Retaining Your Most Important Asset: Employees RETENTION STATISTICS 25% - 60% national turnover rate 55% of all job seekers are currently employed 6% of organizations have a retention plan in place
Retaining Your Most Important Asset: Employees 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
Retaining Your Most Important Asset: Employees WHY DOES TURNOVER MATTER?
Retaining Your Most Important Asset: Employees WHAT IS TURNOVER? 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”
Retaining Your Most Important Asset: Employees TURNOVER HIERARCHY TURNOVER Voluntary Involuntary Functional Dysfunctional Avoidable Unavoidable
Retaining Your Most Important Asset: Employees 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
Retaining Your Most Important Asset: Employees 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
Retaining Your Most Important Asset: Employees 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 chal enge 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
Retaining Your Most Important Asset: Employees THE IMPORTANCE OF TURNOVER (3 Key Reasons) 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.
Retaining Your Most Important Asset: Employees 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 – Typical y, 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).
Retaining Your Most Important Asset: Employees 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
Retaining Your Most Important Asset: Employees HOW TO MANAGE TURNOVER ADDRESS ISSUES OF DISSATISFACTION Monitor workplace attitudes and manage the drivers of turnover identified earlier. BETTER ALTNERNATIVES Ensure 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. PLANS Have flexible alternatives for your employees to maintain work-life balance. NO PLANS Analyze 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).
Retaining Your Most Important Asset: Employees HOW TO KEEP TOP PERFORMERS
Retaining Your Most Important Asset: Employees HOW TO IDENTIFY TOP PERFORMERS (CHARACTERISTICS OF 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.
Retaining Your Most Important Asset: Employees HOW TO RETAIN 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 stil 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 skil s 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.
Retaining Your Most Important Asset: Employees HOW TO CREATE A RETENTION PLAN
Retaining Your Most Important Asset: Employees 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
Retaining Your Most Important Asset: 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
Retaining Your Most Important Asset: Employees Step 3: IMPLEMENTING PLAN & EVALUATING RESULTS? 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?
Retaining Your Most Important Asset: Employees 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
Retaining Your Most Important Asset: Employees 6 RETENTION PRACTICES 1. Recruitment & Selection 2. Socialization 3. Training and Development 4. Compensation and Rewards 5. Supervision 6. Employee Engagement
Retaining Your Most Important Asset: Employees 1ST – RECRUITMENT & SELECTION 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.
Retaining Your Most Important Asset: Employees 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.
Retaining Your Most Important Asset: Employees 3rd - TRAINING AND DEVLOPMENT 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.
Retaining Your Most Important Asset: Employees 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
Retaining Your Most Important Asset: Employees 5th – SUPERVISION 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– Especial y, in areas of employee engagement.
Retaining Your Most Important Asset: Employees 6th – EMPLOYEE ENGAGEMENT Note: highly engaged employees were five times less likely to quit than employees who were not engaged.
Retaining Your Most Important Asset: Employees 6th – EMPLOYEE ENGAGEMENT Note: highly engaged employees are five times less likely to quit than employees who are not engaged.
Retaining Your Most Important Asset: Employees 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
Q & A
Contact Us Becky Ross firstname.lastname@example.org 303.228.8753 A copy of the recorded webinar and presentation slides wil be emailed to you later today.