In a world of multigenerational workforces and falling unemployment levels, traditional methods of attracting, retaining, and engaging employees are losing their effectiveness.
Cerno, which provides adventure learning programs to organizations, recently published a white paper entitled "The Talent Challenge: How Leading Companies Attract, Retain, and Engage Top Talent." The paper outlines several of the factors that complicate employee retention efforts today, including declining unemployment, generational differences in engagement, and the higher expectations employees have of their employers. The paper also offers a potential solution to these challenges: focusing on what top talent needs.
According to Cerno's white paper, "Offering [t]op [t]alent the programs and opportunities they are seeking helps attract, retain, and engage the best employees and build a sustainable [high-performance] organizational culture."
Shifting Power Dynamics
Declining unemployment levels have shifted the power balance of the job market, giving job seekers the upper hand over employers. In an environment where there are more opportunities and fewer people available to fill them, individuals can afford to be more discerning about where they work.
Furthermore, employee turnover can be a significant cost to any company. According to Cerno's report, if an average-performing employee with an annual salary of $50,000 leaves an organization, it can cost the company up to $75,000 in productivity losses, hiring costs, increased workloads for remaining employees, and training and onboarding costs. If the employee who leaves is a top-performing worker, their departure can cost the employer up to $175,000 – not to mention the non-financial costs such as loss of expertise and company knowledge and lowered employee morale.
When top talent leaves a company, their colleagues start evaluating their options as well, which can set off a cascade of resignations.
Engaging More Generations Than Ever Before
There will soon be five generations coexisting in the workforce, each bringing varied expectations for the employee experience. Younger generations, for example, come to employers with different expectations for management and are often motivated in a significantly different manner than their older counterparts are. As a result of these differences, the multitude of generations sharing the workplace can complicate engagement and retention efforts.
Employers must not only be aware of what top employees want but also pay attention to how the needs and desires of top talent can change across generational lines. External motivators need to be paired with internal motivators to engage top employees of all generations.
Prioritizing Top Talent
"It is vital that companies pay attention to their top talent," says Michelle Aikman, director of adventure learning at Cerno. "Just because an employee has been identified as 'top talent' does not mean that they are engaged. In fact, one of the worst things that an employer can do for retention is to identify someone as top talent and then sit back and do nothing."
Engaged employees exhibit more energy, satisfaction, and productivity, and they have overwhelmingly positive effects on their organizations. Since employee engagement is a necessary component in retention, identifying and communicating where employees stand not only allows employers to develop a sense of their talent's strengths but also provides top talent with a reason to stay.
"Top talent want a clear career path and need to see the next step," says Aikman. "When they are faced with the unknown, they are more likely to leave. Companies need to let these people know where they stand and formally provide them with career trajectories. The more formalized these programs, the better. Formalization allows them to become ingrained in the company culture."
Simple, one-shot retention efforts, such as a one-time bonus, are less likely to have a long-term impact. Retaining top talent is an ongoing effort that requires continuous focus and ongoing diagnosis. Employee engagement surveys can allow organizations to regularly "take the temperatures" of their workforces and thus better understand what they need to offer employees at a given time in order to keep them satisfied at work.
Ultimately, the best approach to engagement and retention for any company is to identify what a top performer looks like and then design management processes around these employees. Focusing talent management resources around top talent is an effective way to develop a high-performance culture, meet the needs of top employees, and keep the best of the best on board instead of looking for new opportunities elsewhere.