All the signs point to retention being one of the key issues for HR – while under threat of redundancy, employees hung on to their jobs. An upturn may mean a brain drain – what can HR do? David Leyshon, Managing Director of CBSbutler, shares his view.
A recent survey undertaken by specialist technical and engineering recruiter CBSbutler has found that over 60% of employers have concerns about losing key staff in a recovery. The survey questioned over 300 organisations, and revealed an underlying threat of a disenfranchised workforce which may just be biding its time until things get better. Couple that with the latest employee outlook research from the CIPD, which has found that that job satisfaction has dipped significantly compared with the Spring and Summer and it is not hard to see why employers may be worried for the future. The CIPD research also found that 40% of employees would look to change jobs during the next year suggesting a potential exodus of talent when the job market recovers.
So what does this tell us? I firmly believe that it should act as an ‘early warning system’ for employers. Arguably, many organisations may feel that their employees should just be grateful to have a job, but even in a recession, employee engagement is crucial for long term retention strategies.
When the recovery does finally get underway, organisations who have the right retention strategy today will be the ones who have the right skills in place for tomorrow. But in a recession, many companies forget the argument that good people = good performance.
Consequently, while the economic environment has been tough to say the least, the one area you should not have been cutting back on is the development of your people. And if you have then now is the time to get that right back at the top of the agenda before it’s too late. One of the real features of this last recession has been the pace of change – and that is set to continue – so look at creating different talent pools. This way, your training and development will be tailored to meet the specific needs of different, valued groups such as people with leadership potential.
Indentifying and nurturing you real talent will be crucial to you ability to really take advantage of any upturn. And history tells us that there are plenty of people who can get it wrong. Even Bill Gates once remarked that if you took away its top 20 people, Microsoft, one of the most successful, influential and radically innovative organisations of its generation, would become an ‘unimportant company’.
When managers fail to take talent seriously, they weaken the bottom line. In fact, The Institute of Employment Studies devised an index around a bundle of 12 key people practices and found that firms which improved these practices increased their index score by 10%. They could also expect to see a rise in gross profits per employee of between £1,000 – £1,500 a year. Piecemeal introduction of single practices, however, had little effect on business success.
What also happens is that they spend their time continually shopping. Apart from expense, the ‘hire rather than nurture’ strategy, means teams are often left rudderless while positions remain vacant. Hardworking staff, forced to take up slack consequently pay less attention to their own jobs and become de-motivated. It also means that valuable and often scarce management time is diverted away from business.
Organisations who do not engage their talent are also not able to ‘plant or grow’. A good example of this is a London-based real estate finance and development firm which was gearing up for a major reconstruction job in Berlin, worth £500m in revenues over two years as well as the opportunity to get in on the ground floor of other projects in the region. But when the executive committee reviewed the list of people who might be ready to take on the assignment, the CEO noticed that the same names appeared as the only candidates for other critical projects. The firm’s growth strategy hinged on a few, key projects but no one had groomed the people to lead them.
The real test is obviously return on investment. In a recession everyone’s budgets are under pressure but consider the following scenario. Your organisation undertakes an employee satisfaction survey – gaps are identified for which training and development programmes are put into place. Customer satisfaction surveys are undertaken before the employee surveys and after the programmes designed to close the gaps. After the training and development programmes, customer satisfaction increases, as does revenue. It’s a powerful hypothesis isn’t it?
At CBSbutler, we have employed that very model and by focusing on employee engagement and retention, we have seen revenues increase – and that’s during a recession. So don’t see retention and engagement as ‘nice to haves’ – they are absolutely critical for your future success. The key though is to link the success of your employee engagement to the bottom line – then you are onto a winner.
David Leyshon is managing Director of CBSbutler, a specialist engineering and technical recruiter.
