Employee Retention

Hiring people you can retain

You may recall the checklist I mentioned back in early July for the recruitment stage. You don't want to go to all that trouble of hiring someone, only for them to leave before they have become fully productive in the role.

To avoid this scenario you really need to take a close look at your current recruitment process to see whether it is retention focused recruitment rather than the hiring of employees who may look good at interview but won't stay long enough to make them the wise choice.

The discussion of respective expectations is a theme I've mentioned many times before, but that's not all you need to do. Providing a realistic job preview is another must. The whole checklist is available here.

There's a short guide on retention focused recruitment that you can download by clicking on the link below. If early turnover is a problem for your organisation it is well worth a quick read.

The guide to retention focused recruitment by Colin Brown

Can you under-pay people and still retain them?

Can you under-pay employees and still retain them?

Answer: for many companies it is very difficult to retain employees for a decent length of time if you are consistently paying less than market rates. But in certain situations it is possible to put together an attractive employee value proposition than involves a salary that is less than they could get elsewhere.

So really you need to think about the alternatives available to your employees, and their preferences regarding aspects such as travel, working hours, working conditions and so on. A few quick examples: if you hire an employee who lives in the local area and isn't interested in travelling long distances, then the fact that your competitors, based 100 miles away, are offering higher pay, is not likely to tempt them to want to move. However, if your competitors are located 1 mile away then it will be a rather different story.

If you are the only employer offering flexible working hours, and perhaps the chance to work from home one or two days a week, then you are more likely to be able to retain good employees despite paying less than they could get elsewhere.

Lessons From Successful Retention Projects 4

Some while ago I took a look at a number of successful retention projects to see if there were any key themes that distinguished the successful project from those that had negligible impact. A few of you may have read the resulting guide on this subject.

The short guide on Lessons From Successful Retention Projects has now been updated and you can download a copy by clicking on the link.

In previous posts I have already outlined the main themes, and expanded on some of these lessons, including highly targeted, and awareness of the cost of turnover. So at this point I'd like to suggest that if you are at all interested in this topic, that you download the full guide. All you need to do is click on the link for the guide on Lessons From Successful Retention Projects

Employee Insight For Retention

Here's a secret for you: the nominative group technique.

By now you'll probably be aware of my thoughts on exit interviews. Nice in theory but in practice often a total waste of time and money. Employee surveys also come with their own positives and negatives. They are difficult to do well and will usually require a serious amount of preparation including several focus groups just to make sure you are asking the right questions.

A good test of someone's understanding of the whole retention/turnover field is whether they recommend the nominative group technique as the way forward. If not, I'd be concerned that they were pushing you towards something they have for sale, rather than the sensible, low cost option.

Definitions Of Employee Turnover

As you are probably aware, there are many different definitions of employee turnover. Unfortunately, each one comes with certain inherent weaknesses.

So we have the attrition rate (total turnover rate) : the total number of exits during the period, divided by the average number of people employed. Trying to make sense of such a raw number can be almost impossible. There's no clue as to whether this number is dominated by retirements, by dismissals, by redundancies, or by the loss of productive employees.

The retention rate: the percentage of employees that were employed at the beginning of the period and who remain with the company at the end of the period. Those that joined and then subsequently left, during the period of time you are looking at, get ignored by this definition.

Voluntary turnover: this time retirees and employees dismissed or made redundant, are not included.

Dysfunctional turnover: here the focus is on the loss of good performers. But the problem comes when you start to think about how this number is generated. How many departmental managers are going to admit to experiencing more than the occasional unwelcome departure, for fear of inviting an investigation into the reasons behind these exits?

Regretted turnover: similar to dysfunctional turnover.

There's no easy answer. No sensible way of discovering what you really want to know; which is how many people did we lose, that we would have liked to retain, and that given a few small changes, we would have been able to keep.

Some while ago I did write a short guide on employee turnover definitions. In truth it is probably best to track several different definitions, and to be cautious about benchmarking against other companies or even sector or industry figures.

Retention Research 1: Realistic Job Preview

A quick overview of this proprietary research: 5 key elements that when put together tend to produce a reduction in regretted employee turnover of approximately 18%, all other things being equal. So if your rate was 15%, you could reasonably expect it to move towards 12% once you had put in place these 5 elements, assuming economic factors remained unchanged.

The idea of a realistic job preview has been around for a long time. The reality of actually giving prospective new recruits, and sometimes even internal candidates, a good sense of the day to day nature of the role, is less easily achieved.

My proprietary research suggests that additional focus on this element can produce real dividends in terms of a reduction in the number of departures within the first six months.

So do take the time to review your realistic job preview to see whether there is room for improvement. If you aren't currently including this element within your recruitment process, then it is certainly worthy of consideration if you are experiencing early turnover - normally defined as within the first 6 months, though sometimes a different time-frame may be more appropriate.

The other four retention elements will be discussed over the next few weeks.

Talent Retention - Negotiate To Win

If you are familiar with my line of thinking on talent retention, you may have noticed the underlying principle of success through negotation. While there are several key elements to my approach, this concept of retaining talent by having an on-going dialogue, negotiating small changes every so often, being flexible, creating real value in their life, is a route to success that you rarely see elsewhere.

So if you want to keep hold of your most valuable human assets, be prepared to negotiate a little.

Applying Systems Thinking To Employee Turnover

It is certainly worthwhile taking a few moments to apply some systems thinking to any clear pattern of employee turnover within your company. It could well be that it is the system itself that is driving turnover.

For instance some firms are set up so that at certain points there are very few opportunities for promotion, so the natural movement is out. This should not be a problem so long as the organisation recognises and adapts to this pattern. Expected turnover is far less damaging than the sudden announcement that an employee is leaving in a few weeks.

Not All Turnover Has The Same Impact

As you may have noticed, I tend to take a business perspective on all matters turnover and retention. Much of the current literature on employee retention seems to have missed the point. And it is this: some departures matter more than others.

You are trying to meet your business goals for this year then over the course of 6 weeks, 3 key people decide to leave. Any chance of reaching your targets has just vanished. Of course you can get replacements, but there is no chance that you can get them up to speed in time. On reflection you wish you had put a little more effort into retaining your 3 key people; maybe you wouldn't have been able to keep all of them but there's a fair chance you could have prevented one or two of the departures.

Another department also loses 3 people. One of these departures is not far short of being a relief to all concerned. Another is disappointing because they are a nice person but in terms of productivity it won't be much of a loss as replacements can usually find their feet soon enough. And the third was long expected, their replacement is an in-house promotion that has been lined up for months, prepared and ready to start.

Retention and Appreciative Inquiry

Not something I've mentioned to date, but certainly worth considering, is the use of Appreciative Inquiry, or alternatively, Solutions Focus, during what might be described as the diagnosis phase. In this instance, diagnosis probably isn't the correct term as you'll be focusing more on what's working rather than identifying problems.

Both approaches have proved to work wonderfully well in certain situations. Again, you need to think carefully about what you are hoping to achieve.