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Lucy Beaumont

Talent Q

Solutions Director

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The new HR challenge: Retaining talent in a recovering job market


It has been 15 years since Gallup’s renowned research study sparked the notion that ‘people leave their manager, not their organisation’. Marcus Buckingham and Curt Coffman popularised this concept in their 1999 book First, Break All The Rules[1]. But is it still true?

Hay Group[2] has warned that today’s organisations face the threat of a ‘rising talent exodus’. While some people may still be leaving their organisation because of their manager, it’s clear that something much more fundamental is going on here. The fact is that, as economic growth builds and employment opportunities increase, we’re about to experience a worldwide increase in employee turnover.

During the painful and drawn-out economic recession, organisations have understandably focused on survival. Many have been forced to merge or make cutbacks and redundancies. Coming out of this difficult period, organisations may be optimistically looking forward, thinking that the worst is behind them. But actually a serious problem is now rearing its head.

The thing is, organisations haven’t really considered the impact that the economic downturn has had on employees. Hay Group’s research shows that 63% of employees feel that the hard work they’ve put in to help their organisations survive has not been appreciated, and 57% feel they’ve been treated as a low-value commodity by their employer. It’s almost as if organisations believed that their employees should have been grateful to have a job!

With job market conditions improving, it seems that these frustrated and disengaged employees are considering whether better opportunities exist elsewhere. 59% of the participants in Hay Group’s study say they are actively looking for another job. What’s really alarming though is that 87% of them say they won’t leave at the moment because they don’t think there are suitable opportunities out there. So, in other words, they’ve made up their minds to leave when the chance comes but in the meantime, they’ll go through the motions at work and they probably won’t put in any extra effort.

The real challenge that organisations now have to face is that new job opportunities are increasingly becoming available. Employees are starting to feel confident that the time is right for them to leave. The danger here is that your top talent – the people you really want to keep – are likely to be the most marketable, so they could be the first to go.

Hay Group predicts that different countries will experience ‘spikes’ in employee turnover at different times, as their economies recover. It claims that employee turnover in emerging economies, such as Brazil, China and India, is peaking now and that more mature markets in different regions will peak between now and 2018. According to this study, employee turnover in the UK will peak in 2015, when UK organisations will experience an average attrition rate of 18%.

The point here is that we’re currently in the calm before the storm. HR teams have a limited window of opportunity to re-engage any dissatisfied employees. Put simply, you have a duty to protect your organisation from the impending talent exodus. But how can you do this?

Lay it on the line

Line managers may no longer be the predominant reason why people leave organisations. However, because they interact with their teams every day, they have a significant impact on each employee’s performance, their wellbeing and their engagement at work. In other words, they can be a driving factor in encouraging people to stay.

HR practitioners should spend time with line managers to ensure they understand the value of engagement and the responsibility they have for motivating and engaging their teams. It’s important that line managers appreciate that there’s no one-size-fits-all solution to motivation, because different people will be motivated by different things. In other words, they need to tackle motivation at an individual level.

At Talent Q, our research has uncovered 16 factors that motivate people at work. For example, authority, learning, personal growth, recognition, security, stimulation and wellbeing. If line managers can identify exactly which of these different factors will motivate each member of their team, they can use this knowledge to inspire and engage each individual.

Ultimately, this can help organisations to retain their key talent. Our research shows that 47% of employees don’t feel that they’re treated as individuals at work. However, 80% say that if their organisation did treat them as an individual, they’d feel more motivated and more engaged in their roles.

So, instead of embarking on across-the-board engagement initiatives, the upshot here is that HR teams should encourage line managers to treat people as individuals. But, remember, a storm is coming. Act now to protect your organisation from the impending talent exodus, before it’s too late.

[1] Buckingham, M. and Coffman, C. (1999). Gallup research study: First, Break All The Rules; Simon & Schuster business books.

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Lucy Beaumont

Solutions Director

Read more from Lucy Beaumont