February 2012 marked the launch of the IRC’s new research initiative, Opinion Polls, that address hot topics facing Canadian human resources (HR), labour relations (LR), and organizational development (OD) practitioners. The IRC’s inaugural opinion poll addressed talent management, and the ways in which Canadian organizations recruit, retain, and develop their talent. This article summarizes some of our findings. All reporting is based on aggregated data.
Demographics
We received a total of 47 complete responses. Of these, 63.8% are female, and 36.2% are male. Our respondents represent diverse sectors: public (46.8%), private (29.8%), non-profit (12.8%), and quasi-profit (10.6%). The majority (42.6%) of respondents is in the human resources profession, while labour relations (17%) and organizational development (17%) professions are equally represented. The remainder of the respondents, 23.4%, listed their profession as “other.”
Recruitment
Our survey data reveal that internal hiring/promotion remains the most popular recruitment strategy. A staggering 89.4% of respondents indicated that they preferred hiring internally and promoting from within. Literature (e.g., Datta & Guthrie, 1994) suggests that internal hiring may stem from the fact that managers and supervisors are well aware of employees’ work ethics, knowledge, and skills, and can accurately predict their success in the new role. Print media is a recruitment technique relied on by 70% of respondents, while recruitment agencies are used by 48.9% of our respondents, and social media is a recruitment method for 46.8% of respondents. Figure 1 lists the recruitment strategies identified in our survey.
Figure 1
According to the literature, social media is, indeed, emerging as an effective recruitment tool. For example, research conducted by Emerging Workforce Study (2010a) identified that 44% of companies are using social media to attract talent. Of these, 23% use LinkedIn, followed by a corporate blog (16%), a company Facebook profile (14%), viral video marketing/recruitment (7%), corporate MySpace profile (6%), and second life presence (1%).
Employee Turnover
We provided our respondents with a list of nine factors and asked them to rate the extent to which each of these factors contributes to employee turnover in an organization. Respondents were provided with a five-point scale (1=strongly disagree; 5=strongly agree). Based on average ratings, the data reveal that the top three factors contributing to employee turnover are: employee/management personality differences (3.89), amount of work/heavy workload (3.74), and low employee engagement (3.72).
As seen in Figure 2, the six remaining factors are also perceived as contributing to employee turnover: lack of employee recognition/appreciation (3.64), lack of role clarity (3.55), lack of talent development initiatives (3.28), employee/organizational value conflicts (3.28), lack of talent retention strategies (3.26), and insufficient compensation (3.21).
Figure 2
The theory of organizational equilibrium (Allen, 2008) can be used to explain employee turnover. According to Allen, this theory suggests that an employee remains with an organization as long as the contributions made by the employee equal inducements offered by the organization (such as, professional development opportunities, salary incentives, working conditions, etc.). Thus, if an employee perceives a low return on personal investment to an organization, he or she may be more inclined to leave the organization.
Our data confirms this theory. For example, when asked to identify the most significant obstacle to retaining talent, 14.9% of respondents indicated that it becomes difficult to retain employees in an organization where management does not take an interest in staff development. Similarly, 19.1% of respondents pointed to failing to adequately recognize or appreciate talent as the primary reason for losing employees. Other obstacles to retaining talent in an organization include lack of resources/financial constraints (31.9%), and conflicting organization priorities (12.8%).
Turnover comes at a high price. Not only is it costly and time consuming to replace an employee, the void created by such a transition can adversely impact customer relationships, business performance, and success (Jacobs, 2011).
Employee Retention
In addition to analyzing employee turnover, we also investigated employee retention. We provided our respondents with a list of eight factors and asked them to rate the importance of each factor in retaining talent in an organization on a five-point scale (1=least effective; 5=most effective). We then calculated the average ratings to determine the top three factors that contribute to talent retention in an organization. The top three retention factors are: employee engagement (4.51), work-life balance (4.19), and learning and development opportunities (4.15). The other five factors also remain significantly important to retaining talented employees: role clarity (4.13), employee/organizational value alignment (4.04), career advancement opportunities (4.02), employee recognition/appreciation (3.96), and compensation (3.68). Figure 3 rank orders the factors that contribute to employee retention.
