Collection
November 8, 2023 5 mins
Failure to Attract or Retain Top Talent
Failure to Attract or Retain Top Talent is the fourth biggest risk facing organizations globally, and is predicted to remain the fourth most critical risk by 2026, according to our survey.
What Is the Failure to Attract or Retain Top Talent?
Top performers and talented hires are the lifeblood of an organization, providing new skills, capabilities, perspectives, creativity and innovation. Companies that fail to consistently attract and retain these employees can struggle to maintain their overall business performance.
Why Is the Failure to Attract or Retain Top Talent a Top Risk for Organizations Today?
Companies excel when they have the best possible talent in each role, from the C-suite to the front line. An inability to fill these slots and retain top-performing employees can have serious repercussions. Today’s rising stars in an organization can become tomorrow’s competitors.
Plus, without a steady infusion of talent, companies may lack the skill sets they need to keep pace with market and industry trends. Companies depend on top talent to bring in fresh thinking, new strategies, innovation and creativity — all critical elements to remaining competitive. Many industries, including travel and hospitality, are still struggling to fill positions since the pandemic, while workers for certain roles, particularly in digital and tech, remain at a premium.
An inability to attract top candidates can also have a negative impact on those remaining in the workforce, because it can lead to additional work and responsibilities for the talented employees who remain. This increased pressure can lead to burnout, disengagement and retention issues.
Two key trends have had a massive impact on talent strategy:
Pay and inflation. Overall, salaries have risen considerably over the past two years. In the U.S., wages and salaries increased 5.3 percent year over year in June 2022 and an additional 4.6 percent in June 2023.1 Even though wage growth is starting to cool, it is still high relative to previous years, and in June 2023 it surpassed inflation for the first time in two years.2
The global rise in inflation since early 2022 has spurred employees to seek higher pay. In addition, many countries and jurisdictions are implementing regulations around pay equity and transparency, giving employees visibility into salaries.
Employee experience. The pandemic transformed the notion of the workplace. Many employees were able to work from home, and many have expressed a preference for the added convenience and flexibility. A Washington Post-Ipsos survey found seven in 10 respondents would work from home all or most of the time.3 At the end of 2022, nearly three-quarters of companies offered hybrid-work arrangements.4 The focus on what employees want out of work has also elevated the focus on workplace wellbeing.
Losses and preparedness
Despite six in ten respondents stating they are prepared for this risk, a third indicated they had suffered a loss from failing to attract or retain in the last twelve months.
-
33%
of respondents suffered a loss from this risk in the 12 months prior to the survey.
Source: Aon's 2023 Global Risk Management Survey
-
62%
of respondents stated their organizations were prepared for this risk.
Source: Aon's 2023 Global Risk Management Survey