1. Cameron Coutts, Shane van Staden and Claire Millward
1493 Words (Excluding Citations and References)
S c h o o l o f M a n a g e m e n t S t u d i e s
U n i v e r s i t y o f C a p e T o w n
U
Employee Attraction and
Retention in the 21st Century

2. Employee Attraction and Retention in the 21st
Century
It is a commonly accepted fact that the employees of an organisation are a crucial
element for maintaining a consistent competitive advantage (Pfeffer, 1996 as cited in
Rahman & Nas, 2013). Given the current skills shortage in South Africa and the
amount of literature referring to the global ‘war for talent,’ it is becoming increasingly
important to retain highly skilled employees (Muteswa & Ortlepp, 2011; D’Amato &
Herzfeldt, 2008; Kotze & Roodt 2005). However, this is becoming increasingly
difficult as national and international organisations compete for these management-
level workers (Samuel & Chipunza, 2009).
So what is talent and why has this become a ‘war’?
Professor and HR Guru David Ulrich (2006) changed our perception of talent by
considering it as a product of competence, commitment and contribution. He defined
competence as the knowledge, skills and values that are required for one’s current and
future roles. Commitment is defined as the ability to work hard, invest time in one’s
job and to be emotionally invested in the success of one’s organisation. Finally,
contribution is the perception that employees have regarding the impact their work
has, as well as finding meaning and purpose in their work.
Since 2002, the national and international competition for talent has been intensifying.
Kotze and Roodt (2005) explain that the ‘war for talent’ is due to organisations
competing with one another to attract and retain people from an ever decreasing pool
of skilled workers (i.e. specialist and managerial employees). This is especially the
case in South Africa where the increasing emigration rate, the oversupply of unskilled
labour, the undersupply of skilled labour and the national drive to address
employment equity are all fuelling this war.
The existence of this war has come about because organisations have begun to realise
the impact it has on their business when they do not have the right people in place to
lead and confront business challenges because they are employing ‘below-average’
candidates for the sole purpose of filling a position (Economist, 2006; Price and
Turnball, 2007). Given the global financial crisis, the economic slowdown in South

3. Africa and the massive restructuring of organisations, the search for top talent has
become a more prevalent issue for employers (Guthridge et al., 2008). Not only
because it is detrimental to their performance, but replacing executive or senior level
employees can cost organisations as much as 213% of their annual salary (Boushey &
Glynn, 2012). The deteriorating performance of these organisations, and the damage
to external reputation and internal morale caused by this, has further exacerbated this
‘war.’
We know what talent is and why it is becoming so difficult to find the right
talent, but what is it that makes it difficult to RETAIN this talent?
The work demands of the new generation (Millennials – people born between 1980
and 2000) have fundamentally changed compared to the previous generations
(generation Y and the baby boomers). People are no longer willing to devote their
lives to a single job for the purpose of putting food on the table, as they demand more
from their jobs than simple remuneration (Millennials at work: Reshaping the
workplace in financial services, 2012). This also holds true for people currently in
management or specialist positions, as Kerr-Philips and Thomas (2009) showed that
the reasons for talent loss among South Africa migrants is linked to issues regarding
leadership, organisational culture and employment equity (this is skewed though, as
93% of respondents were white).
However, employment equity can still be seen as a crucial factor impacting the
leadership and culture of South African organisations. Since the end of Apartheid, the
demographic pool of potential employees has shifted drastically, which means that
organisational leaders need to learn new skills in order to correctly manage a
multicultural and ethnic workplace so that this diverse mix of people can be fully
utilized in order to improve their competitive advantage (Kerr-Philips & Thomas,
2009). Also, a major issue is that not all groups within organisations understand the
competitiveness that can be created through such diversity, and so knowledge sharing
in South African organisations has often been resisted and difficult to achieve (Prime,
1999).
Given this context and the fact that the demographic pool is becoming increasingly
filled with Millennials, it is highly important to consider their demands and adjust

