Posted by Alice Kwan and Robin Erickson on June 24, 2013
More than 1,000 people from a broad range of industries and roles attended our HR Executive Dbriefs webcast on talent retention (Talent Strategy: Why Valued Employees Leave and Ways to Retain Them). The fact that this topic attracted participants from the highest levels of their organizations (including CFOs, COOs, presidents, directors, and vice presidents), a variety of functions (finance, accounting, HR, IT, risk, and marketing, among others), and numerous industries (banking, real estate, energy, government, retail, insurance, telecom, health care, consumer products, and more) demonstrates just how high and wide the issue of retention reaches.
The webcast highlighted results from our recent Talent 2020 employee survey, and the large number of attendants gave us a good opportunity to see how their poll responses compared to our survey data from 560 global respondents. Turns out, the results were quite parallel.
- How many employees are leaving? As expected, voluntary turnover rates in their organizations were relatively low for the majority of webcast participants—47.3% reported turnover of 10% or less (and nearly 30% answered Unsure/Not Applicable). This is in line with what we’ve seen: As unemployment goes up, voluntary turnover goes down, and vice versa. Because we’ve had unemployment hovering around 8% or higher since 2008, voluntary turnover numbers have been relatively low. However, if unemployment numbers continue to decrease, expect voluntary turnover to begin to increase.
- Who’s leaving? Webcast participants also believed Millennials (ages 16–31) were the most likely generation to voluntarily leave their organization, which matched our Talent 2020 survey results. This is a shift from our previous employee survey in 2011, when Generation X respondents (ages 32–47) expressed the highest turnover intentions.
- Why are they leaving (and what can make them stay)? When asked what they believed is the No. 1 reason employees look for new employment, webcast participants cited “lack of career progress” and “dissatisfaction with supervisor or manager” as their top choices, which mirrored the top choices in the latest Talent 2020 survey. Interestingly, the incentives to get employees to stay are actually different from the factors that cause them to want to leave. Two of the top three incentives are monetary (additional bonuses or financial incentives and additional compensation)—but we think it’s short-sighted to rely only on money as a long-term retention strategy. It may be more of a quick fix to keep people on board longer who were ready to leave anyway.
- What are they looking for? When asked how important an organization’s commitment was to five factors (corporate brand and reputation, utilizing new technologies, developing leaders, sustainability, or work-life balance/flexibility programs), nearly half (47.3%) of poll respondents chose “work-life balance/flexibility programs” as the most important factor, agreeing with our Talent 2020 results—across Millennials, Generation X, and Baby Boomers, it was the highest ranking response. The Talent 2020 results showed that younger workers (Millennials and Gen X) surveyed were also quite concerned with the organization’s commitment to developing leaders.
- How are you using data to manage attrition? We were curious how many of our webcast participants were using data to manage voluntary turnover. Most (59.6%) answered “Unsure/Not applicable.” More than one-fourth had attrition reporting (18.9% had basic reporting by function; 8.9% had consolidated reporting across the organization). Another 8.7% had a retention dashboard to track voluntary vs. involuntary turnover and future retirements. Finally, 3.8% of poll respondents had made the jump to analytical data modeling to predict which employees are at greatest risk of leaving.
It’s this area of predictive analytics that we believe holds great significant promise for organizations. Too many organizations start actively managing attrition at the moment an employee tenders a resignation. A better paradigm might be to identify which of your critical high performers and high potentials are most likely to leave within the next six months, understand the reasons why those individuals might leave, and know what you can do to increase their likelihood of staying.
Here at Deloitte, we are using analytics to understand the drivers of attrition in our organization and to predict attrition risks for employee groups and even individual employees. We are in the process of implementing proactive retention strategies and interventions with the goal of improving our voluntary attrition levels.
The Talent 2020 survey gives other insights into ways to retain top talent—including things many companies think they do well, but might not be: demonstrating credible leadership and communicating effectively.
How is your organization addressing retention? We’d love to read your comments.
|| Alice Kwan, principal, Deloitte Consulting LLP, leads the firm’s client talent services in the U.S. She regularly leads clients through large-scale transformations with a focus on organizational, cultural, change management, and talent implications.
||Robin Erickson, PhD is a specialist leader in Talent Strategies with Deloitte Consulting LLP. Building off her PhD research that focused on the retention of downsizing survivors, she has focused on the potential for a “resume tsunami” to take place as the economy improves and employees start looking for new jobs.