Attracting and Keeping Top Employees is Still Difficult

September 15 2002 - The economy may be slowing but most HR executives find attracting and retaining talent to be a big problem, according to a new study from The Conference Board.

90% of the 109 surveyed executives say that they are finding it difficult to attract and keep the best people for their organization.

Respondents cited corporate turmoil and limited career opportunities as the key reasons for unwanted turnover. Noncompetitive pay and benefits are also barriers.

"While labor shortages in the 1990s were driven by technology skills and initiatives, employers are currently putting a high premium on general leadership competency," says David Dell of The Conference Board, co-author of the report with Jack Hickey, Research Consultant, The Conference Board. "For this reason, the quest for top-flight talent has to be the job of everyone within an organization from CEO to junior employee. Even with unlimited funding and resources and the best intentions and programs, HR cannot conquer a turnover problem alone. Success requires a corporate-wide integrated recruitment and retention strategy that can respond quickly to change."

"Most companies still take a shotgun approach to keeping employees happy, and most still consider their efforts too reactive, especially in regard to retention," says Hickey.

Behaviors that can drive away talent

Failure to make Talent Supply a Long-Term Strategic Priority. New technology and tools are now available to address getting and keeping talent, but if HR is not actively engaged in the planning process and does not receive corporate commitment from the top, the supply of talented employees will almost certainly be limited to ad hoc clusters of programs and boom and bust cycles of hiring and reductions that waste talent and inevitably cost more.'

Not Making the Business Case on Turnover. Senior managers are not likely to recognize and treat employee turnover as a problem if they do not understand how it affects their business. HR executives need to quantify relevant costs and benefits in clear, concrete terms.

Just Throw Money at the Problem. Pay and benefits are not the only reasons why employees leave their jobs. But companies frequently raise or sweeten the compensation package when valued employees look like leaving = even when compensation is not ranked among the most important staff turnover factors. This response is likely to be inadequate.

Organizational Denial. Employers should acknowledge that employees' first loyalty is to themselves, followed by their craft or professional skills. Companies have to be aware that people make decisions to leave or stay not only on their career prospects with their current employers but also on how it might prepare them to move on elsewhere.

Translating turnover into numbers that executives understand is not only essential because they need to appreciate the true costs, but also because they have the solutions within their spheres of control.

Individual managers control skills, behavior and job design and are 'fairly inaccessible to HR's intervention.' But, although HR may take the lead on attacking turnover, responsibility for their own turnover numbers and any behaviors that may cause employees to leave the firm have to be delegated to line managers.

The HR executives surveyed cite five major objectives for their staffing management activities:
* organizational stability;
* opportunities for career and personal development;
* multilevel involvement and accountability for talent;
* integrated talent strategies;
* emphasis on employer brand and reputation.

Keeping the best talent

Companies are increasingly using the Internet and intranets/enterprise portals to manage part, at least, the recruitment and retention process. Web-based HR systems have often become the key to broader outreach strategies - they are especially cost-effective in accessing passive job seekers, college students, and minorities.

E-recruiting is particularly efficient in cost and time, eliminating expensive headhunters and agencies and may significantly reduce the duration of the recruiting cycle. Speed matters with each day of delay in hiring meaning a loss of potential revenue from a new employee. Online recruiting also vastly expands employers' access to some of the most desirable segments of the talent market, even high-level executives.'

E-recruiting gathers more candidate information and makes it easier and cheaper to gather, track, organize, and store applicant data. It is especially valuable for highly competitive campus recruiting, appealing to college students as leading-edge and dynamic.

Source: Sustaining The Talent Quest: Getting and Keeping the Best People in Volatile Times, Report #1318-02-RR, The Conference Board.