Employee Retention

Retention 2008

What should you be focusing on in 2008?

1) Distinguish between those employees that you really want to retain because of the impact they have on your business, and those that you would like to retain but could replace if necessary.

2) For those individuals or groups of employees identified as belonging to the first category, take a proactive approach to retention. The single most sensible step you can take is to conduct a retention interview.

3) Think carefully about your employee value propositions. What is it that each person truly values? Is there a way of increasing the total value on offer by making some minor changes?

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

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.

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.

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. 

First Principles Of Retention

It is useful to keep in mind the basic principles of retention. These apply to those employees that the firm wishes to retain.

1. Employee Decides

Each employee ultimately decides whether they wish to stay or leave.

An employee may decide to leave despite not having another position lined up.

An employee may decide to stay despite better financial offers from other firms.

2. Different Preferences

Employees are likely to have different preferences.

One may attach greater value to the financial reward, whilst what matters most to another is the chance to spend time with their family.

Some employees may be willing to tolerate a relatively low initial salary in expectation of higher rewards later on.

A given individual's preferences may also change over time.

3. Unavoidable Departures

Some departures are simply unavoidable.

Firms should concentrate their efforts on minimising the number of avoidable departures.

4. Competitive Marketplace

There exists a competitive market for employees.

If the competition offers your employee an overall package that the employee prefers to their current one, you have a problem. However, you have the option of making a counter offer.

5. Headhunters Exist

A rival firm can approach your employees through use of a headhunting firm.

An otherwise contented employee may find themselves in possession of an alternative offer of employment.

6. Cost Of Turnover

The cost of employee turnover should play a part in your decision making.

Where the cost of turnover is high, investing resources can produce a net saving for the firm.

7. Total Reward

Employees' care about the total reward they receive from work, not simply their current salary.

Firms should seek to maximise the total reward each individual receives.

Employees view employment alternatives in terms of the value in my life model.

Work provides value through financial compensation, a favourable everyday experience and psychological growth opportunities, whilst denying the employee the opportunity to spend the time doing other pursuits.

8. Understanding Your Employees

The firm that best understands the needs, aspirations, expectations, and preferences of its employees is likely to be in a strong position to gain a competitive advantage in retention and ultimately, in terms of human capital.

9. Interpretation

The key to a successful employee value proposition is to tailor it to your employees.

It is they that will determine the value on offer.

10. Flexibility And Choice

Providing choice wherever possible is, on balance, a sensible strategy.

A rigid system is less likely to retain individuals than a flexible one.

Lessons From Successful Retention Projects

So what are the lessons from successful retention projects?

A few of you may be familiar with the short guide I wrote on this topic some time ago. If so you might want to skip this post. But for everyone else here are the key themes that distinguished successful retention projects from those that were unsuccessful in achieving their stated aims:

1. Highly targeted
2. Awareness of the cost of turnover
3. Awareness of destinations
4. Information gathering
5. Careful diagnosis
6. Cost effective
7. Combining measures

Over the coming weeks I'll try to expand on some of these themes so you can avoid the mistakes that seem to plague far too many attempts at reducing employee turnover.