16 May Employee retention: What you can do to keep your key talent
A recent Corporate Executive Board (CEB) study of 983 employees in the financial industry found that compensation is not a key driver of employee retention although it has a very low satisfaction score (satisfaction with compensation ranked 35th out of 38 attributes surveyed). Before you roll your eyes and say “really?” Please pause and think about it. Who wouldn’t want to be paid more? And who would agree that they are compensated sufficiently even if they are well paid?
It turns out that having competitive pay is a key driver of employee attraction but not retention. According to this CEB study, you need to do more to keep your key talent. The top three highest ranking drivers for employee retention are having effective managers, providing career advancement opportunities, and having good senior leadership reputation.
What does this mean for you as a HR partner to help your company attract and retain the best talent?
First, start by assessing your employees’ perceptions of their manager’s and senior management’s leadership quality and your employees’ perceptions of advancing their careers within your organization. You can do this by conducting a formal survey or focus groups, or mine your data of 360 feedback and employee complaints and grievances.
Next, review your assessment results and determine what you can do the address the key issues identified in the assessment. Based on our work with clients in various industries, the following are common themes that employees raised with regards to these three topics.
In terms of manager quality, does the data show that your managers need coaching to provide effective feedback and develop employees? Are they accessible to employees and help create a cohesive team environment? Do your managers communicate clearly and regularly with employees about the company’s and their department’s goals, processes and operations? Most importantly, are managers modeling the desired behaviors for employees? In other words, are they walking the talk or just talking the talk.
In terms of senior leadership reputation, employees are looking for signs that say senior leaders conduct business in an ethical manner, lead their organization through positive changes, communicate with employees openly and honestly, and care about employees. To this end, does your company have a plan for senior leaders to communicate your company’s mission, vision, and goals on a regular basis with all employees? Do senior leaders seek employee input before implementing major changes? And are they doing a good job leading the company for business success?
With respect to career advancement opportunities, employees are looking for opportunities to grow with their jobs and move up within the company–either within their department or across departments. Providing career advancement opportunities to employees seems like a straight-forward concept. However, what is not immediately apparent are the processes that help employees advance their careers within the company. We’ve heard employees complaint that their manager is reluctant to let them move to another department because they are doing extremely well at their current jobs. This does not help employees progress within the company. It may even demoralize employees so that they would only do an okay job instead of an excellent job, or may lead employees to look elsewhere to advance their careers.
In addition to having internal job posting and encouraging internal career mobility, you will need to think about how your employees can gain the skills needed to be competent in their next jobs. Do you have the best practice for developing talent at your company? Furthermore, do you reward your managers for growing talent?
For more ideas on employee development, get tips from the 20 Best Companies for Leadership on how to develop talent and leaders and check out Working Mother’s 2011 best companies for women’s advancement.
Even in the current economic climate, many companies already feel the pain of a talent shortage. As the great recession will slowly but surely come to an end, numerous studies have shown that employees are getting ready to say sayonara to their current employer.
What are you doing now to keep your best talent from walking out the door?