While employers recognize the importance of pay and career advancement as key reasons employees choose to join and stay with a company, they don’t place the same importance on another top attraction and retention driver: job security, or a key retention driver: trust and confidence in senior leadership.
With hiring and turnover levels on the rise, employers are now experiencing challenges with both attracting and retaining employees, especially top performers and high-potential employees, according to two major surveys conducted by Towers Watson.
The Towers Watson Global Talent Management and Rewards Survey, a study of 1,637 companies globally, including 337 from the United States, shows there has been an uptick in labor market activity.
Globally, nearly half of employers (48%) said hiring activity has increased compared with last year. For 15%, hiring has jumped significantly. Additionally, more than one-third (35%) indicated that turnover was rising.
Nearly two in three respondents are experiencing problems attracting top performers (65%) and high-potential employees (64%), an increase from two years ago.
More than half reported difficulty retaining high-potential employees (56%) and top performers (54%).
“With talent mobility on the rise, employers need to understand what employees value if they are to succeed in attracting and retaining employees,” said Laura Sejen, managing director at Towers Watson, who led both surveys.
"Unfortunately, our surveys reveal a significant disconnect between employers and employees."
Indeed, the Towers Watson Global Workforce Study, a survey of 32,000 employees worldwide, including 6,014 from the United States, revealed that job security is the second most important reason they join a company and the fourth most important reason they stay.
Employees also ranked trust and confidence in senior leadership as the third most important reason they stick with a company.
However, employers did not rank any of these factors as key attraction and retention drivers. Not surprisingly, less than half of employees think their company does a good job when it comes to attracting and retaining the right workers.
Only 46% said their organization hires highly qualified employees, while 42% said their employer does a good job of retaining talented employees.
The Global Workforce Study also revealed that many employees feel blocked in their current position. Four in 10 employees (41%) said they would need to leave their organization in order to advance their careers.
Even worse, the same percentage (41%) of employees who have been formally identified as high potentials by their organization said they would need to leave their organization to advance their careers.
From the employer perspective, less than half of respondents (49%) believe they are effective at providing traditional career advancement opportunities, while 35% said that compared with last year, career advancement opportunities are improving.
Missing the mark
“Organizations continue to miss the mark when it comes to career development. Given how important career advancement opportunities are to employees, the fact that so many employees, and especially high potentials, feel stuck should serve as a wake-up call to employers to review
their career development programs,” said Sejen.
The Global Workforce Study found that leadership is the top driver of sustainable engagement (i.e., the intensity of employees’ connection to their organization). However, less than half of employees (48%) agree that senior leadership is effective.
“Employees are more likely to remain at their companies if they have trust and confidence in their senior management and leaders,” said Sejen. “And importantly, senior leaders, managers and supervisors each play a critical role in fully engaging employees.”