Employers in some industries are having a hard time finding the right people to fill vacancies. Increasingly, they’re fretting about keeping the key talent they have. As the economy improves, organizations that are looking to grow or restock their ranks will compete aggressively for top-notch employees—and that could prove costly for companies that don’t have retention strategies.
That’s according to Retention of Key Talent and the Role of Rewards, a survey of 526 human resources professionals from a variety of industries released this month by WorldatWork, a nonprofit that focuses on compensation and benefits.
Fifty-six percent of respondents said that the retention of key talent—employees who are the strongest performers, have high potential or are in critical jobs—has become more difficult in recent months, and the same percentage said they expect top employees to search for better jobs as the economy improves.
Retention is now a major concern of senior management, the majority of respondents (65%) said. About half (51%) of the survey respondents are confident their organization can retain key talent as the economy improves.
Companies that have retention programs tend to keep key talent by offering above-average pay and benefits such as flexible scheduling, the survey showed.
Most companies have such retention plans, but their effectiveness varies. Seventy-four percent say identification of key talent is the most effective step. Offering pay above the labor market (73%), allowing flexible hours or telecommuting (69%) and discussing future opportunities with the key talent (67%) also ranked among the most effective strategies.
The survey also addressed the reasons employees leave:
- More money at another job (32%).
- Lack of promotional opportunities (24%).
- Feelings that pay levels are unfair relative to others outside the company (21%).
- Workloads are too heavy (19%).
- Work-life balance issues (19%).
- Concerns about the direction of the organization and its leaders (18%).
- Feelings that pay levels are unfair relative to the employee’s performance and contribution (17%).
- Lack of training and developmental opportunities (17%).
As the global economy has limped along, employees have become more frustrated because, even if they retain their jobs, layoffs have made their work more difficult and, in some cases, reduced benefits, such as a 401(k) match, the report says.
Long term, talent shortages could limit companies’ ability to expand and compete, the report says, as a result of older workers retiring, increasing specialization and technical demands of jobs, global competition for talent, and education systems not keeping up with business demands.
—Neil Amato (firstname.lastname@example.org) is a JofA senior editor.