Figure 3
Interestingly, compensation ranked last in the list of factors contributing to employee retention. This data leads this author to conclude that for employees it is more important to be actively engaged, and receive intrinsic, rather than extrinsic, rewards. Intrinsic rewards include feelings of accomplishment, and sense of meaningfulness, whereas extrinsic rewards are tangible, such bonuses, pay raises, and benefits (Thomas, 2009).
The literature supports this finding. For example, in his article, Thomas (2009) argued that there is a direct correlation between employee engagement and the intrinsic rewards employees receive. He commented that intrinsic rewards are easily sustainable, act as motivators for employees, and offer less likelihood of burnout.
Talent Development
We provided our participants with a five-point scale (1=not at all; 5=frequently), and asked them to indicate the extent to which their organization is currently implementing talent development strategies. Our analysis reveals that performance reviews (including stretch goals) are “frequently” implemented (38.3%), followed by formalized training (28.3%), and sponsoring professional development opportunities (26.1%). Interestingly, only 13.3% of our respondents indicated that action learning is implemented “frequently.”
We next provided our participants with five areas and asked them to indicate how their organization’s talent development strategies rate in each of the areas on a five-point scale (1=ineffective/requires development; 5=effective/fully developed). Data reveal that, in general, respondents do not perceive the talent development strategies currently employed by organizations as “effective/fully developed.” All talent development strategies have an average effectiveness rating of less than 3.25 (see Figure 4).
Figure 4
Summary
Talent management encapsulates talent acquisition, retention, and development. IRC research indicates that talent management is both an immediate and long-range priority for Canadian organizations (Juniper & Hill, 2011). In this section we summarize some of the ways in which organizations can effectively recruit and manage talent, such as hiring the right employees, providing employees with work-life balance and opportunities for professional development, and measuring employee retention and turnover.
First and foremost, it is important that the right employees are hired. That is, selecting qualified employees who fit the organization’s culture, vision, and mission. Our Talent Management survey results indicate that employees, whose core values are aligned with those of the organization, are more likely to remain employed with the organization.
It is clear that work-life balance contributes to employee satisfaction (Deery, 2008). Many organizations have programs and policies in place to support healthy workplace practices. In 2011, the IRC conducted a survey, An Inquiry into the State of HR in Canada (Juniper & Hill, 2011). Data revealed the top three programs in place to promote work-life balance include: employee benefits packages (94.9%), employee assistance programs (87.8%), and support for workplace learning (e.g., tuition reimbursement/educational leave of absence) (80.0%). Other programs cited include: pension plan arrangements (79.8%), flexible work arrangement (65.4%), workplace health and safety initiatives (64.9%), employee recognition programs and events (69.1%), organization-sponsored wellness workshops or programs (49.2%), fitness subsidy (45.6%), and on-site child care (10.1%). Healthy workplace practices may help organizations to retain talent, while providing a balanced work-life environment. Consequently, these intrinsically rewarding incentives may serve to maintain employee performance and productivity.
Providing cost-effective learning and development opportunities, such as relying on online learning tools, or incorporating podcasts, webinars, discussion forums, or MP3s into professional development plans may also help to retain organizational talent (Emerging Workforce Study, 2010b). In addition, opportunities such as, job rotations, coaching, and mentoring can also be combined with other development and learning opportunities (CIPD, 2010).
It is beneficial for organizations to measure their retention strategies, and observe turnover rate within the organization. Doing so may help to determine root-causes behind turnover and enable organizations to implement corrective actions to mitigate turnover. Exit interviews are an effective strategy to determine why employees are leaving. To ensure confidentiality, these interviews should be conducted by HR, rather than a direct supervisor (CIPD, 2011).
