Despite the high costs involved with replacing talented workers, mid-sized businesses in the UK are struggling to keep their workforce happy, according to KPMG.
The study of mid-sized business leaders with a turnover of between £10m to £500m found that less than a third (29%) said their strategy for retaining staff was "formalised". Nearly half (44%) said their approach was “thorough but unplanned, with lots of initiatives which were not integrated into an overall strategy". And more than a quarter (27%) said their strategy was just ad-hoc.
Nearly eight out of 10 said they carried out annual career development reviews with staff, while seven out of 10 said they actively encouraged open and honest communication between line managers and employees. Yet while these practices were quite widely used, the statistics rapidly dwindled when it came to the use of more in-depth techniques.
For example, fewer than half (49%) actually trained managers to manage their staff effectively and a similar number (46%) offered non-financial incentives to staff. In addition, less than one-third (30%) attempted to capture and analyse key performance indicators relating to talent.
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.”
Away from retention strategies, another invaluable tool companies can use in trying to keep their staff is an exit interview, which can be used to identify problems that the company may not be aware of, but can be dealt with in order to prevent other people from moving on. But only half of employers said they felt they got a full and honest picture of why someone was leaving them. And only 51.5% of workers say they were open and honest about the reasons why they were leaving the business.
Ms Waterfield said: “Employers generally like to think that staff members have been lured away by competitors. For employees, however, the number one reason for moving on is to seek better career opportunities – and interestingly, trust in leadership and how often they feel appreciated are also more influential drivers for exit than many employers realise."