Take a look around your office. A third of the people you see think a new employer is the best thing 2012 could bring. And that’s true all over the world for multinational companies, as well.
This year’s annual “What’s Working” study just released by Mercer, a global HR advisory firm, might be more aptly named “What’s Not Working.” It reports that almost a third of U.S. employees are seriously eyeing the exit. And the survey found that more than half of senior managers are among them.
If your hope is to replace the retiring boomers on your staff with some of your up and comers, think again. More than 40 percent of employees 34 and younger are tweaking their resumes, too.
Who’s leaving and why
At the depth of the recession, employees were grateful just to have a job, but now the bloom is now off the rose. Employees are tired of having to do more with fewer resources, suffering through salary freezes and watching co-workers get laid off while worrying about their own fate. The stress has taken its toll. Despite economic uncertainties, employees—particularly those with the best prospects—are now confident enough to make a move.
All the demographic and labor force factors that led to the labor shortages just a few years ago are still there. But we seem to have fallen into a recession-induced amnesia about them.
The cost of losing a trusted employee is estimated at between 75 percent and 200 percent of an employee’s annual salary. That’s not including the drain on organizational memory or the cost of customers and co-workers that may follow them.
Keep your employees by keeping them engaged
How do you keep your best and brightest?
Mercer’s answer is engagement, something it calls the Holy Grail of 21st century management. An engaged employee, according to Mercer, is one who feels a vested interest in the company’s success and is motivated to exceed their job requirements.
The 2011 study points to 13 factors that influence engagement (listed in order of importance):
- Being treated with respect
- Having work-life balance
- Quality of organizational leadership
- Working in an environment where they can provide good services to others
- The type of work
- The quality of people employees work with
- Base pay
- Long-term career potential
- Having flexible work arrangements
- Learning and development opportunities
- Opportunities for promotion
- Incentive pay and bonuses
Why engagement matters
Mercer and other HR experts have shown that the effects of an engaged workforce go far beyond employee retention. Employee engagement translates into these benefits.
- Increased productivity
- Greater levels of innovation
- Improved service quality
- Higher customer satisfaction
- Reduced absenteeism
- Lower health care costs
- The ability to attract talent
- Increased competition
- Higher shareholder value
While employee preferences and motivating factors differ across industry and location, Mercer found the following four factors consistently have the highest impact on engagement:
- The work itself. In particular, employees need to understand how their individual contribution fits into the larger scheme of things.
- Confidence and trust in leadership. Managers should act in a way that’s visible and transparent.
- Recognition and rewards. Most importantly these should be internally fair and externally competitive.
- Organizational communication. It should flow smoothly up, down and laterally throughout the organization. Managers should recognize that not everyone communicates in the same way.
Interestingly, other research shows that merely paying attention to what employees have to say—through surveys, focus groups and active listening—can have a marked impact on engagement. The engagement level changes when employees feel heard, even without any real change in organizational behavior
People want to feel that they matter. They want to have some say in where, what, when and how they work. After all, work accounts for the largest chunk of time they’ll spend at one thing during their entire lives. They want to be treated like thinking adults. And increasingly, if they don’t get what they want, they’ll find it elsewhere.
Over the past 30 years, Kate Lister has owned and operated several successful businesses and arranged financing for hundreds of others. She has co-authored three business books, including Undress For Success—The Naked Truth About Making Money at Home (Wiley, 2009) and Finding Money—The Small Business Guide to Financing (2010). Her blogs include Finding Money Advice and Undress4Success.