Many companies today are investing in the talent they have. They have realized their investment in their current employees will pay benefits in the long run with increased retention, loyalty and commitment which all lead to higher levels of employee engagement. Let’s explore how we got to this point.
The baby boom generation began to hit retirement age in 2011. Over the course of the next 10-15 years, people will retire in numbers never seen before in the U.S. The generations that follow do not have the same sheer numbers as the baby boom generation. Even if demand for employees stays the same, the supply will inevitably go down. Increasingly, employers are becoming more sensitive to the cost of employee turnover (costs of having the position open, recruitment, and training a replacement, to name a few). They are finding, in many respects, it is much less costly to retain your employees versus replacing them, especially since we have transitioned to a knowledge-based economy.
In addition to the pressures of increased cost of employee turnover, recent employee surveys show many companies are struggling with the lack of employee engagement:
- Lost productivity of actively disengaged employees costs the US economy $370B/yr. (Gallup)
- 78% of engaged employees recommend their company’s products/services; 13% of disengagedemployees recommend their company’s products/services (Gallup)
- 86% of engaged employees very often feel happy at work; 11% of disengaged employees very often feel happy at work (Gallup)
Companies are focusing on talent management to improve employee engagement and development. What is talent management? It is a relatively new discipline housing the roles of competency modeling, assessments, on-boarding, career management, retention strategies, succession planning, executive coaching, leadership development and coaching.
Companies that are focused on winning the war for talent will not only focus on a strong recruitment strategy but also on a comprehensive talent management strategy. Progressive companies are investing in their current employees through talent management strategies focused on increasing employee engagement and development. This is especially important to employees of Generations X and Y who, in general, are focused on “what can the company do for me and my personal growth?” So when employers are determining where to invest, there are many compelling reasons to invest in talent.