In PwC’s 15th Annual Global CEO Survey, the vast majority of the 1,258 CEOs who participated said that cultivating and managing talent is their top priority. Despite the downsizing taking place throughout numerous industries across the globe, “just 12% of CEOs say they’re finding it easier to hire people in their industries. These constraints are having quantifiable impacts on corporate growth.” Even with the global economy struggling, good people are still very hard to find.
The War for Talent
PwC’s CEO survey states:
“Industries such as banking that have retrenched workers in large numbers are still struggling to get the right people.”
Two-thirds of the CEOs in the survey said they wanted to devote more attention to developing talent pipelines and “53% of CEOs want to build more diverse leadership teams.” Only 38% of the survey respondents expressed confidence that they have the talent they need to innovate, capitalize on opportunities, and grow their businesses.
Click on Graph to Englarge
Many CEOs reported that they are overhauling their strategies for managing talent using a combination of tactics. These strategies include:
Making HR a Strategic Partner: CEOs are integrating HR with strategic business planning at the highest levels of the company. Over 75% of CEOs reported that their head of HR is one of their direct reports.
Developing Better Talent Pool Analysis: CEOs want more information on their talent than just productivity and labor costs. In order for a company’s senior leadership to really understand the strengths and weaknesses of their workforce, they must:
- Measure employee engagement and team performance.
- Identify the pivotal roles that drive value.
- Isolate the gaps in skills and training.
- Understand the costs of employee turnover.
- Assess the return on investment on human capital.
Creating an Environment Conducive to Talent Retention: The price of high turnover amongst employees is staggering. The American Management Association estimates turnover costs range between 25%-250% of annual salary. The financial services industry average turnover rate is 16.6%, which is higher than the average labor turnover rate for all sectors. CEOs understand that they must work to both engage their employees and develop their in-house talent.
Employee engagement is the key to retaining talent. The PwC report states:
A study conducted by the Corporate Executive Board found that the employees who were most committed to their organisations gave 57% more effort and were 87% less likely to resign than employees who consider themselves disengaged. Yet during the recent downturn, engagement levels among top performers fell more sharply than for workers overall.
Keeping Engagement Up During Down Times
Building employee loyalty goes beyond what workers get paid. Today’s talent is looking for management that acknowledges their lives both inside and outside the office. By taking into consideration the personal needs of their workforce and offering more flexibility where possible, companies can hold onto their talent.
This is especially true for retaining women workers. In an interview with Fortune Magazine, Dan Amos, chairman and chief executive of the insurance giant Aflac, said, “The work-life benefits that are the most important to women are where we find the most gain in loyalty.”
By offering on-site daycare services, flexible schedules, and job sharing, Aflac has created an environment that helps their employees work harder and smarter while increasing engagement and loyalty. Also, half of the six executive vice presidents that report directly to Amos are women. “When women see other women succeeding, it attracts them and inspires them,” Amos said.
Aflac’s policies are certainly working. Not only is the insurance company one of Fortune Magazine’s best businesses to work for, the employee turnover is almost zero. As businesses rethink their strategies to attract, develop, and retain talent, let’s hope more leaders follow Aflac’s path.
