Retaining Your Most Important Asset: Employees

Retaining Your Most Important Asset: Employees

Michele McMann, SPHR

Client Advocate, HR Services

November 10, 2011

Speakers

Moderator Presenter

Becky RossMarketing Manager

303-228-8753

[email protected]

Michele McMannClient Advocate

303-219-7835

[email protected]


25% - 60% national turnover rate

55% of all job seekers are currently employed

6% of organizations have a retention plan in place

RETENTION STATISTICS


DISCUSSION OBJECTIVES:

Turnover and Why it Matters

Retaining Top Performers

• How to identify top performers

• How to retain top performers

How to Create a Retention Plan


WHY DOES TURNOVER MATTER?


Turnover is the rate at which an employer gains

and loses employees.

“How long an employee tends to stay” or

“The rate employees leave an organization”

WHAT IS TURNOVER?


TURNOVER

Voluntary

Functional Dysfunctional

Avoidable Unavoidable

Involuntary

TURNOVER HIERARCHY


2 TYPES OF TURNOVER

1. VOLUNTARY - is initiated by the employee

Ex. An employee leaves for another job

2. INVOLUNTARY - is initiated by the organization Ex. An employee is fired for poor performance


UNDERSTANDING VOLUNTARY TURNOVER

1. FUNCTIONAL - turnover does not hurt an organization. Ex. An exit of a poor performing employee or employee with

easy-to-replace skills

2. DYSFUNCTIONAL - turnover harmful to the organization Ex. An exit of a top performing employee or employee with

hard-to-replace skills


DYSFUNCTIONAL TURNOVER(2 Types)

1. Avoidable - stems from causes that the organization may be able to influence.

Ex. An employee who leaves because of low job satisfaction. Employer could improve the situation by redesigning job to offer more challenge

2. Unavoidable - stems from causes that the organization cannot influence.

Ex. An employee who leaves because of health reasons or being relocated as a result of a spouse’s position


1. IT IS COSTLY (DIRECT COST)-Replacement cost for employees can cost any where

from 50% - 60% of an employee’s annual salary.

(INDIRECT COST)-loss of production, reduced performance levels, unnecessary overtime and low morale

2. IT AFFECTS BUSINESS PERFORMANCE (HIGH TURNOVER) – Businesses with poor production and low

employee morale

(LOW TURNOVER) – Businesses with high production and high employee morale

3. IT BECOMES VERY DIFFICULT TO CONTROL ―Talent Crunch,‖ aging work population, and even off-shoring has increase

the challenge of controlling turnover.

THE IMPORTANCE OF TURNOVER(3 Key Reasons)


WHY DO EMPLOYEES LEAVE?(“Unfolding model”) 4 reason’s employees leave:

1. LEAVING AN UNSATIFYING JOB – The employee no longer enjoys the task of the job.

2. LEAVING FOR SOMETHING BETTER – Typically, means employee has found a job that is better in pay and or job satisfaction.

3. FOLLOWING A PLAN – ―A life Plan‖(i.e., a birth of child)

4. LEAVING WITHOUT A PLAN – ―Shock Event‖ (i.e., a colleague is promoted to a position an employee wanted and results in that employee leaving).


WHY DO EMPLOYEES STAY?

“LINK”– connections with other people, groups, or organizations.

“FIT”– The extent an individual feels they are compatible to their job.

“SACRIFICE”– represents the ―value‖ an employee would give up if he/she left her job


HOW TO MANAGE TURNOVER

ADDRESS ISSUES OF DISSATISFACTIONMonitor workplace attitudes and manage the drivers of turnover identified earlier.

BETTER ALTNERNATIVESEnsure that your organization is competitive in terms of rewards, developmental opportunities, and the quality of the work environment. Be prepared to deal with external offers for valued employees.

PLANSHave flexible alternatives for your employees to maintain work-life balance.

NO PLANSAnalyze the types and frequencies of shocks that are driving employees to leave. Provide training to minimize prevalent negative shocks (such as harassment or perceptions of unfair treatment).


HOW TO KEEP TOP PERFORMERS


1. Having the attitude of being a “leader” vs. the attitude of an “order taker”

2. Commitment to work excellence vs. working the minimal needed

3. Possesses values that integrates with the company’s needs vs. values clashing with organizations

4. Having a far-sighted vision beyond the pay vs. working just for the pay

5. Having the humility to learn and reflect vs. habitual ignorance and arrogance

6. Take self responsibility vs. avoidance to fail and tendency to blame and complain

7. Takes calculated risks vs. risk adverse and total risk avoidance

8. A positive relationship builder vs. negative and participates in gossip and negative discussion of the organization.

9. Possess clarity of career goals vs just work for the moment and see what happens

10. Helps organization to Excel and Improve.

HOW TO IDENTIFY TOP PERFORMERS(CHARACTERISTICS OF TOP PERFORMERS)


1. SHOW THEM THEY MATTER – Let them know that they are valued and you want them to stay.

2. ALIGN INDIVIDUAL & COMPANY NEEDS – Top performers want to be involved in their development.

3. DELEGATE REAL RESPONSIBILTY – High potential employees thrive when they’re truly accountable

for something.

