Employee retention: value and strategy

Upwards of 50% of the workforce is thinking of leaving their current position. That means that one out of every two employees in your company is either actively or passively considering different, and potentially more attractive, job opportunities. Are you concerned that this potentially undesirable turnover could cost your organization up to double the annual salary of a departing employee? And what about the impact that turnover has on the morale of employees that are left behind?

Consider that, according to Shaping Market Trends, "in Canada the labour force will grow at a slower pace than the population starting in the year 2010." Even though the aboriginal and immigrant demographic groups are growing, as Michael Walker from the Simon Fraser Institute says, "there's going to be an increasingly common phenomenon that we are not going to be able to get these people because we're not the only ones looking for them."

As the pool of available employees diminishes, the competition for talented and competent people will only grow fiercer in the not-so-distant future. This raises the question: Could more companies benefit from doing a better job at not only attracting future employees, but also retaining their existing staff? The clear answer is yes.
Studies from the Gallup organization show that "employees who have an above average attitude towards their work will generate 38 per cent higher customer satisfaction scores, 22 per cent higher productivity and 27 per cent higher profits for their companies." This would certainly suggest that the recruitment and retention of competent employees is a strategic concern for any organization.

In a recent study, Accenture interviewed 425 senior executives at leading organizations in North America, Europe and Asia, to identify and prioritize the issues of greatest concern to senior management. They found that "attracting and retaining skilled staff ranks highest on executive agendas for 2005."

With retention being such a high priority, why are people leaving organizations? Some literature suggests that people leave their jobs for a wide variety of reasons, including:

Unmet expectations
Inappropriate fit for the role
Lack of fit with company culture
Lack of sufficient opportunities for growth and advancement
Inadequate recognition and appreciation
Problems with a manager or supervisor
Dissatisfaction with compensation
Stress
Lack of work/life balance
Lack of confidence in the company and/or leadership.

While this is by no means an exhaustive list, it certainly highlights some key areas for focus, if a company is working on developing a strong retention strategy. But the question still remains, how do you attract and retain your key people? In his article, How to Build a Magnetic Employer, David Lee writes, "Regardless of one's profession or age group, or changes in societal norms, human beings have fundamental, hard-wired needs and drives that impact employee satisfaction. These include the need:

For meaning and purpose;
For community and connection;
To learn and grow;
To feel a sense of control and autonomy;
To experience mastery and self-efficacy."

If you were to examine your internal attraction and retention strategies, how well would you say that your organization meets those five basic needs?

Below is a list of questions that you might consider when evaluating the effectiveness of your present employee retention strategy.

Factors
Work Environment	Do we offer the best possible work environment to our employees? Can our employees take pride in the company? Why or why not? Do we provide opportunities for employees to be proud of the work they do? Do we live our corporate values? Do we hire the right people, at the right time?
Relationship	Do we have employee appreciation programs in place? Do our managers know employees on a personal level? As an organization, do we connect with employee's families? If so, how well and if not, why not? Do employees have opportunities to meet with company executives? Do we celebrate personal events in the workplace such as birthdays, marriages, etc.? Do we celebrate service milestones? How do we involve employees in business decision making? Is this done consistently, infrequently or not at all? If not, why not? Do we consistently solicit ideas from our employees? Do we openly communicate with employees, sharing information that is both good and bad?
Employee Support	Do we accurately portray the role for which we are recruiting? Do we provide adequate orientation and training to new employees? Who listens to employee concerns in the workplace? Is this the most appropriate resource person for the employee? Does our organization have an effective mentoring and/or buddy system?
Growth	Does our organization provide training and development opportunities to employees? Does our organization promote from within in a fair and equitable manner?
Total Rewards	Are compensation plans managed fairly and equitably? How do we recognize the efforts and accomplishments of our employees? Does our company provide competitive benefits that are comparable with industry standards? Does our organization offer profit sharing plans?

This is a great starting point, but let's now consider a different, but equally valuable, perspective from the Gallup organization.
In their book, First Break All the Rules, What the World's Greatest Managers Do Differently, Marcus Buckingham and Curt Coffman identify the links between employee opinions, productivity, customer satisfaction and the rate of turnover. "In developing measures of employee perceptions, researchers have focused on the consistently important human resource issues on which managers can develop specific action plans."
These are encompassed in employee ratings on the following statements, called the Q12. How might your company fare if employees were to provide a rating on each of the following statements?

I know what is expected of me at work.
I have the materials and equipment I need to do my work right.
At work, I have the opportunity to do what I do best every day.
In the last seven days, I have received recognition or praise for doing good work.
My supervisor, or someone at work, seems to care about me as a person.
There is someone at work who encourages my development.
In the last six months, someone at work has talked to me about my progress.
At work, my opinions seem to count.
The mission/purpose of my company makes me feel my job is important.
My associates (fellow employees) are committed to doing quality work.
I have a best friend at work.
This last year, I have had opportunities at work to learn and grow.

When examining employee retention strategies, similar themes arise again and again. Regardless of which approach your company takes, it's well worth taking the time to regularly evaluate your attraction and retention programs.

Strategically, companies can no longer afford to be casual about employee turnover. While a certain amount of turnover is normal and expected, retention may become more and more a subject for examination. As the labour market tightens and competition for talent increases, it may become increasingly more difficult to find and/or replace knowledgeable and capable employees. In the future, investments in effective attraction and retention programs may pay the highest dividends!

Reprinted with permission from Meyers Norris Penney, www.mnp.ca