A shift is taking place in the business world; power has moved from employers to employees. In this Idea, the reasons behind this shift are explored, and advice is provided to organizations on how to ensure they successfully attract, develop and retain employees, and remain an ‘employer of choice’.
Traditionally, financial capital has been viewed as the primary promoter of growth and profitability for an organization. Though undoubtedly still important, executives have begun to realise there is something else that is even more crucial: human capital. How companies attract, develop and retain talent is fast replacing financial concerns, especially in light of the fact that today’s employees have more information, more choices and lower switching costs than ever before; employee retention has become a necessity.
In a White Paper published by IMD Business School, Professor J. Stewart Black highlights five seismic shifts that are taking place in the current business environment, which play a role in the changing nature of organizational talent:
These five seismic shifts have increased the importance of being an employer of choice; organizations must implement strategies that will help them address each of these dimensions, as the ability to attract, retain and engage talent has gone from nice to necessary.
According to Black, one approach organizations can take is to focus on strengthening employee attraction, retention and engagement through a superior employee value proposition. He points to four categories of benefits that capture 80% of what employees care about: leaders; the company; the job; and rewards. Today, employees (like customers) can access more information about these benefits, and have more choices and lower switching costs; consequently, they have more power.
Simplistic notions and measures of employee satisfaction (such as employee surveys) will need to be set aside as measuring employee value proposition is different from simply measuring employee satisfaction. To an employee, ‘value’ encompasses not just what they get, but what they pay for what they get (i.e. hours, time away from home, stress, etc.)
Employers must strive harder to understand and build superior employee value propositions based on what employees want. This, according to Black, is the key to attracting, retaining and engaging talent.
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