No business can afford to lose a valuable employee but the impact is disproportionately severe at small- and mid-sized enterprises. The repercussions hit hard at a company's bottom line — replacement costs are estimated at upwards of 150 percent of annual salary for mid-level employees and a whopping 400% for high-level or highly specialized employees. Furthermore, when staff morale slumps at a smaller organization, there are fewer people to help restore momentum.
Research from the Center for Talent Innovation shows that leaders can increase retention and halt the disengagement and burnout that leads to flight risk by focusing on three key areas:
- Strengthen sponsorship. What can help all employees — but especially talented women, members of the LGBT (lesbian, gay, bisexual, and transgender) community, and people of color — feel your company is a place where they can spread their wings and succeed? The answer is sponsorship--a strategic workplace partnership between those with power and those with potential. Unlike mentors, who act as sympathetic sounding boards, sponsors are people in positions of power who work on their protg's behalf to clear obstacles, foster connections, assign higher-profile work to ease the move up the ranks, and provide air cover and support in case of stumbles.Why should you or your managers take on the responsibility--and risk--of becoming a sponsor? Because sponsors have a significant impact on the career traction of their protgs, especially women and multicultural talent: 68% of women with sponsors say they are satisfied with their rate of advancement, compared with 57% of those without sponsors; 53% of sponsored African-Americans are satisfied with their career progress compared with 35% of those without sponsors; 61% of Hispanics and 55% of Asians are satisfied with their career progress, compared with 30% of those without sponsor. Those numbers add up to employees who are more committed, more engaged, and more likely to attract similar talent. Furthermore, by building a dedicated team of talent, sponsors see a measurable benefit to their own careers: White leaders--both men and women--with a protg are 11% more likely to say they're satisfied with their own rate of advancement than those who do not have protgs. Sponsors of color who have protgs are overall 30% more likely to be satisfied with their career progress than people of color without protgs.
- Create an inclusive work culture. What does it take to consistently drive growth and innovation? The answer, according to CTI's research, is a diverse workforce managed by leaders who cherish difference, embrace disruption, and foster a speak-up culture. But ideas from outliers too often are ignored or squelched because their originators don't resemble the paradigms of corporate power--caucasian, male, heterosexual, and from a similar educational and socioeconomic background.Yet an inherently diverse workforce can be a potent source of innovation, as diverse individuals "match the market," that is, they are better attuned to the unmet needs of consumers or clients like themselves. CTI research shows that when teams have one or more members who represent the gender, ethnicity, culture, generation, or sexual orientation of the team's target end user, the entire team is 2.58 times as likely to understand that target, increasing their likelihood of innovating effectively for that end user. Leaders who cherish difference, embrace disruption, and foster a speak-up culture effectively "unlock" the full spectrum of innovative capacity, enabling companies to increase their share of existing markets and lever open brand new ones. By encouraging a proliferation of perspectives, leaders who foster a speak-up culture also enable companies to realize greater efficiencies and trim costs--another way that innovation drives bottom-line value.
- Enhance flexible work arrangements for both men and women. As we emerge from the nose-to-the-grindstone tunnel of the recession, a slew of recent studies find that rather than traditional measures of material wealth, Americans are redefining success to include such intangibles as having a good balance between work and personal life, and being able to take a day off when desired, have soared in importance. Flexible work arrangements, such as teleworking, flexible start/stop times and part-time schedules, as well as job-sharing and career on/off-ramps — not just for child-bearing and rearing but for caring for an ailing parent or other significant life events — are a mosaic that equals an employee talent magnet. According to a 2013 survey on workplace flexibility by WorldatWork, organizations that rated themselves as having established flex policies overwhelmingly report that these policies have a positive or extremely positive impact on employee engagement (85 percent), motivation (84 percent), and satisfaction (92 percent).
Employees want to feel engaged and valued. Flex time, sponsorship and creating an inclusive work culture not only retain top talent but attract the best and brightest. That's a boost to a company's bottom line, both now and for many years to come.