Executive Guidance for 2010: Confronting Six Enemies of Post-Recession Performance

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Enemy #2: Productivity Losses Due to
Top Talent Disengagement and Flight

7%The average organization faces an imminent 7% productivity loss from the combination of departing top talent and undermanaged recruiting pipelines.

Recent economic turmoil and the resulting layoffs, reorganizations, and wage pressures have exacted a huge toll on the workforce of most companies. While most CEOs derive some level of comfort from having identified and retained their most important people across this period of tumult, just underneath the surface lurk two troubling trends:

  1. The combined damage of employee disengagement and employer inaction
    First, there exists quiet yet dangerous disengagement among companies’ best
    employees—which means most of your strategies are built around those most likely to leave. Over the past six months, high-potential employees expressed 13% increased desire to leave their company within the next year, compared to no change in this desire for non-high-potential employees.

    Second, employers are showing lax recruiting activity, despite 75% higher application volumes. Most recruiters are discarding applications from individuals unqualified for open positions, rather than storing them and creating a talent pipeline for future needs.

    These two facts together create a harsh reality: when companies lose even a small segment of their high performers as economic conditions improve, they will find key projects crippled by the lack of available talent.
  2. Well-engaged but potentially immobilized employees
    Sixty percent of engaged employees are not directing their efforts toward the firm’s top priorities    . As a result, most companies have suffered significant productivity loss from disengagement and misdirection right when they are trying to execute enormous change in their organizations.

 

Confronting the Enemy

  • Carefully monitor and manage elevated attrition and disengagement among high-potential employees.
  • Keep recruiting pipelines full.
  • Consider competencies that are hardest to replace when considering staff reductions.
  • Take advantage of managers and peers to focus employees and ensure mobilization rather than using top-down communications.