The UK may have officially emerged from recession towards the end of last year, but many employers are still worried about the stability of their workforce – especially if greater business confidence and improving job opportunities make it more likely that talented staff will start jumping ship.
In our HR 2012 Salary and Market Insight report, for example, a third of HR professionals mentioned concerns over such workforce instability, with the threat of redundancy (59%), on-going pay freezes (59%) and low morale (56%) cited as the top reasons for it.
To make matters worse, some 16% of workers indicated that they were either unsatisfied or very unsatisfied with their job.
But a key means of combatting these concerns is to ensure that organisations have effective talent management processes in place in order to boost staff retention rates. Reassuringly, some 55% of HR professionals said that their company already invested in training and development to try and achieve this goal.
But, with just over a quarter admitting that their business does nothing to keep hold of its talent and four out of five having failed to implement a specific talent management strategy, it is clear that more needs to be done.
The first thing that an HR director should do before going down this route, however, is to define what talent means to them and to other senior managers throughout the company. The aim is to ensure that each line manager knows what they need to look out for and develop in their teams.
Are they keeping an eye out for the top 20% achievers in terms of results, for instance, or are they interested in those with the potential to progress further? The answer will be different for every organisation, and possibly even within the same organisation, as different departments will have different priorities.
Understand your workforce
But it is just as vital to know and understand your existing workforce in a broader sense. HR departments should always check that they are measuring and evaluating the right information through appraisals, however, and that such information is used effectively to inform their wider talent strategy.
One thing to consider, for example, is the balance of qualitative and quantitative measures employed as numbers do not always show the full picture.
But also be aware that, although budgets may be squeezed in the short-term, a talent management strategy should look to the long-term.
Even if immediate investment is not forthcoming, it is vital to be innovative with overall reward packages as talented staff will begin to look elsewhere if they believe that they have no reason to stay.
It doesn’t have to be all about bigger bonuses and pay packets, however, as there are other ways to motivate staff that may arguably leave them happier than if they had just received a pay rise.
The world of work is changing, and a member of Generation Y might be prepared to take a slightly smaller wage if it means gaining better benefits such as private healthcare and/or flexible working.
Setting up mentoring schemes can also be a useful way to boost morale, with mentees receiving the necessary one-to-one attention to help their development, while mentors start to realise the value of their own experience.
Such activity can likewise be helpful in identifying future talent, creating talent pools and developing internal succession plans.
Strategic importance
Other relatively low cost ways of retaining talent and maintaining morale, meanwhile, include setting up an internal development academy or training programme so that such activity does not need to be sourced externally.
This approach can be particularly useful if there are areas of expertise within the organisation that can be shared internally, whether between departments or between more and less experienced members of staff.
Whatever methods your organisation chooses, however, it is important that they are clearly communicated to employees – sometimes simply telling people that such initiatives exist can be half the battle in increasing morale.
Regular employee communication shows personnel that their employer cares about their job satisfaction and happiness and is doing something concrete to reward and recognise this.
But despite the apparently relentless doom and gloom, it appears that the recession wasn’t actually all bad. In fact, in many instances, it served to highlight the strategic importance of the HR function to the business by helping senior managers to push through tricky policies such as redundancies or cuts in staff working hours.
As a result, we have seen increasing numbers of HR directors appointed at board level. But even if the department is not represented here, it can still act as a strategic partner.
And achieving this level of strategic partnership will undoubtedly make the implementation and operation of an effective talent management strategy easier and simpler, which can only be good news for the business overall.
Linda Marshall is head of HR services at recruitment consultancy, Reed.
