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Erik Finch

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Exploring the engagement and retention relationship

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With resignation on the increase it makes good business sense to focus on retaining the talent you already have.

Recent research from Oxfordshire-based management consulting firm, The Focus Group finds that 60% of the 950 executives polled will be looking to jump ship on the economic upturn, thus creating a major void in 450 organisations. And the available evidence suggests that rates of employee attrition are already rising.

Resignations have increased over the past year despite growing fears over job security, new data has found. The 2010 National Management Salary Survey carried out by Celre, and published by XpertHR and the Chartered Management Institute (CMI), has revealed that in the year to February 2010, resignations across the UK’s labour market stood at 4.7%, compared to 4.5% 12 months ago.

The survey, based on data collected from 197 organisations covering 43,312 individuals, also implied that employers were failing to persuade staff to stay, with requests for ‘internal transfers’ as an alternative to leaving dropping to 3.6% from a high of 5.8% last year. Overall the labour turnover rate climbed to 13.6%, up from 12.4% in 2009.

These statistics reflect a growing disconnect between employers and their employees. It is alarming to learn, for example, that in the latest Global Workforce Study from global professional services company, Towers Watson, which covered 20,000 employees from private sector organisations across 22 countries only 39% of those surveyed, believes their senior leaders are trustworthy and 30% believe their organisations did not treat their employees fairly in the last 12 months.

These figures give cause for concern. And they are particularly worrying in the current business environment, where organisations should be focused on building from within. Unemployment remains high, having recently risen above the 2.5 million mark,  and there are many people actively looking for work, so employers will often have the apparent luxury of a large pool of candidates to choose from every time they advertise a job. In reality, however, this represents an excess of people rather than of talent. The truth is that there is a shortage of individuals with the necessary skills to fill existing job openings.

This makes it particularly important that organisations concentrate on retaining and developing the proven talent that they already have. Focusing on internal talent makes sound business sense. High staff turnover levels can be very expensive to a business. So how can organisations address the sense of alienation many employees feel in their current roles and ensure that they retain their best staff? As this article indicates, better employee engagement is key.

A unified approach
The truth is that, if individuals are to remain loyal and motivated, they need to feel that they are being listened to and that their growth aspirations and financial goals are within reach. Without actionable career development plans, dissatisfied staff will look for other opportunities that offer them their desired growth.
 
To avoid these scenarios becoming a reality, employers need an employee engagement strategy that encompasses all staff, including managers, strengthens morale and ultimately increases productivity and staff retention.

To make certain that they have the right people with the right skills in the right jobs in order to advance their business goals, organisations must follow a unified approach to talent development. They must first ensure that key components, principally around learning and performance management, are in place. Second, they must develop a unified process around those components, enabling them to build an effective talent development strategy.

By closely linking modules within performance and learning management systems and helping to combine otherwise isolated learning and performance tasks, businesses can help drive enhanced organisational productivity and reach their core objectives more quickly and effectively.

This approach helps drive employee engagement by translating valuable performance reviews and ratings into career and leadership roadmaps and then following those roadmaps to bridge skills gaps and implement true succession plans. It further engages employees by providing clear objectives to work towards, recognising achievement and helping to show the employee how they are positively affecting the business by aligning their objectives with those of the organisation itself. And, as organisations are starting to appreciate, better employee engagement ultimately leads to better business results.

Erik Finch is a talent development specialist for SumTotal Systems.

2 Responses

  1. employee engagement and retention

    Thankyou – its an intersting article, however I am not sure that there is a universal mechanistic approach – this is also about the maintenance and development of a psychological contract, and as organisations have reacted to their current environment and context this has changed – sometimes unilaterally as jobs have gone and costs cut.

    Inevitably those who go are the ones who can and in the face of their strong performance being rewarded with low or no salary increases and increased responsibilities as roles are not replaced and restructures take place, this is hardly surprising.

    Career, talent identification and development and succession planning should absolutely be unified, but theres something even more basic that needs focus to keep people engaged…

    … maintaining the employer brand promise and staying true to organisational values – keeping the sense of identity and purpose that is at the core of the psychological contract. This is an emotional rather than mechanistic approach  – in the same way that we look at decisions to purchase – they are not always rational – often they are based on "how does it feel" – in the work place do I feel my contribution is truly valued? – do I really want to work here (ie am I a brand advocate). Much of this will be driven by how organisations and leaders and managers behave during downturns – and how good their line managers are in navigating this and keeping the psychological contract in tact…

    Most people leave managers – these are the people that bring the work experience to life – truly great managers tend to hold on to truly great people and dont usually suffer from not being able to attract talented people to work for them – no process can replace the advocacy of a talented manager…

  2. Think about the whole system

    Rapid economic and technological change defined the 20th century, Most people accept that in the 21st century that the pace of change is even faster and more difficult. It’s time businesses recognise that your assets- both financial and human – can now move very quickly. The deeper objective for leaders today is to create ,influence and maintain the authentic conditions inside and outside the company so that people can believe. It is shaped by your brand and cemented by your culture and it requires looking at the whole picture. The results of this approach can lead to things like high employee engagement, talent retention, improved talent attraction capabilities, innovation, better performance, and a driven organisation. ….Which modern organisation wouldn’t want that ? All things being equal if the choice was yours, Who would you rather work for a company you believe in or one that just provides you with a job? Today’s talent has that choice, they will either leave for somewhere they believe in or they won’t join in the first place

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