When economies rebound from a sluggish market, recruiting and retaining top workers becomes more of a concern. But two recent surveys conducted by global professional services company Towers Watson indicates that many employers don’t understand the important reasons that employees join and stay with a company, including strong leadership.
The Towers Watson Global Talent Management and Rewards Survey, a study of 1,637 companies globally, including 337 from the United States, shows that more than one-third (35 percent) indicated that turnover was rising. Nearly two in three respondents are experiencing problems attracting top performers (65 percent) and high-potential employees (64 percent), an increase from two years ago. Further, more than half reported difficulty retaining high-potential employees (56 percent) and top performers (54 percent).
“With talent mobility on the rise, employers need to understand what employees value if they are to succeed in attracting and retaining employees. Unfortunately, our surveys reveal a significant disconnect between employers and employees,” said Laura Sejen, managing director at Towers Watson. “While employers recognize the importance of pay and career advancement as key reasons employees choose to join and stay with a company, they don’t place the same importance on another top attraction and retention driver: job security, or a key retention driver: trust and confidence in senior leadership.”
A second report, The Towers Watson Global Workforce Study, found that leadership is the top driver of sustainable engagement (i.e., the intensity of employees’ connection to their organization). However, less than half of employees (48 percent) agree that senior leadership is effective.
“The importance of leadership can’t be overstated. Employees are more likely to remain at their companies if they have trust and confidence in their senior management and leaders,” said Sejen. “And importantly, senior leaders, managers and supervisors each play a critical role in fully engaging employees.”
In addition to trust and confidence in senior leadership, two other drivers of employee retention cited by workers were not even mentioned by employers — job security and the length of the commute. “By underestimating the value employees place on these three issues, organizations risk losing key talent,” the report states.
Many employers are also failing to differentiate their broad-based employee annual incentive programs. Across the 31 markets included in the talent management survey, average funding is reported at 90 percent. There is a clear need for employers to optimize their short-term funding. Yet fewer than half of employers differentiate their programs substantially.
In fact, similar to merit increases, the extent of differentiation has diminished compared to 2012. Bonuses for employees who exceeded or far exceeded expectations relative to bonuses for average performers have decreased, while the relative
payout to those who partially met expectations has increased. “This is a missed opportunity not just for recognizing top performers and improving the employment deal for this key workforce segment, but also for creating incentives for improved productivity across the whole workforce,” the report states.
Links to both Towers Watson surveys can be found in our Additional Web Resources box at SalesandMarketing.com.
