Human capital is one of the most valuable assets in a business’ arsenal. When employees believe in a company’s mission, they are more engaged and productive, which makes the whole company prosper.
Too many businesses fail to retain their key workers as employees become disengaged from their work, fueling their interest in job opportunities elsewhere. Replacing this talent is difficult and costly, so companies need to do more to hold onto their best and brightest.
Multiple surveys underscore the difficulties companies face for retaining workers. In last year’s SHRM/Globoforce survey conducted by Globoforce, a provider of human-resources software, 40 percent of respondents said that employee turnover is their biggest concern, and 57 percent of employers said that retention is their top concern in a 2015 research report from PayScale.
A report last year from research firm Aberdeen Group affirmed those findings when it surveyed HR executives from about 250 businesses. The report found that the top pressure driving HR strategy in the 2016 will be the “critical need” to have talent in place to execute a company’s strategies. The survey cited several reasons for this, including the difficulty of managing an organization’s current talent pool – a concern stated by almost half (47.6 percent) of the respondents. Another is the scarcity of talent available in the external market, a concern expressed by 62 percent of respondents.
“Where retention issues hurt organizations the most is when it involves talent typically classified as high potential, highly skilled, very difficult to find or in high demand,” said Michael Moon, a consultant at MMM & Associates, an HR advisory firm.
So what can businesses do to hire and keep talented people?
One way is to increase employee compensation and benefits, recommended a recent report by Manpower Group. Another is to make the workplace more conducive to the ways in which people want to work─for instance, by creating open areas for employees to collaborate in teams and quiet rooms to work alone. Yet another is to regularly assess employees to discern areas of improvement.
A newer approach is to use data analytics tools to identify a company’s high performers and then assess their chances of leaving. That approach puts HR in a position to address individual retention problems ahead of time.
Consider cultural fit
Many HR consultants believe the key to keeping top talent is to make sure you hire the right worker in the first place. Recruitment strategies should be focused on more than simply employing those with the best resumes and top credentials. Rather, it may make more sense to hire the job candidates best aligned with the organization’s culture and then teach those people to perform the work for which they are hired.
“By assuring a potential hire is a good fit culturally in an organization, you can improve the odds of retaining that hire,” Moon said. “What is important is to match the employee’s value system to that of the organization’s values.”
If teamwork is critical, for instance, then hiring someone who prefers to work alone will likely result in a bad fit. Successful workforces are laboratories of human behavior, in which different chemical reactions can be expected. With a bit of alchemy, HR can hire people who are enthusiastic about the company’s culture.
A company’s culture begins with the values, ethos and principles of the business’s founder. He or she has a vision to create something or provide a valuable service, which inspires other individuals to join in making that happen. Those people hire others who are cut from the same cloth.
Over time, the workforce coalesces into what is known as the company’s culture. Hiring people who don’t fit into that culture fosters discontent and poor productivity, and that proves costly. According to the U.S. Department of Labor, the average cost of a bad hiring decision can equal 30 percent of that individual’s first-year potential earnings.
Hiring people who stay the course can really pay off. A study by the Academy of Management Journal indicates that the top 15 percent of companies with superior talent management practices achieve considerably higher sales per employee, market value per employee and profits per employee.
The bottom line is that to hire and keep good workers, companies must hire workers compatible with their culture, then inspire them to do their best and enjoy their jobs.