Employee Retention

Employee Turnover: Push Factors and Pull Factors

If you think carefully about the various factors that cause an employee to leave their current employer, it is quite easy to see that you two categories: push factors and pull factors.

Pull factors are those reasons that attract the person to a new place of work. So in this category we would have the likes of a better paying job, a career advancement opportunity that they wouldn't have got in the short term had they stayed with their present employer, and so on.

Push factors are aspects that drive the employee towards the exit door. They make the person want to leave, make them start thinking about other options, about talking to recruiters, looking at the job ads in the paper, on the internet etc. In some instances employees will even go so far as to leave without a new job lined-up.

You just have to accept that pull factors are going to exist. From time to time competitors will make offers to some of your employees that you simply cannot match. Job opportunities will arise that are so attractive that the employee is almost certain to leave.

But what you can do is minimise those push factors. To download a short white paper on 10 reasons employees leave, simply click on the link and wait a few seconds.

Employee Turnover: 10 Reasons Employees Leave

Blocking Strategies?

I've just been reading a very strange series of articles by Dr John Sullivan on blocking strategies. Sorry but I'm not remotely convinced about the wisdom of such efforts. And anyway, an increasing number of top performers make it abundantly clear to the key executive recruiters in their field, that they are on the market. So not much need for the headhunters to actually approach them via the company phone line.

As discussed earlier, the best way to counter the threat of headhunters is to make sure your top talent wants to stay. Trying to prevent recruiters from making contact is near impossible.

Employee Turnover: The Rule Of 1/3

In every field you have these rules of thumb, short cuts that while an oversimplification, and not true in every instance, do provide a useful guide.

So in employee retention, for a competent company that is not hemorrhaging employees, it is not unreasonable to expect that 1/3 of turnover is unavoidable, 1/3 is avoidable but would cost so much to prevent that it is not worthwhile, and the remaining 1/3 should be where you focus your attention.

More on employee value propositions

A quick mention for the 5 part e-course on employee value propositions. Day 5 concludes the series with 6 key principles. Here are numbers 3 and 4:

3) Tailoring your employee value proposition to your current employees is far more sensible than attempting to outbid your competitors on every issue under the sun. You have to make choices, so aim to be strong in areas that your employees will actually appreciate. If you can do this, you will increase your chances of retaining them for longer periods.

4) Where possible, provide choice so that employees can remain with the firm even when their value preferences change. Don't expect everyone to have the same preferences or for their preferences to remain constant over time.

If you'd like to learn more about employee value propositions then do sign up for the free e-course I've created on the subject. Simply click on the link below, opt-in with the appropriate email address, click on the link in confirmation email, and as if by magic, the course will be delivered to your in-box.

Free E-Course on Employee Value Propositions

Are exit interviews a waste of time?

There are poorly conducted exit interviews, there are poorly constructed exit interviews, there are exit interviews that are largely pointless because no action is ever taken, but the typical response is to say that you should improve your exit interview process; I wonder whether a more realistic, and indeed truthful answer, would be that very few exit interviews are anything other than a waste of time and money.

If you are conducting exit interviews, why are you doing so? Are they providing you with valuable information? Are you reducing turnover as a result?

I know talent management companies tend to offer exit interviews as part of their package and numerous consultancies offer outsourced exit interviews as a way of getting more truthful answers from departing employees, but just because a service is on offer does not mean that it is of any value, or of sufficient value to justify the cost.

I'm afraid exit interviews are a nice idea in theory, but in reality, rarely a sensible use of time and money.

Lessons From Successful Retention Projects 2

You may recall that in an earlier post, I mentioned some of the lessons from successful retention projects. Some of you may be familiar with these points if you have read the guide I produced on this topic some while ago.

Anyway, today I'd like to say a few words about one of the key points and this is: awareness of the cost of turnover.

To put it simply, some departures are very costly to the business, while others barely make a difference. You really do need to be able to distinguish between the various categories. Sure it is not easy to put an exact figure to the cost of turnover, but to make an assumption that all departures result in a cost of turnover of say 50% of salary, or 100%, or even 150% is not remotely sensible.

Successful retention projects recognise the importance of the cost of turnover. They know the importance of producing a decent return on investment.   

Employee Retention 2008

Let's be brutally honest here. Some employee retention strategies have a high success rate, while others don't. You can invest your time and money doing what works or you can go with the latest fashion trend. You can spend money on impressive systems and strategies, when low cost, small scale, subtle changes would be far more likely to actually make a difference.

If you are interested in what really works then make sure you look out for our latest research which will be appearing in early September. 

Why Do Good Performers Leave?

Keeping hold of good performers is vital if businesses are to grow and continue to be profitable in the future. A reputation for losing good performers can be extremely damaging and hard to change.

Here are some of the top reasons why good performers leave:

They perceive a lack of advancement opportunities

The first point to emphasize is that the key is the employee`s perception of the situation, and not the reality.

There may be opportunities for growth that have not been communicated successfully to the employee, or the timescale involved may not have been clarified, leaving them with the an incorrect perception.

If there are opportunities, they need to be clearly explained, so that employees understand the actual position. Where limited opportunities exist, it is often worthwhile examining whether they could be created.

A common problem is when good performers expect to be promoted much faster than the company is used to. Here the firm needs to find ways to reduce the gap if at all possible.

They feel their contribution is not valued or appreciated by others, hence their work is not important

Employees naturally want to feel their work serves some purpose; sometimes the link between their contribution or role and the final product or service is not easily visualized.

Unfortunately unspoken appreciation is rarely recognised. A few words of thanks can go a long way towards retaining good employees.

