AS COMPANIES look to shore up their competitive advantage in an increasingly tight labour market, CEOs have recently demonstrated a better understanding of a number of key talent retention measures
AS COMPANIES look to shore up their competitive advantage in an increasingly tight labour market, CEOs have recently demonstrated a better understanding of a number of key talent retention measures.
Improving morale, manager/staff retention initiatives, HR policies that improve the work/life balance and better communication from the CEO and other senior management were identified as key CEO concerns, according to a study of 1,000 CEOs/MDs and 1,000 mid-to-senior managers across Australia.
“Human capital issues have reached the top of board and senior management agenda items and are likely to remain there for the next five to ten years, driven by an increasingly tight market for talent,” said John Colvin, MD of Hamilton James & Bruce, which conducted the study.
“CEOs have realised that people now select companies, and so attracting talent in a candidate short market will depend on the strength of a company’s reputation and brand as an employer of choice.”
There was an increasing focus on improving morale in most companies in order to retain staff, the study found, with the most effective means being: hiring high quality, like-minded people that existing colleagues enjoy working with; teaching managers to create a better working environment for staff; good communication strategies and building/implementing a set of flexible work policies.
The study also found that more than 80 per cent of managers are now happy in their companies, compared with 56 per cent a year ago. “This improvement is likely to have been due to companies focusing on strategic retention management more so than they have done in the past, and this has been driven by a much tighter market looking for talent,” Colvin said.
Despite the improvement in work satisfaction, nearly half of the managers are considering leaving the business and/or reviewing their options. However, two-thirds of CEOs think that only around 5 per cent of mid-to-senior managers will leave the company in the next six to twelve months.
“This means there is a much larger group of managers who are considering their options than CEOs believe to be the case,” Colvin said. The main reasons managers consider leaving the business are: senior managers with poor management skills; a lack of real challenge in their jobs; and no significant prospects for career advancement with their current employer.
“While CEOs have a much better understanding of people and culture issues than they did a year or two ago, they are still out of touch with why significant numbers of managers are considering alternative job options,” Colvin added. For instance, 70 per cent of CEOs believe that the main reason managers leave their company is due to some problem or situation in their personal lives, while only 22 per cent of managers ranked this as the seventh most important reason why they would choose to leave their company.
There was also a discrepancy in the understanding of employee retention, with 89 per cent of CEOs placing a high priority upon it compared to only 61 per cent of managers. “This means that there has not been sufficient focus and discussion with mid-to-senior management about initiatives required to improve retention across the business at all levels,” Colvin added.
The market had also forced many companies to deal with work/life balance issues over the past few years, he said. “A lot of companies have implemented changes to improve work/life balance in the business which would then increase retention and improve the company’s culture.”
The four most important changes included: introducing flexible working arrangements; creating teams where flexible working arrangements are able to operate effectively; providing training to assist people in working more flexibly and efficiently; and upskilling people in this area through counselling and mentoring services.
While the study found that communication from the top was also an important way of empowering managers and staff and retaining them, only 27 per cent of managers believe CEOs communicate effectively and regularly regarding important company information.
Much information is communicated via email and the company intranet, however the study found that people much prefer to see senior management talk directly to them.
“Companies who commit themselves to implementing creative retention strategies and strengthening their culture are more likely to enjoy business success in the challenging years which lie ahead,” Colvin said.
