While "star" employees provide the competitive edge companies need in today's knowledge-based economy, retaining this talent is becoming more difficult, an Accenture survey has found.
According to the study, companies rely too heavily on salary increases and performance incentives rather than providing staff with a range of career development opportunities.
Entitled "The High Performance Workforce: Separating the Digital Economy's Winners and Losers", the survey covered 500 senior executives from dotcom and traditional companies across Australia, Asia, Europe and the Americas.
Duncan Armitage, a partner with Accenture's local human performance practice, said 80 per cent of executives believed people issues were more important than they were three years ago.
Moreover, 68 per cent said that developing existing talent was more crucial than bringing in new blood.
"People have become the key competitive differentiator in today's knowledge-based economy, but addressing these human performance issues is still a real management problem for many corporate leaders, regardless of location, industry or type of company," Armitage said.
And if executives think that money is the solution to their retention problems, Armitage said they need to think again.
Companies can improve retention rates and raise the performance levels of their top talent by making it easier for employees to find and seize new opportunities within an organisation.
"Providing a comprehensive range of career and skills development opportunities is the key to attracting and retaining the kind of flexible, technology-savvy workforce needed to succeed in the digital economy," he said.
In order to overcome retention challenges, 59 per cent of executives surveyed said their organisation had made changes to their recruiting and development strategies in the past three years.
For instance, respondents said they used more employee-inclusive strategies when making company decisions.
And pure Internet companies were far more likely to have altered their strategies than traditional companies, the survey found.
However, regardless of the type of company, most of the changes were compensation-related.
More than half of the executives said they altered salaries, stock options or bonuses to lure and retain talent, while 27 per cent said they adjusted their company's policies to provide staff with advancement opportunities.
"Employees have become impatient with employers' promises to focus on people issues. Employees are assuming greater control over their own careers," Armitage said.
"Until senior executives effectively address these issues, their companies will continue to find it difficult to build and maintain a high-performance workforce."