Dave Willis and Andrew Jacobus
Business has seen tremendous change during the past 12 months, but some
things have remained the same, especially when it comes to workforce
management. After a year of recession, only workforce aging challenges
remain in the forefront of workforce issues that talent leaders are
wrestling with, and those have become more complex to forecast and
manage now that so many individual retirement funds have been
decimated. Companies may believe a weaker global labor market has
reduced the need for aggressive attention to retention and associated
performance management strategies, but data reveals those assumptions
may not hold true.While
turnover in North America is dropping, average performers in
organizations stick around more than A-players. A cross-sampling of
more than 1 million employees across industries showed high-performer
turnover year-over-year in the first quarter increased for the
significant majority. In the last three quarters compared to Q1 2008,
the rate of decline in voluntary turnover for average performers was
more than triple the rate of decline for high performers. Companies are
losing a significant source of competitive advantage at a time when
they may be ill-equipped to handle the loss. Worse, organizations' high
performers may be leaving critical roles.
Turnover rates suggest
the best talent always has options, and organizations that hire in this
market can be more selective about filling roles with people who have
the best skills, experience and proven performance. This is a buyer's
market, and talent managers should make an effort to stockpile talent
with whom to accelerate the company ahead of the economic upturn.
Career Management as a Retention Driver
Traditionally,
organizations drive retention with pay increases, bonuses and other
financial incentives. But according to Towers Perrin's "Global
Workforce Study 2007-2008," engagement and commitment based on
incentives other than money often work better after employees have been
with an organization a few years. Development is one method talent
leaders can use to aid retention. External career opportunities, or
lack of internal career options, rank among the top five reasons people
leave most firms.
The average promotion rate is about 10
percent, meaning one in 10 employees per year gets a promotion.
Restated, employees wait an average of 10 years for a promotional
career opportunity. Companies that foster organic growth and take pride
in promoting from within can create expectations of upward mobility
they're unable to meet, especially when growth slows.
When
employees need career development, and the upward path is blocked,
companies can implement transfers, intra- or cross-functional hiring
and job rotation programs often only available for high-potential
talent, and other lateral developmental moves to meet the need. These
moves are often less costly than a promotion. Yet, year-over-year, 76
percent of the aforementioned sample group showed declining transfer
rates.
