It’s a paradox: Despite continued high levels of unemployment, many companies are confronted with a serious scarcity of qualified talent . Corporate America is in a post-recession world. As such, using the recession as a retention strategy is no longer viable. Results from Deloitte’s most recent global employee Talent Edge 2020 survey put the challenge front and center.
What a difference a couple of years makes. Among global employees surveyed this past spring, only 35 percent expect to remain with their current employers compared with 45 percent in 2009. Yes, nearly two out of three global employees surveyed (65 percent) report they are either passively or actively testing the job market. If this doesn’t cause corporate executives to note it’s time for a change, perhaps this will: By a margin of more than 2:1 (45 percent to 20 percent), employees anticipate an increase – versus a decrease – in employee turnover in the next year.
There’s a red flag here. Employers potentially are at risk of losing more than the hearts and minds of their employees; they’re at risk of losing their heads and hands. With a stronger economy, more employees with a desire to leave their current employer are now actively testing the job market. Rising turnover intentions, which built slowly but steadily during the recession, may create a resume riptide (i.e., a strong and steady wave of departures of some of the most critical employees) and hit companies at precisely the time when many executives predict talent shortages in the very business units they depend on to drive growth and innovation.
What do these eying-the-exit employees see that their employers don’t? The 65 percent of employees exploring their career options believe their companies’ corporate talent programs are seriously lacking. In the hierarchy of what isn’t working, employees surveyed identify:
- uncertain career paths – 57 percent believe their companies do a “poor” or “fair” job of creating career paths and challenging job opportunities,
- little leadership development – on average 35 percent rate their company’s leadership development programs as “poor/fair”,
- a lack of trust in leadership – 57 percent rank their company’s ability to effectively inspire trust “poor/fair,” with more women (35 percent) than men (22 percent) rating this ability as “poor”,
- difficulty retaining top performers – 50 percent believe their company is doing a “poor/fair” job and
- inadequate training programs – nearly half (48 percent) believe their company is doing a “poor/fair” job managing and delivering these programs.
What’s an employer to do? Companies hoping to slow the potential exodus of critical talent from their companies should consider several options for turning the revolving door in their favor. The top retention strategies identified by employees are, not surprisingly, remarkably close to mirror images of the departure drivers: lack of career progress, compensation increases, job security, trust in leadership, and new opportunities in the market. The top five retention incentives identified by respondents are: promotion/job advancement (53 percent), additional compensation (39 percent), and additional bonuses/financial incentives (34 percent), support/recognition form supervisors or managers (30 percent) and additional benefits (21 percent).
Of significant importance for employers with an eye to successfully competing in the global talent markets is gaining an understanding of the differing perspectives of their multi-generational workforces. Deloitte’s survey results suggest companies with a one-size-fits-all strategy for retaining and attracting talent may have a very difficult time in the worldwide competition, as different generations have different goals, expectations and desires. Both turnover triggers and retention incentives appear to vary significantly across employee generations with emerging differences by gender and world region.
Of those surveyed, 11 percent of employees from the Asia Pacific region reported morale “significantly improved” versus just 7 percent of their compatriots in Europe, the Middle East and Africa and 5 percent of employees in the Americas. Companies that adapt their talent and retention strategies to meet the particular expectations and motivations of different employee populations will likely retain their talent while those that don’t could find themselves on the losing end of the competition.
Addressing the challenges of increasing employee frustration is critical. Yet, as the survey data reveals, employees don’t think their companies’ talent management programs are making the grade. Of the survey respondents, only a scant 6 percent of employees rated their companies’ talent program as “world-class.” By a margin of 7:1 (43 percent:6 percent), employees rated their companies’ talent programs as “fair” or “poor” versus “world-class.” Financial services employees revealed themselves to be even less satisfied with their companies’ talent management programs than the average. A majority – 57percent — rated their employers’ overall talent efforts as “fair” (44 percent) or “poor” (13 percent).
By an approximately 2:1 margin, employees surveyed rated their company’s talent programs as “fair” or “poor” versus “world-class” or “very good” in the following areas: developing leaders (46 percent “fair/poor”:26 percent “world-class/very good”); maintaining high morale (49 percent “fair/poor”:22 percent “world-class/very good”); inspiring trust and confidence in leadership (48 percent “fair/poor”:26 percent “world-class/very good”); creating career paths and challenging job opportunities (48 percent “fair/poor”:27 percent “world-class/very good”); and providing career mobility and international career assignments (45 percent “fair/poor”:25 percent “world-class/very good”).
The area in which employees granted their company relatively high marks was in providing competitive compensation and benefits packages with 36 percent rating their company’s compensation and benefits package “world-class/very good” compared with 34 percent who rated them “fair/poor.”
So, what does it take to keep employees committed to their company and satisfied with their career? According to the 35 percent who plan to stay with their current employer, the answer is a strong talent management program with:
- defined career paths,
- leadership pipeline,
- leadership that inspires trust,
- commitment to retaining top talent and
- effective communication.
Survey respondents also identified an organization’s commitment to the following attributes as important to their consideration of an employer: sustainability, creating a fun work environment, work-life balance, corporate responsibility and volunteerism and diversity and inclusion.
Many employers are predicting shortages of qualified talent in critical business units. Employers driven to differentiate their company in the competition for top talent recognize their talent retention and attraction strategies should engage and meet the specific needs of an unprecedentedly diverse workforce. World-class talent programs that keep top talent committed to their jobs with challenging opportunities, excited about their prospects with defined career paths and confident in their leadership can distinguish their organization as a world-class employer.
Jeff Schwartz is a principal with Deloitte Consulting LLP's Human Capital practice. He is a regular contributor to Business Finance, sharing his perspective on executive talent development, where the next generation of finance leaders will come from and some of the best practices organizations are applying in addressing these issues.
Robin Erickson, PhD, Deloitte Consulting LLP, contributed to this article. Robin works in the Human Capital practice and currently leads the program management of Deloitte’s integrated marketing offering for Talent.