Talent engagement is more than “keeping people happy”—it is a set of managerial and leadership activities critical for building and maintaining a strong team while keeping talent costs reasonable.
In my previous post, I introduced readers to the integrated talent excellence model. Here, I’ll more closely examine talent engagement, which provides a good starting point for managers to launch integrated talent management for their teams.
Cost of poor talent engagement
Failure to engage talent can cause high levels of turnover, which has big financial implications. Over six months, onboarding new hires for entry level roles typically can have $12,500 in direct costs. The total cost of turnover for an entry level employees who leaves within the first year can range from $29,600 to $86,300 (based on retraining, redistribution of workload, loss of company knowledge, etc). For experienced talent, the costs can be much higher.
To keep these costs low, three key aspects of talent engagement must be managed: turnover, employee satisfaction and productivity through change.
Not all turnover is bad
Think about turnover as a 2x2 matrix on which who is making the choice to leave is mapped against the impact on the organization. People who choose to leave who are not a cultural fit or are poor performers help the organization stay healthy. When high performers choose to leave, it is unhealthy for the company. Leaders should focus on keeping unhealthy turnover near zero and accept that 10 to 15 percent healthy turnover is a good target.
Keys to employee satisfaction
Organizations need employees who are satisfied with the work, the work environment and their coworkers and managers. In particular, all employees want: a job that is interesting; fair compensation; opportunities for advancement; a helpful manager; and pride in being part of the whole.
Managers have the most influence in fostering satisfaction (or dissatisfaction). They need to create opportunities to talk with and listen to employees. Short, frequent and informal conversations tend to generate more empathy and connections between employees and managers. The best managers can deliver timely, focused feedback that recognizes the small steps in employee development, and accept mistakes in ways that help an employee to learn and grow. Encouraging the team to implement new ways of doing the work is another path to satisfaction.
Two ways to address change
To survive in the insurance industry, organizations need to maintain productivity levels through a sea of constant change. Successful companies need to utilize different change efforts depending on the nature and scope of the change itself.
One way is to address change as a project. In essence, there is a beginning (current state), middle (clear actions and milestones to show progress and engagement) and end (desired new state). This is typically called change management, and there are many models available (e.g., ADKAR, Kotter, etc). Which model you choose is less important; identifying when change is a project and when it is not has more impact on the results.
Organizations can also address change as an ongoing competency to develop; this is typically called change agility. Focus on selecting learning activities that help employees accept, adjust to and absorb constant change. Managers serve as role models by:
- Listening: creating space for employees to share frustrations, asking questions for understanding and acknowledging employees’ perspectives.
- Adjusting: being patient, speaking to employees’ interests, and changing his/her communication approach in response to different working styles.
- Engaging: Checking-in frequently, coaching others on how to learn through reflection and empowering team members to make specific decisions.
Metrics for monitoring talent engagement
Like any important initiative, talent engagement should be managed to metrics. To help you get started I recommend the following metrics and targets:
- Voluntary separation rate for one to three years of service. This is the percent of employees with one to three years of service who voluntarily left the organization during the year. Target: 15%
- Cost of voluntary turnover. What is the average cost to the organization to replace each employee who voluntarily separates during the year? Target: 75% of annual salary.
- High performer separation rate. The percentage of high-performers who left the organization during the year. Target: 5.5% or less
Metrics vary from organization to organization, but this provides a baseline to build your own measurement systems.
Talent engagement is critical for maximizing the satisfaction and productivity of the teams you have today. But it alone is not sufficient to build strong teams for the future. That’s where talent development comes in—a topic we’ll explore in the next column.
Dr. Kirk D. Fleming, MBA, is the Assistant Vice President of Global Talent Development at ReSource Pro. He has more than 20 years of experience in learning and development across a variety of industries. Since 2010, he has led ReSource Pro’s Learning & Development department where he and his team have been recognized with several international and national awards for excellence. Dr. Fleming can be reached at [email protected]
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