Cornerstone OnDemand Research Suggests 21 million Americans Are Planning to Change Jobs in 2012
Employee churn could cost U.S. businesses up to $2 trillion next year, but a new Cornerstone study indicates the solution may lie in the employee performance management process
SANTA MONICA, Calif. – December 2, 2011 – Despite high unemployment rates, an estimated 21 million Americans are planning to change jobs in the next twelve months, according to a new survey conducted by learning andtalent management software provider Cornerstone OnDemand (NASDAQ: CSOD) with Harris Interactive®. When the cost of employee turnover can be up to 250 percent of the annual salary per exiting employee, U.S. employers who are unprepared can expect a steep price tag of an estimated $2 trillion on employee churn in 2012.
But employers take note: the cause of this exodus – and the solution – may be rooted in the employee performance management process, including the annual performance review ritual that many organizations are going through at this very moment. Cornerstone’s survey reveals that half (50 percent) of employed U.S. adults who have experienced their employer’s review process feel more valued by the company when they receive a performance review that is focused on helping them succeed in their role. However, when describing their job within the past six months:
- Only 37 percent said they’ve been given useful feedback from their manager/employer;
- Only 34 percent indicated that they’ve received training and development to help them better perform their job;
- Only 32 percent said that their performance goals are aligned with their company’s business objectives; and
- Only 20 percent have established career goals with their manager/employer.
“Managers who simply go through the motions with performance appraisals not only risk employee retention, but also limit the success of the business. Performance management should be about developing employees to help them succeed and stay aligned with the goals of the organization,” said Adam Miller, CEO and founder of Cornerstone OnDemand. “Especially now at a time when companies are challenged with finding skilled workers, it is important to invest in the training and development of people in order to build strong pools of talent and recruit from within. Employees who have access to training, resources and tools to improve their performance and reach their career goals are happier, more engaged and more empowered to become champions for their company.”
So should organizations scrap their performance management processes? Not exactly, says Miller. Rather, it is about evolving processes and investing in the right tools to support the way people work today and the needs of tomorrow’s workforce. This includes providing more frequent feedback and blending traditional performance technology solutions for goal setting and appraisals with social functionality for just-in-time feedback.
“If you think about traditional performance management processes, they’re very transactional. But performance management should no longer be just one time events or annualized cycles. Social tools can help to make these processes more interactional, ongoing, transparent and feedback-based,” said Miller.
It is also about getting feedback from the right people, at the right time. According to those surveyed, 43 percent said peer feedback and opinions would be the most valuable to them, but only 21 percent of respondents indicated that peers provide feedback during their employer’s performance review process.
“While a lot of organizations are set up as hierarchies, how work actually gets done is in more of a matrix-based structure. With this in mind, it makes sense to allow for reviews from peers, project leaders or clients that people work with on a daily basis. It gives employees the helpful feedback they need, and it gives managers better insight for more meaningful discussions with their direct reports,” said Miller.
For more information about Cornerstone OnDemand, visit www.cornerstoneondemand.com. To follow Cornerstone OnDemand on Twitter, go to http://twitter.com/cornerstoneinc. To read Cornerstone OnDemand’s talent management blog, visit http://www.cornerstoneondemand.com/blog.
Cornerstone powers the future ready workforce, with HR software and solutions designed to unite people, teams, technology and business, and inspire a work environment of growth, agility and success for all. With an AI-powered and skills-forward system designed for the contemporary workforce, we help organisations modernise the learning and development experience, deliver the most relevant content from anywhere, accelerate talent and career mobility, and establish skills as the universal language of growth and success across the business. Cornerstone serves over 6,000 customers and 75M users and is available in 180 countries and 50 languages. Learn more at Cornerstone OnDemand.