Employee turnover and employee engagement are the biggest challenges talent management professionals are facing at the moment. This is closely followed by — and strongly linked to — creating a company culture to attract and retain talent.

These findings, from a survey of 200 HR professionals carried out in February 2018, are hardly much of a shock.

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Last year we reported that a quarter of Americans feel unmotivated and indifferent about their jobs, and almost half of employees in the US were thinking about changing jobs in 2016.

In this research report, we’ll look at ways to overcome these challenges, as well as other talent management strategies that are emerging that can transform your business

Key findings

  • Employee turnover is the biggest talent management challenge for 21.9 percent of respondents, compared to 21.6 who cite employee engagement as their main challenge.
  • 47 percent of HR professionals have a talent management policy not just for developing individuals, but for the development of the team as a whole.
  • 69.4 percent of respondents say that this policy has improved employee engagement.
  • 64.8 percent of respondents believe that their current performance management processes are effective in developing talent.

Improving employee retention and engagement

There are two words that come up again and again regarding attracting and retaining high-performing talent. These are “employee experience.”

According to research firm Gartner: “By 2022, organizations that made sustained investments in employee experience will achieve a net 10 percentage point improvement in employee engagement scores.”

Employee experience is key, so how do companies go about improving this to attract and retain talent?

Managing talented teams

One area we were keen to explore is the idea of talent management for teams, instead of just individual employees. The idea is that, instead of assembling teams based on factors such as location, job role, time at the company, etc, that companies group their best workers together into a team.

The benefits of talented teams has already been quantified. According to Harvard Business Review: “A five-member team, comprised entirely of A-players, can produce 16 times as much output – or the same output in one-sixteenth the time – as the sum of five average players working individually.”

So far, adoption of talent management policies for teams has been slow, with only 47 percent of our respondents already having practices in place.

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We asked those HR professionals who have a policy for managing teams just what impact it has on those two key challenges of employee turnover and employee engagement to find out if switching to a new style of talent management more in line with emerging work styles could help.

More than half of our respondents said it has decreased employee turnover, but a quarter say that their policy of managing talented teams has had no impact.

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The results are more pronounced for employee engagement, with more than two thirds of the HR professionals surveyed saying it has increased employee engagement.

The main kind of activities companies offer in terms of developing these teams include:

  • Development workshops or lectures
  • Team-driven goals
  • Group mentoring

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Overhauling performance management

Another talent management area that can help improve employee engagement and boost retention is performance management.

In terms of current performance management processes, almost two thirds of HR professionals in our survey said they are effective at developing talent.

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However, this jars with research from Gallup which says that only 14 percent of employees strongly agree that their performance reviews inspire them to improve, and only two in 10 strongly agree that their performance is managed in a way that motivates them to do outstanding work.

In addition, performance management practices are failing to develop internally the skills needed for companies to succeed. Research from Gartner (paid clients only) revealed that CEOs cite talent and skills as the number one internal constraint to business growth.

In addition, almost two thirds of employees feel they could be more effective in their job if their employer offered more training.

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We reported last year on a new kind of performance management that ties goals to an employee’s overall purpose and aspirations, even if this leads to them eventually pursuing opportunities elsewhere.

If you are wondering what’s in it for you and your company, then the answer lies in the creation of a workplace culture that both attracts and retains top talent. This top talent, then attracts more high performers in the form of employee referrals, with recent research showing that employee referral provides the shortest time to hire.

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Research firm Gartner reports: “By looking at individual careers as a series of experiences aligned to a purpose, organizations can be more agile. By enabling individuals to chart their own course and follow opportunities — both within and outside the organization — they can reap the benefits of a great employer brand that supports and encourages growth without the constraints of fixed career paths.”

This means that instead of creating development plans that are tailored to the requirements of the organization, department or role at one particular time, companies should allow individuals to pursue opportunities that align to a purpose, rather than a specific job role.

To this end, we ask HR professionals what methods they use to set goals— whether they come from the top down, or whether it’s more collaborative, and allow employees input in terms of moving towards their overall purpose. Almost half responded that the line manager and employee set goals together, although more than two thirds said it was line manager.

