With hiring and turnover levels on the rise, employers are now experiencing challenges with both attracting and retaining employees, especially top performers and high-potential employees.
Adding to the challenge is that many employers don’t understand the important reasons that employees join and stay with a company, according to two major surveys conducted by Towers Watson.
The Towers Watson Global Talent Management and Rewards Survey, a study of 1,637 companies globally, shows there has been an uptick in labour market activity.
Globally, 48% of employers say hiring activity has increased compared with last year. For 15%, hiring has jumped significantly. Additionally, 35% indicated that turnover was rising. Nearly two in three respondents are experiencing problems attracting top performers (65%) and high-potential employees (64%), an increase from two years ago. Further, more than half reported difficulty retaining high-potential employees (56%) and top performers (54%).
“With talent mobility on the rise, employers need to understand what employees value if they are to succeed in attracting and retaining employees,” says Laura Sejen, managing director at Towers Watson. “Unfortunately, our surveys reveal a significant disconnect between employers and employees.”
While employers recognize the importance of pay and career advancement as key reasons employees choose to join and stay with a company, she notes that they don’t place the same importance on job security (a top attraction and retention driver) or trust and confidence in senior leadership (a key retention driver).
Indeed, the Towers Watson Global Workforce Study, a survey of 32,000 employees worldwide, reveals that job security is the second most important reason they join a company and the fourth most important reason they stay. Employees also ranked trust and confidence in senior leadership as the third most important reason they stick with a company.
However, employers don’t rank any of these factors as key attraction and retention drivers. Not surprisingly, less than half of employees think their company does a good job when it comes to attracting and retaining the right workers. Only 46% say their organization hires highly qualified employees, while 42% say their employer does a good job of retaining talented employees.
The study also reveals that many employees feel blocked in their current position. Forty-one percent say they would need to leave their organization in order to advance their careers. Even worse, the same percentage of employees who have been formally identified as high potentials by their organization say they would need to leave their organization to advance their careers. From the employer perspective, 49% believe they are effective at providing traditional career advancement opportunities, while 35% say that, compared with last year, career advancement opportunities are improving.
“Organizations continue to miss the mark when it comes to career development,” Sejen explains. “Given how important career advancement opportunities are to employees, the fact that so many employees, and especially high potentials, feel stuck should serve as a wake-up call to employers to review their career development programs.”
The study also finds that leadership is the top driver of sustainable engagement. However, just 48% agree that senior leadership is effective.
“The importance of leadership can’t be overstated,” she says. “Employees are more likely to remain at their companies if they have trust and confidence in their senior management and leaders. And, importantly, senior leaders, managers and supervisors each play a critical role in fully engaging employees.”
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