Why You Need to Know Your Industry’s Talent Retention Risk Score (and How Your Company Compares)

ENGAGE Research

Editor’s Note: This post is part of our ENGAGE Research series, in which we analyze and discuss predictive recruiting and sourcing data. Read the most popular post in the series, “ENGAGE Research Identifies Top 2017 Employee Tenure Trends and a Tightening Labor Market,” here.

Talent Retention Risk scores—introduced by ENGAGE—are new measures of volatility versus stability that reveal whether workers in an industry (and, as we shall see, in individual companies) are more or less likely than average to be interested in exploring other jobs. They are powerful given their effectiveness for evaluating many key workforce planning issues, including:

  • Is an industry at high or low risk of losing talent in the short and medium terms?

  • Is your company at higher or lower risk than other companies in your industry of losing talent?

  • How confident can you be that you can recruit away talent from competitors within your industry at reasonable cost?

  • Which competitors within your industry are you likely to have best success recruiting candidates away from?

  • How much should you focus on targeting candidates from outside your industry in your recruiting efforts?

  • Do you need to make an intensive effort to bolster employee engagement and retention?


Let’s take a closer look at Talent Retention Risk  (TRR) scores, and how they drive better workforce planning decisions. We’ll begin with this table that shows sample of the industries with high and low TRR scores as of July, 2017.

Industries with low TRR score Industries with low TRR score

What Does Having a High TRR Score Mean?

These industries are at the highest risk of losing talent in the short to medium terms. Workers in these industries are feeling the most insecure about their jobs and career prospects. Companies in these industries should be especially concerned with employee engagement and retention.

Workers in these industries tend to be more responsive to recruiters approaching them about new job opportunities, even for lateral moves.

What Does Having a Low TRR Score Mean?

These industries exhibit the most stability and their workforces enjoy the most positive career outlooks in the short and medium terms. As a result, it’s generally harder to attract people away from these industries. People typically wouldn’t leave their jobs for a lateral position at the same compensation.

How Are TRR Scores Calculated?

ENGAGE uses different AI techniques to calculate TRR scores, with an ensemble of models examining how various factors contribute to volatility or stability. The factors are weighted based on the size and influence of the company involved within the industry as well as the potential magnitude of the factor.

Factors that are considered in the calculations include:
  • Macroeconomic trends

  • Social and news sentiment

  • Stock performance and analyst assessments (for public companies)

  • Leadership changes

  • Employee churn trends

  • Other events impacting the company

  • Many other factors that impact workforce job security


In some but far from all cases, it’s easy to see why certain industries have high or low TRR scores. It’s easy, for example, to see why the mining and metals industry has a high TRR score. The industry’s workers have to feel unsecure due to the steady drop in jobs (coal mining jobs dropped 32% between 2001 and 2016, according to Department of Labor data), the push for alternative energy sources, and other factors. As a result, they’re likely to be interested in more stable opportunities, both in and outside the industry. 

Aren’t Some Companies Outside the Norms for Their Industries? Isn’t this Important?

Absolutely. Many companies are outside the norms. For an individual company, the relative position compared to its industry and peers (as well as how it is trending) is MORE IMPORTANT than the industry score. For example, a struggling organization in the very tight Hospitals and Healthcare industry would be in poor position to acquire talent from its more successful peers.

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What Are the Implications if My Company is Outside our Industry’s Norm?

The implications depend on whether your industry’s TRR score is high or low, and if your company is doing better or worse than its peers.

What Are the Implications if My Company is Outside our Industry

  • If your industry has a HIGH TRR score and your company is doing BETTER than its peers, you are in a good position to attract talent from within the industry at relatively lower cost of acquisition—and potentially for lateral compensation and job levels.

  • If your industry has a HIGH TRR outlook score and your company is doing WORSE than its peers, you are in the most difficult position for attracting talent. You should budget for longer and more expensive recruiting cycles than average. You would be best served by focusing on building “promote from within” processes as well as strong training, career development, and learning programs to both reduce your churn risk and build your internal talent pipeline.

  • If your industry has a LOW TRR score and your company is doing BETTER than its peers, you will have a slight advantage in attracting talent from within the industry.

  • If your industry has a LOW TRR score and your company is doing WORSE than your peers, then you are in a risky spot and should be concerned with retention and employee engagement. Your talent strategy should include recruiting candidates from outside your industry (especially from high TRR industries) and then training them on industry-specific skills. You will be less likely to be able to attract talent from within your industry at lateral compensation and job levels.


How Often Are TRR Scores Updated?

ENGAGE closely tracks over 6m companies in the country.  Company TRR scores are updated daily, and industry TRR scores are updated weekly.  In any given month, close to half a billion data points are being aggregated, categorized, scored and fed into the models to determine these scores.

Are you interested in learning more about Talent Retention Risk scores and how ENGAGE can help with your passive candidate recruiting? Contact us at hello@engagetalent.com or (855) 435-6566.

 

Tags: Recruiting Trends News Predictive Analytics ENGAGE Research Artificial Intelligence passive candidates Talent Retention Risk
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