Trends Increase Vulnerability to Talent Loss
Top 5 Ways to Revive your Retention Plan
By Jack W. Wiley, Ph.D.
President & CEO, Gantz Wiley Research
The past few years have been challenging times for most organizations. Facing layoffs, revenue loss, changing employment laws, and corporate ethics scandals; leaders have been on the edge of their seats, attempting to avoid the next corporate disaster. And now, even amid economic recovery, data suggests leaders should remain vigilant. Results from WorkTrends™, Gantz Wiley Research's annual survey of 10,000 U.S. workers, coupled with current economic trends implicate the next potential crisis: talent loss. After a couple years in hibernation, talent retention issues have come again to the business forefront. Is your organization prepared?
Gantz Wiley Research has been tracking workplace issues for two decades with WorkTrends, a program that surveys 10,000 U.S. employees annually on topics such as leadership effectiveness, job satisfaction, business ethics and employee retention. We use WorkTrends as a forecasting tool to provide a snapshot of the outlook of the U.S. workforce. It has proved effective in providing business leaders with information they can use to anticipate problems and implement solutions, before the problems themselves are apparent.
There are three main forces of turnover within an organization: the push (the dissatisfaction with one's current job) the friction (the switching cost), and the pull (the attraction and opportunity at other organizations). Macroeconomic indicators show that the pull is building--the economy is improving and job growth is imminent. A main implication of the overall WorkTrends 2005 results demonstrate that as this pull grows, employers must carefully focus on the drivers of retention.
Turn-over is remarkably expensive. With the loss of productivity, training time, and overall disruptions, a very conservative estimate of turnover cost is at 30% of an employee's annual salary. Some experts estimate the cost of turnover as being up to 2.5 times an employee's salary for management and sales positions.
Why are employees choosing to leave? A statistical evaluation of WorkTrends 2005 results indicate that the five key drivers of intent
to remain in rank order are:
- Career development opportunity
- Sense of accomplishment
- Job security
- Confidence in the future of one's organization
- Pay satisfaction
Simply stated, the more present these conditions, the stronger the intent to stay.
Despite the increasing pull to new jobs, efforts to keep talented employees can be highly effective. Talent loss is not a given in any situation. A talent retention initiative based on the five key drivers of intent to remain can significantly decrease your retention vulnerability. A focus on these drivers can guide leaders towards building organizations where employees believe in a promising future and want to stay. Here are five key aspects of a retention plan that can keep your employees from walking out your door.
1. Career Development Opportunity
Employee perceptions of career development opportunities is the number one driver of employee intent to remain. Employees want
to be on a career path leading to a promising future. Employers must first seek to understand employee interests and properly identify
development needs. Then, employers must provide the financial and structural support necessary to make employee development a reality.
Here are some actions that can be taken to improve employee perceptions of career development opportunities:
- Create individual development programs for each employee
- Provide cross-training opportunities
- Implement a mentorship program, broadening exposure to managers beyond the immediate manager
2. Sense of Accomplishment
In addition to financial recognition, employees want to feel an intrinsic sense of accomplishment. The more employees
understand how their work contributes to the organization's success, the more likely they are to feel a sense of accomplishment in the work
they perform, and the more likely they are to remain with the organization. Here are some actions that can be taken to improve employee
sense of accomplishment:
- Provide meaningful recognition and reinforcement for performance
- Provide opportunities to exercise control, discretion, and autonomy including decision making, planning, and problem solving
- Take the time to discuss action planning with employees to communicate how their work fits into the big picture
3. Job Security
As a key driver of intent to remain, it is important that employers focus on improving perceptions of job security. Here are some actions that can be taken:
- Regularly communicate with employees on issues relating to the company's viability and success
- Be up-front with new employees on benefits and frustrations of the job
- Provide clear and honest communication surrounding mergers and acquisitions and layoffs
4. Confidence in Future
Employees want to be on a winning team and when they see a promising future for themselves and their organization, their
intent to remain rises dramatically. Here are some actions that can be taken to build employee confidence in their organizations future:
- Promote a clear mission, vision and strategy
- Share information about the viability of your organization, both the good news and bad · Solicit and act on feedback from employees and customers
5. Amount of Pay
On average, organizations spend about 50% of their overall budget on pay and benefits. Since this is typically the largest
expense organizations face, pay systems are very carefully monitored and controlled. Constricted by limited budgets and often inflexible pay
grades, managers can sometimes regard compensation as an area where they have little influence. It is important for employers to understand
that it is the perception of low pay and not necessarily actual market-based knowledge that causes dissatisfaction. Here are some actions
that can be taken to improve employee perception of pay:
- Conduct annual compensation market-place review and share results with employees
- Create a 1-page summary of all company-sponsored pay and benefits paid on behalf of employees
- Keep employees feeling psychologically rewarded through recognition of superior performance
The message is clear. If you do not already have a talent retention program in place, now is the time to act. And if you have already taken action, now is the time to make sure you can handle the latest changes in the economic climate. Focusing on actions to increase the presence of these five drivers will provide the greatest impact on creating a productive and healthy workforce.
What is WorkTrends?
The WorkTrends survey program has been used by Gantz Wiley Research for over 20 years to provide a normative comparison to client employee survey results. The National Academy of Sciences selected WorkTrends as a source of data for a project that involved examining macro-level trends within the U.S. economy. Their book, The Changing Nature of Work, features WorkTrends data.
WorkTrends is administered as a paper and pencil survey that is annually sent to workers across the nation. WorkTrends uniquely draws from a sample that mirrors the U.S. census statistics key demographics. The results, used by Gantz Wiley Research clients worldwide, provide normative data on pertinent workplace topics including job satisfaction, leadership, and customer orientation. The data can be sliced by several demographics including industry, location, and job type.
A webcast of the results of the 2005 WorkTrends study is available for viewing at
www.gantzwiley.com.
About Gantz Wiley Research
Founded in 1986, Gantz Wiley Research has provided consulting services to industry leading organizations worldwide, helping them to
drive business performance through the strategic use of employee and customer surveys. Gantz Wiley Research is recognized as the leader in
identifying and leveraging the links among employee opinions and customer satisfaction to drive improved business results. We have offices in
Minneapolis, MN, San Francisco, CA, and Melbourne, Australia.
For more information on Gantz Wiley Research and our services, please call our Minneapolis headquarters at 612-332-6383
or visit www.gantzwiley.com.
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