How to Avoid Losing Talent to Competitors

When faced with health concerns, we usually consult a doctor who identifies symptoms, diagnoses the causes, and prescribes a treatment plan. Similarly, organizations that risk losing top talent to competitors need help addressing underlying issues to solve churn problems.

So if your company is showing signs that something's wrong, don't just blindly try any old remedy. Discover how workforce analytics and labor market intelligence can be used to monitor your organization's health, pinpoint challenges, and strategize data-backed solutions for retaining key talent.

Symptoms: Signs Your Talent is Heading Out the Door

Does your organization seem to be a revolving door for new hires, who tend not to stick around for long? Or has the most engaged talent in your company steadily gone quiet? 

Declining engagement levels often accompany turnover, with "quiet quitting" emerging as a red flag. Disengaged employees tend to check out mentally long before they leave, citing lack of recognition or career development as core frustrations.‍

The Great Resignation years ago amplified these challenges with millions of employees leaving their roles to seek better opportunities, greater work flexibility, and alignment with personal values. Companies that failed to adapt faced significant retention issues, underscoring the importance of proactive engagement strategies.

Why talent decides to leave

Bad experiences. Unfulfilled goals. Career frustrations. Inadequate pay.

There are a lot of reasons workers decide to leave a company.

Stagnant career growth 

Many employees crave direction and growth in their careers. And when they see limited opportunities for professional development or recognition, they look elsewhere. PwC's findings in its Global Workforce Hopes and Fears Survey 2024 reveal that 51% of workers moderately or strongly agree that their skills will need to change within the next five years. Less than half (46%), however, agree that their employers provide adequate opportunities to develop new skills, potentially driving many to seek new employers that actively invest in upskilling and reskilling initiatives. Similarly, the perception of an employer’s failure to invest in their future increases in dissatisfaction and turnover.

Poor leadership 

Leadership has a profound impact on job satisfaction. Gallup research shows that managers account for 70% of the variance in employee engagement. Ineffective leaders fail to inspire, leaving employees feeling undervalued or misunderstood. The impact of poor leadership is even more pronounced in hybrid or remote work organizations, where communication and trust are paramount.

Only 27% of workers rank their manager as highly effective, and more than a quarter (28%) have left a job because of a negative experience with their manager, according to an October 2023 study by Chartered Management Institute.

Different values 

Employees are no longer just looking for a job; they're looking for purpose. Organizations that don't align with their stated missions or values often lose credibility and trust, which are key retention factors — especially for Millennials and Generation Z workers. The 2024 Deloitte Gen Z and Millennial Survey found that 40% of Millennials and 44% of Gen Z workers have turned down an employer due to personal ethics and beliefs.

For example: A Fortune 500 retailer faced mass layoffs among Millennial employees because it failed to deliver on sustainability promises it advertised during hiring. These employees felt betrayed, leading to a 30% increase in employee turnover among this demographic. The company has since revamped its sustainability strategy, tying executive bonuses to environmental impact goals.

Compensation and benefits 

While compensation alone isn’t always the main motivator to leave a job, undervaluing or missing significant benefits such as flexibility can push employees to the competition. Gallup research found 64% of workers cited pay and benefits as the top factor in taking a new job. These extras aren’t just nice to have; they’re the secret sauce to employee satisfaction and loyalty.

“Your employees are your company’s real competitive advantage. They’re the ones making the magic happen — so long as their needs are being met.” — Richard Branson, founder of Virgin Group 

How turnover hurts your organization

Losing an employee affects more than just headcount. The implications run much deeper. 

• You lose a valuable employee with critical skills and knowledge about your organization's processes and strategies. 

• Your competitor gains an insider's perspective, potentially using these insights to strengthen their position. 

• You're left with the challenge of finding a replacement, which could take an average of 20-56 days. 

But the ripple effects don't stop there. Losing key talent forces organizations to divert focus from strategic initiatives and spend time and resources on recruiting and onboarding. Meanwhile, the time needed to fully acclimate and train new hires costs the organization productive time and even agility.

Diagnosis: Know if Your Organization is at Risk

Now comes the challenging part: finding the root causes of talent turnover. The key not only lies in internal data — including turnover rates, learning and development enrollment, and employee engagement metrics — but also in salary, role, skill, and competitor trends analysis of external labor market intelligence.

