13

Strategic Retention

“My job can be so exciting. I get to work with some of the brightest minds and most accomplished luminaries in technology, politics, and business. I am consistently humbled and feel lucky for the opportunities I get.”

—Christopher Saccca, former head of special initiatives, Google, Inc.¹

Not all of us can have the work environment of a Google—a firm that consistently makes the Fortune 100 Best Places to Work list, but, no matter what business you are in or how large or small your organization is, you can take action to retain your valued employees. It takes some effort, but the payoff is potentially huge!

Cost of Turnover

The cost impact of losing good employees can be high, and in more than just dollars. Consider the impact losing a valued employee has on his or her coworkers. Productivity will suffer as they adjust to a new team member. Think about the impact on your customers when you lose someone. If the terminated employee is in sales, consider the lost revenue. If you are a member-driven organization, consider the negative impact losing a key staffer may have on your valued members. Also consider the time investment of your managers, recruiters, and HR staff to recruit, orient, and train a new hire. Also, do not discount the impact that losing a valued employee has on the institutional knowledge of your organization!

Then, consider the cost to hire a new person and train the new hire to the level needed to be productive! This can have an enormous financial impact on your organization, so it makes sense to develop retention strategies to mitigate this potential loss or, to put it in more positive terms, it makes good economic and organizational sense to work to keep your good people. Although we know that it is impossible to keep people forever, why not make the effort to retain them as long as you can. Millennials, who now make up the largest segment of the U.S. workforce, are known for changing jobs frequently, but even they will stay with you if you give them a good reason to!

Turnover is especially difficult in smaller organizations, in which losing one person can severely impact productivity, culture, and institutional knowledge.

Research by SHRM shows that direct replacement costs (recruiting and training) can reach as high as 50–60 percent of an employee’s annual salary and the total cost of turnover can range from 90–200 percent of annual salary.²

When looking at turnover, it is important to differentiate between turnover you can control (poor management, wages, benefits, working conditions, lack of development opportunities, inflexible scheduling, dress code, etc.) versus turnover you can’t control (spouse gets transferred, employee returns to school to pursue graduate degree). Focus your attention on the turnover you can control, and try to learn as much as possible about why people leave your organization. Exit interviews can provide you with valuable information.

    See Chapter 30 (Ending the Employment Relationship), for more information on exit interviews.

Strategic Retention

Originations invest a great deal of time and money to hire and develop their employees and, after all that effort, want to retain as many as possible. If you want to retain your talented employees, it is important that you approach it strategically. Retention starts very early in the relationship between the employer and employee. It starts even before there is a relationship; it starts from the time the prospective employee hears there is a job opening at your organization or selects your firm as a place he or she would like to know more about—just in case a job comes available.

It starts with how your employee brand is crafted and lived.

    See Chapter 8 (Recruiting From Outside the Organization).

Prospective applicants learn about you from your website; from colleagues; from sites such as LinkedIn, where they may connect with someone who has or does work for your organization; and from sites like Glassdoor, where they can read reviews posted by your current or former employees. So, consistency is the key here to letting applicants know what your organization is all about, including your mission and your values, how you display those values in your advertising, and how you treat your employees. The applicant has already formed an opinion of your organization before ever completing your online application or sending in a resume—and you certainly want that impression to be favorable.

Though some managers resent sites like Glassdoor, try to approach their information with an open mind, and use what you see and hear posted about your firm to make positive changes. Don’t ignore what’s written about your organization either on social media or other online sites. Learn what you can and make needed changes.

The retention process continues during the selection process. How applicants are treated when they are going through the interview process gives them a sense of how they will be treated as employees; therefore, be sure every applicant is treated as a VIP. The increased focus on the candidate experience is extremely positive. Organizations are more aware than ever that applicants have choices and they want to work where they’re valued and that starts in the hiring process, so be sure how your hiring process is as good as it possibly can be and never stop trying to improve it!

    See Chapter 9 (The Interview).

Simple things can make all the difference, such as being warmly welcomed upon arrival and not being asked to wait for a long time before starting the interview. Were all of the applicant’s questions answered? Did the interviewer get back to the applicant in the time frame that was promised? Did the applicant feel as if the interviewer gave the applicant a chance to tell his or her story?

The retention process continues during the offer/acceptance phase. How the offer is made can be significant. Did the hiring manager call to make the job offer, and did the manager convey enthusiasm for the applicant? Did the applicant receive a well-worded offer letter that contained the information needed to make a decision? After the acceptance was given, did the new hire receive calls, emails, or other information from the company between the time of acceptance and the start date?

The retention process begins in earnest when the employee arrives on Day 1. You want the new hire, from Day 1, to be so excited about what a great day the new hire had at his or her new job, and how happy the new hire is that he or she made the decision to join this great organization. These are the kinds of experiences that “glue” your employees to your organization.

    See Chapter 12 (On-Boarding New Employees), for information on putting together a process that will wow your new hires.

According to best-selling author Daniel Pink, the critical things organizations must do to keep current employees is tap the motivators that encourage them to stay engaged. Pink, during a presentation made at the SHRM 2011 Talent & Staffing Management Conference Exposition, said that “people can’t be managed or incentivized to engagement; they have to get there on their own. So pay people enough to take money off the table. Instead, provide them with these three intrinsic motivators:

    Autonomy.

