How many leadership positions in your company have a successor in place? According to Human Capital Institute, only 14% of HR professionals say they have strong bench strength within their company.
Employee retention is an often overlooked – but increasingly important – element in talent management and succession planning. With external forces of change constantly in flux, occasional abrupt departures at the C-suite level and an unemployment rate at an all-time low (3.7%), retaining a healthy and sustainable workforce is crucial for success.
Adding to the tight talent market, the multi-generational workforce presents its own challenges. A 2019 Deloitte survey of millennials reports that 49% would quit their job within two years, and that 25% of the same respondents reported leaving an employer within the past two years. Meanwhile, 10,000 baby boomers are retiring every day. Because of these factors, many companies will have a serious shortfall of leaders within the next five years.
One of the biggest mistakes a company can make is assuming its workforce is content. Organizations must have open communication with employees in order to gauge job satisfaction levels, highlight problems that require resolution and provide more of what employees seek.
A 2018 Gallup study revealed that employee engagement is on the rise, with 34% of U.S. workers saying they are engaged (this ties the highest score in the study’s history). Additionally, the number of actively disengaged employees is down to 13%, a new low. Yet, the remaining 53% of workers report they are “not engaged,” which infers that many are satisfied but not “cognitively and emotionally connected to their work or workplace.”
Millennials have a bad reputation of job-hopping, and here’s why: They view development and engagement as more than just training, and many companies have standard training or engagement programs that just don’t work anymore. In today’s culture, job satisfaction isn’t solely a reflection of the organization itself, but of the opportunities presented to employees. Employees expect coaching, mentoring and rotation through different roles. They also expect opportunities to have a real impact on the organization. If an organization doesn’t offer these opportunities, employees will move on.
Every company seeking low turnover rates should consider what it offers to its talent that makes it a “great place to work.” This may include an assortment of factors that contribute to an appealing, sustainable work environment, such as:
Succession planning is not effective as a one-off thought or process. To minimize both internal and external challenges to employee retention, it must be engrained in day-to-day operations – an ongoing process.
For example, we worked with an organization whose designated successor had battled a serious illness, which impacted this person’s presence and performance. In turn, this required others to step up and ultimately necessitated a restructuring of the succession plan. The new succession plan has led to a new organizational strategy with a new set of skills needed for the future CEO.
Retaining valuable talent and keeping them engaged is an ongoing commitment and process. Organizations that offer their people sustainability, opportunities and meaningful engagement will fare well in the end, making their workplace one that is well-loved and hard to leave behind. Determine what your talent lacks in terms of job satisfaction, use your resources to meet those needs and protect yourself from a shortage of leaders in the future.