By DAN REYNOLDS, senior editor of Risk & Insurance®
Do you know Jay and have you seen the man operate? When it comes to client service, Jay is so smooth that he is like butter.
And creative? The ideas come out of his head like bees leaving the hive on a balmy day in May. And the ideas fly in almost as frequently, usually laden with that golden pollen.
And committed to what he does? To paraphrase Donald Fagen, the lyricist, vocalist and composer, the work Jay does is deep beneath his skin, it's what he majored in.
But do you know Jay? And if you think you know him, how well do you know him?
Because I've got news for you; Jay is ready to leave you. That's right, he's uploaded his contact list from your server, he's transferred his important documents from his user drive, he's said goodbye to the dusty artificial ficus plant in his office, he's cast one last wistful look at your receptionist, and he has got one foot out the door.
And why is he leaving? Because, to be brutally frank, compared to the attention you should be giving him, you give him about as much attention as you give the dusty ficus.
For Jay and his imminent "sayonara" slap to your company logo is a fictionalized representation of talent risk, otherwise known as talent flight risk, a concern that companies have got their sensors honed in on right now.
"It is such a hot topic with all of our clients right now," said Jane Kwon, a New York-based vice president in the talent and reward group for Aon Hewitt.
And why is this topic so hot?
The economic downturn and the Great Recession led to the great thinning of the work force. Those that kept their jobs took on that much more. And they knew times were tough, they did the extra work, expanded their expertise and kept their mouths shut, even as their perks were cut, their wages frozen, and some of their colleagues ushered out the door.
A RESUME RIPTIDE
But the tide is always turning and it is turning now. Not in the form of the résumé tsunami that we sometimes see coming out of recessions. This time around, it's a different sort of a tidal movement, according to Jeff Schwartz, the McLean, Va.-based principal with Deloitte Consulting and leader of U.S. talent services for the company.
"I don't know that we're seeing a résumé tsunami, but we are certainly seeing a résumé riptide," Schwartz said. In focused talent segments of the economy, there is talent on the move and there is hunger for that talent.
"Each industry and each sector has a small number of critical workers that have very important skills that are in very high demand and although the aggregate employment level isn't going up, the activity within these critical sectors is incredibly hot right now," Schwartz said.
Research and development (R&D) is one of those places.
According to study results reported by Deloitte in December 2010, 72 percent of executives surveyed said they foresaw either a moderate or severe talent shortage in their R&D ranks in 2011. The same study found that 56 percent of executives surveyed expected moderate-to-severe talent shortages in executive leadership. The survey reported that 52 percent of executives forecast a moderate-to-severe shortage in sales.
We all know that not all employees are the same. Some, like our fictitious friend Jay, are more talented and double their value through their commitment. It's those 10 percent of employees who are the most engaged in their work that companies can ill-afford to lose, Kwon said. Those are the employees that on the revenue-generation side of the equation, are your innovators. On the stop-loss side, they are the employees who know the business well enough to help you avoid catastrophic loss.
And if you bungle the relationship with that sort of talent? "You run the risk of not having the people who can drive the growth that you and your competitors are focused on," Deloitte's Schwartz said.
And those sharper employees are the ones, just about right now in the scheme of things, that are evaluating their relationship with their employer and deciding whether they are being cultivated and nurtured, or whether they are being exploited and overworked.
"When we looked at the data, those that are in the highly engaged bucket, they are asking that question more seriously, 'What is going to motivate me to stay here?'" Aon-Hewitt's Kwon said.
"We saw that more than half of them are saying that they are planning to go somewhere else and that is a huge cost to an organization," Kwon said.
Mary Mosqueda, a St. Louis-based compensation practice leader with Lockton, said she saw first-hand the panic that ensued when one of her clients felt it was at risk of losing two key sales producers.
"They call and say, "How can we keep them?' " Mosqueda said. "And I say, 'Well, did you ask them? Let's get them on the phone, what is it that they want? Sometimes it's the easiest things you forget," she said.
Rather than focus on just one piece of the compensation puzzle, Mosqueda said her firm advises clients to use a "total rewards" approach. That is, looking at such things as pay, benefits, career development, job sharing, telecommuting and other lifestyle factors to determine which pieces of that mix will satisfy an employee and make them feel like a company has made a commitment to their long-term happiness and security.
And don't forget, different generations want different things. To older employees, who use healthcare services more frequently, the strength of that piece of the benefits package may be more important. To younger employees, who may feel the fun quotient rules, the social atmosphere they have at work could outstrip all other considerations.
Indeed, the Deloitte study found that Generation Y employees, those under age 30, valued company culture above all else. Baby Boomers, those aged 45 to 64, mostly wanted additional healthcare and pension benefits.
That's good to know, but what might be even more important, is that like our friend Jay, many U.S. employees are not all that happy with their employers.
The level of motivation that U.S. employees had to help their companies succeed went down significantly from 2007 to 2008, Kwon said. The factor dropped even more significantly from 2008 to 2009, Kwon said. The Great Recession is likely to have played a part in explaining the 2007-2009 declines.
From 2009 through 2010, that decline stopped. "So if we wanted to view that as a positive we could," Kwon said.
But don't. Because all that means is that those engagement figures stopped sliding and there is serious doubt as to whether they will ever get back to where they were in 2007.
It's not hype to posit that we are in a new economy. There was a recession--indeed a near depression, according to some--in the United States and Europe. But there wasn't anything close to that in Asia, and that has led to more intense international competition, not just for customers, but for talent as well. "As we come out of the recession we are realizing that it is not as if there is an easy set of markets to sell into right now," Deloitte's Schwartz said.
Add to that the more intense regulatory environment that we are seeing in this country in the wake of the financial crisis, and that means that managers and senior executives with an effective knowledge of regulatory risk management are that much more valuable.
"There is a pretty hotly contested market for people who understand risk and regulation and compliance itself as most risk managers know," Schwartz said.
"So, it is a different world and the economic state is completely different," Kwon said.
"Employees are sending the message that it's no longer about what I can give to the organization, it is about what the organization is willing to give to me."
April 1, 2011
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