The Association between Talent Retention, Antecedent Factors, and Consequent Organizational Performance

By Kontoghiorghes, Constantine; Frangou, Kalomyra | SAM Advanced Management Journal, Winter 2009 | Go to article overview

The Association between Talent Retention, Antecedent Factors, and Consequent Organizational Performance


Kontoghiorghes, Constantine, Frangou, Kalomyra, SAM Advanced Management Journal


While much attention has been paid to the subject of employee turnover, little or none has focused exclusively on the retention of an organization's most talented employees. A survey of 197 employees of a Cypriot broadcasting organization was the vehicle for testing the most important predictors of talent retention and the extent to which such retention correlates with bottom-line performance. The results showed that, in addition to the usual factors predictive of employee turnover, turnover among talented employees correlates with several other factors. In addition, talent retention was highly correlated with quality performance and other factors directly affecting the bottom line.

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Given the critical role of human capital in assisting organizations gain competitive advantage in today's hyper-competitive environments, talent management has become a popular topic among human resources (HR) scholars. In fact, some argue that talent management has become HR's new cornerstone. Numerous surveys have shown that executives consider talent management to be the main differentiator among companies and, hence, an important strategic priority. It is not by accident that many organizations invest a sizable portion of their financial resources to attract, deploy, and retain talent.

According to Lockwood (2006), talent management is the implementation of integrated strategies designed to increase employee productivity by developing processes for attracting, developing, retaining, and utilizing people with the required skills and aptitude to meet current and future business needs. This study focuses on talent retention, which is a global issue. As implied earlier, hiring and retaining top talent is the driving concern for human capital management practitioners today. The concept of human capital management is that employees possess skills, abilities, and experience and therefore have economic value for the organization.

With competition so intense, executives today worry about their organization's ability to locate, attract, hire, develop, and retain the qualified people they need to run their companies. To ensure effective leadership for the future, corporations strive to attract and retain top talent (Cliffe, 1998; Menefee and Murphy, 2004). But top talent is difficult to find and expensive to replace. Further, holding on to skilled employees once they are on board, is a major challenge. It is easier for talented employees to change jobs or seek a better place of employment. Given the special skills and abilities talented employees bring to the table, any loss of these key players could negatively affect productivity, cause customer dissatisfaction, and lead to decline of the remaining workforce morale (Mitchell, Holtom, Lee, and Graske, 2001). Moreover, departing employees often take with them valuable knowledge, expertise, and relations with clients (Mitchell et al., 2001). Loss of top talent to a competitor can diminish the organization's competitive advantage as well. Thus, to attract, engage, develop, and retain talent, those who have responsibility for talent management must understand what is important to employees (Lockwood, 2006).

Research Review

In terms of research, a study by Martel (2003) concluded that employee autonomy, risk taking, and tolerance of mistakes helps engage high performers and build their confidence. Open communications and good supervisory relations were also cited as important factors in retaining high performers. Lastly, Martel (2003) identified education and training as yet another means of engaging employees. Open communications, job satisfaction, and training opportunities were found to be associated with intention to turnover (intention to leave a job) and employee commitment by other studies as well (Benson, 2006; Breukelen, 2004; Egan, Yang, and Barlett, 2004; Firth, Mellor, Moore, and Loquet, 2004; Griffeth, Hom, and Gaertner, 2000; Joseph, Ng, Koh, and Gaertner, 2007; Walsh, 2007). …

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