There is an interesting phenomenon going on in American workplaces today. Despite national unemployment levels at five-year highs, top talent is leaving our organizations...

by Felix Verdigets, PhD

Organizational Effectiveness Consultant

There is an interesting phenomenon going on in American workplaces today. Despite national unemployment levels at five-year highs, top talent is leaving our organizations en masse. An estimated 76 million workers will retire by 2020 (accounting for approximately 40 percent of the current workforce), which is about 10,000 workers a day for the next 10 years. Further, according to a study by Leadership IQ, 47 percent of high performers are actively looking for other jobs.

Indeed, the chasm between talent attraction and talent retention is as wide as I can recall. Top talent is in such high demand that the age-old practice of “just paying more” is no longer good enough to differentiate why employees choose one firm over another. Herzberg, one of the most influential names in business management, believed that pay is a “hygiene”—something needed to ensure that an employee does not become dissatisfied. Pay does not cause higher levels of motivation, nor does it act solely as a retaining agent. Still, employers struggle with this premise and various industry studies continually demonstrate this point. For example, in a study by Salary.com, employers and employees were asked to rank the top five reasons employees stay on the job. Compensation was ranked by employers as the second most important reason employees stay—employees ranked it last.

The answer to this difficult situation often lies in the firm’s culture. When asked why people leave their jobs, Eric Foss, CEO of Pepsi Bottling Group, who joined as a campus hire 25 years ago, stated that “people leave mostly because they feel underappreciated. A culture of recognition needs to be a part of the company DNA.”

There are three key motivators that should be part of this cultural DNA, that, irrespective of salary, should be part of the highlights shown to potential recruits. They are:

  1. Recognition for achievement—this is a constant across all four generations in the workplace, regardless if one is just starting out or is about to retire.
  2. Responsibility for task—the work should continue to challenge the employee, be interesting, and should vary. Job rotation programs where employees can reap the benefits of working on different assignments and in different areas of the company (a.k.a. a new job without leaving the firm) are very popular with generations X and Y.
  3. Growth—advancement to higher-level tasks is important. Job enlargement and job enrichment are seen as key ways to motivate top talent.

Effective talent acquisition and retention begins with recognizing areas where culture change is most needed—areas where the necessary motivators may not exist or are not working properly. Ask yourself the following questions:

  • Are your workforce demographics changing dramatically, reflecting an older, more diverse labor force?
  • Do you have a rigid, tradition-bound culture? (If you answered yes to the first question, chances are you will answer yes to this question.)
  • Is recruiting replacement talent becoming increasingly difficult, especially when trying to attract top talent?
  • Do large numbers of employees feel management is not open to criticism or suggestions for improvement?
  • Do problems not get identified until they reach the crisis stage?
  • Do employees distrust management, or visa versa: does management distrust employees?

One strategy for addressing these issues is for leaders to be more conscious about managing corporate culture. A positive, inclusive culture contributes not only to retention and recruitment, but also to career development, productivity, and customer relations, particularly for companies facing future shortages of skilled workers.

Felix Verdigets, PhD, is a consultant in the human capital and organizational effectiveness areas. He can be reached by phone at 404-704-7555 or by email at [email protected]

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