The importance of top performer retention is a topic that consistently leads in HR and business surveys alike. Notably, more than 1,000 CEOs were asked: “How important are the following
The importance of top performer retention is a topic that consistently leads in HR and business surveys alike. Notably, more than 1,000 CEOs were asked: “How important are the following sources of competitive advantage in sustaining your growth over the long term?” The number one response — chosen by 97 percent — was “access to, and retention of, key talent.”1
Talent retention is critically important for all organizations for two main reasons:
1) Turnover is expensive.
2) Top performers drive business performance.
Although estimated financial impacts from turnover fluctuate depending on industry, position, and location, estimates range from 30 percent to 250 percent of annual salary.2 Turnover costs mount steeply arising from the direct replacement costs of talent acquisition, the opportunity costs of vacant positions and time to productivity, and — more broadly — lost business performance.
The impact of quality performers was crystallized in McKinsey’s seminal War for Talent study. It found that in the opinion of senior managers, high performers outperform average performers by a wide margin. According to the study, high performers in operations roles are able to increase productivity by 40 percent; high performers in management roles increase profits by 49 percent; and in sales positions, high performers are responsible for 67 percent greater revenue.3
Constrained economic conditions further highlight the need for organizations to keep their best people as companies strive to control costs and increase productivity. Talent management strategies address this dual agenda directly. For example, a Taleo Research global survey found 70 percent of respondents see an increased need to retain top performers by driving focus on performance management and career planning in a low growth economy.4
Because low talent retention produces a substantial drain on corporate resources, leaders need to know what practices work and what they should focus on to retain and motivate their workforce. For instance, a talent management strategy that allows employees to build a network, seek and find mentors, and help them grow and develop while feeling more connected and engaged is one means of retaining talent.
Many approaches have been explored as levers to increase retention, including compensation packages and rewards, benefits, telecommuting options, and work/life-balance initiatives. Each may have a place in a company’s portfolio of retention strategies.
Today, certain talent management practices that utilize self-service software as a service (SaaS) interfaces can be effective and extensible throughout organizations. Specifically, retention strategies can be carried out through talent management practices supported by a robust technology platform. These practices span the talent lifecycle from hiring, to managing employee performance and alignment with corporate goals, to providing career and promotion opportunities, to measuring program success.
In the whitepaper titled “Talent Retention: Six Technology-Enabled Best Practices,” we reveal the six key practices that organizations can implement with technology support to retain their top talent:
1) Recruit the right people in the first place.
2) Improve the line manager’s ability to manage.
3) Give employee’s constant feedback about clear, meaningful goals.
4) Empower employees to manage their own careers.
5) Proactively drive talent mobility.
6) Continuously measure and improve retention strategies.
—To learn more, download Taleo’s free whitepaper at: http://www.2elearning.com/www/resources/research-whitepapers/browse/1.html
Source: 1Pricewaterhouse Coopers 12th Annual Global CEO Survey 2009; 2“Employees leaving? Here’s why and what you can do,” The New York Times, Oct. 24, 2008; 3“The War for Talent,” McKinsey & Company, 1998; 4Global Unified Talent Management Survey, 2008 by Taleo Research with Human Capital Institute (HCI), Business Intelligence, Markess International, Quantum Market Research