by Razor Suleman | March 23, 2011
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Is your organization prepared to win the war for talent, or will your top performers take flight? Showing employees that they are a valued asset is a critical retention tool that will prevent current employees from becoming active job seekers. Adopting an employee-centric engagement strategy is a tactic that no business can afford to opt out of.

The Problem
Top talent is always hard to find, and the landscape for recruiting "A-player" employees is increasingly competitive. In a yearlong survey, McKinsey & Co. found that the most important corporate resource over the next 20 years will be talent.  More alarming is MarketTools’ new study, which found that nearly 50 percent of surveyed employees have considered leaving their jobs, and 21 percent have applied for another job in the past six months. The rebounding economy and warming job market are a call to action. People are the competitive advantage, and winning the war for talent will be the biggest factor in determining a company’s future success.

Even with unemployment rates hovering high and hundreds of eager job applicants, employers struggle to fill empty seats. A recent article in CFO Magazine warns that almost any company can feel the pinch as the talent demand outstrips the supply. That old "It’s easier to find a job when you have a job” saying holds true—and the first applicants considered for open positions will be top performers who are gainfully employed. The most recent numbers released by the Bureau of Labor Statistics show that more workers had voluntarily left their jobs than had been laid off. 

The war for talent has begun, and companies that have yet to initiate or revamp their talent strategies will be the ones that lose the most.  

The Solution
Top performers will always have their pick of jobs with salary offers to match, so it’s important for employers to differentiate themselves from their competition by delivering above-average employee experiences. The things that have the most influence on retention run far deeper than a paycheck transaction, and it’s important for employers to upgrade management strategies to a level that is in line with the needs of today’s employees. Here are initiatives that will have the biggest lasting impact.

1. Constant, Transparent, and Two-Way Communication  
The old HR model followed a rigid annual schedule to discuss both positive behaviors and less-than-satisfactory performance, but nowadays no company can afford to wait an entire year and lose a valuable employee over a resolvable issue. Managers should instead provide timely feedback, as high-performing people are very good at taking it in and improving as a result.  

Communication was also traditionally top-down, but today’s workforce has a much greater voice. Communication should be a constant and transparent two-way street that empowers both managers and employees to discuss performance and engagement.  

2. Performance-Based Recognition
Towers Watson found that companies whose managers were effective in recognizing employee performance saw up to 60 percent higher engagement levels than those with ineffective managers. One of the major findings of Blessing White’s 2011 Employee Engagement Report was that “engaged employees plan to stay for what they give; the disengaged stay for what they get.” 

Recognition is validation for employees’ impact on the organization as a whole and is a powerful but underutilized tool. Highlighting valuable contributions and their roles in overall objectives increases employees’ investment and boosts retention levels.  Recognition should be timely, specific, and meaningful. It should also be delivered in a way that is relevant to the receiver, whether that is publicly, during a one-on-one meeting, via e-mail, or even through social platforms.

3. Meaningful Rewards
Years-of-service awards are outdated, but 92 percent of companies still give them. For an employee who receives a fair salary, a cash bonus does little to influence motivation and retention. Personalized, performance-based rewards have a lasting impact on engagement, with travel, experience rewards, and merchandise products being the most desired. Making the leap from giving five- to 10-year incremental awards to providing meaningful choices is intimidating, but awarding employees impersonal rewards and years-of-service items certainly won’t inspire them to stick around. Rewards based on performance rather than longevity will breed a workforce that thrives on high performance and create a culture that retains its top performers.

The Return
Apart from avoiding the financial drain that turnover imposes, engaged employees are also more productive, so Gallup calls them “more profitable, more customer-focused, and safer.” Success in delivering on the employee experience is key to winning the war for talent. The difference in retention levels is stark, according to Towers Watson research that finds only 9 percent of disengaged employees have no plans to leave compared to 43 percent of engaged employees. With 2011 predicted to be the year that kicks off the war for talent and retention already falling back to pre-recession levels, it is no longer an option for a company to assume that employees will submissively stay put.

Razor Suleman is the CEO and founder of I Love Rewards, a provider of Web-based employee reward and recognition, sales incentive, and service award solutions. I Love Rewards works with top employers across North America to recruit, retain, and inspire employees, and drive results most important to business success. For more information, visit www.iloverewards.com