A recent survey indicates that employees suddenly are indicating a desire to stay with their current companies. But employers cannot afford to neglect their retention practices, according to Deloitte.
Eighty per cent of respondents in Deloitte’s Talent 2020 global survey report said they plan to remain with their current organisations for the next year. A year ago, 65% of respondents in the same survey said they were seeking new employment.
This year, 46% said they are not inclined to move because in the past 12 months they have changed jobs, were promoted or have taken new positions with their current employers. But nearly one-third (31%) said they are not satisfied with their jobs.
The report suggests that employers need to adjust their retention processes, narrowing their focus and zeroing in on high-performing employees with key skills who are at high risk for departure.
Robin Erickson, a human capital specialist at Deloitte, thinks workers’ intentions of remaining with their current employers are bound to change, perhaps as soon as the economy improves. “The more confident folks are in the economy, the more likely they are to look for a new job,” she said.
US Bureau of Labor Statistics data since 2001 show a nearly perfect negative correlation between the unemployment rate and voluntary job turnover, Erickson said. The data show that when the unemployment rate decreases, workers are more likely to leave their jobs of their own accord.
In this situation, companies that have laid off workers need to be especially sensitive to the needs of their remaining employees, Erickson said. She said employees who are spared layoffs may be frustrated with how their colleagues were treated and with the additional work they have been required to do since the downsizing.
The top five reasons survey respondents listed for seeking new employment were:
Lack of career progress (27%)
New opportunities in the market (22%)
Dissatisfaction with manager or supervisor (22%)
Lack of challenge in the job (21%)
Lack of compensation increases (21%)
There are things executives can do to keep employees engaged:
Use and develop your employees’ skills. “Employees aren’t getting the right training and development in their current organisations,” Erickson said. “And organisations really need to start looking within for talent and reskilling.”
Build trust in leadership. Successful execution of strategy makes employees more likely to remain in their jobs. Seventy per cent of those surveyed who plan to stay said their organisation has the ability to execute; just 33% of those who plan to leave had the same confidence in management’s ability.
Communicate effectively. Among those who plan to leave, 66% said communication has been ineffective. Sixty-two per cent of employees who plan to stay said their employers communicate effectively.
Ways to keep them
Erickson said it is also important for companies to make a detailed assessment of the costs involved with losing high-performing employees. Using an auditing firm as an example, Erickson said costs for replacing a fully billable manager include recruiting, hiring, orientation and lost productivity. Even after orientation, the new employee might not be fully billable. She said some large organisations can calculate savings of millions of dollars if they can decrease their voluntary attrition by just one percentage point.
“You can very quickly make the business case for investing in your people when you start to calculate,” she said.
Compensation is a factor in retention because, although employees often give non-financial reasons for seeking new employment, the money is what can get them to stay. The top five retention incentives workers listed were:
Additional bonuses or financial incentives (44%)
Promotion/job advancement (42%)
Additional compensation (41%)
Flexible work arrangements (26%)
Support and recognition from supervisors or managers (25%)
Although financial incentives are important, finding meaningful work for employees also is of utmost importance. Forty-two per cent of respondents who are seeking new employment say their job does not make good use of their skills and abilities.
In addition, employers can focus retention efforts on employees who occupy demographics with a high risk of departure. These include workers with less than two years on the job, and those who are 31 years old and younger.
Employees “wait and see”
Erickson said she believes employees are exhibiting a “wait-and-see” attitude with respect to leaving their current jobs as they monitor an uncertain economy with high unemployment. Meanwhile, 71% of executives in a survey report released in January expressed high or very high concern about losing critical and high-potential talent.
Those concerns could be rooted in a skills gap that has developed worldwide. Despite high unemployment, employers frequently report trouble finding workers with the skills they need. Erickson said people in her firm are fond of saying that the war for talent is over, and the employees won. Employees with updated skills in certain sectors are in high demand.
“You can post your résumé on LinkedIn, and all of a sudden people come to you without you even having to look for a job because they look for those skills,” Erickson said. “Social media has made it a lot easier to look for jobs and to network. So I think the power is now in the hands of the employees.”
Additional CGMA Magazine resources:
“Appreciation from managers critical in employee retention, survey shows”: Forty-nine per cent of workers in a recent survey said they would be somewhat or very likely to leave their current position if they did not feel appreciated by their manager.
“At work, engagement is lacking; so is meaning”: The global workforce is less than enthusiastic about work these days. Leaders hoping to improve levels of engagement should consider three steps, beginning with creating meaningful work, an expert on retention and rewards says. The engaged worker is more productive – and less likely to go to work elsewhere.
“Employers worry about top employees taking their talent elsewhere”: Employers are expressing concern about retaining that talent – and the cost of losing and replacing talent. Employers think that retention strategies help limit losses.
“Shortage of talent top concern among employers worldwide”: Finding the right talent is a big problem for companies worldwide, despite easy access to a large pool of educated people and opportunities to outsource. The problem is most acute in knowledge industries and heavy industry. Find out how companies say they are addressing the challenge.
—Ken Tysiac (firstname.lastname@example.org) is a CGMA Magazine senior editor.