For employers, managing talent has never been more important. Organizations, particularly ones who've suffered massive layoffs over the past two years, are leaner and meaner.
As the economy improves, there's been a lot of talk that those employees who've stayed with their employers throughout the recession - simply because they were happy to have jobs - are poised to leave for greener pastures.
The Bureau of Labor Statistics' Job Openings and Labor Turnover Survey reported in October that the number of employees voluntarily quitting their jobs has surpassed involuntary terminations through layoffs and discharges.
The data reveal that 1.998 million people quit their jobs in August 2010, while 1.830 million employees were terminated or discharged.
A mass exodus of top performers represents a major threat to most companies, says Douglas Rozman, managing principal with Communivation Consulting. "Various studies show that somewhere between 25% and 60% of people who've been identified by their organizations as high-performing employees plan to leave their organizations within the next year."
And while many employees are happy where they are, turnover intention is up. "Our research shows that when the job market improves, employees will be giving much more serious consideration to leaving their current employment than they would have in the past," says Mike Norman, senior vice president, who leads service offerings in talent management for Sibson Consulting.
Organizations that haven't made preparations to develop and retain skilled talent through workforce planning and talent management efforts will be at a significant disadvantage when the economy rebounds, says Joy Kosta, practice leader and team lead for organizational development and leadership with the Human Capital Institute.
"Even though boomers have postponed retirement and everyone across generations is holding on to their jobs for economic security, those retained have been asked to do four or five jobs," she says. "The expression we've heard repeatedly is 'working like a water bug' because all they can do at best is skim the surface of what they've been asked to do. When the economy improves and people can make a change, they will."
And while employees might be sitting tight for now, they are disengaged. "Disengagement is higher than ever, historically," says Kosta. "Some people, if they can, spend up to 50% of their time looking for another job."
Letting people know that they're important and asking employees, particularly those high-performers, what they need to feel valued are two ways employers can engage employees.
"The top retention driver isn't necessarily salary," notes Lauren Herring, president and CEO of IMPACT Group, which recently released a report called "The Awakening: Understanding the Post-Recession Talent Reality." It notes that the top retention drivers are an inspirational manager, opportunities for advancement, a "good employer" reputation and then salary.
"That development opportunity is really critical," says Herring. "It doesn't necessarily have to be a promotion. It's letting [employees] know you really see a future for them at the company and also having them take on a special project or supporting someone in a team lead role. Identify opportunities where that person can learn new skills."
When Lisa Kluczinsky, HR manager for Johnson & Johnson Insurance, a 125-employee organization based in South Carolina, joined the firm in 2005, the firm had a very flat structure.
She lobbied to institute levels within each position. "It's not as much about the pay or the title as it is about the ability to continue to grow with the company," she says.
"We used to just have underwriters. Now we have an associate underwriter, an underwriter and a senior underwriter. And they're given specific requirements for attaining those titles. They have to work for it and pursue industry education. It gives them the opportunity to strive for the next thing," she adds.
At Insomniac Games, a video games studio with 190 employees in California and North Carolina, one of the most important aspects of talent management starts as soon as employees join the firm, with a review of the new employee's job description.
"We have mini reviews at 30-, 60- and 90-day intervals, with the intent being that they're getting up to speed, and we're setting goals so they know how to do their job here," says Carrie Dieterle, director of HR with Insomniac.
New employees are assigned a buddy, and career paths - a description of everything an employee needs to accomplish to take their career to the next step - are posted on the company's intranet.
Dieterle has one-on-one meetings with every employee on an annual basis to talk about the company. "We discuss their likes, their dislikes, what they'd like to see the company focus on and, more importantly, how they see their career path and how we can help them to get there," she says. "We're constantly having honest communication and feedback with our employees."
Support for managers
It's also critical for organizations to really think about the support they're giving managers. An employee's relationship with their supervisor or manager is often cited as a key reason employees stay in a job or leave the organization.
And with so many companies having eliminated a layer of management because of economic pressures in recent years, the managers and supervisors still on the job are taking on even more responsibility than ever before, with even fewer resources to get the job done.
"Now you have managers with expanded duties, additional reports, and now we're saying to them, 'Don't forget - we have to retain our talent as well,'" says Herring. "Some people are naturally good at developing talent and coaching, but most are not when they are incented on business results and margins and things like that."
Kosta agrees. "Busy managers often don't feel they have the time to engage talent, when what is really at play is [that] they've been selected for their functional and operational expertise rather than their talent management competencies," she says.
In addition, it's important for leaders to be just as visible now as they were at the height of the recession. "Connection with the leaders helps engage people, and engagement and retention go hand in hand," says Kosta.
