In a market full of job seekers, nearly 60 percent of North American employers have trouble attracting critical-skill workers, according to the 2011/2012 Towers Watson Talent Management and Rewards Study* of 316 organizations. This problem will likely persist beyond the economic recovery, making retention of specific employee groups a top business priority.
Particularly in tough economic times, it’s important for employers to identify the critical talent in their organization and ensure they are rewarded for their contributions in a way that matters to them. Critical-skill employees are those who possess skills the organization needs most to compete. Nonetheless, the study found that only 44 percent of organizations identify such employees.
“There are certain employee segments within each organization that are more critical than others,” says Towers Watson Talent and Reward consultant Greg Kuczaj. “There’s a stronger correlation between their performance and the performance of the company as a whole compared to other employee segments. Differentiating rewards for these critical roles has pmven to provide the greatest return on investment.”
Employers continue to react to economic uncertainty by tightening merit budgets while expecting more hours from their employees. In fact, most organizations (65 percent) expect employees to work more hours than before the recession, and more than half (53 percent) expect this trend to continue. However, money-saving measures that affect work/life balance may result in unintended consequences by reducing critical-skill employee retention. Donna Bahr-Landsea, a Florida-based Towers Watson managing consultant, says that employees are already feeling burnt out from having to produce more with less staff.
“We can help employers understand what employees truly value, identify gaps and realign their programs to achieve their overall business strategy,” says Bahr-Landsea.
Employers are missing an opportunity to ease the difficulty in attracting and retaining the best and brightest. Talent management and reward programs represent significant investments of time and money that can be used to lower the risk of losing key talent and keep undesired attrition low. Three key principles identified in the Towers Watson study can guide organizations in creating a sustainable talent management and reward model: integration, segmentation and agility.
Integration involves a company aligning its reward and talent management programs with each other and within the larger framework of the business’s strategy and objectives. The study found that organizations doing this are more than twice as likely to report being high-performing companies. Moreover, such companies are less likely to have trouble attracting or retaining critical-skill employees.
Segmentation involves delivering a different employee experience to employee segments to meet their needs cost effectively. Employee segmentation reduces ineffective spending on human capital programs. By understanding which employees have the most impact on the bottom line and customizing talent management and reward programs to retain and engage them, employers can maximize their return on investment.
Agility involves an organization adapting programs to changing business or economic conditions to more effectively manage risks and improve performance. The simplest way to create agile reward and talent management pmgrams is to build in flexible benefits, comp time, alternative work schedules or remote work arrangements.
Organizations that strive to create longterm competitive advantage can attract and retain key talent by developing a sustainable model for talent and rewards. When applied, the principles of integration, segmentation and agility can help employers reduce human capital risks and get the most out of their reward and talent management programs.
*For more information on the study, visit towerswatson.com/research/5563.
Ashley Cisneros is a co-founder of Chatter Buzz Media, an Orlando Internet marketing firm that helps companies and organizations engage with their target markets through inbound marketing via the Internet. Chatter Buzz Media, which won the Social Madness competition for the Orlando small business market, is a full-service digital marketing firm specializing in website design, search engine optimization (SEO), social media marketing and content creation. Prior to founding Chatter Buzz, Ashley worked as a newspaper reporter, magazine editor, technical writer, marketing manager, public relations practitioner and freelance journalist. To see Ashley’s content writing, visit www.ashleycisneros.com. You can also reach Ashley on her Google profile.