Rise in hiring activity puts retention back in spotlight
But new study finds many employers unclear about what their employees really value
Aug 25, 2014
By Claudine Kapel
What do your employees really value?
Knowing the answer to that question is key if you want to craft an effective strategy for recruiting and retaining talent.
And having an edge when it comes to securing talent is becoming a higher agenda item now that we’re seeing reports of increased hiring activity.
Two new studies by Towers Watson suggest many employers don’t really understand what matters most to employees. Employee respondents to the Towers Watson Global Workforce Study indicated the top factors that cause them to stay with an organization include:
- Base pay / salary
- Career advancement opportunities
- Trust / confidence in senior leadership
- Job security, and
- Length of commute.
The study surveyed 32,000 employees worldwide, including more than 1,000 employees from Canada.
But in a separate study, when employers were asked to identify what they thought the top drivers of retention were from the perspective of employees, their list included some notable differences. The survey, entitled the Towers Watson Global Talent Management and Rewards Survey, covered 1,637 companies globally, including 95 from Canada.
The respondents of both the employer and employee surveys identified the same top two drivers of retention – base pay and career advancement opportunities. The other three top items on the employee list didn’t make the employer list. Instead, the employer respondents rounded out their top five choices with:
- Relationship with supervisor / manager (which was number six on the employee list)
- Manage / limit work-related stress (which was number seven on the employee list), and
- Learning and development opportunities (which didn’t rank among employees’ top choices).
Addressing any key gaps in your organization’s proposition is especially vital now that the competition for talent is heating up and employee retention is back in the spotlight.
The talent management and rewards survey found that globally, nearly half of the respondents (48 per cent) said hiring activity has increased compared with last year, with 15 per cent indicating hiring has jumped significantly.
More than a third of respondents (35 per cent) indicated turnover was rising, with more than half reporting difficulty in retaining high-potential employees (56 per cent) and top performers (54 per cent). In addition, nearly two in three respondents (65 per cent) reported experiencing problems attracting top performers.
The research results highlighted some key areas of importance to employees that organizations may be overlooking as they build their talent and total rewards strategies.
For example, organizations seem to overlook the vital importance of trust in senior leadership. The new Towers Watson research isn’t the first study to highlight the significant impact that declining levels of trust can have on an organization’s ability to retain and engage talent.
This is an area where many organizations can probably identify some opportunities for improvement, whether it relates to improving leadership development and coaching, strengthening the lines of communication, or tackling specific issues that have caused trust levels to decline (e.g., issues related to inconsistent or poorly explained leadership decisions).
As well, the research results suggest employers may need to pay more attention to career development, versus just learning and development. The results found that four in 10 employees (41 per cent) indicated they would need to leave their organization to advance their careers.
Meanwhile, of the employer respondents, less than half (49 per cent) felt they were effective at providing traditional career advancement opportunities.
Employee retention hasn’t been a hot topic in recent years. But as organizations start to see more hiring activity and related turnover, concerns about talent will move higher on the corporate agenda.
But key employee priorities, including trust in leadership and advance opportunities, represent complex issues. If these are trouble spots in your organizations, they’ll take time to address.
That’s why there’s no time like the present to build a strategy for addressing your organization’s future talent needs.
Claudine Kapel is principal of Kapel and Associates Inc., a human resources consulting firm specializing in compensation design, performance management, and employee communications. Claudine is also the co-author of The HR Manager’s Guide to Total Rewards and Straight Talk on Managing Human Resources.