Communication also is vital to the talent management process. Ben Adams, chairman and CEO of law firm Baker Donelson, which employs approximately 1,200 attorneys, paralegals and support staff, credits open communication with employees as a key ingredient to weathering the economic storm and keeping employees engaged.
Just before the recession hit, the firm expanded its internal communications program, introducing a CEO blog and what it calls 'daily dockets.' Groups of employees meet daily for 10 minutes to discuss what's on their minds.
Group leaders rotate and are provided with information sheets to generate discussion. "We use that to get the word out on various things and get feedback on things going on in the firm," says Adams. "That's given people a sense of belonging and two-way communication."
Organizations need a more sophisticated approach to aligning communication with engagement, says Rozman. "High-performers are a distinct audience, and so the communication an organization delivers to them needs to be thought about differently. Take a very careful look at what motivates these individuals and integrate that into [your] communication."
Companies need to focus on their critical roles and the employees in those roles, says Norman. "Those are the positions that have a direct effect on the accomplishment of strategic objectives and business plans, both in the short-term and longer-term."
What you can do about it
Experts suggest organizations go through some type of diagnostic exercise to determine what their talent management issues are. For larger organizations, it might be a pulse survey or engagement survey of some kind. Smaller companies might want to consider focus groups or interviews.
"Find out what people are thinking about, are they still challenged and motivated, what would help them get recharged?" says Patrick Shannon, partner with Mercer.
According to Mercer's recent Future of Talent Management Survey, two-thirds of the nearly 1,200 global HR and talent management leaders surveyed plan changes to leadership training, workforce training, employee engagement, recruiting, retention, rewards, performance management and career programs.
Shutterfly, Inc., an organization with just over 500 employees in Arizona, California and North Carolina, conducts annual engagement surveys. Between 2008 and 2009, the company saw an 8% to 9% increase in every area of employee engagement, something senior vice president of HR, Peter Navin, attributes in part to having clearly defined roles and responsibilities.
"We've deliberately focused on role clarity and how you impact the company's success and grow your career here," he says. The company's business objectives are at the heart of its talent management program. It offers a learning and development program and uses competency-based hiring. "We're building a lot of scalable infrastructure around talent management that should prepare us for the future," says Navin.
Shutterfly uses a robust performance management system. The company organizes its business objectives and bonuses on a quarterly basis, essentially "forcing the conversation between the employee and the manager four times a year," says Navin. "It allows for clear objective-setting, clear communication and clear rewards for great results."
Organizations have traditionally fallen short in framing their talent management needs and priorities in business terms. "Executives clearly understand data, and HR needs to translate talent management gaps in terms of risks and implications to the business," says Norman. "If HR can quantify the impacts in dollars, they get people's attention."
The second thing employers can do is to make the decision to do something about it, he adds, and the third step is execution. "Turning intent into action is where many organizations now are coming up short because they don't have the bandwidth to execute any additional initiatives. Due to the current economic realities, organizations are very lean."
But not everyone is worried about employees moving on to greener pastures once the economy starts growing again. "I don't think it's a particularly strong concern," notes Adams. "Because we've been forthcoming about how we're doing [financially], and we've been able to do reasonably well and share that with our people, I think we're well positioned for when things start to turn, not only to keep our people but attract new people."
Dieterle agrees. "Our philosophy is to treat our employees really well. So we don't get overly concerned about a lot of movement. Our expectation last year was that we would see a little bit [of movement] by the end of 2010. But our overall attrition has remained the same year after year."
Roving coaches Roving coaches
Coaching as a talent management and retention strategy has traditionally been reserved for top performers and senior management.
But a new company, Roving Coach, aims to change that with its model of 30-minute coaching sessions for middle managers and other employees "who don't have access to coaching like the big dogs do," says CJ Scarlet, Chief Rover with Roving Coach, adding that strapped HR staff often don't have time for coaching, and managers - though many are being asked to coach and mentor their employees - often don't have a feel for what they're doing.
"At the end of 30 minutes there's always a shift in consciousness, there's always a shift in awareness of their situation," says Scarlet. "We're getting employees to understand that they have the ability and capacity to take responsibility for their situation and do something about it."
Frequent complaints include conflict with managers or co-workers, and employees "tend to be in that victim mode - it's something happening to them. And what we get them to do is enlarge their perspective to recognize the manager or the co-worker likely isn't going to magically change. If something's going to shift in the relationship, it's got to be [the employee's] perception and their actions," says Scarlet.
Employers pay for a minimum of one coaching day per month. One day includes eight coaching sessions. "For the cost of two executive coaches, we can coach over 200 employees in the course of a year," says Scarlet.
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