Stemming the Tide of Employee Defections

As new opportunities begin to open up in the job market the loss of top performers has emerged as the top concern of employers across the country. As many as one in three senior executives and human resource professionals told us that defection top talent is their most pressing HR challenge. A further 30% are suffering from a lack of high-potential leaders in their organizations and 22% have low engagement and lagging productivity. Staggeringly, 18% reported that they have a shortage of talent at all levels

Loss of top talent will likely emerge as the most pressing concern for many employers in the year ahead. This seems particularly prevalent in the service industry whose growth largely depends on the creativity and knowledge of their key employees. In fact, it’s now more of an expectation. After all, it’s no secret there’s a lot of pent-up frustration in the workplace and that many, if not most, employees have been floating their resume.

Many employers find themselves faced with a dilemma. Right now they don’t want to do much hiring, but at the same time they think they will lose top people. If these defections play out, that in turn will mean more hiring to fill key gaps. It seems pretty sure that in the year ahead job churn and turnover will notch upward, which may harm growth at many organizations.

Those organizations that can evaluate what drives workforce engagement – and the lack of it – are in a much better position to mitigate the risks of top talent flight to competitors. Simply understanding what the current workforce engagement levels are is no longer a sufficient strategy to stem the tide of potential attrition. Organizations that can identify what drives engagement in actionable terms, so that those drivers can be leveraged in an overall retention strategy, will be the winners of the emerging talent migrations.

Cutting Back on Cutbacks

For the past couple of years, organizations have cut costs and laid off staff. Most organizations have very little, if anything, left to cut. After two years of widespread downsizings most companies foresee few or no staff cutbacks in the year ahead. We recently surveyed more than 700 firms across the U.S. and learned that just five percent of firms nationally anticipate significant cutbacks or restructurings.

While it is anticipated that organizations will likely continue to be conservative with cash, many leaders are shifting from crisis mode to a growth agenda. According to research by Gartner, some 42% of CEOs are focusing more on revenue growth than cost control and 29% expect this to be the prime focus for 2011, according to Gartner research. In 2009, this research reflected CEOs’ focus on restructuring, layoffs, consolidation, write-offs and rebuilding trust.

So the road ahead will be one focused on growth. Many organization’s are at a point where they need to make a greater investment in talent to ensure strategic viability. An organization’s people are, in the end, the only differentiator that may be sustained. And a coherent strategy around talent will be needed to deliver on increasingly aggressive business goals. Businesses across the board have successfully taken costs out of their structure through a variety of methods. The challenge is rebuilding and growing the business with the talent left after the wake of cost cutting efforts.

Engagement and motivation levels are not the only challenges firms face when re-focusing the business on the future. The skill sets and abilities of the remaining workforce may or may not be what is needed to take the business forward. Organizations that evaluate what the “new normal” looks like – and how the mindsets, skills sets, motivations and abilities of the workforce need to be developed, adapted and changed to meet the future – dramatically increase their the chances of success.

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