As the economy begins to improve, employers across the board are finding it more difficult to retain key talent -- employees who are the strongest performers, have high potential or are in critical jobs. That’s among the findings revealed by a survey of primarily U.S.-based mid-level to senior-level rewards professionals, as reported in Retention of Key Talent and the Role of Rewards, a report published in June 2012 by WorldatWork, an association of total rewards professionals. The survey was a collaboration by WorldatWork, pay consultancy Hay Group and Dow Scott, Ph.D., professor of human resources at Loyola University Chicago.
A majority of respondents (83%) thought that failure to retain key talent is “very costly,” and two out of three agreed that retention of key talent is a major concern of senior management, the study revealed.
Survey participants reported that the top reason key talent quits is to get more pay elsewhere. Other reasons include a lack of promotional opportunities, the perception that pay is unfair, and dissatisfaction with job and work responsibilities.
“Talent wars are going to become intense, not just this year but for at least a decade, because jobs are becoming more complex and demanding, Baby Boomers are retiring and Generation X has far fewer people who can fill this gap, and other countries are retaining their most talented people with great job opportunities of their own,” Scott said.
Tom McMullen, North America reward practice leader for Hay Group, added, “Top talent can easily compare the deal or pay package they get from their employer with other organizations through Salary.com, Vault.com and O’net.gov, etc. If a company is to survive and hopefully thrive in the next decade, it must learn how to recruit, develop and retain key talent.”
Effective and ineffective efforts
According to respondents, the most effective methods for retaining key talent are:
• Identifying key employees and discussing with them their future opportunities with the organization.
• Paying key employees above the labor market.
• Allowing flexible hours or telecommuting.
The least effective employee retention methods are:
• Providing tuition reimbursement and other educational opportunities.
• Providing pay communications, including total compensation statements.
• Assigning mentors for key employees.
“Rewards professionals are under increased pressure to make counteroffers, increase new-hire offers and offer special deals to retain key employees,” said Kerry Chou, practice leader at WorldatWork. “The most successful organizations moving forward will be those that develop a clear definition of what is considered key talent, identify them and make a concerted effort to ensure that those employees are satisfied with the rewards system.”
Respondents represented publicly traded companies (47%), privately held companies (26%) and public-sector and not-for-profit organizations (26%). Survey responses were gathered from Dec. 15, 2011, to Jan. 15, 2012.
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