As the economy improves, more opportunities will become available for your company’s top performers. What are you doing in the area of talent management to retain your top talent?
A recent Society for Human Resource Management study finds that approximately 83% of employees will likely be looking for new jobs as the economy improves. Another study says 48% of middle managers are now looking. Our own research shows that 53% of employees are likely to leave their companies (read: want to) in the next 12 months.
I think we would all agree that the worst appears to be behind us. Our economic growth rate of over seven percent in the third quarter is the highest growth rate we have seen in the United States since 1984. The chief economist of Wells Fargo Bank is predicting that the economy will add at least 100,000 jobs a month beginning in 2004. We have just turned the corner this past August in terms of adding jobs to the economy; the net of this current economic growth pattern is that our employees will begin to see and feel opportunities for their movement and career advancement open up shortly. They haven’t experienced such favorable job conditions since the end of 2000, and that was three long years ago.
And we certainly have seen lots of attrition triggers during these past three years: stock options under water,respected co-workers laid off, no bonuses and few pay hikes, to name just a few. Add this to the current economic growth and the fact that, according to the U.S. Dept. of Labor, the average employee tenure in a corporation today is merely 3.6 years. Here’s the confluence of a “perfect” storm!
Voluntary employee turnover is caused by a worker’s perception that their needs will be met in a better way someplace else. Taking action to make a move is often caused by both running from someplace and going somewhere else. Recent research by several well-known and credible management consulting firms and SHRM, shows that top performers and managers are particularly vulnerable, as they feel under-rewarded, under appreciated and over-burdened by crushing work demands. In addition, anecdotal information from several Bay Area companies indicate that more hiring is going on now or is planned for 2004 than in some time. Employee retention consultants also report that their business has definitely picked up this last Fall. Though everyone recognizes that these have been tough times for corporations, most employees somehow feel that other companies have managed better than their own organizations. It’s a “grass is greener” phenomenon.
So, what should your company do? It’s really easier to create a list of things your company shouldn’t do…one of them is to wait until the crisis is upon you. Most employees make a decision to leave or look for a new opportunity six to nine months before they actually resign. Trying to reverse an employee’s decision to leave at the point of resignation is often unsuccessful. Research shows that even when someone can be turned around, 90% of employees in this group leave within 12 months of the resignation event anyway. When employees are merely considering leaving, that’s the time an intervention should be made.
Call us to discuss how you can get a read on the real turnover risks operating in your organization now and what you can do to prevent your best employees from leaving your company.
