Retaining core, critical & scarce skills in the energy industry.

JurisdictionIndia
Date01 April 2014
AuthorMabuza, Phuti F.

Introduction

Employee retention is one of the major challenges that organizations face today. Attracting the best talent is a difficult task, and retaining these employees is even more difficult. Globalization has worsened the situation, as employees are both ready and willing to change jobs and relocate to any part of the world. Managers around the world are concerned about the retention of skilled employees, and are very conscious of the high rate of employee turnover. Skilled employees in today's business are the major differentiating factor when determining the success of a business, making the employee retention environment very competitive. This is as a result of dependence on the expertise of these employees to compete effectively and to gain competitive advantage in the market (Samuel & Chipunza, 2009).

According to Carr & Jones (2001), the demand for core, critical and scarce skills outnumbers the pool of available talent. As a result, people in these skill categories experience high levels of stress and they tend to easily resign from their jobs. A war on talent, as reported by Stairs, Galpin & Linley (2006), was predicted to start in 2007. Organizations were managing staff retention on a 'knife edge'. Elaborate strategies for attracting and retaining talent need to be devised in order for organizations to maintain a competitive edge and to ensure their long term survival (Stairs et al., 2006).

In the past, employees leaving their jobs voluntarily was seldom an occurrence. However, this is now the norm in the workplace; a shift which has been intensified by an increase in job mobility. Changes in the work environment are so complex that employers were slow to comprehend that the power balance of the work relationship had shifted from employer to employee. A new concept, 'employee turnover' was therefore introduced. As a result, a management tool known as 'employee retention' was developed to respond to employee turnover (McKeown, 2002). In response to the employee turnover challenge, many organizations changed their remuneration packages to be in line with what similar companies in the market were paying. According to McKeown (2002), remuneration packages alone were not totally effective in helping employers to keep their employees. In addition to the remuneration packages, other factors such as, safety and workplace health should be included to make the employee happy (McKeown, 2002).

Problem Investigated

The study is focused on a department within the organization which provides consulting, advisory, supporting and other specialist services in the energy industry in a developing country context. The department comprises predominantly core, scarce, skilled and experienced subject matter experts in the engineering environment, who have acquired a good reputation in providing outstanding technology services to their customers over time.

According to management, the department is losing its core, critical and scarce skills to the external market every year. The trends on staff movement were discussed in various management meetings to determine the severity of the problem. As a result, management identified the loss of skills as one of the department's high risks. Although a strategy has been implemented, the organization still experiences loss of these skills and it is evident that the strategy has not been effective. Recruitment policies and processes, as well as the national shortage of specific skills have contributed to the delay or inability to replace the employees that have left. Lack of skills increased the workload for remaining employees, hampering their ability to execute the overall operations plan and brought about an undesirable effect on service delivery.

Aim of the Research

The main aim of the research is to: a) determine critical factors in respect of employees wanting to remain with the organization, and b) identify which factors may result in employees wanting to leave the organization. Such a study can lead to recommendations which can be incorporated into the strategy of the organization to retain core, critical and scarce skills.

Literature Review

Organizations hire people from different backgrounds and employees demand more fulfilling jobs (Mitchell, 1973). Traditional models of motivators relied solely on financial rewards, which in terms of Maslow's position, helped employees to achieve their basic needs of food and shelter. In the 1960s and 1970s career progression emerged as an additional motivator to satisfy the employees' need for achievement, status and recognition. For this generation, motivators go beyond tangible rewards, shifting to intangibles like meaning, value fit and the ability to make a worthwhile contribution.

Since the current generation of employees has grown up in a world of choice and rapid change, they may not stay with one employer for a long time if their self-actualization needs are not satisfied (Stairs et al, 2006). Managers and organizational leaders should seek to comprehend and address employee motivation successfully to be able to lead the organization (Amabile, 1996). It has been noted that five features which trigger recent theories of human motivation are needs, reinforcement, cognition, job characters and emotions (Ramlall, 2004). Three common motivational theories are Maslow's Needs Hierarchy, Herzberg's Two Factors and Vroom's Expectancy Theories. Maslow's theory focuses on individual needs while Herzberg scrutinized motivation from the perspectives of the interaction between the individual and his/her work (Cesare & Sadri, 2003). Vroom's theory proposes that people are driven to behave the way they do, and produce combinations of outcomes that should be desired and expected.

Maslow developed his Hierarchy of Needs theory because he believed that human beings desire to become self-actualizing. He held that human potential being underestimated is an unexplained area. Human needs can be grouped into at least five areas, namely: physiological, safety, love, esteem and self-actualization.

Equity theory stresses the point that individuals are not only concerned with their own rewards, but also compare their compensation to what others receive. The Expectancy Model of Motivation, as cited by Ramlall (2004) highlights the causes of people's expectations and connects effort with performance and job satisfaction.

It has also been acknowledged that the attitudes of employees towards their jobs and work environments influence their retention. Job satisfaction is a catalyst to employee turnover. Employee motivation is a complex issue and involves a combination of factors influencing individuals.

According to Mak and Sockel (2001) and Stum (1998) job satisfaction is believed to be an important driver of employee performance. It affects productivity, quality and morale, and hence influences commitment and reduces turnover and absenteeism. According to Benest (2008), competitive salaries are important to employees but are not sufficient to retain them. When employees do not see the relevance of their job to an organization, they may feel that they do not belong to the unit. According to Stum (1998), in most cases employees would like to learn and grow. They also expect employers to give them an opportunity to grow.

Employees may leave an organization if the reward strategy does not appreciate their performance, or lacks consideration for skills and experience, or cannot match the compensation system of the competitors. A meaningful job is the most powerful motivator of behavior. Employees appreciate working in a safe and comfortable environment. Factors such as family responsibilities are also related to employee retention, because one's family, community and other life activities outside work influence one's decision to stay or leave (Hausknecht et al...

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