The Race for Talent: Retaining and Engaging Workers in the 21st Century
Journal article by Fredric D. Frank, Richard P. Finnegan, Craig R. Taylor; Human Resource Planning, Vol. 27, 2004
Journal Article Excerpt
The Race for Talent: Retaining and Engaging Workers in the 21st Century. by Fredric D. Frank , Richard P. Finnegan , Craig R. Taylor As the 21st Century unfolds, major changes are beginning to occur in today's workplace. A growing awareness of unavoidable demographics is creating a greater urgency for HR professionals everywhere to focus more attention and energy on retaining talented employees and keeping them actively engaged in their work. New strategies are emerging that go well beyond traditional solutions, holding much promise in the effort to keep and engage well-performing employees. Employee retention is king. And employee engagement is not far behind. CEOs of the nation's fastest growing companies overwhelmingly cite retention of key workers as the most critical factor to plan for in the next year ahead (PricewaterhouseCoopers, 2004). Similarly, the number one priority on the HR agenda is still to attract and retain key talent (Towers Perrin, 2004). Or, said differently, among all the factors that could influence the effectiveness of organizations in the future, the foremost driver is talent (Buckingham & Vosburgh, 2001). What about the jobless recovery? It may not be here much longer. Research from Manpower shows that, at least in the short term, job growth is anticipated in 18 of 19 surveyed countries (Manpower, 2004). In the United States, while job-creation remains below expectations partly as a result of continued layoffs, the economy added approximately 1.03 million jobs in the first half of 2004. (U.S. Bureau of Labor Statistics, 2004b) The issue of the jobless recovery is minor, compared to what is about to come. Take this statement (Webber, 2004) from Alan Webber, founding editor of Fast Company magazine: |
This beneath-the-surface issue isn't
jobs. It's work. Specifically, it's the
growing recognition by workers
that corporate leaders have so
abused them during the recent
recession, that when a job-producing
recovery really kicks in, as
appears to be happening, companies
will suffer a tsunami-like wave of
employee defection. The disruption
will be enormous; the costs astronomical.
And the signs are already
there that foreshadow just how serious the
problem could become.
| This is echoed by the national (U.S.) 2003 Spherion Emerging Workforce Study: "Our study reveals ... workforce that is poised to walk out on employers at the first opportunity." The problem is about to become world-wide, if it hasn't already. India, for example, which has garnered considerable attention in recent years as a center tier outsourcing, is starting to experience significant increases in turnover and accompanying costs (Scheiber, 21104). Employee engagement is joined at the hip with employee retention. A lack of engagement has serious consequences for the economy. For example, in the United Kingdom, the cost of disengagement is calculated to be in the billions of pounds. The U.S. economy is estimated to run at only about 30 percent efficiency because of a lack of engagement (Bates, 2004). This article provides an overview of both employee retention and engagement, what has caused the present state of events, solutions both traditional and innovative for improving retention and engagement, recent research, what the future portends, and what we must do as HR professionals to combat turnover and disengagement. Employee Retention and Turnover: An Overview Employee retention can be defined as the effort by an employer to keep desirable workers in order to meet business objectives. Turnover, on the other hand, is most often used to describe the unplanned loss of workers who voluntarily leave and whom employers would prefer to keep. In statistical terms, measuring employee turnover is comparatively straightforward and is tracked by most organizations. In a 2004 study of 351 companies representing a wide range of sizes and industries, 87 percent reported that they track turnover at the overall organizational level and 54 percent monitor turnover at the leader level (TalentKeepers Research Report, 2004).Companies initiate "involuntary turnover" of employees who are poor performers, violate company policies, participate in illegal activities, and the like, but it is the unplanned, voluntary turnover that companies strive to control. Unplanned, voluntary turnover is most often associated with high labor costs, defeat of skills and company knowledge, low morale, poor customer satisfaction, and financial losses (Hay Group, 2001). Planned, involuntary terminations such as layoffs iii response to shifting strategies or business conditions are considered to be appropriate and necessary management practices and are generally not considered part of an organization's effort to control unwanted turnover; however, these moves have doubtless had a direct impact on an organization's culture and morale and contribute further to ... |
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