4. organisations in ways to meet these demands. A survey conducted by PwC (2012) on
over 4,300 graduates from 75 countries showed clearly what it is that milennials look
for in an employer. Even though competitive wages are an important consideration for
millennials, the most important factors for them when picking an employer was their
opportunities for career progression and personal development. Not only that, but
millennials also consider training, flexibility, opportunities for international
experience, a person-organisation fit and the fact that they want their work to be
meaningful (i.e. contribution) to be some of the top factors that they would consider
when choosing an employer.
This is largely due to the fact that the financial crisis caused a lot of job losses and so
these millennials are less loyal to their organisations and are more focussed on their
own development (Millennials at work: Reshaping the workplace in financial
services, 2012). Going back to talent, these skilled workers have the competence to
perform in their current and future roles due to the skills that they have acquired.
Also, seeing as they are millennials, they seek contribution in their work by having
their work be meaningful to them and have an impact on the organisation. This leaves
one major challenge for organisations to address: creating commitment within their
workforce.
Ok, but how do we get them to be committed?
Lum et al. (1998) have shown that organisational commitment (i.e. the extent to
which an individual identifies and is involved in their organisation) has the most
direct and significant impact on intent to quit, which has been supported by a number
of other studies (Khoele & Daya, 2014; Joo & Park, 2009; D’Amato & Herzfeldt,
2008; Armstrong-Stassen & Schlosser, 2007; Maurer & Lippstreu, 2006; Benson,
2006; Kotze & Roodt, 2005; Curtis & Wright, 2001; Steers, 1977). Therefore, in
order to decrease employee turnover, organisations should focus on developing a
highly committed workforce.
Curtis and Wright (2001) showed that organisational commitment is most
significantly impacted by the following: group cohesion, dissatisfaction with
managers and supervision, feedback on performance, employee involvement and
participation, career development, flexible work options, employee benefits and

5. training. Now, what is most interesting to see is that all of these variables were
mentioned as factors that would affect a millennial’s decision to choose an employer
in PwC’s millennials at work report (2012).
Therefore, in order to get employees to be committed, it is clear that organisations
need to focus more and more attention on meeting the demands of the millennials.
This is all good and well for now, but what about the future?
The 6 key findings (in order) in the Deloitte 2015 Global Human Capital Trends
report that organisations need to consider for the future are: culture, engagement,
leadership and development have become urgent priorities; leadership and learning
need to be addressed in order to mitigate the highly prevalent global skills gap;
Human Resources in organisations needs to be reinvented in order to keep up with
business needs; Human Resources technologies are becoming a growing market;
talent and people analytics are a valuable opportunity and are becoming a high
priority and finally, to simplify systems and processes to address information
overload.
What now?
1. Change your culture – Organisations need to build a culture that focusses on
developing its employees, as well as the youth. By 2025, 50% of the
economically active workforce will consist of millennials. This means that
organisations need to start shifting their cultures now to pre-empt this. By
providing opportunities for career progression, training and development and
resources for continuous learning, organisations will be able to grow the

6. knowledge of their workforce and continuously build on the skills of its
employees and thus improve their competitive advantage. We suggest that
organisations start even earlier though. South Africa has a perennial issue
around inequality and education, so organisations should invest in the future
of their recruitment by assisting with the education of the country’s youth. Not
only that, but employment equity needs to be embraced in order to make the
importance of diversity a crucial element of the organisation’s culture.
2. Use analytics – Performance Management systems are incredibly valuable
sources of information and growth. Millennials search for feedback and so a
transparent PM system will provide this feedback and fuel their ambition by
highlighting areas of improvement. However, in order to make this as
successful and beneficial as possible for all, this should be tightly linked to a
Rewards and Recognition programmes, as well as a succession management
system. By rewarding (more non-monetary than monetary rewards) people
who perform well and grow will feel the recognition that they search for and
see the contribution that they are making. By linking this to a succession
management system, high performers will be clear candidates for promotions,
which will help them progress in their careers and help address the lack of
skills and leadership in organisations.
By managing performance effectively and providing the resources needed to learn and
grow, organisations will definitely be able to retain their employees by clearly
showing them how they can be rewarded and promoted through their organisation. If
this is met with an open culture that cherishes learning, growth and diversity, we see
no reason why organisations will struggle to retain their employees in the future.

7. References
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content/uploads/2015/02/DUP_GlobalHumanCapitalTrends2015.pdf
Boushey, H., & Glynn, S. J. (2012). There are significant business costs to
replacing employees. Centre of American Progress. Retrieved from:
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content/uploads/2012/11/CostofTurnover.pdf
Curtis, S., & Wright, D. (2001). Retaining employees – the fast track to
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Guthridge, M., Komm, A. B., & Lawson, E. (2008). Making talent a strategic
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