At the end of last year, unemployment fell to 1.4 million, the lowest rate for nearly 40 years. And more than half of all unemployment is sat with those that have been out of work for less than six months. This buoyant employment market plus a growing skills gap is resulting in a greater competition for talent.
This has significant implications for organisations who are increasingly having to fend off competitors looking to hire their top performers. Against this backdrop, all organisations, need to do all they can to keep their best employees engaged and from walking out the door. A good salary and benefits package often top of the list of ‘wants’ but engaging good people is about so much more than money.
Our research finds that people stay longer at companies that recognise their potential, yet more than three-quarters (77%) of organisations are doing nothing or little about this important aspect of talent management.
The brain drain risk
We surveyed 1,000 employees across the UK and discovered that a mere 13% described their organisation as currently doing a lot to recognise potential. They said that recognition is important to them remaining committed to their current role and, because employers are not responsive to that need, valuable talent around them is either going to waste or has already exited the organisation.
The research suggests that an organisation’s failure to adequately identify potential was responsible for nearly a quarter of attrition in the past 12 months - a significant discovery when many organisations are being challenged by increasing staff turnover.
A source of disenchantment
A high number of employees surveyed (71%) said that they would be more likely to stay with an organisation that recognised their potential, yet almost a quarter (24%) had no idea whether or not their company thought they had what it takes. Also, when potential is recognised, only 23% of employees said that there had been any investment in developing their skills.
The managers perspective
Concurrently we surveyed 1,000 managers in an attempt to uncover why the identification of potential is not being taken as seriously as it should be as a talent retention strategy. The vast majority (81%) of managers surveyed personally regarded developing potential as fairly or extremely important, while half (50%) recognised that failing to do so can lead to staff disengagement, high staff turnover and recruitment costs (43%) as well as decreased productivity (34%). Yet, a quarter of managers said their organisation didn’t consider the recognition of potential as a business priority (25%). Furthermore, nearly a third of managers (31%) feel they lack senior management support in identifying employee potential.
Making it happen
While there is understanding from managers of the importance of providing development to their rising stars, there is an apparent disconnect where organisations don’t have the formal systems set up to pinpoint these individuals in the first place. As many as 79% of managers said that they didn’t have proper assessment processes or tools in place to spot potential.
The lack of the right development programmes, which would be used to cultivate the potential that is identifying, is turning off almost a quarter (24%) of managers from even trying to find it without there being a clear means of making use of this insight.
Where to look for hidden gems
It seems that many organisations at the moment are looking in the wrong place for potential, or certainly not in enough places. Younger workers (25 – 34 year olds) at the beginning of their career trajectory appear to be the focus of attention for 62% of managers, which means that large swathes of today’s four-generation workforce are being overlooked.
The bottom line
Organisations need to take a more disciplined and systematic approach to identifying potential; many have undiscovered future “stars” sitting within their existing headcount and their first thought is to go elsewhere to find new talent.
Instead, organisations need to have a clear definition of what potential actually looks like, a clear way of measuring it, and link this to appropriate development interventions to ensure potential is optimised. By failing to do so they are jeopardising their greatest asset – their talent. Not only are organisations currently missing out on the opportunity to engage their most valuable employees, they also risk wasting – and possibly losing – existing talent at a time when it’s in short supply.