey could describe themselves as “world class.”
Employers and employees are obviously headed for a collision to be played out in a workplace near you. A recently released Deloitte report called the standoff “a tale of two mindsets.”
Many employers seem to believe their employees have few options in this weak economy. They feel employees should feel lucky they have job.
Employees, especially the most talented and qualified, see the world a bit differently. Among employees surveyed in the Deloitte survey, a significant number of workers are looking to jump ship. Thirty percent of employees are currently working the job market and nearly half are at least considering leaving their current jobs.
That stands in sharp contrast to the executives who were surveyed. Only 9 percent of executives expect voluntary turnover to increase significantly among Generation X employees. That means 9 out of 10 executives may be ignoring the elephant in the room.
The survey revealed that about 22 percent of Generation X employees are actively job hunting. Even more alarming, only 37 percent plan to remain with their current employers. Employers might find Generation Y a little stickier when it comes to retention but even then 44 percent plan to stay put over the next year.
Employee retention isn’t the only thing that executives and employees appear to disagree on. When asked to rank their top three retention tactics, employees chose in every instance different non-ﬁnancial incentives than the executives. Even greater differences existed when executives were asked to identify retention strategies that might appeal to different generations.
For instance, Gen Y and executives agreed that additional compensation and bonuses were effective. But that’s where agreement broke down. While 29 percent of the executives believe flexible work arrangements were what Gen Y wanted, nearly 4 out of 10 Gen Y employees said they wanted job advancement opportunities. Generation X wants a job with good wages but are only willing to stay if they can learn new skills too.
Like they’ve done many times in the past, Baby Boomers break the mold on retention strategies too.
Baby Boomers are looking for strong leadership, additional bonuses, and more compensation. Executives offer benefits, bonuses and flexible work arrangements.
Based on the results of this survey, executives are offering money and flexibility while the three most active generations in the workplace want opportunity, bonuses, and compensation. Executives need to learn that one size doesn’t fit all when it comes to employee retention and stop using the recession as their primary retention strategy.
Businesses may be able to erect a firewall to limit an employee’s access to Facebook, Twitter, and YouTube. But they can’t erect a fence high enough or deep enough to prevent dissatisfied and disengaged young workers from leaving their jobs despite a weak job market.
According to a recent Deloitte survey, nearly one-in-three (30%) employees are actively working the job market and nearly half (49%) are at least considering leaving their current jobs. Academic research indicates that 44% of these employees will actually act on these turnover intentions.
Employers, on the other hand, hardly see what may be coming. For example, only 9% of surveyed executives expected voluntary turnover to increase significantly among Generation X employees in the 12 months following the recession. That stands in sharp contrast to Deloitte’s survey results: about one-in-five surveyed Generation X employees (22%) have been actively job hunting over the last year and only 37% plan to remain with their current employers. Members of Generation Y also have their sights set on better opportunities, with less than half of those surveyed (44%) reporting they plan to stick with their jobs.
Among the executives surveyed, 65% expressed concern about losing high potential employees and critical talent to competitors in the year following the recession. Nearly half (46%) recall that voluntary turnover increased following the 2001-2002 recession. Nevertheless, only 35% have an updated retention plan in place to keep hold of talent as the recovery strengthens.
In Deloitte’s white paper, “Has the great recession changed the talent game?”, they include an excellent overview ranking effective retention initiatives by generation, comparing executive perceptions vs employee wants:
Key question for talent leaders: Do you know what your employees really want and are you tailoring your strategies to address the generational and geographic diversities of your workforce?
Read the full paper at Has the great recession changed the talent game?”