War for talent

Human resource departments have traditionally focused on the retention of all employees, but in light of the talent war it is necessary to identify and implement policies to retain top talent.[5] Top performers are responsible for a large portion of productivity.[6] Better talent management can aid in the identification and retention of top performers.[7] This can include:

• Clear advancement opportunities - high performers are more likely to cite advancement opportunities as a reason for why they will stay with their company.[5]
• Financial rewards - financial compensation is not useful as a sole strategy to attract and retain talented employees.[7]  For high performers, salary is important, but also the opportunity for rewards based on performance - top performers are more likely to stay with companies that have contingent rewards.[5]  It is critical to recognise employee contributions and reward effort accordingly.[8]
• Alignment with organisational objectives - when employees feel their objectives and skills are not aligned with their organisation, they are more likely to move on, and top performers with more talent and skills are more likely to move on to other jobs.[8]
• Job sculpting - Top performers want challenging and interesting work, so it is crucial that is provided, in order to retain them. They are also more likely to want to stay if they feel they are making a difference. Job sculpting, matching the job to the person's values and interests, can help with this.[5]
• Development plans - individualised development plans improve retention of top performers, as top performers seek learning and development opportunities.[5][8]
• Training - training is an investment in an employee, but to benefit from the costs of this the organisation must retain the employee. Research found that training increases employee retention by 14% across all training measures studied, and 18% for credible training (from external institutions).[9] There is a flip side - the same research found that retention is reduced by up to 2.5% in general when training is visible and portable, and by 4% when credible. However, the overall effect is still positive.[9]
• Leadership behaviours - research has found that six leadership behaviours are predictors of talent retention: acknowledgement of employee background and experience; understanding employee motivations; respecting employees; taking responsibility; treating employees as individuals; and providing stimulation to maintain employee’s interest at work.[4] Leaders who demonstrate empowering behaviours have a positive influence on retention.[4]

Talent management practices used alongside employee engagement initiatives leads to improved talent retention.[10]

The COVID-19 crisis may have triggered a change in workers’ preferences. Workers, including those that have been on the front line during the pandemic, are no longer accepting low-quality jobs that are characterised by low-pay, and poor working conditions e.g. shift hours, health risks and strenuous tasks, as well as poor social benefits. Retail trade, food and hospitality, as well as manufacturing exhibit the highest rises in attrition. As the labour market tightens post pandemic workers quitting their employer may not necessarily switch industry or occupations; rather, as vacancies are on the rise, they may be offered better pay and working conditions for the same activity by another employer [17]

One of the most critical issues is finding the right people, something many organisations appear to be struggling with. A 2016 digital business study found that the ability for ministries to attract and retain talent was one of the most serious, and most overlooked, digital threats governments faced.

There are four main streams of research on Talent Management which both the public and private sector can consider when they are developing a way to win the war for talent [18][19]

First, Talent Management is viewed as a rebranded human resource practice that highlights the importance of external hiring from the labour market. This talks to grounding talent management in a strategic decision framework that clearly defines talent, guides talent decisions, and develops systems-level models that illustrate talent choices. Bringing talent in externally is seen as a competitive advantage by having fresh perspectives, market knowledge and insights, and bringing in new networks [20][21]

The second stream shifts the emphasis toward internal development of talent which involves cultivating particular roles and skills, and human resources (HR) practices such as succession planning. This is a very common practise in militaries around the world, where personnel are brought in with the intent to grow and develop them over many years through specific training and promotion requirements, and clearly defined pathways with multiple job options within the same organisation [22][23]

The third views Talent Management as the generic management of talents to fill talent gaps by focusing on top/star performers [24]

And the fourth stream focuses on key positions that can impact outcomes and actively adopts workforce differentiation by dividing jobs into two categories: those that are strategic and those that are nonstrategic.

While options and priorities will vary depending on country-specific context, a number of these options can be considered to make jobs more attractive to talented workers where labour shortages are most acute and workplaces are trying to attract and retain the best talent.

An organisation must be able to articulate clearly why it exists and the value they contribute to the public. When the organisational value, goals and objectives are clearly aligned with the employees, people are motivated to put in their best effort into job performance because they feel the sense of purpose and belonging. If people know “the why”, they can work out “the how”. It is particularly important when it comes to crisis and dealing with unexpected work demand, such as the pandemic. Agencies with great cultures often put in the effort to build continuous value alignment with their employees through regular webinars and organisational newsletter and updates.

Clear, transparent, and timely communication provided by leaders in the organisation is another important practice to create trust and build a strong organisational culture. It includes communication on organisational value and purpose, updates about organisational operating environment, and the awareness of key projects happening in the team. It also includes leaders providing clear guidance and expectation on how the team and people should performance their jobs, regular catch ups to check in how they are doing and providing timely appreciation and feedback on their performance (LMA, 2023).

Giving employees the autonomy to perform their work and encourage innovation is also very important to foster an engaged organisational culture. People often perform better when they have autonomy over their work because they feel they own the process and the product delivered, and they also feel trusted by their leaders. It is important to make sure they have the freedom to operate in their work and the ability to use technology and resources to apply their creative thinking to all aspects of the organisation (Wong, 2023). Through autonomy and innovation, people will feel valued and recognised, and a sense of ownership and belonging to the organisation.

Promoting flexible working, diversity and inclusion in the workplace are also great practices for creating positive culture. Employees are putting an increasing focus on how an organisation supports their work-life balance. Flexible working provides people with choices of their work locations and hours. It gives people the flexibility to choose what is the best for them and their family. Family-friendly culture in the organisation creates a healthy work environment (Feeney & Stritch, 2019). When the organisation has a culture of family support, it can help organizations attract, recruit, and retain employees (Carless & Wintle, 2007; Lee & Hong, 2011). 

Diversity and inclusion are also important practices to enhance organisational culture. This means that people of different gender, ethnicity, culture, background, and beliefs are treated equally at their work in performance recognition and career progression. People are supported to bring their whole self to work and are empowered to be the best of themselves.

Although organisational culture is intangible, it can be assessed through employee surveys, the percent of presentism and absenteeism in the organisation, it can also reflect in its organisational recruitment success rate and staff turnover rate. This information can send signals to the leaders on the current state of its organisational culture.

Due to the clear linkage between the organisational culture in relation to attracting and retaining talents in the organisation, public sector organisations have been putting strong emphasis on culture building more than ever before. When the organisation is focused on its value alignment, leadership communication, employees’ autonomy and innovation, and workplace practices, it will have a greater success in creating and maintaining a strong organisation culture. When the organisation culture is positive and supportive, it places itself in a good position to win this war of talent.