Retention Strategies for Winning the Upcoming Talent War

While the Great Recession is over, another global workforce crisis is on its way.

It’s just a different kind of crisis.

Boston Consulting Group (BCG) and World Economic Forum ran a few workforce supply-and-demand dynamics studies across 25 major economies, and they discovered a shocking rate of labor shortages and surpluses through the year 2030.

In other words, some economies will have too many workers to fill their open positions, and others too few.

Suffice it to say, the talent war will be fought more fiercely as organizations compete over an increasingly global workforce.

And while this might sound more than a little alarming, it’s actually an incredible opportunity – specifically for HR leaders.

30% of companies report that their new hires didn’t reach full productivity for at least a year or more.

As you know, these days HR is responsible for delivering real, measurable business value, and that includes cutting costs as much as increasing revenues.

And one of the biggest, most avoidable costs any organization faces is turnover.

The Allied Workforce Mobility Survey calculated that most companies pay an average of 150% of an employee’s annual salary to replace him or her.

What’s more, 30% of the companies surveyed reported that their new hires didn’t reach full productivity for at least a year or more.

A high turnover rate is simply harder than ever to afford – especially when attracting new talent is becoming even more difficulty.  

But HR is the perfect department to really make a difference in that rate – to cut it down and keep it down, so their companies can thrive in this brave new world of global talent competition.

You just need a couple agile retention strategies to help you get the job done.

Develop Your Employees

The first step is to recognize the unique strengths and weaknesses of your employees, so you can start making the most of their potential.

Because when you invest in your professional growth of your employees, they won’t just contribute more to your bottom line – which, really, is reason enough to make that investment – they’ll be more engaged in your company too.

And engaged employees are far less likely to leave their roles at your company and take up with one of your competitors – even if they’re offered more attractive compensation packages.

The key is to accurately identify what their capabilities are, so you can intelligently personalize their growth plans.

Use a performance management tool like Reflektive’s 9-Box Question Type tool to get started.

It’s a 3×3 grid that ranks an employee’s actual performance and potential performance across a variety of business skills, technical competencies, leadership qualities, and more – you can measure just about anything.

[bctt tweet=”Focus on your high-potential employees to increase engagement and retention” username=”reflektive”]

From there, focus on the employees who have high potential, but not necessarily high performance, in whatever it is you’re ranking so you can move them toward real, measurable improvement that they’re actually capable of making.

They’ll feel more confident, more engaged, and more motivated as a result.

They’ll know that not only do you value them as employees – happy to help them improve their skills – but that they’ll continually grow and be challenged in their roles at your company, which leads to greater job satisfaction and lower turnover.

Build a Culture of Open Communication

We all know that companies that play favorites, promoting and terminating based on who curries the most political favor, don’t foster very much loyalty among their employees.

We also know that opaque, cloak-and-dagger performance review policies – like holding a single annual review, employing stack ranking, and so on – leave employees anxious and fearful, which drives turnover rates and replacement costs.

But it’s not enough to just promote based on merit, or hold semiannual reviews with clear judging criteria.

That’s still bureaucratic. It’s not human.

In a recent TED talk by BCG managing director Rainer Strack, he stresses that every company needs a people strategy – and to act on it immediately.

And a people strategy should have a “people,” not a “process,” orientation.

So, talk to your employees regularly – ask how their work is coming along, if they’d like any help, or if they have any questions.

Give them performance feedback proactively – not just once or twice a year – so they’ll feel more like team members than college students studying for their midterm or final exams.

When you manage your employees in a more human way, you’ll inspire them to perform better, with greater motivation and job satisfaction, while reducing turnover and churn.

Unsurprisingly, when Strack reviewed a survey of the 20 most desirable job qualities, the top four were all related to workplace culture.

[bctt tweet=”People are people, not headcounts or machines.” username=”reflektive”]

As he puts it, “people are people, not headcounts or machines.”

It’s not an easy time for HR leaders, but it is an exciting one.

Because while you’re being called on to contribute to bottom-line business results now, you actually have the capacity to do it – by managing the people you already have better.