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New Study Explores Why Key Employees Quit and What to Do About It

June 19, 2012 — Scottsdale, Ariz. — As the economy begins to improve, employers across the board are finding it more difficult to retain key talent — employees who are the strongest performers, have high potential or are in critical jobs. The “Retention of Key Talent and the Role of Rewards” study by WorldatWork, Hay Group and Dow Scott, Ph.D., professor of human resources at Loyola University Chicago, found that a majority of respondents (83 percent) view turnover of key talent as very costly to their organization and two out of three agree retention of key talent is a major concern of senior management.   

Survey participants reported that the No. 1 reason key talent quits is to earn better pay elsewhere. Other reasons include a lack of promotional opportunities, the perception that pay is unfair and dissatisfaction with job and work responsibilities.

“Talent wars are going to become intense, not just this year but for the foreseeable future, because jobs are becoming more complex and demanding, Baby Boomers are retiring and Generation X has far fewer people who can fill this gap, and other countries are retaining their most talented people with great job opportunities of their own,” Dr. Scott said.

Tom McMullen, North America reward practice leader for Hay Group, added, “Top talent can more easily compare the ‘deal’ or pay package they get from their employer with other organizations via social networking sites like, and If a company is to thrive in the next decade, they must learn how to recruit, develop and retain key talent in a much more competitive and transparent competitive environment.”

The most effective methods for retaining key talent are:

  • Identify key employees and discuss with them their future opportunities with the organization.
  • Pay key employees above the labor market.
  • Allow flexible hours or telecommuting.

 “Rewards professionals are under increased pressure to make counteroffers, increase new-hire offers, and offer special deals to retain key employees,” said Kerry Chou, a certified compensation professional and practice leader at WorldatWork. “The most successful organizations moving forward will be those that develop a clear definition of what is considered key talent, identify them and make a concerted effort to ensure that those employees are engaged with their organization and satisfied with the full range of organization rewards.”

About the Study
WorldatWork, Hay Group and Dow Scott, Ph.D., professor of human resources at Loyola University Chicago, collaborated on this study. Survey data were gathered from 526 participants (11 percent response rate) between Dec. 15, 2011, and Jan. 15, 2012. Respondents represented different types of organizations including: private sector-publicly traded (47 percent), private sector-privately held (26 percent) and public sector and not-for-profit (26 percent).

About WorldatWork®

The Total Rewards Association

WorldatWork ( is a nonprofit human resources association for professionals and organizations focused on compensation, benefits, work-life effectiveness and total rewards — strategies to attract, motivate and retain an engaged and productive workforce. WorldatWork and its affiliates provide comprehensive education, certification, research, advocacy and community, enhancing careers of professionals and, ultimately, achieving better results for the organizations they serve. WorldatWork has more than 70,000 members and subscribers worldwide; 95 percent of Fortune 500 companies employ a WorldatWork member. Founded in 1955, WorldatWork is affiliated with more than 70 local human resources associations and has offices in Scottsdale, Ariz., and Washington, D.C.