Now is the time to review the whole array of employment terms. Because strategic talent management is important not only in the war for talent, but also with the upcoming transition to the new pensions system. It also helps with both attracting and retaining talent.
The new Wet toekomst pensioenen (Future of Pensions Act) is due to come into force on 1 January 2023. The pensions system is about to undergo a major change. One of the most important changes for your organisation is that the same contribution rate will apply to every employee. Older people will pay less in contributions, while younger people will pay more. As the employer, you have the option to keep the accrual for existing employees as it is now and place new employees in a new scheme. Or switch everyone to a fixed contribution rate, in which case compensation will be payable, particularly to older workers. You do not have to decide immediately, incidentally; you have until 2027 to do so.
The choice you make as an employer can have an effect on your employees’ job mobility. For example, if you choose to compensate older workers, it may be (financially) attractive for them not to change jobs. The reverse is true for young people; if they can accrue more pension with another employer, that can be a reason to switch. This makes it even more important to consider the talent within your organisation. By offering young and older employees sufficient development opportunities, for example.
Remuneration is not decisive
Lidewey van der Sluis, Professor of Strategic Talent Management and Organisational Leadership at Nyenrode Business University, knows that strategic talent management is about much more than offering an attractive salary. She carries out research around the globe on strategic talent management. This shows – contrary to popular belief – that high remuneration is not a decisive factor in employees’ decision to change jobs. Van der Sluis says: ‘It plays a role: today’s employees knows their market value – they won’t work for less. But there are many more aspects involved.’
Employees also appreciate the career development opportunities, the culture of the organisation, the appreciation and the possibility of combining work and private life within their organisation. Various studies have shown this. Like a study by salary service provider Raet: Employees’ ‘work happiness’ was found to be based on a combination of several factors. Workers could list several. The factors that employees consider important in their jobs are remarkably evenly divided: remuneration and terms of employment (66 per cent), the balance between work and free time (62 per cent) and having nice colleagues (58 per cent).
Not buying, but seducing
‘You cannot buy valuable employees, but you can seduce them,’ says Van der Sluis. She believes that organisations could focus much more on employee retention. Because there is a shared interest: employers and employees need one another, for various reasons. ‘People are born with talent, not as talent. You become a talent because of someone else who sees something in you and gives you the work and everything that goes with it,’ Van der Sluis concluded in a previous study.
The employer does have to ‘see’ the employee’s talent. According to Van der Sluis, companies are missing opportunities there. ‘Employees need attention. They want to be treated as human beings and not feel like mere ‘hands’ or FTEs.’ That is a risk, according to Van der Sluis. ‘An employee who does not feel acknowledged or seen by their manager will start looking around and will be more likely to move to another organisation.’
Clear talent management
Good employees are sought after, and the number of vacancies is enormous. Employees do not hesitate to switch to another employer if they will have more opportunities to grow there. Even at organisations that claim to invest time and resources in strategic talent management. ‘It doesn’t help that terms like talent and talent management are rather vague,’ says Van der Sluis. It can be that within a single organisation someone focuses on talent management of young starters, another on high potentials, and yet another on the key people at all levels of the organisation.
Van der Sluis believes it is important that it’s clear who talent management relates to and what its purpose is. Many companies focus primarily on attracting and retaining young talent. Less attention is paid to older workers. With the risk that the company’s accumulated wisdom disappears from the business along with older workers. ‘That’s a missed opportunity. Strategic talent management is also important for older employees. Senior professionals can also contribute to the company’s goal. Those who have already made their pile are often keen to work. They also have a lot to offer because of their vast experience.’
Who is on the payroll
In the context of the Wet toekomst pensioenen (Future of Pensions Act), insight into the age structure of the company is therefore also important. Does it employ a lot of over-50s? Or are there many young people on the payroll? And what about the pension plans of employees in roles that are crucial to the business? Identify what possibilities the pension offers; an advisor can help you with that. Retirement is personal; many people want something other than keep working as normal until the official retirement date. Stopping (full-time) work earlier, for instance. Or working beyond the official retirement date, but less intensively. Pension schemes already offer many opportunities for this, but employees could be making even more use of them.
What makes the organisation attractive
In order to attract and retain employees, Van der Sluis believes that it must be clear what the organisation offers. There are opportunities there for organisations: ‘Ask yourself: why would people want to work for my organisation? What makes us attractive as an employer? And as colleagues and a team? If you don’t know or see that yourself, then someone else has no chance of knowing or seeing it.’ Does the organisation have a social goal alongside the financial goals? This significantly increases the attractiveness of the organisation. According to the professor, people experience more satisfaction after a working week if they understand what their contribution to society has been. ‘Employees are more likely to feel at home at a company with an established story, a company that has thought about the question: “What do we want to mean for today’s society and for the next generation?”’
Keep seducing talent
To attract and retain talent, it is important to be an attractive employer. One that pays attention to talent, offers terms of employment that match the employees’ wishes, and possibly has a social mission. This is how your organisation manages to keep ‘seducing’ talent. And with the arrival of the Wet toekomst pensioenen (Future of Pensions Act), this is more important than ever.
This article appeared on MTsprout.nl on 28 June.