Almost half of mid-sized companies don’t plan talent retention
Despite the high cost of replacing talented staff, the majority of mid-sized companies still have an erratic approach to keeping their people happy, according to new research from KPMG.
In a study of 223 leaders of mid-sized companies (with a turnover of between £10m to £500m), only 29% of businesses described their approach to talent retention as “formalised”. Meanwhile, nearly half – 44% - said their approach was “thorough but unplanned, with lots of initiatives which were not integrated into an overall strategy”. A further 27% said their approach was ad-hoc.
Nearly eight out of eight said they carried out annual career development reviews with staff, while seven out of ten said they actively encouraged open and honest communication between line managers and employees. While these practices were quite widely used, KPMG said that the statistics dwindled when it came to the use of more in-depth techniques.
The research found, for example, that fewer than half (49%) 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 of 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.”
“Many of the practices we would suggest mid-sized companies implement need not cost the earth but can really go a long way to improving relationships between companies and their people. For example, being able to reward staff as part of a recognition scheme outside of the normal bonus can be of minimal cost to run, but can pay for itself many times over in terms of employee motivation and engagement.”