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These goals, however, are still based mostly on team/departmental objectives (43.4 percent), and overall company objectives (25 percent), with only a quarter reporting that it’s a mix of company and personal objectives.

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Ensure intercompany mobility

In the past, the ideal career path has been linear, moving up through the ranks until you get to the lofty heights of the C-suite, with a compensation package to match. In today’s world of working, this approach has changed.

Gartner explains: “Talented people are not focused on moving from one level to the next in a compensation and job framework, but exercising their talents in varied ways until new opportunities lure them away to build new things that will contribute to their personal success but also that of their previous employer.”

This means the companies should ensure that employees have access to a wide variety of coaching and mentoring opportunities, whether this be from managers or peers, both inside and outside the organization. Job and role flexibility is also required to help employees identify what kind of job opportunities they want to pursue, and discover their personal values and purpose.

With this in mind, we asked HR professionals how common it is to move between departments in their company.

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The results show progress in this area, with almost two thirds of respondents say ing it is common for employees to move to roles within different departments in the company.

Map the employee journey to adapt to the new digital workplace

To improve employee engagement and retention, and to transform talent management processes to attract and retain the highest performers, companies need to embrace the digital workplace, and provide a culture, environment, and technology that enables it.

According to Gartner, by 2020, organizations that support a choose-your-own-work-style culture will boost employee retention rates by more than 10 percent.

It says: “The employee experience within the workplace is inextricably linked to organizational decisions about workplace design, availability of technology to work more effectively, and organizational design.”

The office environment

Let’s look first at the physical space for the many companies that are still investing in their offices, rather than going remote. The office environment is crucial in contributing towards employee wellness, which boosts engagement and retention.

According to analysis from Gartner:

“Numerous studies explore the relationship between the physical space and the employee experience. They establish that employees who enjoy their physical work environments are more engaged, productive and happy. Nearly 7 percent of workers said that physical workspace would be a major factor in considering leaving for a position outside their current organization.”

Tom Paladino, CEO and founder at Paladino and Company, explains: “Architects, developers, and building operators need to design their space with wellness in mind. The good news is that some have already started to recognize that wellness frameworks play a critical role in building design, business operations, and social responsibility. For example, the WELL Building Standard has become the top third-party validation for organizations pursuing a certifiably well space.”

HR solutions

The right worker-centric technology can help HR professionals overhaul their talent management strategy to improve the way they attract and retain talent. However, companies should recognize that the way these solutions will (and should be) deployed and used across different jobs roles, locations, and demographics will differ.

Gartner explains it as the following:

“It is important to stress that organizations should expect that experiences are not one-size-fits-all, particularly as the workforce spreads across geographies, cultures, age groups and jobs.

“For example, a baby boomer manager in Europe would have different perception about the expected use of mobile functionality than a millennial employee in India. Similarly, required functionality for timely performance management for retail stores’ seasonal nonemployees will be vastly different from that of a professional office-based employee role.”

Taking a leaf out of the book of retailers and ecommerce businesses, HR professionals should draw up user personas and employee journeys to better understand the needs of the staff and how this differ across cultures, jobs, ages, locations, and job profiles.

According to Gartner, HR professionals need technologies that will collect, track and monitor the information needed about each individual workers and their capabilities to accurately and fairly match talent supply and demand at scale.

It says: “Perhaps we will see a convergence of ideas from e-commerce domains with algorithmic pricing and gig economy domains where networks of independent professionals promote their own work and seek other workers to complete the work they cannot do, for the right price.”

Next steps in transforming your talent management strategy

stIf you would like to find out more about how to choose the right talent management solution for your business that meets the needs of all your employees, or to find out what other users recommend, here are some resources that can help:


Survey Methodology

This research is based on a survey of 215 full time HR professionals in North America. The survey was carried out in January 2017 using online survey tools.

If you have any questions or would like to get in touch regarding use of the charts above, please contact karen@getapp.com.