    Mastery.

    Purpose.”³

    See Chapter 14 (Employee Engagement) for more on employee engagement.

Pink singled out companies including Netflix and Facebook as examples of organizations that give their employees a high degree of autonomy to do their jobs. Netflix’s vacation policy is to give salaried employees as much time off as they want when they want it. Facebook lets its new hires interview teams and pick which ones they want to work on.

Pink said that employees are motivated to get better at what they do (mastery) through frequent feedback (especially Generation X employees and Millennials). He said, “Younger workers’ lives have been rich with feedback, until they get to the office—a feedback desert.”⁴

    See Chapter 25 (Performance Management), which discusses feedback.

He also reminded us to be sure our employees understand and are committed to our mission. This helps people understand where they fit and how the work they do matters. Pink said, “We want to learn, be engaged, and contribute.”⁵

So, we need to hire good people and let them use their expertise to do what they were hired to do, provide them with development opportunities to increase their skills, and let them know where the work they do ties to our organization’s mission. That is autonomy, mastery, and purpose!

Finding out why employees stay can be even more important than all the time and energy that are put into finding out why people leave. Most organizations do some sort of exit interview when an employee leaves. Though these interviews can be informative, it is equally interesting to find out what it is about your organization that appeals to people. Why does one person stay while another quits? This information can be gathered in focus groups, individual interviews, from online interview using sites such as Survey Monkey (www.surveymonkey.com), or from information gathered in employee opinion surveys.

    See Chapter 14 (Employee Engagement).

You may discover that people stay with your organization because your organizational culture is strong, allows for a flexible schedule, and pays well. That information is helpful to you in several ways. First of all, you can talk about these issues in newsletters, on your intranet, and at all company meetings. In other words, build on what you now know resonates with your employees. You can also emphasize these positives in your job postings and on your website’s careers page. If you find out that your employees particularly like your generous benefits package, this might not be the time to cut back on benefits; find another way to cut costs, if possible. Many people stay with organizations because of the mission. They believe in the cause the organization supports. Use this positively to continue to build your mission as another way to glue your employees to your organization. Some employees enjoy working for your organization because of your commitment to the community, so be sure you publicize your efforts on behalf of the community. People want to work someplace they can be proud of. This doesn’t mean your organization has to be a “household name”—just that when your employees tell others where they work, they can say it with pride because your organization is well-respected.

One area to focus your attention on is your “superstar” employees. These are the people you couldn’t run your organization without. These employees are not only valuable to your organization, but your competition would also love to steal them from you. So don’t you want to know what is important to them and what keeps them motivated? Consider starting with your high-potential employees to gather retention information. What you learn from them may be applicable to others in the organization—and, if not, at least you know what is important to your stars so that you can design a strategy to keep the ones you can’t survive without! Spend time with each of them to learn what is important to them at work and to assess what special skills and abilities they have that make them so good at what they do. You can build on what you learn to design a “stay” strategy for each person while using what you learn about their skills to help you develop others in your organization. And don’t forget that talented people like to work with other talented people. Your outstanding employees will refer other good people to your organization!

We’ve all heard the phrase “People don’t leave organizations. They leave managers.” Although there are some that don’t agree with that statement, it is true that managers have a tremendous impact on the people they supervise. A good manager can provide the encouragement, mentoring, and leadership to help an employee grow and reach his or her potential, whereas a manager who doesn’t invest in his or her direct reports can drive people out of the organization. This is why management/leadership development is such a key retention tool.

Many organizations promote high performers to management positions without providing any training, coaching, or mentoring. They somehow believe that if someone was a good salesperson, he or she’ll be a good manager. Well, maybe that will be true, but it would make more sense to be sure the new manager has the skills he or she needs by providing her some basic training in areas such as:

    Interviewing.

    Motivation.

    Delegation.

    Time management.

    Conflict resolution.

    Performance management.

    Coaching.

    Counseling.

Because it is the first line supervisor who usually has the most contact with employees on a daily basis, providing them with the skills to really be successful managers should pay off in employee retention as well!

Keeping employees with your organization isn’t a simple task, but it really isn’t complicated, either. It comes down to forming connections:

    Employees need to connect to the organization.

    Employees need to connect to the work they do.

    Employees need to connect with each other.

    Employees need to connect with their manager.

People connect to the organization by believing in its mission, vision, and values. They connect to the work they do by understanding where their work fits in—and how it supports the organization’s mission. They connect with each other to form teams and to pull together to get the work done as efficiently and accurately as possible. And they connect with their manager by being treated in a fair and equitable manner, and by knowing that their manager supports them and the work they do.

You won’t know what matters to your employees until you ask them, but here are some things that research, including what Gallup did to create the Gallup 12,⁶ says that organizations should do to retain employees. You will find many of these topics discussed elsewhere in this book:

    Hire carefully and for your culture.

    Be sure employees know what is expected of them.

    Provide opportunities for employees to learn and grow.

    Provide them with the tools they need to do the job.

