Employee development programs key to retaining talent

Companies looking to hang on to good workers would be well-served by updating and expanding their employee-development programs and other processes.

According to Mercer’s 2016 Global Talent Trends Study, nine out of 10 organizations anticipate that the competition for talent will increase in 2016, and more than one-third expect this increase to be significant. However, though 70% of organizations say they are confident about filling critical roles with internal candidates, 28% of employees say they plan to leave in the next 12 months, even though they are satisfied with their current role. A lack of development, outdated processes and discontent with the role of managers are the three main drivers of worker dissatisfaction, the study found.

“Millennials want experiences and a definite career path, but ‘soft’ learning and development programs dropped during the 2008 recession have not been fully rebuilt,” says Ilene Siscovick, a partner and North American solutions leader for Mercer’s talent business.


“Employees are demanding a new value proposition that combines greater career support with flexibility to manage their work and gain additional skills,” adds Kate Bravery, a partner and global solutions leader for Mercer’s talent business. “HR professionals are challenged to meet employee demands and achieve a talent advantage — especially if they do not have a crucial seat at the table — so they can remain a viable part in the talent ecosystem.”

An overwhelming majority of organizations (85%) report that their talent management programs and policies need an overhaul. But managing these changes requires support from leadership, and few HR professionals (4%) say that the HR function is viewed as a strategic partner within their organization.

The study, which takes into account the perspective of both employers and employees, also finds there is an ever-growing competition for labor in spite of high unemployment in many parts of the world.

“The issue is a skills mismatch — the people who are out of work typically do not have the STEM [science, technology, engineering or math] skills that are in highest demand,” Siscovick says. “Remember, every company is an IT company today. Retail, healthcare and even food services organizations all need people to build and maintain their technology platforms.”

Despite the fact that leveraging an increasingly diverse labor pool is viewed by employers as one of the top workforce trends impacting talent priorities, fewer than one-third of employers surveyed strongly agree that their company is working toward creating a diverse workforce or that their leaders are held accountable for attracting and supporting teams that include different genders, ages, races and backgrounds.

Furthermore, the importance that organizations have placed on developing a diverse workforce has not translated into actions that are visible to employees. While 73% of companies are working toward diverse leadership teams, only 54% of employees say their organization has effective programs in place to do so.

Not surprisingly, achieving gender equality is still a continuing challenge faced by the majority of employers seeking a representative workforce. Mercer’s “When Women Thrive” research, based on data from more than 600 organizations globally, found that female representation declines as career level rises.

To avoid losing female workers at key bottlenecks in their career, Siscovick suggests that employers develop special programs to engage women and encourage them to stay with their companies.

“Employees are demanding a new value proposition that combines greater career support with flexibility to manage their work and gain additional skills.”

A further trend identified in the study that will influence and challenge talent development programs are the growing ranks of contingent workers.

“The rise of ‘free agents’ who manage their own careers and move from job to job means employers can hire the ‘spot’ talent they need for a limited period,” Siscovick notes. “However, they may have to pay more for these people and they won’t be a human capital asset of the firm.”

An evolving approach to performance management also was a key focus for many companies in 2015, and this will continue in 2016. While ratings remain an important part of the performance management landscape and help to drive salary differentiation, the study reveals that some organizations are giving up forced rankings, while 22% plan to abandon ratings completely this year.

Yet two out of three employees participating in the survey see performance ratings as very or extremely important because ratings help them know where they stand (46%) and encourage them to improve their performance (54%). Only 8% said that performance ratings are not valuable, with most believing that ratings encourage them to work harder, help them to know where they stand relative to others and enable them to earn more.

In order for HR to translate the gap between employer and employee perceptions into an action plan for change, the study suggests that the HR function must more effectively build the business case for talent by leveraging analytic and predictive scales.

“When you think about finance, they don’t come to the table without a financial plan,” Siscovick says. “We are seeing a major upscaling of the HR function.”

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