By Claudine Kapel
What does in take to retain key talent? That’s a question more organizations seem to be grappling with in the face of converging talent challenges.
A recent WorldatWork study found only 51 per cent of participants are confident their organization can retain key talent as the economy improves. Further, 56 per cent said they expect a substantial number of key employees to search for better jobs as the economy improves.
The study was conducted for WorldatWork by Loyola University and Hay Group, and involved interviews with 526 WorldatWork members.
Top of mind were concerns about retaining critical talent, with 69 per cent reporting retaining managerial and professional employees who are high performers or have critical skills is a significant challenge.
The report authors suggest senior rewards and human resources professionals “fear that key employees are becoming increasingly frustrated in their organizations due to layoffs, the resultant expansion of job accountabilities, and constraints on reward programs – primarily limited base salary increases, lower incentives and fewer advancement opportunities.”
According to the study, there are a number of forces at play that are making access to talent a growing concern, including retiring baby boomers and the increasing specialization and technical demands of jobs.
Converging with these challenges is the concern that percolating employee discontent will fuel a spike in turnover levels over the next few years. Hay suggests not only is competition for employees going to increase, but employees are also going to be actively seeking new jobs as well. Employee opinions from surveys conducted by Hay indicate 20 per cent of employees plan to look for new jobs in the next two years – and another 20 per cent plan to leave their employers within the next five years.
In the face of these talent concerns, the study reviewed some of the employee retention methods used by organizations. Topping the list was identifying key employees who are essential to the business, with 88 per cent indicating they have such a program.
Other employee retention methods include:
- Engaging key employees in discussions about their future opportunities within the organization (84 per cent).
- Paying key employees above market rates (83 per cent).
- Allowing flexible hours or telecommuting (80 per cent).
- Providing meaningful pay communications, including total compensation statements (77 per cent).
- Providing meaningful and enriching job designs for key employees (76 per cent).
- Monitoring the satisfaction of key employees concerning their pay and work situation (75 per cent).
The study found that while organizations use a variety of approaches for retaining key talent, the effectiveness of these methods varies substantially in the eyes of the participating organizations. But a key finding was “those that used a broader toolkit of retention methods believed they were in less danger of having key talent quit.”
As most studies or research on employee retention show, there’s no magic pill for achieving higher levels of employee retention, whether across the board or relative to key talent.
The most effective talent retention strategies start by defining the target audience and then incorporate a variety of components to drive desired behaviours and outcomes.
In this way, retention strategies are akin to the broader total rewards strategies that support them. Talent retention is a three-dimensional chess game. Attention to multiple variables is required for ultimate success.
Claudine Kapel is principal of Kapel and Associates Inc., a Toronto-based human resources and communications consulting firm specializing in the design and implementation of compensation and total rewards programs. For more information, visit www.kapelandassociates.com.