Recruitment market returning to buoyancy
There has been continued increase in hiring activities across all sectors in 2010. The market enjoyed a 'bull run' in the last twelve months with the financial services sector leading the way and general buoyancy across the rest of the other sectors. Following the global financial crisis, we observed that the appetite for recruitment in Singapore has returned.
Hiring expectations have more than doubled in the third quarter of 2010 (compared to the same period in 2009) and with it, saw an increased focus on employee retention. As a result, organisations are more prepared to offer higher salaries and other forms of compensation in an effort to retain their high potentials. There is a war for talent as candidates experience a greater mobility in terms of switching job roles, in lieu of a headcount growth across all sectors that made job opportunities more widely available.
Why are employees leaving organisations?
There are various reasons why employees leave their companies, with a few of the more common causes being better prospects and greater career development opportunities available outside of their current organisations (e.g. bigger portfolios, higher salaries, news of potential restructuring). Some may move also because they feel undervalued, especially when they are being bypassed by an external talent for a position within the company.
There are many other reasons why employees leave, but not all of them are as obvious and clear-cut as they might first appear. Some of them include:
- Limited opportunities for career progression
- Absence of new challenges
- Better remuneration in the new company
- Lack of clear communication
- Brand dilution and/or change of direction by the management.
The key for employee retention is in understanding these potential reasons at an early stage, and taking action with the right solutions before losing a skilled employee.
The role of HR in retention
HR has a dual role to play in order to ensure that employees feel valued in organisations. Firstly, HR has the responsibility to educate line managers on various methods of providing employee support and training in order to encourage their team to achieve optimum performance and positive value generation. It's also necessary for line managers to be adept in managing their employees’ careers (e.g. gradually providing a wider scope of job responsibilities, job security, evaluating career goals and charting a career progression path).
Additionally, HR has to provide advice and support to employees through constant communication while ensuring that they are given opportunities for career progression within the organisation. Regular sit-down sessions and/or appraisals should be conducted to show employees that their work is highly valued and essential in contributing towards the company.
Other ways to keep employees motivated could involve identifying developmental areas whereby employees would be able to improve their work performance or perhaps provide employees with more challenging responsibilities.
Additionally, the level of employee motivation could also be dependent on how well they have embraced the company’s culture. The better the culture fit, the more motivated an employee would be, and vice versa. Thus, culture fit would be one of the important factors of considerations during the process of a new hiring decision.
The employer's role
With the current buoyant market, employers are expected to offer pay increments or additional compensation benefits to ensure that employees feel valued and well rewarded for their work. Managers need to be prepared to devote a portion of their time to motivate their employees, provide feedback and ensure that they have adequate support from their team.
Additionally, it's necessary for them to show appreciation to their staff in other innovative ways besides monetary remuneration. For instance, they can have different types of employee awards (e.g. “best employee of the month”) or award incentives to staff with good performance (e.g. sales people who have achieved their targets/brought in new client accounts).
Employers should not underestimate the importance of the phase prior to onboarding the new hire in the company. In order to set a stage for new employees to feel valued from the very beginning, managers could take steps such as making an official announcement to the team and explaining the positive impact that the new role will bring to the team as well as to the organisation as a whole.
In addition, it's crucial to make sure that the team is around during the first few days for introductions, and that all access cards/computer logins are set up. All these preparations will show the new employee that his/her presence is eagerly anticipated and valued.
Retention - key to future growth
As the economy continues to improve, the job market is gradually shifting its focus to a candidates' market. Candidates are now in a stronger position than employers, and this has led to higher expectations in terms of salaries and job responsibilities. As a result, companies are finding it more challenging to attract new hires to fulfill new vacancies in demand whilst at the same time retain top employees in their organisation. Meanwhile, candidates will be more open to switching jobs for the various reasons discussed above.
To retain high potentials, companies will tend to focus more on structuring their staff retention strategies that could include reward schemes, offering salary increments or providing a wider scope of job responsibilities and exposure. Employers could also become more flexible with candidates’ requirements and expedite their hiring decisions so as to prevent running the risk of losing their preferred candidate profiles to a competitor.