HR’s roles range from interviewing potential employees to dealing with employee conduct issues. But one of the most daunting duties HR faces is talent management. Here are the top contributing challenges.
- Tight Talent Market
Think back to the early 2000s: employers were dealing with a huge talent pool because unemployment rates were so high. This meant employers could pick and choose from a surplus of talent. But unemployment rates have gone down considerably in recent years, which means employers have less skilled talent to choose from, making recruitment focus a top priority.
Finding compensation and benefits packages that will hook today’s elusive top talent is instrumental in solving this recruitment challenge.
- High Employee Turnover
As of November 2016, 5.5 million jobs were open, up 17% from two years ago. With the abundance of jobs opportunities, skilled talent have more options to go explore than before. That means increased turnover.
In addition to the challenge of a small talent pool to choose from, replacing an employee tends to cost about one-fifth of an employee’s salary, with that number increasing for talent that requires specialized skills and training. To keep these costs down, retention is a top priority. Hooking talent is only part of it; HR must also figure out how to keep them.
- Executive Turnover
Executive positions are experiencing some of the highest turnover. On top of the high recruitment costs of replacing someone at that level, losing an executive results in a lack of leadership for the company. An unfocused or missing leadership role can have ripple effects on the entire company that ultimately negatively impact the bottom line.
Because of the high impact, executive retention often is and should be treated as a separate retention and recruitment strategy.
- Company Culture
A big driver of employee satisfaction is company culture. Open communication, relaxed environment, flexible hours and team building events are among the list of a positive company culture in today’s market. On the contrary, the rigid, closed-door policy, 9-5 structure is going out of style and if companies don’t change with the times, finding and keeping employees will be a major hurtle.
Something to keep in mind: Creating a cool company culture can’t be the only driving factor in a recruitment and retention initiative, just like great benefits can’t stand on their own without a culture to back up those values. After all, a ping pong table can’t pay for a broken arm and a 401K can’t take all of the stress away from working long hours like a common area lounge might be able to.
These elements must work together and balance each other out to create a powerful talent management strategy that hooks and keeps talent and helps talent thrive.