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Talent, what’s next? Moving beyond the recession as a retention strategy

Deloitte Insights podcast


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For organizations still using the recession as a retention strategy, it’s high time for a rethink. Nearly two-thirds of the employees polled in Deloitte’s latest Talent Edge 2020 survey, “Building the recovery together,” are looking for an exit sign or at least are open to the idea of leaving their current jobs ─ an increase of 10 percent since 2009.

Listen to the latest episode of Deloitte Insights to learn more about employee attitudes around the world.

Guests

Jeff Schwartz, Principal, Deloitte Consulting LLP
Robin Erickson, Manager, Deloitte Consulting LLP

Transcript

Sean O’Grady, Host, Deloitte Insights: Hello and welcome to Insights. Today we are welcoming back Jeff Schwartz, principal with Deloitte Consulting LLP and we’re welcoming Robin Erickson, a PhD and manager with Deloitte Consulting LLP. We are here to talk more about the second survey in the Talent Edge 2020 series and what it reveals about employees attitude around the world.

Jeff, good to have you back. We are going to start with you, and there is an interesting point in the survey that shows that nearly two-thirds of the employees polled are looking for an exit sign or at least are open to the idea of leaving their current job. That’s a pretty big number Jeff, so what’s going on here?

Jeff Schwartz: Well thanks Sean, it’s great to be back. Let me start with the headline here. When we look at comparing 2009 and 2011, we’re seeing something that we think is pretty important and pretty dramatic. First when we asked the employees around the world whether they thought they were staying or going in 2009, about 45 percent of the people we surveyed said that they were pretty intent on staying and about 55 percent said that they were thinking in some way about looking at other options. That number has moved more than 10 percent in the last two years and that indicates to us that people are looking both passively and more importantly are looking more proactively for different jobs.

The headline for us is that the recession as a retention strategy really is not working and will not work very well going forward. When we look at two out of three employees who are exploring the possible exit signs, what they seem to be most interested in is exploring career options, the nature of the work, and the potential for job advancement. Very specifically, if we look at what people are looking for, 53 percent of the people interviewed said that job advancements or promotions would persuade them to either stay or leave their company. So, this is becoming very important. There are a lot of people, who are in some way in the job market, and some of them are active but some of them are passive. When we say passive, one of the things that we are seeing now that was quite different than a couple of years ago, is the use of social media in job boards. There are a lot of people who are looking out there.

Guess the final point I will make as we’re starting is, and we will talk about it a little more in the next little while, there are differences that we’re seeing out there and one of the differences we saw was something about the intentions of staying or going and the differences between women and men. In the survey that we’ve pulled together, it looks like over the next 12 months 55 percent of the women we surveyed compared to 41 percent of the men we surveyed were either actively or passively looking for a job. We also saw that the number of men passively looking was actually twice as high as the number of women passively looking. So, for the companies that are focusing on diversity and particularly gender diversity, there are really some warning signs out there.

Sean O’Grady: Thank you for that Jeff. Clearly a lot of change in that time period that you are speaking of. Robin I’d like to bring you into the conversation. When I had a chance to look at the survey, I noticed that one of the findings is that there seems to be a generational driver that age is dictating a different set of goals. Robin, could you explain a little more about that trend?

Robin Erickson: Happy to Sean. One of the things that we found is that companies that apply one-size-suits-all strategy for retention will have a hard time competing. Because, we found in our survey that each of the different generations had different reasons that they were frustrated and perhaps eyeing the exit sign. Specifically for the baby boomers, we found that they express the strongest discontent with their employers. More than half of them reported that morale had dropped over the past year. Less than half of them believe that company successfully communicated their corporate strategies, and 32 percent of them cited that lack of trust in leadership was the key turnover trigger. So, we really think that baby boomers feel that their loyalty and hard work has not been recognized or rewarded.

When you look at Generation X, we found that they were by far the most likely generation to be looking for a new job. In fact, only 28 percent of Generation X expects to stay with their current employers. The statistic that Jeff cited earlier around 35 percent of the employees are looking for the exit sign is even less than that for Generation X, only 28 percent are expecting to stay with their current employers. We think that based on the fact that Generation X’s top turnover trigger was lack of job advancement or promotion, we think that they are bumping up against the so-called grey ceiling of not being able to be promoted, having their career path blocked by the baby boomers who aren’t retiring. So, we think that one of the biggest talent challenges that companies need to look at is opening up career path for Generation X employees.

Then when you look at the Millennials, you see that they have a different value system. We think that their primary turnover trigger also is around promotion and job advancement, but when we dug deeper into the results we found that Millennials were much more interested in the values that a company has. Specifically we found Millennials thought that a company’s commitment to sustainability was important. Two in three Millennials rated that’s very important, compared to just one in three baby boomers and by more two to one – 32 percent to 13 percent – Millennials were more likely to consider their employer’s commitment to corporate responsibility and volunteerism to be very important compared to the baby boomers. They were also three times more likely to be looking for a fun work environment compared to a baby boomer.

