Talent War Shifts from Crusade for Acquisition to Battle for Retention

Accenture Study Finds Employee Mobility, "Real-Time" Performance Measurement and Skills Development Key to Retaining Talent

New York, March 21, 2001 — Despite recent corporate staff cutbacks, 80 percent of global business leaders believe that "people issues" are more important today than they were three years ago, and 68 percent believe that retaining talent is far more important than acquiring new blood, according to a study released today by Accenture.

Accenture’s study, titled "The High Performance Workforce: Separating the Digital Economy’s Winners from Losers," found that most companies continue to struggle with retention because they are relying on salary increases and bonuses to prevent turnover. Leading companies have discovered that providing employees with a comprehensive range of career and skills-development opportunities is the key to attracting and retaining the kind of flexible, technology-savvy workforce needed to succeed in the digital economy.

The findings are based on interviews with nearly 500 senior executives from companies in eight countries on three continents and spanning 10 major industry groups. Almost half of the survey participants — 47 percent — identified themselves as senior executives of traditional, or "brick-and-mortar" firms, 39 percent identified themselves as senior executives of "click-and-mortar" companies, and 14 percent identified themselves as senior executives of pure-play Internet businesses, or "clicks."

All the companies surveyed face similar challenges in retaining and boosting the performance of their talent bases, but their approaches to remedying the problem vary. Fifty-nine percent of respondents said their companies have made some changes to their recruiting and retention strategies in the past three years. "Clicks" companies were much more likely than "brick-and-mortar" and "clicks-and-mortar" organizations to have made such changes.

Regardless of the type of company, however, the majority of changes were compensation-related. More than half of the executives in the study said they altered salaries, bonuses or stock options in their quest to attract and retain talent, while only 27 percent reported that they adjusted their companies’ policies to provide employees with advancement opportunities within their organizations.

The ongoing retention problem suggests that money itself is not the answer. In fact, Accenture’s research indicates that companies can improve retention rates and improve employee performance by making it easier for workers to find new opportunities within an organization, and by developing the skills and knowledge of all talent, regardless of their position in the company. For example, leading companies in the area of talent retention are:

"People have become the key competitive differentiator in today’s knowledge-based economy, but addressing these human performance or ’people issues’ is still a vexing management problem for many corporate leaders, regardless of location, industry, or type of company," said David Clinton, global leader of the Human Performance practice at Accenture and primary author of the study. "By using creative talent-sourcing and talent-management practices, and leveraging customized performance management and teaching tools, companies can better understand and maximize the role of their people in the digital economy."

Other findings of the study include:

"The perception is that the war for talent has eased somewhat in the short-term wake of the dot-com fall-out. But the reality is that it is not going to be easier to retain and attract top talent in the coming year," said Clinton. "The dot-com market correction actually highlighted an underlying problem that has existed for years: employees have become increasingly impatient with employers’ promises to focus on people issues, and employees are assuming greater control over their own careers. Until senior executives effectively address these issues, their companies will continue to find it difficult to build and maintain high-performance workforces."

Accenture’s Human Performance practice helps its clients address their most critical people issues through new approaches in the integrated areas of Human Resource Process & Technology, Learning & Knowledge Management, Organization & Change Strategy and Workforce Performance.

About the Study
At the end of 2000, Accenture and NOP Global Research Limited completed an extensive study on human performance issues in companies worldwide (primarily the United States, Europe, Asia and Australia). Thirty-minute telephone interviews were conducted with 483 senior executives from companies in a range of industries, including manufacturers of electronics or high-tech products, retailers, automotive and industrial equipment suppliers and banking institutions. The companies vary from long-established corporations to newer dot-coms.

About Accenture
Accenture is a $10 billion global management and technology consulting organization. The firm is reinventing itself to become the market maker, architect and builder of the new economy, bringing innovations to improve the way the world works and lives. More than 70,000 people in 46 countries deliver a wide range of specialized capabilities and solutions to clients across all industries. Under its strategy, the firm is building a network of businesses to meet the full range of client needs — consulting, technology, outsourcing, alliances and venture capital. Accenture’s home page address is http://www.accenture.com.


Karen Cooperman