Six Myths of Talent Management

Despite what most of us would think, employee motivation and retention at all levels of the organization is not driven by a desire for job stability and higher salaries. The six myths below show findings from CLC Human Resources’ large dataset of global employee survey data based on conjoint analysis of employee preferences.

If you would like to add to the list or if you disagree with what’s there then please do so below. If you are a CEB client and want to discuss any of this in more detail (or the research behind it), please contact me, or ask questions of your fellow corporate professionals in our client-only HR forum.

And, if you missed any previous editions of our ‘six myths’ series, catch up with them all here.

Myth 1: Employees Just Want Rewards and Incentives

Reality: The characteristics of an organization most likely to ensure happy, productive employees are people- and culture-related.

Fact: While companies often focus on rewards and incentives for their employees, factors such as quality of people in the organization, level of empowerment, and senior leader reputation will significantly improve employees’ perception of their organization and their desire to put in extra effort.

Must Do: Compare survey results of your organization against CLC Human Resources’ global list of the drivers of employee commitment to an organization and identify tactics to improve the quality of people and the level of empowerment. Recruit high-quality talent to maintain engagement of existing employees.

Myth 2: Employee Engagement is Unimportant If Attrition Is Low

Reality: Engagement is not just about keeping hold of your employees. Engaged employees also choose to put in more effort, which leads to better employee performance.

Fact: Engaged employees: perform 20% better; have 44% lower rates of absenteeism; and produce 5% higher customer ratings for the organization.

Must Do: Identify the top drivers of discretionary effort within target employee segments and customize an engagement strategy for each. Across segments, demonstrate a connection between employees’ work and organizational success to improve commitment.

Myth 3: Employee Engagement Only Helps Employees

Reality: Good engagement benefits more than employee performance, it also helps corporate performance.

Fact: Firms with good employee-engagement scores consistently demonstrate a higher stock price compared with a sample of 500 leading companies across industries. These firms also enjoy an 11% higher average three-year revenue growth compared with their industry peers.

Must Do: Focus on engaging the workforce by improving key drivers such as manager quality and development, and future career opportunities.

Myth 4: After the Recession, All Employees Want is Greater Stability

Reality: Stability has always been important for attracting talent but has negligible impact on retention and performance, particularly among the employees that really matter

Fact: Stability doesn’t drive commitment: organizational stability is 29th among the 38 most important commitment drivers. Stability is less important for high potential employees (HIPOs): organizational stability is 30th among the 38 most important commitment drivers for HIPOs.

Must Do: Do not overemphasize stability while communicating with current employees, instead ensure you always set accurate expectations; failure to do so actually drives down commitment by up to 46 percentage points. Provide line managers with the right support to help communicate accurate expectations of stability.

Myth 5: Paying More than the Competition Will Prevent Employees from Leaving

Reality: Paying higher-than-market compensation may attract talent from competitors but it will not help retain it for long.

Fact: Compensation has a far lower impact on commitment than factors dealing with day-to-day work and career progression.

Must Do: Demonstrate to employees how their work aligns with their career interests and improve manager quality. When deploying talent to meet business needs, take into account employee aspirations and cognitive capabilities to ensure alignment.

Myth 6: Employee Engagement is Less Important in Periods of Low Growth

Reality: If companies ignore employee engagement during times of uncertainty, they will find key projects crippled by lack of available talent to support future growth. This is especially true of the high-potential talent essential for long-term growth.

Fact: Fully one quarter of high-potential employees intend to leave their employer within a year. This will leave organizations ill-equipped to sustain long-term performance in a complex and uneven global recovery.

Must Do: Focus on engaging employees in anticipation of change rather than as a reaction to market volatility. Take targeted steps to engage high-potential talent to lead crucial growth initiatives.


Let us know about the myths that you are constantly having to explain away, or please contact me for more detail.


This series was first published in LiveMint a joint venture between the publisher of the Hindustan Times and The Wall Street Journal.