Benefits July 27, 2009

Employers Focus on Retention Strategies, Anticipating Economic Rebound

July 27, 2009 (PLANSPONSOR.com) - In a new research report Deloitte reveals that while headcount reductions and other cutbacks remain prevalent, many surveyed executives are also beginning to sharpen their focus on retention and employee development initiatives so they can be prepared when the economic turnaround begins.
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The third in a series of a five-part longitudinal study, “Managing Talent in a Turbulent Economy: Clearing the Hurdles to Recovery,” finds for the first time that the number of surveyed executives who said the worst is yet to come declined – from 32% in March to 18% in May. According to a press release, the group who believes the worst is behind us doubled to 16% from 8% in March.

Nearly two-thirds of surveyed executives (65%) are highly or very highly concerned about losing high-potential talent in the year after the recession ends. The announcement said talent managers and business executives surveyed see greater turnover potential among younger employees.

Generation Y (under age 30) workers were considered most likely to be on the move, with 63% of executives predicting an increase or a significant increase in turnover among this group, followed by Generation X (ages 30-44) at 46%. Only one in four expect an increase in departures by Baby Boomers (ages 45-64) or Veterans (over age 65).

“Once the recovery begins to take hold, business executives and talent leaders can expect a ‘resume tsunami’ as voluntary turnover rises with leaders and workers with critical skills seeking new opportunities,” said Jeff Schwartz, principal, Human Capital, Deloitte Consulting LLP, in the press release. “The depth and quality of retention planning today will likely separate the talent winners from the talent losers tomorrow.”

Despite cost-cutting measures cited, nearly half of executives and talent managers surveyed (47%) say their companies plan to recruit more critical talent to manage the current economic environment – up from 34% in March.

However, cutting costs remains the top strategic priority, with 56% of surveyed executives ranking cutting and managing costs as their top strategic issue. When asked to rank their current talent priorities, 42% of executives surveyed in May put reducing employee headcount at the top of the list – slightly higher than in March (39%).

For a copy of the full research report, go here .

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