Base pay and career advancement opportunities are the key retention drivers followed by convenience of work location
Estimates suggest that the cost of employee turnover often ranges from 50-200 per cent of the employee's annual salary
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As the Indian economy gasps and sputters, employers are keen to utilise the talent available rather than go on a hiring spree. So, more than often not, companies have been in the news for firing people rather than hiring people. The global race to attract and retain top talent is foremost on employers’ minds even as they continue to face major reward challenges in a slowing economy.
According to a study by leading global professional services company Towers Watson, a vast majority of organisations in India experience challenges in attracting talent with critical skills and retaining high potential talent.
The survey captures employer views from 1,605 companies worldwide, including 796 from Asia Pacific on trends and issues in areas of rewards and talent management.
According to the Towers Watson Global Talent Management & Reward Survey (TM&R), 92 per cent organisations in India experience challenges in attracting talent with critical skills and over 75 per cent in retaining high performing talent.
The reason why companies focus on high potential talent is that their contribution and impact is far above than your regular employee. These key talents become future candidates for organisational leadership. Estimates suggest that the cost of employee turnover often ranges from 50-200 per cent of the employee’s annual salary based on the type and level of job he/she holds. These costs are substantial for even medium-sized organisations that have moderate rates of turnover.
In fact, not only is the competition for employees going to increase, nearly 20 per cent of employees plan to look for a new job in the next two years and another 20 per cent plan to leave their employers within the next five years, according to a Hay Group report.
These figures suggest that there is discontent among the workforce. This is not surprising considering that employees these days are working longer hours with limited salary increases and low rewards in recent years and an increased pressure to perform.
The Top Five Global Employer Rewards Priorities Survey by Deloitte reveals that the top challenge over the next three years for HR leadership across the globe is talent – finding it, motivating it, and keeping it. When asked to identify their top personal challenges, respondents globally indicated that their primary concern is the future of their own employment security, followed closely by the ability to earn additional rewards that allow them to advance in real economic terms, and the ability to afford retirement.
In the Towers Watson survey, Indian employees scored job security and career advancement as top attraction drivers, while employers held career advancement opportunities followed by challenging work environment as the top two attraction drivers.
Subeer Bakshi, Director, Talent & Rewards Practice, Towers Watson India, said, “A vast majority of companies in the developing world continue to struggle with attracting and retaining high-potential and critical-skill employees necessary to increase their global competitiveness. Part of the solution, for companies and workers alike, lies in the articulation and execution of a strategically designed employee value proposition (EVP). In the high-stakes quest to find, keep and engage the right workforce, the EVP can be an effective tool in creating the right balance between employee preferences and employer needs — leading to stronger overall performance and improved financial outcomes. Organisations willing to drive the design, delivery and differentiation of their EVP forward can create a successful future for both the organisation and its employees.”
Incidentally, employees and employers in India seem to be in agreement on the top retention drivers with both viewing base pay and career advancement opportunities as the key drivers followed closely by convenience of work location and learning and development opportunities.
Be willing to experiment with ideas for retaining key talent – organisation, size, industry or sector do not play a significant role