Relying on old methods to address entirely new talent challenges may prove detrimental in today’s global economy that is desperate for innovation, refreshed leadership programs and new demographic and skill gap challenges, says Deloitte in a statement announcing the release of the report, “Has the great recession changed the talent game? Six guideposts to managing talent out of a turbulent economy.”
In the report, Deloitte captures ways surveyed executives and talent managers have adjusted their workforce and talent strategies to deal with the shifting economic forces from the depths of the recession to the first hints of the recovery. Further, Deloitte identifies six key guideposts for executives to consider as they map out their talent strategies to address the challenges of the changing economy.
“Based on our research, many executives are planning to use their pre-recession playbooks to manage their talent programs,” says Jeff Schwartz, principal, Deloitte Consulting LLP. Schwartz warns that relying on old methods may not be effective in a post-recession economy. Thus, Deloitte is suggesting six key guideposts for for senior executives and talent managers to consider as the recession morphs in to the recovery:
1. The problem may look familiar, but the solutions are not. The global study finds that only 39% of executives surveyed have a talent plan aimed at driving innovation. Two out of three executives surveyed acknowledge that workforce planning is not being integrated at both the corporate and business unit levels.
While the recession may have put retention planning on hold, 20% of executives surveyed acknowledge their companies have not updated their retention plans to take into account a changing economy.
2. There is a paradox of scarcity amidst plenty. Among the 1,600 executives surveyed worldwide, 65% expressed concern about losing high potential employees and critical talent to competitors in the year following the recession. Nearly half (46%) of those surveyed recall that voluntary turnover increased following the 2001-2002 recession. Nevertheless, only 35% have an updated retention plan in place to keep hold of talent as the recovery strengthens.
3. Companies using the recession as their retention strategy are taking a big risk. Among the 350 employees surveyed, nearly one-in-three (30%) are actively working the job market and nearly half (49%) are at least considering leaving their current jobs. Only 37% of Generation X and 44% of Generation Y employees surveyed plan to remain with their current employers.
More than three out of four surveyed employees (76%) who intend to leave their current jobs cited lower morale at their companies.
4. Understanding your people is as critical as understanding your customers. In ranking the top three retention tactics, in every instance, employees surveyed chose different and non-financial incentives compared to executives. While 62% of surveyed employees cited a lack of communication from executives during the recession only 35% of surveyed executives felt the need to increase the frequency of employee communication.
5. Show me the money — but show me the love, too! Among reasons for leaving current employers, surveyed employees ranked two non-financial factors among the top three: job security (36%), lack of career progress (27%) and lack of compensation increases (27%).
More than one-third of surveyed employees (34%) reported that new opportunities in the market could prompt them to leave their current job, closely followed by a lack of compensation increases (33%) and a lack of career progress (24%).
6. Follow the market leaders. Companies surveyed that described their leadership programs as “world class” are constantly searching the market for the best talent available, with 69% reporting plans to step up recruitment of critical talent.
Companies surveyed that lead the pack on leadership are experiencing higher morale: 59% report an increase in morale compared to 21% at competing firms. Trust and confidence in corporate leadership is also rising faster 53% to 21%.