Professional skills shortages are resurfacing in the aftermath of the global financial crisis. The demand for skilled workers is already outweighing supply in certain professional occupation groups and all indicators point to this trend continuing through 2011. In addition to more jobs being available, many of the professionals who did not risk a job change during the downturn are now actively looking, which places the challenge of staff retention in sharp focus for employers.
Companies can ill afford to lose their most skilled and experienced employees at a time when business conditions are improving and there are opportunities for growth. In a recent survey of 3,200 white collar professionals in Australia, conducted by the global recruitment firm Michael Page International, 38 percent of respondents said it was highly likely they would take a new role in the next six months. This level of potential staff movement will make retention a crucial business challenge for the year ahead.
The reality is that staff retention is not an exact science and people are likely to respond to different approaches based on their circumstances. Working parents may place a higher value on flexible hours than a university graduate who may favour learning and development. Having said that, there are a set of common sense considerations that employers should address as part of their retention strategy. This article will explore these options while referencing the results of our market research into the strategies employees have said they would respond to.
Identify business critical skills
Begin by identifying the skills that are most important to retain in your company. In large organisations, this will involve senior management working with hiring managers and human resources to review the broader business plan and identify the skills needed to support it.
It is a common sense approach to ensure the people with business critical skills are targeted as the basis of a retention strategy, but this is not always co-ordinated at a strategic and company wide level. It needs to be or the result will be a fragmented approach largely determined by line managers at a team level.
Retain top performers
Identifying the people to retain is only the first step. The real challenge is in implementing retention strategies they will actually respond to.
Michael Page International recently conducted an extensive survey of white collar professionals in which respondents were asked what their current employer should do to retain them. For the majority of respondents (35 percent), being financially rewarded for achievements is the most influential factor in deciding to remain in their current job. The salaries of many professionals were capped during the economic downturn and now that business conditions are improving, there is an expectation that this will be reflected in salary reviews.
Companies will need to review salary levels and offer competitive market rates in order to keep top performers from seeking financial rewards elsewhere. Employers that do not address this expectation risk losing their most capable and experienced staff at a time when their skills are crucial to support business growth. In response, many companies are offering financial incentives for their most valued staff, but making the rewards performance-based rather than a flat increase to base salary.
When the survey results were segmented according to the age of respondents, it showed that workplace flexibility was especially valued by mature age workers, as well as those from Generation X. These groups represent a number of people who are approaching retirement age and looking to reduce their work hours, or parents with family responsibilities that need a degree of workplace flexibility to juggle commitments. Generation Y on the other hand, showed a preference for structured career development opportunities.
These results are a useful reminder that people will respond to different incentives depending on their career and life stage. Financial reward is always an important retention strategy for all age groups, particularly during a skills shortage in which top performers have multiple options. But there are other options that employees will respond to, such as workplace flexibility, career growth opportunities and training and development. The most effective retention strategies draw on these alternatives in a targeted way to address individual requirements.
Develop future leaders
The reality is that despite your best efforts there will be occasions in which you will lose key employees through circumstances beyond your control. People retire, change industries and accept competitive offers. So it’s not enough to limit your thinking to the retention of your proven performers, you also need to focus on building the next generation of managers from within your organisation. This is where succession planning plays an important part in the talent management strategy.
In a similar approach to developing a retention strategy, an organisation’s succession planning process should begin with an analysis of corporate business plans to identify and agree on the positions and skills most critical for business growth. Once this is understood, high potential employees in the relevant business units need to be identified and their competency levels determined. This information can be used as the basis for implementing a variety of developmental activities that can include mentoring, coaching, job rotation, secondments, educational programs and formalised feedback processes.
Career development programs do not have to involve costly study grants and external training courses. You can give employees the opportunity to work in different business functions, support their development with internal training and provide a senior mentor from the business to discuss progress and provide guidance. If the program is well communicated, practically structured and delivered according to plan it will significantly improve retention through improved employee engagement.
In addition to the necessary technical training, professional development should also address soft skills in areas such as communication, negotiation, presentation and time management. These softer skills become increasingly important as people progress their careers to more senior levels.
When the organisations we work with meet these requirements, they create the kind of leadership and management capacity that delivers sustainable business results. On the one hand, high potential employees will get career development opportunities and are more likely to stay. On the other, when a key person leaves the company, a suitable replacement will already have been developed within the business.
– Jason Hemens is Corporate Communications Manager at Michael Page International.