I have read article after article regarding the importance of employee retention. I have also read in a recent survey the American Society of Training and Development that the following are ranked according to how the best companies measure performance; 1) Productivity Improvement, 2) Ability to Retain Essential Employees, 3) Quality of Products and Services, 4) Customer Satisfaction, 5) Employee Satisfaction, 6) Sales and Revenues, 7) Overall Profitability, 8) Cycle Time Reduction or Improvement and 9) Other.
In another article, “The Hidden Talent Retention Strategy” by Michael Laft, which appeared in Training and Development (December 2007 Issue) stated that 75% of managers are unaware of a retention strategy in their office. Appearing in the December 2007 issue of Training and Development, it has been shown that even when companies are making an effort to engage workers or make them happy, the managers are not aware of the company’s actions and this is not being communicated to them.
The number one non-financial reason why workers leave their jobs is an opportunity for advancement, followed closely by work-life balance and more interesting work. This was noted in a survey conducted by the International Association of Business Communicators.
Even though most articles written for the HR circles are telling everyone to align your people with your business strategy, they are not telling the management team of the respective company to do the same. Almost every article on employment is demonstrating that there will be an imminent shortage of executives and that most companies expect competition for talent to intensify. Senior executives have frequently acknowledged their failure to pay attention to these issues and now seem to understand that their retention strategies cannot focus solely on the top performers but all employees. We need to engage workers of all ages, nationalities and genders who want to work for your company and remain there for as long as they can.
The problem is that managers treat talent in a most reactive manner. Managers and companies alike must think of the workforce as a collection of segments that actively create or apply knowledge. Companies need to make sure that performance reflects the workplace expectations of both the worker and the company. Companies need to instill a deep commitment to its employees. A commitment must start at the top and should cascade downward through the ranks. Managers must try to integrate a hiring and retention program with their strategic business plan and communicate this integration to all employees on a daily basis. These employee retention strategies must be incorporated into the culture of the company and be expected in terms of core value or competency.
When we find that talent is being nurtured at all levels of the organization or company, we can be reassured that we have been successful in creating a real retention plan that exhibits the real values of company and its commitment to its people and their values.
Contact Innovative Leadership at your convenience for information on our integrated Hiring and Retention Process that can make a difference in motivating, retaining, and even hiring your next top producer or “star” employee. www.ILDV.org or 609-390-2830.
2 comments:
All managers know that turnover is expensive. However, as managers, we have not done our jobs very well. Ask any managers if they believe turnover is costly, and they will get to sputtering and slinging words yet not be able to quantify the estimated costs. Don’t believe me? Go out and survey your top managers. If you research this area, you’ll find a wide array of answers ranging from the ridiculously low to the outrageously high. The cost of turnover can vary greatly—estimates of turnover costs range from ten percent to two hundred percent of annual compensation. The hidden costs are more difficult to estimate and include customer service disruption, emotional costs, loss of morale, burnout/absenteeism among remaining employees, loss of experience, continuity, loss of “corporate memory,” workers’ compensation expenses, relocation costs, interview time, advertising, recruitment fees, lowered quality standards, poor community image, etc. Indeed, I don’t believe you can ever capture all of the true costs of turnover. At best, it is only going to be an educated guesstimate. I personally like the one-third rule, that is, turnover costs about a third of the annual salary of the person you are replacing. This is probably too low, but we have to start somewhere. Michael L. Gooch, SPHR author of Wingtips with Spurs: Cowboy Wisdom for Today’s Business Leaders http://www.michaellgooch.com
I believe you. I believe that you can't always get the exact cost of turnover but the minimum costs normally associated with turnover can affect the bottom line. I like the one-third rule too but I just hope that people realize that turnover is expensive and a process to improve the retention of key employees is paramount.
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