This story was updated on July 12, 2018.
Failing to identify an employee flight risk can be a costly mistake, especially with today's skilled labor shortages. HR leaders are struggling to stay afloat in the most difficult recruitment climate since 2007, notes ManpowerGroup. While many HR organizations double down on recruitment and retention factors, some talent just can't be replaced quickly or cheaply.
So, how to tackle that problem? Of course: Don't lose that talent in the first place. It's not quite as easy as it sounds though.
Data-Driven Flight Risk Reduction
According to the ADP Research Institute® Workforce Vitality Report (WVR), the first quarter of 2018 saw a job turnover ratio of 62.7 percent. It's a job-seekers market.
Not understanding what is happening with your employees could be more expensive than ever before. While the cost of talent replacement can vary significantly, the cost to replace an employee usually exceeds the cost to keep them.
Adopting the latest in HCM provides meaningful workforce analysis to discover problems and intervene before it's too late. The analytics tools use internal and external data and benchmarks from cloud-based HR technologies to give a more complete picture of what is happening with the workforce. These insights aren't limited to organizations with dedicated HR data scientists. Here are three tools to help identify employee flight risk.
1. Cloud-based HCM
Using a cloud-based tool for your HR data can enable analysis from the employee's point of view, including compensation, benefits, position and how your firm stacks up against competition. The result of moving to a single cloud-based system for managing human capital is real-time information. HR can shift from asking questions and looking back to understanding how things are trending presently.
The Society for Human Resource Management notes that HR professionals have the ability to understand their workforce like never before.
2. Industry Benchmarking
Things that can influence flight risk include long commutes, below average salaries and length of time without promotion. However, there's more to employee engagement and retention than just wage and benefits — dissatisfaction with a manager or stress can also cause employees to be disengaged. Today's leading HCM solutions identify flight risks based on a variety of factors, including employee demographics, position-specific characteristics, and external insights from firms with a similar location, size or annual revenue.
Accessing the data AND tools to examine flight risk comprehensively just makes sense. Josh Bersin reports on LinkedIn that the cost of losing an employee can "range from tens of thousands of dollars to 1.5-2X annual salary."
3. Customized Recommendations
HR leaders can't afford a reactive approach to flight risks. Realizing your pay or HR strategy is driving away top employees should not occur after you've lost an employee. With cloud-based HCM and benchmarking, HR can gain the ability to act before it's too late with customized recommendations.
In Cloud Tech Insights, Stuart Sackman, ADP corporate vice president of global product and technology, highlights the value of HCM tools that deliver push notifications as soon as a flight risk is identified and assist HR in scheduling one-on-one meetings to engage with at-risk employees.
"(I)f the data accross HR systems is connected, HR can correlate that data and run predictive models to show things like employee flight-risk."
New tools are coming that will help HR understand what may be causing the problems and give available options for how to address them and keep valued employees.
Using HR Data to Analyze Human Behavior
Employee flight risk is rarely as simple as wage or job title, especially in a job market that's overflowing with options for highly-skilled workers. With cloud-based technology that can centralize insights into a whole picture, you can understand the combinations of demographic, organizational and external factors that could cause your employees to look elsewhere.