Mid-Sized Companies Risking Losing Talent
New research from KPMG has shown that the vast majority of mid-sized companies are risking high costs of talent acquisition after losing staff. This has been blamed on the lack of a coherent reward and recognition system in these businesses.
When we speak of mid-sized companies, that includes those with a turnover of between £10m to £500m. The study questioned 223 leaders of such companies. The report found that only 29% of those questioned had any sort of ‘formalised’ approach to employee retention. Almost half (44%) said that any approach they did have was ‘thorough but unplanned, with lots of initiatives which were not integrated into an overall strategy’. Furthermore, 27% admitted their approach was simply ‘ad-hoc’.
So what were companies actually doing?
In terms of monitoring and retention efforts, almost 80% stated that they implemented annual reviews which included career development chats with staff. Encouragingly, 70% said they fostered an open and honest line of communication between managers and employees. But when this was questioned further, any in-depth techniques were lacking.
When KPMG looked into this, they found that fewer than half of respondents had trained managers to properly manage their staff and fewer still offered any non-financial rewards or incentives. Worryingly, only 30% were making attempts to record KPIs related to performance or to analyse this information.
When staff left the company, only half of the employers questioned felt that they truly understood why that person was leaving. This was reinforced by 51% of employees saying that they hadn’t given honest overall feedback to their employers of their reasons for leaving. There is a serious lack of communication here!
Ingrid Waterfield, director, KPMG’s People Powered Performance team, said: “Despite the fact that many of our clients frequently complain that they are engaged in a ‘war for talent’, these results show that mid-sized companies are a lot less systematic than larger businesses in their approach to talent retention.
“While that is not surprising in itself, given the perceived cost of implementing more formalised practices, the impact of a talented individual leaving a smaller business is likely to cause much larger ripples throughout the rest of the company. Talented people take time and cost money to replace. So by not adopting more formalised talent management strategies, companies are almost fighting this war with one hand tied behind their back.”
As a global incentives company, we’d like to offer our recommendations for such companies. Staff retention should be a key target for companies of any size. Mid-sized companies must outlay considerable investment to recruit quality staff. This can be avoided by investing more time into existing staff satisfaction.
1. Don’t underestimate the power of employee recognition
By way of example, Attachmate Group approached us to help run an engagement and employee recognition scheme following an acquisition and influx of new employees. They wanted to integrate, engage and recognise their staff in one cohesive program. It combined monetary rewards and peer-to-peer acknowledgement. Find out the results here.
2. Do make time to understand staff exits
Each company is different; it has its own culture and values. Sometimes there just isn’t the right fit between company and employee. Exit interviews are vital to evaluate whether staff don’t understand the company culture and where they fit into it.
3. Adopt a genuinely open approach to communication
Staff feedback, as well as management feedback, should be as honest as possible. It is only through truly open lines of communication that a transparent working environment can be achieved. Neither party should be afraid to voice their concerns. And as long as it is conducted in a constructive and professional manner, potential reasons to leave can be nipped in the bud.
Find out more about how Ovation has helped companies with employee retention through reward and recognition schemes, click here.