Thames Valley: KPMG study suggests mid-sized companies risk losing talent
New research from KPMG suggests that despite the high cost of replacing talented staff, the majority of mid-sized companies in the country still have an erratic approach to keeping their people happy.
In a study of 223 leaders of mid-sized companies (with a turnover of between £10 million to £500m), only 29% of businesses described their approach to talent retention as “formalised”. 44% said their approach was “thorough but unplanned, with lots of initiatives which were not integrated into an overall strategy”. A further 27% admitted their approach was nothing more than ad-hoc.
In attempting to monitor and retain staff, nearly eight out of 10 companies said they carried out annual career-development reviews with staff, and seven out of 10 said they actively encouraged open and honest communication between line managers and employees. Far fewer, however, used more in-depth techniques.
For example, only 49% actively trained managers to manage their staff effectively and only 46% offered non-financial incentives to staff. In addition, only 30% attempted to capture and analyse key performance indicators of talent.
Andrew Morgan, senior partner for KPMG’s Thames Valley office, said: “Despite the fact that many of our clients frequently complain that they are engaged in a ‘war for talent’, these results show that mid-sized companies are a lot less systematic than larger businesses in their approach to talent retention.
"While that is not surprising in itself, given the perceived cost of implementing more formalised practices, the impact of a talented individual leaving a smaller business is likely to cause much larger ripples throughout the rest of the company. Talented people take time and cost money to replace. So by not adopting more formalised talent management strategies, companies are fighting this war with one hand tied behind their back.”
A relatively inexpensive practice, KPMG would recommend rewarding staff in a recognition scheme beyond the normal bonus.
Another inexpensive practice is to improve the exit interview which can often help to identify problems companies may not be aware of and which need attention. As staff are often less than frank in this situation, a useful way to find out more is to offer leavers anonymity in exit surveys. Even more important is to develop a culture where there is greater focus on honesty and regular feedback and recognition throughout the year.
