Talent management in the role of employee retention

Abstract

Retention of key productive employees is a major challenge for all organisations locally and internationally because the resulting churn created by replacing employees that voluntarily leave the organisation costs the business both directly and indirectly. The purpose of this study is to determine whether lack of talent management of employees is one of the causes of job dissatisfaction, to determine whether lack of talent management of employees contributes to employees’ intentions to leave an organisation and to determine whether talent management plays a positive part in retaining employees in an organisation. Three main themes are focused on in this report to identify and describe reasons for voluntary employee turnover in business organisations that have a profit objective, namely low job satisfaction and intent to leave an organisation, employee retention and talent management. One of the primary reasons that employees leave their current employer is better compensation from the new employer, however talent management in the form of personal development opportunities, opportunities for employees to use their skills and good career opportunities are important factors influencing an employee’s decision to stay. Factors contributing to a cumulative process of job dissatisfaction include perceptions of job inflexibility and control, employees feeling overworked, excessive workloads, concerns that existing management may not be able to effectively lead the organisation, lack of challenging work and not enough recognition for work performed and a poor work/life balance. Style of leadership plays an important role in affecting the level of job satisfaction and a more democratic style of leadership leads to better job satisfaction than a more autocratic leadership style. Job stress is also a major contributor to voluntary employee turnover as well as negative behaviour by employees feeling stressed at work. Effective talent management is essential to achieving organisational excellence and a driving force for business success. Recruiting the most talented employees may not be the best strategy for effective talent management as high fliers tend to leave organisations more quickly thereby generating significant employee turnover costs. Talent development is a more complex activity than many people responsible for HR in organisations realise. Coaching and mentoring are business tools of the 21st century and mentors enhance and can ensure the professional development and success of existing and new talented employees in organisations. HR personnel can have a positive impact on the value of an organisation through effective talent management by way of performance management, succession planning/decision analytics, targeted selection/talent reviews, development planning and support, career development, workforce planning and recruiting. Ignoring the problem of employee turnover is risky and reluctance by employers to invest resources in order to retain productive talent doesn’t help matters. Despite findings confirming that employees reach a decision to leave their current employer for something better, the leaving process remains a very complex process. The case study in this report found that job satisfaction of employees was a function of remuneration, performance appraisal and feedback, work context and working environment and the affect of leadership. Talent Management of employees in the case study was a function of motivation for superior performance, training and development, job enrichment (variety of jobs), performance reviews and attraction of talent (and opportunities for promotion). Employee Retention of employees in the case study was a function of leadership, employment equity and equal opportunity, and influence of manager (direct superior). All these factors are supported by existing academic findings both locally and aboard. Business leaders are increasingly acknowledging that talent does matter, but finding it difficult to measure precisely how valuable talent is. There are similarities between the reasons why employees in SA and the US leave organisations of their own accord. In SA there is a significant disconnect between what young, talented black employees want from their employer and what most corporate employers were offering leading to the damaging culture of ‘job hopping’. Money hardly played a role in the decisions of 65 percent of black employees that changed jobs at least once out of the three preceding years. Rather, ‘push’ or ‘pull’ factors influenced the employee’s decision such as culture clash and/or hostility at work and/or lack of recognition and the spirit of being an entrepreneur and personal growth/new challenge. Local research has found that the top five variables impacting on talent retention in SA are challenging and meaningful work, advancement opportunities, manager integrity and quality, empowerment and responsibility and new opportunities/challenges. Talent and knowledge management are linked and together form an important source of competitive advantage in the SA context and talent management should be a strategic business priority in order to retain employees for sustainable competitive advantage. The general conclusion of this report is that talent management in the role of employee retention cannot be seen in isolation. It needs to be considered along with factors influencing job satisfaction and employee retention. Results from the study indicate that organisations need to focus on all the above factors of job satisfaction, talent management and employee retention to address voluntary employee turnover in order to curtail the drain of talent from their organisations. These strategies should achieve outcomes such as preservation of sustainable competitive advantage, better motivated and effective employees generating better business results and an increase in value of the organisation as a whole. The research problem investigated in this study attempted to analyze whether lack of talent management of employees is a cause of job dissatisfaction and employee turnover in a specific case study of a regional office of a local South African bank. Existing literature on the subject of job satisfaction; employee retention and talent management does not describe the role talent management plays vis-à-vis other variables.The case study contained in this research could not reach any meaningful conclusions due to a very low response rate to the questionnaire on which the case study was based. Despite this limitation, general conclusions were drawn from existing academic literature and valuable findings extracted from a qualitative analysis of responses to the questionnaire. Recommendations are put forward in this report to guide organisations how to focus on factors that influence job satisfaction, talent management and employee retention which should assist in addressing employee turnover to curtail the drain of talent from local organisations.