Job security and leadership matterMonday September 22, 2014 Written by Brandi Cowen
With hiring and turnover on the rise, employers face new challenges to attract and retain top performers and high-potential employees.
Adding to the challenge is the fact that many employers don’t understand the reasons employees join and stay with a company, according to the Towers Watson Talent Management and Rewards Survey.
The study of 1,637 companies globally, including 95 from Canada, shows an uptick in labour market activity. Globally, nearly half of employers (48 per cent) said hiring activity has increased compared with last year. For 15 per cent of these employers, hiring has jumped significantly. Additionally, more than one-third (35 per cent) indicated that turnover was rising. Nearly two in three respondents are experiencing problems attracting top performers (65 per cent) and high-potential employees (64 per cent), an increase from two years ago. Those employers who do attract high-potential and top performers struggle to retain these workers (56 per cent and 54 per cent, respectively).
“With turnover on the rise, employers need to understand what employees value if they are going to succeed at attracting and retaining employees. Sadly, our surveys reveal a pretty big disconnect between employers and employees,” said Ofelia Isabel, managing director of Towers Watson’s reward, talent and communication business in Canada. “Employers seem to recognize the importance of pay and career advancement as key reasons employees choose to join and stay with a company, but they don’t place the same importance on the two other top attraction and retention drivers — job security and trust and confidence in senior leadership.”
Meanwhile the Towers Watson Global Workforce Study (a survey of 32,000 employees worldwide, including over 1,000 employees from Canada) revealed that job security is the second most important reason workers 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 did not 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 per cent said their organization hires highly qualified employees, while 42 per cent said their employer does a good job of retaining talented employees.
The study also revealed that many employees feel blocked in their current position. Four in 10 employees (41 per cent) said 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 said they would need to leave their organization to advance their careers.
From the employer perspective, less than half of respondents (49 per cent) believe they are effective at providing traditional career advancement opportunities, while 35 per cent said that compared with last year, career advancement opportunities are improving.
"Organizations are still missing the mark when it comes to career development. Given how important career advancement opportunities are to employees, the fact that so many high-potential employees feel stuck should serve as a wake-up call to employers to review how they develop careers,“ said Sandra McLellan, Toronto leader of rewards, talent and communication business at Towers Watson. "As hiring activity continues to increase, employers need to recognize that their key employees are going to have more options and it’s going to be harder to replace them.”
The Global Workforce Study found that leadership is the top driver of sustainable engagement (i.e., the intensity of employees’ connection to their organization). However, less than half of employees (48 per cent) agree that senior leadership is effective.
“The importance of leadership can’t be overemphasized. Employees are more likely to stay with their current employer if they have trust and confidence in their senior management and leaders. Senior leaders, managers, and supervisors all play a critical role in fully engaging employees,“ said McLellan.
The Towers Watson Global Talent Management and Rewards Survey was conducted between April and June and includes responses from 1,637 companies worldwide. The participants represent a wide range of industries and geographic regions.
The Towers Watson Global Workforce Study covers more than 32,000 employees selected from research panels that represent the populations of full-time employees working in large and midsize organizations across a range of industries in 26 markets around the world. It was fielded online in April and May.