4. BE FLEXIBLE – Finding creative ways that respect lifestyle needs and still provide means of

advancement can differentiate employers.

5. ALIGN EFFECTIVE MENTORS – Top performers want access to people in the the hierarchy they

respect.

6. FOSTER VISIBILTY – Exposure to top decision makers

7. MAKE LEARNING AND ADVANCEMENT UNLIMITED- Invest in their skills and make available

opportunities to move up within the organization.

8. MAKE ASSESSMENT TEST TRANSPARENT – Morale suffers when employees say the selection

process is unfair or built around favoritism.

9. PART ON GOOD TERMS – Separate on good terms. Employers can still keep employees within their

plans even after they leave for other opportunities.

HOW TO RETAIN TOP PERFORMERS


HOW TO CREATE A RETENTION PLAN


Step 1: IS TURNOVER A PROBLEM?

Calculate Turnover Identify the type of employees that are leaving your organization

Benchmarking Compare the organizations turnover rate to companies within the same industry.

Needs Assessment INTERNAL- Assess current skills and talents within the org. and align them with the

orgs. strategic goals.

EXTERNAL – Evaluate orgs. needs in the future

Turnover Rate = Average number of employees leaving X 100

# of employees


Step 2: HOW SHOULD WE PROCEED?

Broad-based Strategies

Concentrates on overall turnover rate in comparison to the market.

Ex. Retention Research, Best Practices, Benchmarking Strategies

Targeted Strategies

Designed for organizations specific turnover concerns.

Ex. Exit Interviews, Current Employee & Focus Groups,

Needs Assessment

INTERNAL- Assess current skills and talents within the org. and align

them with the orgs. strategic goals.

EXTERNAL – Evaluate orgs. needs in the future


IMPLEMENTATION Need top management support prior to implementation

Generate a communication plan

• Try to anticipate objections

• Minimize initial communications to management staff

Implement Selected Strategy

Initiate steps for Broad-Based, Targeted or a combination of both.

EVALUATE RESULTS How many employees are leaving after implementation?

Which employees are leaving (esp. for orgs. implementing a targeted strategy)?

What return your company is getting on its investment in the strategies?

Step 3: IMPLEMENTING PLAN & EVALUATING RESULTS?


TOP 10 RETENTION INITIATIVES(WorldAtWork Survey)

62% Market adjustment/base salary increase

60% Hiring bonus

49% Work environment

(e.g. flexible schedules, casual dress, telecommuting)

28% Retention bonus

27% Promotion and career development opportunities

24% Above-market pay

22% Special training and educational opportunities

22% Individual spot bonuses

19% Stock programs

15% Project milestone/completion bonuses


1. Recruitment & Selection

2. Socialization

3. Training and Development

4. Compensation and Rewards

5. Supervision

6. Employee Engagement

6 RETENTION PRACTICES


RECRUITMENT Hire the Right Person — Employers are adopting the strategy of "hire for

fit, train for skill."

Realistic Job Preview (RJP) –present accurate information and

expectations of the job to perspective candidates.

SELECTION “Fit vs. Skill” – The concept that an employees fit within an organization

culture than their skill and ability.

Using bio-data – Using questionnaires and analyzing responses and

determining characteristics of those who tend to stay at organizations.

Weighted Application Blank– Comparing candidates responses to those

employees with high tenure and high-performance.

1ST – RECRUITMENT & SELECTION


2nd – SOCIALIZATION

Develop a comprehensive Orientation Process— ―on-boarding

process‖ Pair up new hires with mentors.

Feedback– Especially new hires, give employees a feedback on

performance and identify areas of strength and areas of

improvement.


Opportunity to obtain skills for the job– Employees tend to

stay when there is a feeling that employer is investing in them.

Career development– Employees like to know their career path

within an organization.

3rd - TRAINING AND DEVLOPMENT


4th – COMPENSATION

Salary and Benefits — Employers need to ensure that their

compensation packages are competitive.

Tailor rewards to individual needs – i.e., flextime, incentive pay,

etc…

Promote justice and fairness in pay and reward decisions

Explicitly link rewards to retention


Ensure managers are exercising fairness in the workplace–

Statistically, employee’s have a increase chance of leaving

when an employee has a ―bad‖ boss.

Employer need to ensure that managers are properly

trained– Especially, in areas of employee engagement.

5th – SUPERVISION


6th – EMPLOYEE ENGAGEMENTNote: highly engaged employees were five times less likely to quit

than employees who were not engaged.


6th – EMPLOYEE ENGAGEMENTNote: highly engaged employees are five times less likely to quit than

employees who are not engaged.


CONCLUSION

Analyze the nature of turnover in your organization

and determine if it is a problem.

Show employees that they are important to the

organization

Increase ways for employees to communicate with

management

Contact Us

Becky [email protected]

303.228.8753

mailto:[email protected]