Employers underestimate impact of stress behind employee attrition: Watson Wyatt - WorldatWork survey

25 October 2007

With the increasing integration of the global economy, businesses around the world are finding it increasingly difficult to retain employees says a new study by global HR consulting firm, a new study by Watson Wyatt Worldwide conducted jointly with WorldatWork, an international association of human resource professionals.

A large majority of companies in the United States and around the world are struggling to attract and retain top-performing and critical-skill workers, according to, a leading global consulting firm,. Furthermore, many employers do not fully understand why workers join or leave an organization, an obstacle that greatly increases the challenge of finding and keeping good employees.

Two of three companies worldwide report difficulty attracting top-performing workers, while a full 70 per cent have difficulty attracting critical-skill employees, according to the 2007/2008 Global Strategic Rewards study.

These trends show remarkably little variance around the world. In addition, more than half of companies report difficulty retaining top-performing (52 per cent) and critical-skill (56 per cent) workers. The United States has the highest median voluntary turnover rate, at 11 per cent, while Latin America has the lowest, at 5 per cent. The study results are based on a survey of 946 companies and a complementary survey of 13,000 employees.

"Attracting and retaining the right employees is a challenge for employers globally," said Laura Sejen, global director of strategic rewards for Watson Wyatt. "Employers that are best at building and maintaining the right work force are often the best at aligning workers'' rewards with the company''s goals. Their performance management programs clearly communicate what workers need to do to get ahead and to improve company performance. This builds a sense of teamwork that makes it easier to retain employees, as well as attract high-potential newcomers."

Efforts by companies to limit turnover appear to be hampered by an incomplete understanding of employee priorities. For example, workers rank stress as a top reason they would leave their company, but it is not even among the top five reasons that employers cited. Instead, employers cite insufficient pay and lack of career development and promotion opportunities.