HR headache as young employees no longer interested in lifetime jobs

Delegates follow proceedings during the 2014 Human Resources Congress at the Serena Beach Hotel in Mombasa on May 15, 2014. PHOTO | KEVIN ODIT | NATION MEDIA GROUP 

In Summary

• Deloitte research finds 52 pc of employees not ready to deal with turnover challenge
• Stiff competition is further compounded by the evolving nature of the 21st century workplace.
• Where before job candidates would have been more concerned about painting a good picture of themselves in interviews and recruitment drives, in today’s job market employers also need to sell themselves to potential candidates.

By MUTHOKI MUMO
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Retaining skilled staff in a competitive environment is the biggest headache facing human resource managers in Kenya, according to a report by Deloitte Consulting.;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;

In a survey of Kenyan corporates, 80 per cent of respondents said employee retention was their number one priority in terms of human capital management.

However, most of the companies are unable to cope, with 52 per cent admitting that they were not “ready” to deal with the challenge.

“Senior management and specialised skills sets are increasingly rarer to source in the Kenyan job market … retaining and engaging talent has emerged as the key human capital challenge,” said Deloitte.

Stiff competition is further compounded by the evolving nature of the 21st century workplace. In local and global research, Deloitte has found that, increasingly, the younger employee wants to work in an environment in which he feels nurtured, and she wants to pursue career goals that fit in with her personal life. Both want to work at what they are passionate about.

Employees are no longer seeking employers to serve for a lifetime; they are looking for jobs that can serve their lifestyles. This leads to increased staff turnover, especially in businesses that are unable to keep up with the trends.

The research was part of a global survey carried out by Deloitte in the last quarter of 2013.

Difficulty in retaining employees is also closely tied with increasing difficulty in recruiting the best talent. Although this was not among the top three concerns of Kenyan corporates, Deloitte notes that meeting this specific challenge will also require a change of philosophy in how employers deal with recruits.

Where before job candidates would have been more concerned about painting a good picture of themselves in interviews and recruitment drives, in today’s job market employers also need to sell themselves to potential candidates.

“As the battlefield for scarce talent continues to shift, talent acquisition is becoming more like marketing every day,” writes Deloitte.

These talent wars have been very visible in Kenya’s corporate scene in the past few years especially in the financial services sector.

BANKS AFFECTED

Earlier this year, Kestrel Capital raided rival Africa Alliance Investment Bank taking with it five staff. It was the second such raid on Africa Alliance in five years after Standard Investment Bank poached senior staff in 2011. In 2008, Renaissance Capital suffered after Equity Bank executed a clean sweep of its senior management.

Equity Bank has also found it difficult to retain staff having gone through five chief finance officers (CFOs) since 2010.

Staff retention problems extend beyond the private sector. According to a February 2014 paper in the International Journal for Science and Research, poor talent management has seen staff retention fall to 30 per cent in over 60 per cent of Kenya’s state corporations.

However, in this war for highly skilled staff, Kenyan companies may be the ones that are losing out. In May, consulting firm Ernst & Young (EY) said the constant poaching among Kenyan companies had raised local staff costs above the regional average.

“Companies poach because they are looking for innovativeness, new ideas. But these companies should focus on creating a workplace environment in which all employees have the freedom to contribute and become innovative,” Kenya Institute of Management CEO Davide Muturi said in a telephone interview. “This also creates a feeling of ownership of organisation products. Employees will be less likely to leave.”

In such an environment, leadership is nurtured from the bottom. The third human capital priority for Kenyan businesses, according to the Deloitte survey, is building leaders. And here, too, the majority of Kenyan companies acknowledge they are ill-equipped to deal with the challenge.

Ideally, Deloitte says, leaders need to be nurtured at every step of the corporate hierarchy, not just in the C-suite. Companies need to invest heavily in leadership training for staff, and a succession plan ought to be evident within corporates.

Kenyan businesses and multinationals based in the country have often turned to expatriates whenever talent is not available locally. In the long term, however, reliance on foreigners to manage businesses will harm efforts to nurture new leaders and eventually, the bottom line, Deloitte says.
“… the high premium that expatriates attract becomes a source of tension within companies. At the same time, political pressures for localisation is growing,” said EY.

While the top human capital concerns for Kenya’s corporates are generally in keeping with global trends, they differ in the level of prioritisation.

Globally, nurturing leadership is the most urgent need for corporates when it comes to human resource management.

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WAY FORWARD

Need to embrace modern trends

According to Deloitte, human resource professionals need to abandon the traditional role in which they’ve been cast as administrators and take a more active role in corporate planning. They need to understand how businesses work and the market in which they operate.

But in order to effect the changes needed to operate effectively in a 21st century workplace, companies will need to retool their human resource departments. This is the second highest priority for Kenyan firms.

Delegates follow proceedings during the 2014 Human Resources Congress at Serena Beach Resort in Mombasa in May. HR managers say retaining young talent is their most pressing difficulty.