Sean O’Grady: Thank you for that Robin. Clearly there are some differences along age lines there. So, thank you very much for that. My last question is for both of you, Robin we can begin with you and Jeff we will let you round off the thoughts. Up to this point we’ve been talking about employees, but you have to wonder what this data is going to mean for employers. So, if somewhere close to 65 percent of employees might be looking for the door, what do organizations have to do to keep these people?

Robin Erickson: We believe that organizations need to tailor and target their talent strategies to satisfy each of the employee groups. As Jeff mentioned at the beginning, each of the generations was interested in promotions and job advancement as their No. 1 retention incentive to keep them. But, it’s also important to look at things - like the Baby Boomers who are looking for support and recognition from supervisors or managers is their No. 2 retention incentive. For Generation X and the Millennials, their No. 2 was around additional bonuses or additional compensation. So, we think it’s important for organizations to both look at the non-financial retention incentives and initiatives that they can offer, but as well they also need to balance it with the financial retention incentives.

Sean O’Grady: Thank you for that Robin and Jeff your final thoughts?

Jeff Schwartz: Let me start by talking about how employees view the talent functions and the talent priorities of their companies. One of the things that we looked at in our research was we asked this global set of employees how well do they think their companies are doing in terms of talent programs or their talent priorities and we asked them what percentage of them think that their companies are world-class at talent management. 6 percent, one out of 16 percent of the people that we surveyed around the world thought that their companies were world-class in talent management. That’s interesting because when we asked corporate and talent executives the same questions six months before, their answer was 20 percent. 

So, one out of five business leaders think that they are world-class in talent and one out of 16 employees think their company is world-class in talent. So, there is room for improvement. When we look at this from the perspective of employees, what are the programs that the employees are looking for that they believe will keep them with their employers. There were five clear answers to that question. No surprises here.

The first one is creating a clear career path. The nature of work, the job opportunities and job advancements is the No. 1 thing employees are looking for. They are obviously looking for compensation and increased benefits, but one of the things that we’re focusing on is helping companies to understand these non-financial benefits. Second priority is that employees are interested in whether or not companies are walking the walk on creating and developing robust leadership pipeline. Employees like to know that there’s a strong emphasis on leadership and that they have the opportunity to become the leaders in their companies. The third we touched on is employees are looking to be inspired by and trust in the leadership of their organization. That’s particularly important observation that we heard from this global survey. The fourth interestingly is, employees are looking for companies that focus on top performers or put in another way, they’re by two to one margin interested in companies that reward through performance management in job training and opportunities for employees who are doing a good job. Finally, employees are looking for leaders and managers who can communicate effectively and honestly.

And Sean if I can, let me just make two final closing points here. One was, we primarily talked about this from the U.S. perspective and one of the themes that we’ve been raising is the importance of understanding different segments, whether it be generations, whether it be men and women, diverse members of your workforce population, but also of the global population. I’ll just give one quick example. When we looked at employee morale around the world, we saw that employee morale was significantly improving or improving in more than 60 percent of the respondents of the survey in Asia-pacific, but only 23 percent of the respondents in the Americas thought that their morale was improving. Actually it was about 49 percent in Europe and the Middle East and Africa. So, there is something going on in terms of how employers are interacting with employees in these regions, we think it’s important to keep our eye on that.

Finally, if I would have sort of summarized this in one thought, it’s what we’ve seen in our research and surveys around retention is that it’s important to move beyond the averages and move beyond the aggregate numbers that we’re seeing. Although on one level it looks like there is not a lot of movement in terms of retention, it’s in very specific areas - Women, diverse population, leaders with critical skills – which we are seeing quite a bit of movement right now in the market. There’s what we might describe as a resume riptide, a riptide being a focused force pulling the very people out of your organization that you most want to keep and you’re most dependent on going forward. So, recession as a retention strategy is outmoded. We’re very much in a new mode now as we’re focusing on retention in the next year or two going forward.

Sean O’Grady: So we can’t count on the recession to calm the riptide. Thank you both. We’ve been talking about employee attitude around the world with Jeff Schwartz, a principal in Deloitte Consulting LLP and Robin Erickson, a manager in Deloitte Consulting LLP. If you’d like to know about Jeff, Robin, or any of the topics we discussed on this program, you can find that information and much more by visiting our Web site. It’s www.deloitte.com/insightsus. For all the good folks here at Insights, I’m Sean O’Grady, we’ll see you next time.

As used in this document, ‘Deloitte’ means Deloitte LLP (and its subsidiaries). Please see  www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries.

 

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