Employee Retention

Performance Turnover

Should you be calculating "performance turnover" rather than treating each departure equally?

Writing in Workforce Management Magazine back in May this year, Professor John Sullivan made the case for focusing on performance turnover. As he rightly points out, not all turnover is equal; some turnover is desirable, while other turnover is deeply damaging to the firm.

As I have long stressed, the traditional and most commonly used approach to calculating employee turnover has the potential to be hopelessly misleading, as the emphasis is on the quantity of departures rather than the quality.

If managers are to be assessed and rewarded based on their efforts to minimise turnover, you don't want them to be incentivised to make a special effort to keep onboard unproductive employees.

Professor Sullivan recommends that different weights should be allocated to the loss of a top performer, an average performer and a poor performer. He suggests three, one and zero, as appropriate figures. So the loss of three top performers would result in a performance turnover score of nine, while the loss of three poor performers would produce a performance turnover score of zero.

Talent Retention

For those of you who want to keep up to date on talent retention, there are three fairly recent books that while not directly aimed at this field, do contain some valuable insights and are therefore worth a quick read. As anyone familiar with the field will know, one of the key aspects of talent retention is the art of negotiating; an area where there is often significant room for improvement.

In The Power Of A Positive No: How To Say No And Still Get To Yes William Ury, author of the classic book on negotiation, Getting To Yes, examines how to handle those difficult situations where you have to say no but at the same time, need to open up a pathway to a positive solution, so as to avoid damaging the relationship. Anyone who has ever conducted a retention interview will immediately recognise the relevance of this book. Strongly recommended.

Roger Fisher, also co-author of Getting To Yes, has teamed up with Daniel Shapiro to write Beyond Reason: Using Emotions As You Negotiate. Their focus is on the role of emotions during negotiations; again the parallels with certain retention situations are fairly clear.The model is based on the negotiator being aware of 5 critical core concerns: appreciation, affiliation, autonomy, status and role.

Finally, and in truth perhaps the least relevant of the three books, is Roger Volkema's Leverage: How To Get It And How To Keep It In Any Negotiation.

Mass Career Customization

A quick mention for Cathleen Benko and Anne Weisberg's new book Mass Career Customization: Aligning The Workplace With Today's Non-Traditional WorkForce. They stress the importance of personalizing employees' careers to fit their lifestyles in order to improve retention over the medium to longer term.

They suggest managers and employees discuss four key elements: pace, workload, location/schedule and role. Those of you who have read Lynda Gratton's The Democratic Enterprise will probably be familiar with most of the main ideas.

For more on mass career customization visit their website.

Employee retention - does it matter?

HR Zone website has an article by Bettina Pickering and Tom Marks, of PA Consulting Group titled employee retention - does it matter? Their basic point is that employee retention is not the key objective to ensuring the overall performance and growth of an organisation.

It is an interesting article and one that contains a certain amount of truth, even if at times, they do tend to go too far with their conclusions. Raw employee turnover figures tell you absolutely nothing about the impact this turnover is having on the business. If an employee has been in position too long, and that will vary from person to person, then you may well see a productivity boost following their departure.

As I have written many times, both here and elsewhere, some departures really hurt the business while others make little difference. It just depends who is leaving, where they are going, the impact it will have, and the time and cost of getting a suitable replacement in position and fully productive in the role.

So it is quite easy to imagine a scenario in which two rival companies each lose 20 employees during the course of 1 year. The employees departing company A are easily replaced at minimal cost, the loss in productivity is minimal and the knowledge they take with them is of little value to their new employer. Constrast that with company B who lose 20 top performers, who have built relationships with key clients, are difficult to replace within a reasonable time frame and whose unique knowledge is now lost to the business. Company B struggles to cope with these 20 departures, clients take their business elsewhere, and the company goes under as a direct result.

People leave one employer to join another; it is a simple fact of modern working life. Keeping hold of your best performers is normally a sensible idea. 

The truth about Exit Interviews

Doing a quick search on the term "exit interview" I come across the following statements:

• Open Ended Exit Interviews Provide Solutions to Turnover Issues
• Discover how to reduce employee turnover with exit interview survey
• Online exit interviews reduce turnover

Of course all these statements came from adverts by companies attempting to sell you their online exit interviews. Unfortunately, exit interview data is not particularly reliable and is therefore of limited value when you are attempting to reduce turnover.

The reason why the data is notoriously unreliable is actually fairly obvious to anyone who has ever left one company to join another: references. Why risk doing, or in this case saying, anything that might come back to haunt you?

I've written a detailed guide to exit interviews taking a close look at what actually happens; the reasons for, the reasons against and so on. There is even a selection of exit interview questions and an exit questionnaire for those who still want to conduct exit interviews. But make sure you read through the whole guide first.

To get a copy of the Exit Interview Guide simply click on the link.

Holding on to good staff if you're a small business

It can be tough holding onto good staff if you're a small business. This month's Director magazine (Yes I'm a member of the Institute of Directors) features an example of some smart thinking from Amtrak Express Parcels, a medium sized business with around 1,000 staff. They are using home working as their main weapon in the battle to retain productive employees in their IT development team.

Clearly home working isn't the solution for every situation and it does require a certain amount of adjustment and the occasional physical meeting to keep things ticking over. But the general principle is that the flexible company is likely to be the one that holds on to its best people while the rigid firm loses out.

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.