Cory Erickson, SPHR
President, Career Momentum, Inc.
Many companies today are investing in their talent. They realize their investments in current employees will pay benefits in the long run. Increased retention, loyalty and commitment all lead to higher levels of employee engagement.
Over the next 10-15 years, people will retire in numbers never seen before in the U.S. Even if demand for employees stays the same, the job supply will inevitably decline. As 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 it much less costly to retain employees versus replacing them, especially as we transition to a knowledge-based economy.
In addition to the pressures of increased employee turnover cost, recent employee surveys show companies are facing a lack of employee engagement.
- Lost productivity of actively disengaged employees costs the US economy $370B/yr. (Gallup)
- 70% of engaged employees understand how to meet customer needs; only 17% of non-engaged employees understand how to meet customer needs (Right Management)
- 78% of engaged employees recommend their company’s products/services; only 13% of disengaged employees recommend their company’s products/services (Gallup)
- 86% of engaged employees very often feel happy at work; only 11% of disengaged employees very often feel happy at work (Gallup)
As a result, companies are focusing on talent management to improve employee engagement and development. Competency modeling, assessments, on-boarding, career management, retention strategies, succession planning, executive coaching, leadership development and coaching are becoming the major strategies and tools used to increase engagement and retention among employees.
In today’s employment market and beyond, winning the war for talent will not only focus on strong recruiting, but also on comprehensive talent management. Progressive companies are investing in their current employees through talent management strategies focused on increasing employee engagement and development. As the focus of employees shifts more toward what companies will do for them and on personal growth opportunities, and as employers determine where to invest, talent management and employee development and engagement are more imperative than ever before.