Limited chance to use their natural talents

Sometimes good performers are restricted to those roles in which they have previously performed well. For the firm this may seem sensible, but does run the risk of them departing in search of opportunities to use other skills they may possess.

Finding opportunities for employees to use additional skills may be difficult but with luck you may be able to create some.

Their expectations have not been fulfilled

These expectations may have been unrealistic, or have been due to slightly misleading information at the recruitment stage. Either way, far too many good performers are lost due to communication breakdowns.

Regular dialogue between management and employee can help to minimise this type of situation. Equally, a realistic job preview at the interview stage is to be recommended.

They are unhappy with the way they are being managed

Unfortunately, managers are behind a significant proportion of employee departures. People management is notoriously difficult and the value of having managers highly skilled in this area is enormous.

The departure of a favoured manager is often followed by the departures of good performers unhappy with the style adopted by the replacement.

It may be worthwhile reassigning roles so that managers who are not strong in this area can focus on other aspects.

They do not share the firm`s values

For some individuals it can be very difficult to sustain working in an environment or culture that does not share their values.

If this is a common problem, it may be appropriate for the firm to adopt the values of it`s best performers. An additional benefit will often be that similar high performers are attracted by these values, improving the quality of the pool from which the firm recruits.

Final thoughts

To avoid losing good performers, be the firm they want to work for. Make sure communication is two way; get feedback on values, on management styles, on making best use of talents.

Keep hold of your best performers, they make the difference.

Retention Thinking: Alternatives To Pay Rises

Let`s assume you can`t afford to raise the pay of your in demand employees; the business situation is tight, there isn`t enough room for such a move right now. What else could you do to keep them from departing to your competitors?

Consider their perspective

Start by putting yourself in your employees` shoes. See the world as they see it. Of course they would like higher pay but there are other things they value too; perhaps flexibility in terms of the hours they work or being able to work from home.

Increase the value they receive from work

Would they appreciate greater autonomy, increased responsibility, the chance to do more varied work, develop new skills? Perhaps being mentored or coached would be of value to them?

Connect emotionally

Could you let them know how much they are appreciated? Explain how their work benefits your customers. Help them to feel good about themselves.

Find ways of meeting preferences

Some employees want to be able to contribute ideas for improving productivity. To get involved more. Some like individual responsibility while others enjoy being part of a team. Can you find ways to meet their preferences?

Be imaginative, be creative

If they moved elsewhere what would they get? Look to beat your competitors in areas other than pay. More contact with clients, special projects, the opportunity to use their strengths more often.

Co-create the solution

Be curious about new ways of doing things that will benefit both clients and employees. Start a dialogue, co-create new roles for your employees that they will provide added value for them.

Add value, and see the benefits

For some employees money is the single most important factor in where they work but for others their hearts can be won by different means. Give it a try. You might be surprised.

Countering The Threat From Headhunters

For many professional service firms one of the key drivers for the success of the business is the retention of key employees for extended periods of time.

Achieving this is made more difficult by the presence of headhunters, who will inevitably be attracted to your star performers, seeking to tempt them to pasteurs new.

In a sector in which the depth of the client relationship is one of the main factors determining revenue growth, ensuring your best people don`t take their talents elsewhere is paramount. All too often, clients follow departing employees as they prefer to continue an established relationship with a trusted figure.

Although overall rates of turnover will tend to be lower than many other sectors, the significance of each departure is often far greater. With the cost of employee turnover often exceeding a year`s salary, firms need to ensure they aren`t losing valuable employees for entirely avoidable reasons.

Given this, the threat from headhunters is one that needs to be taken seriously. Firms should consider whether taking proactive measures would be an appropriate move.

Whilst some departures are simply unavoidable, for example due to the size of the financial offer or the nature of the career advancement involved, many others fall into the avoidable category.

Headhunters prey on unhappy employees, on skills that are under-utilized, on brains that aren`t challenged by new situations, new problems, on resentment at salary levels. They are assisted by firms that fail to appreciate efforts, that don`t recognise success, that don`t promote fast enough, that don`t delegate, that hold young talented staff back, that don`t communicate, that don`t ask, that tell more than they listen.

So your defence against the threat from the headhunters should include emotional switching costs; a feeling of attachment to the firm, to colleagues, to the job. It also needs to include both short term and long term perspectives. Painting a picture of their future role within the firm, how they will progress, can build loyalty. Problems need to be resolved quickly so that long term disaffection or resentment does not set in. Communication channels need to be open. That means investing time in simply listening to the views of employees.

The best way to limit the appeal of any offer brought by the headhunter is to gain a detailed understanding of each employee`s current needs, desires, aspirations and preferences and use this information to tailor their role, personal development, hours and rewards so that the total value to the employee is maximised.

Employers need to recognise that circumstances change and that the deal that was struck to bring them to the firm is unlikely to be sufficient to keep them if the headhunter calls with a tempting proposal. To achieve that, the firm will have to update the total reward on offer so that it more accurately reflects the current position. As situations change, so does the value an individual attaches to each of the individual elements of the total reward package.

The last thing you want is for unhappy employee to get a call from a headhunter while you are unaware of their discontent. At that moment in time, merely the sense of being wanted may be enough to tempt them to move on. So ensure that employees come to you with any issues they may have so that you can act.

By engaging the employee in a detailed retention focused conversation it is possible to acquire the information needed to enable avoid losing them for avoidable reasons.

The first stage is to eliminate any minor problems that may be having a negative effect on their loyalty towards the firm. This knowledge will give you the edge on competitors who rely on the appeal of a position not tailored to the individual needs of your employee.

By meeting the employee`s preferences as far as possible, whether it be for additional training, flexible working hours or greater responsibility, you reduce the room that competitors have to exploit.