When it comes to retaining high-performing employees, money talks. But according to new research from Hewitt Associates, it can’t buy loyalty.
The human resources consulting agency found that top workers who stuck around when times were tough could now be getting itchy feet as the economy shows signs of recovery.
To be competitive in a rebounding market, companies will have to hold on to their key employees. And it’ll take more than just an attractive salary.
“High-performers tend to get bored easily. They need new assignments and tasks but also things that give them the chance to show leadership,” says Rob Lewis, a senior consultant with Hewitt.
Companies should act fast.
“As the economy picks up, high performers have the most confidence, so they’re probably the first to go out and start looking for other jobs. They’re also the most attractive to your competition,” Lewis cautions.
Job variety and engagement are important, but salary still plays a factor, the research suggests.
“If you don’t pay them well, they will leave,” Lewis says, adding that raises questions in light of Hewitt’s 32 annual Canada Salary Increase Survey, which found national 2010 average salary increases were lower than raises earlier this decade.
Lewis recommends companies on a tight budget explore variable pay programs or other ways to put aside money for its high performers.
Investments in training will also be important, as many managers don’t know how to deal with top workers.
“Managers need to first identify who the high performers are and then how to reward them,” Lewis says, adding this presents “a great opportunity for human resources to take a look at its management team.”
The findings from Hewitt’s research, with more than 500 Canadian organizations reporting, mirror another recent survey by Towers Watson, which found 61 per cent of firms in Canada have trouble attracting critical-skill employees.
For 62 per cent of companies, “ensuring the readiness of talent in critical roles” was the top reported talent management priority.
“It is probably the single biggest issue we’re going to have in the manufacturing sector,” says Mark Tomlinson, executive director and general manager of the Society of Manufacturing Engineers.
He says there’s a “pyramid” of essential skill demands in the sector, starting with an understanding of how products are developed, what machines are used, and how supply chain affects production.
“As technology changes, we’re going to get away from that fundamental skill set into advanced skills knowledge specializing in certain aspects of what the industry needs,” he says.
He points to aerospace and design sector’s need for specialized knowledge of composites technology, advanced materials and electronics. In the medical sector, there’s a demand for acuity in areas like nanomanufacturing and micromachining.
Tomlinson says there’s “a collaborative effort across state, provincial and national borders” focused on the challenge of meeting workforce needs in the manufacturing sector.