Over the next 30 years, labor demand in the United States may outstrip supply by as many as 35 million workers. According to the Census Bureau, the percentage of our working population that is 60 or older will rise from 12.5 percent in 2000 to more than 20 percent by 2025.
According to a 2013-2014 report on Human Capital Effectiveness by PwC Saratoga, “Employees are more likely than ever to view themselves as free agents who can easily switch teams. As the economy recovers, that’s what many people may do.” Voluntary turnover has continued to rise over the years, from a rate of 7 percent in 2010 to 8.4 percent in 2012. PwC is predicting that rates will far exceed initial predictions of 8.7 percent for 2013.
What do these statistics mean for you and your contracting business? They mean that you as a business owner need to identify your top performers and best talent, and do what it takes to retain them. You can be sure that if you don’t, your competitors will lure them away. Our clients are already telling us that they are experiencing increased levels of poaching of top performing employees at all levels of their organizations.
What do we know about the current workforce? For starters, the workforce is roughly composed of the following four generations:
Traditionalists (born 1925-1946)
Baby Boomers (born 1946-1964)
Gen Xers (born 1965-1980)
Millennials (born after 1980)
Each group has different motivations, expectations, values and attitudes based on their respective life experiences. This means that in order to survive and thrive given this diverse and aging workforce, you need to prepare your business to be more flexible, more engaged and better equipped to retain not just your top talent but all of your qualified employees. So how can you as a leader create this environment?
The Right Mindset
As a leader, you need to believe that you have the power to make things happen and to capably and forcefully lead. You provide the vision, inspiration and direction to attract and motivate others to succeed. Effective leaders create the infrastructure and establish the processes by which their businesses thrive. If you don’t believe in your ability to do that, then you are setting yourself up for failure.
You can establish trust with your employees through integrity, competence and compassion. Your leadership should be guided by a set of principles that are aligned with your core values, as well as your goals for the company. It is important that your actions match your words; if you say something, deliver on it so that your employees see the follow through. Be sure to consistently demonstrate an appropriate level of care and concern for your employees.
Once you have established trust among your employees, you need to empower them by making them feel like they are partners in the business and are working toward the common goal of the company’s success and profitability. You can empower your employees by:
- Sharing information widely;
- Letting employees solve problems independently when and where they occur;
- Allowing employee participation in the decision-making process; and
- Providing new responsibilities as employees prove themselves within the company.
Proper coaching is an integral part of employee empowerment. Coaching is a planned and purposeful process that helps people develop an objective perspective on their own abilities. The goal is to enhance behavior, thought processes and performance. Through this process, you can empower employees to become your top talent.
How you best empower particular employees may vary, but as long as all employees trust you and respect your leadership, it is easy to retain talent. Keep in mind that they do not necessarily have to like you; they just need to trust and respect you. Every employee is motivated differently and operates with a different set of morals and values. A true leader is able to recognize this and develop a way to motivate individual employees accordingly.
How to Retain Your Top Talent
Once you have created a leadership environment in which your employees trust and respect you, it will be easy to identify your top talent — the group that possesses the skills and competence necessary for the company’s sustainable growth, profitability and competitive advantage. These are the employees that will prove most helpful to you in achieving the company’s goals, so it is critical that you as a leader effectively manage them. Companies with superior top talent management strategies achieve consistently superior financial performance.
Here are the steps necessary to retaining your key management:
- Leadership Benchmark — define the skills and attributes that will serve as a benchmark for assessing individual leadership capability for those who will lead your organization today and in the future.
- Leadership Fundamentals — provide your managers with a solid foundation in the fundamentals of leadership with specific emphasis on your leadership benchmark — that is, what is particularly important to your organization. This does not happen organically — managers need to be actively trained, coached and mentored.
- The Talent Pipeline — develop a process to identify and develop high potential employees and to determine whether there are opportunities to add employees who raise the performance level of your organization.
- Employee Engagement — cultivate an engaged workforce to support your management team. Engaged employees are motivated beyond the normal duties of their job description, are driven by the company’s vision, understand their value to the business and consistently support its interests. To foster an engaged workforce, make sure that employees know what is expected of them and what company resources are available to them. Be sure they feel that their opinions matter, that they are contributing and that they have the opportunity to discuss their progress.
In this slowly rebounding economy and with the demand for talented employees and managers predicted to grow, retaining those employees through effective leadership is more important than ever.
David Liddell is Founder and CEO of SKYE Business Solutions. For more information, visit www.skye-solutions.com.
This article was reprinted with the express permission of the NUCA Business Journal, which is published exclusively for NUCA members.