Great career opportunities drive talent retention

05 May 2016 Consultancy.uk

Organisations that have strong talent in key areas often have an edge on performance. As the global talent pool shrinks while demand increases, competition for those within the pool is soaring. In a bid to expand the pool, companies are inclined to develop strong in-house talent. According to a new report, such efforts are not always translating successfully.

Learning and development has for a long time been part of organisational life. Organisations offer a wide range of both theoretical and practical opportunities for their employees to improve their capabilities as well as to create the leaders of tomorrow. While the stakes are high, as the global talent pool decreases, organisations have had difficulty creating the right environment to successfully train their staff for leadership or with new skillsets.

To understand the current HR focus, as well as how employees grade practices, Mercer ran a survey of more than 1,730 HR leaders and 4,500 employees across 15 countries. In a report, titled ‘Future Proofing HR Bridging the Gap Between Employers and Employees’, the current state of the HR landscape is identified as evolving toward a focus on building talent within organisations, however, employees suggest that managers are often not up to the task.

Contracting talent
The global demand for talent is heating up. Modest economic growth, coupled with an aging working aged population, are resulting in a smaller talent pool – while the kinds of skills needed within organisations are getting ever more specialised. The result is a lack in the kinds of talent demanded by the private sector – resulting in an economic and social distortion, where there is large scale unemployment, underemployment and non-participation even in developed economies. Businesses are now engaging in cross-border competition to access the shrinking pool of those with in-demand skills; global competition for talent is expected to be on the increase by nine out of ten respondents, with a third saying that there is a significant increase in competition.

In-demand
The report considers the kind of skills that are currently seen as important as cited by employees and organisations. Employees suggest that analytical skills are the most important, cited by 41%, followed by couching/people development, at 37%. Organisations, however, see leadership/inspirational leadership as the number one in-demand skill, at 43%, followed by couching/people development, at 40%. Analytic skills was number three for employers, at 34%, while leadership/inspirational leadership was number four for employees, at 36%. The high placement of coaching/people development by both organisations and employees reflects that these skills are currently highly valued as a HR focus.

Building rather than buying
As competition for the right skills increases, while the pool of talent decreases, more and more focus is being placed on training those whom have been identified as showing growth potential. To support the realisation of that potential, 82% of respondents said that they will focus on building talent from within, through the development and promotion of talented staff. Buying talent remains a key method of accessing potential, however, with 57% of respondents saying that the practice will increase while 30% plan no change. Borrowing employees, or using contractors and/or temporary employees, too is set to increase – although the largest proportion of respondents (13%) will decrease focus on this method of accessing talent.

Yet, the report highlights that many organisations, that are focusing on improving talent within their organisations, are failing to do so effectively. As it stands, few employers (25%) have an effective means of identifying promising talent, while internal competition for talent – where managers seek to keep talent siloed to their department – creates barriers for organisation-wide success. Employees too note that their skills are often not kept up-to-date, resulting in a depreciation of their capabilities, with the potential for costly employee churn.

Grading effort
Employees, once attracted to an organisation, were asked to reflect about various aspects of their work and relationships – by grading them from A to F. The relationship with team members was cited to have the highest overall score, with more than sixty percent giving a B or greater. The hiring experience too was relatively well scored at around 50% at a B or above.

Respondents were less happy about their compensation packages, 5% rated them with an F while 15% with a D – 44% rated their compensation with a C. Another area of growing discontent is the way managers are providing them with the tools and resources required to get the job done, with 6% grading this area with an F and 12% with a D. Managers not having the skills in-house to improve employees’ performance came in with 19% at D or below, while managers’ skills in coaching, supporting and developing employees has a D or lower score from 20% of respondents and a C from 38%.

The area with the biggest fail grade, and the lowest high grade, is related to career trajectories within organisations. A low performance in a wide range of managerial coaching skills, is in part reflected in the high demand the skill faces among employees.

Moving on dissatisfaction
The lack of support for career growth, cited by employees as the area with the lowest overall grade, does not bode well for the current ‘build’ within strategy cited by organisations as a key means of increasing their access to talent.

Millennials currently make up around a third of all employees, which is set to grow to half by 2020. This group is also currently the most dissatisfied with their current employer. Of all employees, 25% (although mainly millennials) say that they plan to leave because they do not see a long term career in their current organisation or see better options externally. Around 20% are also unsatisfied with their current employer but are not currently seeking to move on.

According to the study, “developing a career infrastructure and fostering career moves is on the list of priorities for organisations this year, but for most organisations it barely makes the top half in terms of priorities. Given that career opportunity is a significant retention driver, this area demands attention.”

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