In conclusion, our survey indicates that intrinsic rewards facilitate employee retention and may reduce employee turnover. Based on our data, employee engagement, work-life balance, and learning and development opportunities are the top three factors contributing to employee retention. The top three factors contributing to employee turnover include employee/management personality differences, amount of work/heavy workload, and low employee engagement. While social media is emerging as a popular recruitment strategy, data reveal that traditional forms of recruitment (internal/promote from within, print advertising, and recruitment agency) remain relied upon. Respondents also perceive that there is room for improvement with regard to the development and effectiveness of talent development strategies. As talent management continues to remain a priority, challenge, and opportunity for organizations, this author suggests that companies consider developing and implementing assessment and measurement tools to assist with effectively evaluating the success of their talent management programs and practices.
References
Allen, David. Retaining Talent: A Guide to Analyzing and Managing Employee Turnover. Alexandria: Society of Human Resource Management, 2008. http://www.shrm.org/about/foundation/research/Documents/Retaining%20Talent-%20Final.pdf
Chartered Institute of Personnel and Development (CIPD). Factsheet: Employee Turnover and Retention. London: Chartered Institute of Personnel and Development, 2011. http://www.cipd.co.uk/hr-resources/factsheets/employee-turnover-retention.aspx
Chartered Institute of Personnel and Development (CIPD). The Talent Perspective: What Does it Feel Like to be Talent-Managed? London: Chartered Institute of Personnel and Development, 2010. http://www.cipd.co.uk/NR/rdonlyres/95D2D604-36C6-450A-996A-01F45F0B17C5/0/5262_Talent_Perspective.pdf
Datta, K. Deepak, James P. Guthrie. “Executive Succession: Organizational Antecedents of CEO Characteristics.” Strategic Management Journal 15, no. 7 (1994): 569-577.
Deery, Margaret. “Talent Management, Work-Life Balance and Retention Strategies.” International Journal of Contemporary Hospitality Management 20, no. 7 (2008): 792-806.
Jacobs, Elizabeth. Executive Brief: Differences in Employee Turnover Across Key Industries. Alexandria: Society of Human Resource Management, 2011.
Juniper, Paul, and Alison Hill. An Inquiry into the State of HR in Canada: Executive Summary. Kingston: Queen’s University Industrial Relations Centre, 2011.
Thomas, Kenneth. “The Four Intrinsic Rewards That Drive Employee Engagement.” Ivey Business Journal (2009).
Emerging Workforce Study. How Attracting Talent Has Changed. Emerging Workforce Study, 2010a.
Emerging Workforce Study. Maximize Social Media throughout the Employment Lifecycle. Emerging Workforce Study, 2010b. http://www.sfngroup.com/emergingworkforce/SFNGroup_socialmedia_POV.pdf
Recommended Resources
Chartered Institute of Personnel and Development (CIPD). Factsheet: Talent Management: An Overview. London: Chartered Institute of Personnel and Development, 2011. http://www.cipd.co.uk/hr-resources/factsheets/talent-management-overview.aspx
Chartered Management Institute. Talent Management: Maximising Talent for Business Performance. Ashridge School of Business, 2007.
Corporate Leadership Council. Attracting and Retaining Critical Talent Segments: Identifying Drivers of Attraction and Commitment in the Global Labor Market. Corporate Leadership Council, 2006.
Holland, Peter, Cathy Sheehan, and Helen De Ceiri. “Attracting and Retaining Talent: Exploring Human Resources Development Trends in Australia.” Human Resource Development International 10, no. 3 (2007).
Olaniyan, D.A., and Lucas. B. Ojo. “Staff Training and Development: A Vital Tool for Organisational Effectiveness.” European Journal of Scientific Research 24, no.3 (2008): 326-331.
Morton, Lynne. Talent Management Value Imperatives: Strategies for Successful Execution. New York: The Conference Board, 2005.
Ray, Rebecca L. CEO Challenge Reflections: Talent Matters. New York: The Conference Board, 2011.
Williamson, Doug. Talent Management in the New Business World. Human Resource Management International Digest 19, no. 6 (2011).
