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Take Steps to Prevent Talent Erosion as Economy Recovers

Economic recovery is prompting organizations to rethink their talent management strategies in an effort to hold on to key employees. Here are practical steps to dispel employees\' notion that the grass is greener on the other side.

May 11, 2010
Related Topics: Mentoring, Learning and Development
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The economic upturn is driving new job opportunities, but low levels of employee trust and engagement, even lower levels of entry-level recruitment, and increasing demand for executive talent have created a crossroads. Companies must rethink their talent management strategies if they hope to retain key talent and remain competitive in today’s marketplace.

“They need to do that now or they’re going to end up in a situation where talent erosion accelerates, and it’s going to make it very difficult for them to take advantage of the upturn in the economy,” said Matthew Parker, group managing director at StepStone Solutions, a talent management solutions provider.

“You’ve basically got this situation where people haven’t moved jobs over the last 18 months for fear of organizations taking a last-in, first-out approach if they have to make cuts,” he said. “If people get more comfortable with the fact that organizations are not doing restructuring or cuts, they’re much more likely to embrace a new opportunity.”
 
These were some of the findings cited in “Companies at a Crossroads,” a recent report based on a study conducted by the Economist Intelligence Unit and StepStone Solutions.

The study also laid bare a significant discrepancy between the way senior executives and line managers perceive the level of trust and engagement within their organizations.

“Thirty-eight percent of C-level executives are saying [trust and engagement] is high, [compared to] only 16 percent of people working within the business — doing the doing versus doing the telling,” Parker said. “That is a huge disconnect, and it’s potentially driving business strategy in one direction when organizations should be focused in other areas.”

In fact, 40 percent of line managers said trust levels were “quite low.” There could be a few contributing causes to this discrepancy, Parker explained.

“One is the lack of effective technology to allow transparency around what’s going on in an organization, so data probably just isn’t feeding up through the food chain,” he said. “The other side is people don’t want to hear what they don’t want to hear — and some people don’t like giving bad news, so it reflects on a line manager if he goes to his boss and says, ‘My team is unhappy.’

“We work with close to 1,500 organizations across the globe, and we see a big difference in terms of levels of employee engagement between organizations that really embrace talent management and doing things in a transparent [manner] versus organizations that don’t use technology to support that or try and do that behind closed doors.”

Low levels of trust and engagement are bound to make employees think the grass is greener on the other side, Parker explained.

In order to combat this mentality, organizations need to focus on retention, communication and transparency, he explained. For instance, put together development plans for key talent as a retention strategy.

“If you look at what drives a number of the demographic groups that we speak to on the employee [or] candidate side, a lot of it is, ‘I want to know what I’m going to be doing in two years’ time, and I want to know that I’ve got a career at this organization,’” he said. “Career is a different thing for different people — for some people, it’s moving up the ladder; for some people, it’s job security in a 9-to-5 job; there’s no one size fits all — but the key thing is making it very clear that your organization is taking this seriously and actually values its people.”

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