Keeping Top Talent: How Leaders Can Manage Increasing Employee Turnover

© VRD -

A weak labor market associated with the economic downturn may have held down turnover rates in many organizations. But, it could be argued that we have been in the eye of a turnover storm.

Data from Hay Group’s employee opinion database, including responses from over 1.69 million U.S. employees working in 152 organizations, offer leading indicators of future turnover. And the trends indicate cause for concern.

The percentage of U.S. employees indicating an intention to remain with their current companies has declined 8 percentage points since 2009, with the result that 44 percent are now reporting plans to change employers in the next five years. Perhaps recognizing these shifts, fewer U.S. employees are confident about the ability of their companies to retain high quality employees, falling from 56 percent in 2009 to just 43 percent presently.

Where to focus to keep top talent

Those organizations that fail to identify and act on issues negatively affecting employee commitment during this break in the storm are likely to find employees exiting in increasing numbers as other opportunities become more plentiful. High performing and high potential employees, who can find alternative opportunities even in tough labor markets, are particularly likely to be turnover risks.

Where should leaders be focusing now to keep more of their top talent?

To provide insight, we conducted additional analyses on Hay Group’s employee opinion database. We isolated employees who indicated that they are committed to their companies for more than two years (the “stayers”) and compared them with employees reporting intentions to leave within the next two years (the “leavers”).

Five key retention factors

By examining the largest gaps in workplace perceptions between these two groups, we can identify key factors affecting employee retention.

  • Playing for a winner. Employees are unlikely to bind their futures to organizations unless they view them as well led and headed in a positive direction. Some 60 percent of “stayers” report trust and confidence in company senior management, versus just 35 percent of the “leavers.” The “stayers” also report considerably more faith that the direction and goals of their companies are the right ones at the present time (73 percent versus 51 percent).
  • Somewhere to go if I stay. Today’s employees have become increasingly aware that they are responsible for managing their own careers. As opportunities for career development are among the most consistent predictors of employee engagement, it should not be surprising that the “stayers” are much more optimistic about their ability to achieve their career objectives with their current employers (64 percent versus 31 [percent). Likewise, 67 percent of the “stayers” report that their supervisors provide ongoing coaching for development, as compared with 45 percent of the “leavers.”
  • A fair exchange. If organizations want employees to do and deliver more, it’s essential that they have confidence that they are valued as people, that their extra efforts are recognized and appreciated, and that there is a reasonable balance between rewards (tangible and intangible) and contributions. The “stayers” rate the care and concern for employees displayed by their companies much higher than the “leavers” (62 percent versus 39 percent). And they also report greater levels of satisfaction with the fairness of their pay in relation to the work they do (53 percent versus 31 percent).
  • Support for success. As many employees are being asked to do more with less, they need to feel that they are working “smart” as well as hard. Of particular concern are efficient work processes and collaborative support from co-workers to allow employees to perform at their best. The “stayers” give their companies higher marks for being effectively managed and well run (73 percent versus 51 percent) and are considerably more favorable regarding cross-work unit working relationships (63 percent versus 41 percent).
  • A sense of control and influence. Critical to optimizing work processes, especially in dynamic environments where goals and objectives are frequently changing, is leveraging the ideas and input of employees at all levels. Some 73 percent of the “stayers” indicate that they have the authority necessary to do their jobs well, as compared with 51 percent of the “leavers.” The “stayers” are also more positive about the support their companies provide for employee creativity and innovation (70 percent versus 48 percent).

Implications for employees, too

Taken together, these findings provide organizations with a road map for managing increasing turnover risks in the months and years ahead.

Article Continues Below

Leaders who are successful in keeping their best people will need to foster a positive view of future company prospects and opportunities for individual growth and development, focus on structuring work environments to support employees’ success in their roles and leverage employee input to promote high levels of effectiveness, and reinforce the balance between what employees contribute and what they get back from the organization in return.

The findings also have implications for individual employees.

Research has generally suggested low correlations between the reasons employees cite for leaving in exit surveys and explanations given in follow-up surveys months later. While some employees may be less than candid with their employers at the time of exit, others may simply struggle to identify and pull together the sources of their dissatisfaction.

Are you feeling frustrated in your current job and thinking of quitting? If so, consider whether these turnover factors hit home for you. Your manager would likely appreciate discussing them now – as opposed to learning about them in a resignation letter.

Mark Royal is a senior principal in Hay Group Hay Group’s employee research division and a co-author of the new book, "The Enemy of Engagement: Put an End to Workplace Frustration – and Get the Most from Your Employees." Contact him at


1 Comment on “Keeping Top Talent: How Leaders Can Manage Increasing Employee Turnover

  1. All solid ideas for reducing turnover, Mark. Couldn’t agree more with your last point–sense of control and influence–to employee retainment. We have seen time and time again at Mom Corps that when employees feel in control of their work situation, through less top-down authority and more schedule flexibility, they simply perform better and want to stay on board. –Allison O’Kelly, founder/CEO of Mom Corps 

Leave a Comment

Your email address will not be published. Required fields are marked *