British workers are losing confidence in their senior leaders, which could lead to an exodus of talent unless the issue is tackled urgently. Arvinder Dhesi, Head of Talent Management at Towers Watson, explains why businesses risk, unnecessarily, losing valuable employees.

Deep unease about job security as a result of wider economic uncertainty has led to more employees staying put in their current roles, but particular talent segments know their value and are not willing to sit tight and fall behind when career opportunities dry up. Effective retention strategies require more than simply keeping people in the organisation; they should also aim to involve those people in driving the business forward. The role of senior leaders here is paramount as they are best placed to provide the direction needed to motivate the workforce and drive them towards success. Whilst most companies would agree that good leaders are important, the reality is, according to our latest Global Workforce Study, that many employees are losing confidence in their senior management.

The study shows that, out of the 2,600 British workers surveyed, one in three (32 percent) said their company was doing a poor job of developing future leaders. This is worrying, as a failure to inspire confidence and communicate the work of senior management could lead to an exodus of talent, with a knock-on effect on business performance and future growth. So what has caused this lack of confidence in our business leaders and what can be done to tackle it? The research points to a growing disconnect between senior leadership and their workforce, resulting in a climate of discontent with the organisation and its intentions. In fact, a third of employees surveyed said they would leave their organisation if they lost trust in their leaders. It is perfectly plausible that when senior leaders are pressured by immediate targets and budget cuts, particularly in this age of austerity, they can lose touch with their staff while tackling corporate issues. However, the long term damage this can do to the company could prove to be much bigger and more expensive.

Workers are also feeling the pressure. Our study showed that over half of British workers claimed they are working more hours than they were three years ago, yet almost a quarter say they are not being assigned tasks to suit their skills and abilities. In addition, one in five confirmed that their manager did not encourage new ideas and ways of doing things. This makes it hard for employees to excel in their job and advance in their career, despite their hard work, which may make them feel demotivated and eventually leave. In fact, two in five employees say they would need to move organisations to progress their careers due to a lack of opportunities within their current workplace.

Honest communication from leaders and managers and a flexible, personalised approach to career development, will be increasingly important in retaining talent as economic conditions continue to be challenging. An atmosphere of innovation should also be created by encouraging employees to actively participate in the future direction of the business and to put forward solutions to problems. There are few better ways to show talented staff that you value their work than by both requesting and implementing their ideas. Ultimately, the purpose of talent management is to drive business performance by guiding, informing and influencing all people decisions. Recognition and reward must be at the heart of this. Leaders should make the time for face-to-face dialogue with employees, which can be challenging but is even more important when times are tough. Staff surveys are one way of creating opportunities for voices to be heard but they should not just be about what is wrong and how to fix it but also about what employees collectively think the organisation should be doing to make it a success. Creating a culture of confidence and shared purpose has been shown to help strong business performance.

Positive employee engagement is the key to business success, whereby the idea of reward and recognition is embedded in senior leaders’ brains through ongoing training and development and interaction with both HR and the workforce. Even if the wider economic outlook continues to appear fragile, companies can still look to grow and keep staff motivated, with the help of open communication, clear staff development activities and relevant reward programmes.