Here are a few key areas to consider:

• Compensation and benefits: One of the most common reasons for losing employees is inadequate compensation and benefits. HR teams need to take a close look at their organization's employee value proposition (EVP) offerings, average salaries and common priorities across roles and industries, and how they rank against competitors in the market. Strategize around unique offers — such as work flexibility, wellness programs, and career development opportunities — to keep EVPs competitive and build an employer brand that attracts and retains key talent.
• Leadership readiness: Looking at your organization's succession planning and leadership pipeline helps organizations evaluate the readiness and effectiveness of senior-level leaders. Identify opportunities for managers and others on the fast track to leadership to develop critical skills that will keep workforces and organizations productive and moving forward.
• Career development opportunities: Building and communicating a clear path for career development and internal mobility can have a tremendous effect on attracting and retaining talent. Investing in training, mentorship, certification courses, or other learning opportunities helps employees feel seen, valued, and part of the organization's growth.
• Engagement monitoring: Keeping track of workforce engagement is one of the best ways to get ahead of potential turnover. HR teams can use data as well as sentiment analysis to calibrate initiatives, programs, and best practices that keep employees involved and committed to the organization.

Treatment Plan: Solutions to Retain Top Talent   

Churn isn't something that's solved overnight. HR teams need strategic, data-driven solutions to address the root causes of employee dissatisfaction and prevent their organizations from losing key talent to competitors.

Here are five ways companies can leverage internal and external data to keep workforces engaged and satisfied.

1. Bridge skill gaps for future success

Sound workforce planning for critical roles helps prevent talent churn, skill gaps, and other issues that could impact future business goals and objectives. When organizations gain visibility into workforce skills, they can make informed decisions about upskilling and reskilling. This level of insight transforms how companies manage transitions and partner with their talent.

The roles and skills critical to organizations today, however, might not be the same ones needed in the future. Ask yourself: 

• What are our current critical roles, and what will be our key roles in the future? 

• Who are our potential successors? Are they ready now, or do they need to be developed? 

• What training and development do we need to implement to ensure knowledge transfer? 

To answer these questions, HR and workforce planning teams must continuously analyze skill evolutions and other labor market trends to help close workforce gaps. By building a skilled talent pipeline and using labor market data to track new skills and demand, organizations can make informed build-borrow-buy decisions and develop mentoring and training opportunities needed to retain the knowledge of experienced employees.

2. Benchmark strategies for a competitive edge

Understanding market trends and competitor strategies helps organizations align their offerings with employee expectations and gain an advantage over the competition.

Data insights into competitor hiring patterns, location strategy, and even employer branding enable businesses to calibrate their talent acquisition, employee engagement, and EVP approach to attract and retain skilled talent. Competitive and market benchmarking also empower workforce planning and transformation, giving organizations a holistic view of skill and technology trends as they align talent strategy with future business goals.

Siemens used competitor benchmarking to identify roles requiring immediate recruitment and other opportunities to reskill existing talent. This helped the company retain top talent while positioning itself as a leader in its industry.

3. Align actions with employee values 

Retention today hinges on the alignment between an organization's core values and those of its workforce. When employees see their priorities — including sustainability, diversity and inclusion, community outreach, family support, and more — reflected in the company's mission and offerings, they are more likely to remain engaged and committed.

TalentNeuron data for Pfizer and Google, for example, shows how the companies are becoming more strategic with their EVP offerings to appeal to multigenerational talent. Pfizer has emphasized flexible work arrangements, family support, organizational resilience, and health benefits, which are likely to appeal to Baby Boomers. Conversely, Google emphasizes career opportunities, compensation, a fun work environment, and innovation that would appeal to younger demographics (Millennials and Gen Z).

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In 2022, Google also expanded its parental leave policy, increasing leave for all parents from 12 weeks to 18 and 24 weeks. Why did this happen? Because Google was losing talent with the previous policy. The corrective move made Google one of the first large U.S. companies to offer extended maternity leave to support employee work-life balance and retain talent. 

4. Open up to automation 

Automation has become essential for organizations looking to streamline operations while empowering their workforces. By automating repetitive and monotonous tasks, companies free up employees to focus on more creative and meaningful work, driving innovation and improving job satisfaction.

TalentNeuron data shows automation that standardizes work processes increases efficiency, reduces errors, creates measurable productivity gains, and can help redirect resources to strategic initiatives. HR leaders can also leverage automation to identify workforce gaps and align strategy with organizational goals. AI-powered tools make forecasting talent demand and analyzing skills shortages easier, helping companies prepare for future challenges.

5. Plan for skillful, effective leaders

Leadership is at the core of employee engagement and retention. With the right tools and training, managers can inspire their teams, build trust, and create a thriving workplace culture. Effective leadership improves employee satisfaction, significantly reduces employee turnover, and helps build loyalty.

Some common methods for fostering effective leadership include: 

1. Assessment tools and surveys: Resources for leadership skills assessment help organizations identify and measure key managerial competencies. 
2. Customized training programs: Insight guide companies in designing leadership programs that address current and future challenges. 
3. Practical frameworks for growth: From identifying gaps to implementing learning strategies, build a pipeline of competent leaders.