    Provide a safe work environment.

    Provide clear and fair supervision.

    Communicate with candor and honesty.

    Celebrate successes and occasions.

    Have a pay program that is competitive and fair.

    Provide competitive benefits.

    Respect employees and celebrate their diversity.

    Acknowledge them as individuals.

    Provide constructive feedback.

    Reward employees frequently.

    Help employees build on their strengths.

    Solicit employee feedback on how you can help them do a better job.

    Create team-building opportunities.

    Address performance issues quickly.

    Provide a flexible environment.

    Prohibit discrimination of any kind.

    Listen carefully.

    Make work fun!

Realistic Job Preview

Realistic job preview is a way for applicants to know something about the job that’s more than words on a page or verbal information from a hiring manager. It’s real experience to get a sense of what the job entails. It can apply to all kinds of jobs where people have to deal with a lot of angry customers (call center for example) or where the work is repetitious (assembly line worker) or even a job like a receptionist in an office where the person has to be at the desk all the time, and be warm and friendly to everyone who calls or comes in the door.

If your turnover is high in the first 90 days, consider adding an element of realistic job preview to your staffing process. It can be in the form of a tour to see where the job is performed or a video clip the applicant sees early in the process that showcases each job.

Follow-Up Exit Interviews

There is a growing trend around doing follow-up surveys several months after valued employees leave the organization, when the former employees may be more open and honest and provide information you can use. Most exit interviews are conducted on the employees’ last day and they may feel self-conscious about saying anything negative. They may be worried that you won’t release their last paycheck or give them a reference if they say anything about their manager. Doing a survey after a few months may net you better information. Asking for feedback after a short period of time (three to six months) also allows people to be a little more objective. They have, by that time, hopefully found a new position and may be able to share good insights about why they left and what they have found good in their new job. All of this information can help you as you develop your retention strategies. You may want to have an outside firm do these follow-up surveys, as people may be more open if they’re talking with someone who doesn’t work for your organization.

Information about why people leave can be valuable in planning a retention strategy—especially when coupled with the information about why people stay with your organization. For example, if you find that people stay because you offer great career opportunities, find ways to reinforce that upward mobility is encouraged. If you discover that people stay with you because you provide a flexible workplace that allows for work/life balance, be sure that you stay on the cutting edge and enhance your program when needed.

Targeted Retention Strategies

After you’ve collected data from exit interviews, focus groups, or interviews with your superstars, you may discover that some groups of employees have particular issues that need to be addressed as part of your retention strategy. For example, you might have a division or department that has higher turnover and, if you do employee opinion surveys, you may find those same employees report lower job satisfaction and less positive relationships with supervisors than workers in other divisions or locations. This information should lead you to design a retention strategy around supervisor training. A targeted retention strategy can be very cost-effective.

    See Chapter 14 (Employee Engagement).

Re-Recruit Your Great Employees

Once you know what is important to your best employees, consider a strategy of re-recruiting them to your organization. Think about what you did to attract them to your organization. You probably met with them several times to find out about their background, their career goals, their interests, and their strengths.

Why not do the same thing now that they’ve proven to be excellent hired for your organization? Spend some time to find out how they are feeling about the work they are doing and about your firm. Find out if their expectations have been met. Ask about their career aspirations now; perhaps they’ve changed since you first met them in the job interview process.

Based on the answers you receive, put together a strategy to meet as many of their needs as possible. If you find out that they are interested in learning more about other parts of the business, consider a job rotation project, or getting them to serve on a task force or cross-functional team. Be as creative as possible. This kind of attention should go a long way toward retaining a valued employee.

If you find that your best employees are looking for more interaction with senior-level executives in your organization, consider something as simple as setting up a series of lunches with the CEO, COO, or other leaders where, in an informal setting, your great employees get a chance to learn from the leaders they admire. Additionally, your leadership gets a chance to see the talent you have in your department or division. This strategy can help as you work on your succession plan as well.

    See Chapter 2 (Workforce Planning).

Evaluate Retention Strategy Impact

Whatever retention strategies you come up with, build in an evaluation element so that you can see which strategies have the most impact to help you retain your best employees. You can use your employee opinion survey information, turnover data, and exit interviews as your measurement tools.

Retention and Engagement

There is an obvious link between engagement and retention. Strengthening employee engagement can help you retain talented employees. Engaged employees are satisfied with their jobs, enjoy their work, believe their job matters to the organization, take pride in the organization, and believe that their employer values the work they do. This is what it takes to retain employees in your organization. It isn’t an easy task, but it’s one with big payoff for you and your organization.

    See Chapter 14 (Employee Engagement).

Discussion Questions

1.    Other than financial costs, what are some of the costs of turnover to the organization?

2.    Describe the difference between controllable and uncontrollable turnover.

3.    Discuss some of the ways retention starts in the hiring process, in the acceptance phase, and in orientation.

4.    What are employees looking for from their work? How can you find out what matters to your employees?

5.    What role does the supervisor/manager play in retention?

6.    Name two to three ways to connect with your employees.

7.    How can realistic job preview help in retention?

8.    Discuss the link between employee engagement and retention.