Retention: Learn How You Can Create a Competitive Advantage for Your Company

By: Robin Throckmorton, MA, SPHR
Submitted: 2008-06-30 22:05:09
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Have you seen the IBM commercials that focus on some gadget that is the key to your business success (i.e. crystal ball, magical jeanie lamp)? They are right, there is no magical solution to solving your business problems. But, if I could share a nugget of information with you that would help ensure that your company could obtain a unique competitive advantage, would you be willing to listen? AND, take action? What if I told you many of those solutions will only cost you a little time and a minimal amount of money? What do you have to lose?

We’ve seen our economy go up and down over the past four or five years with many more challenges ahead of us. I’ve seen employers tighten and loosen their belts with each change and with no regard to what may come next. With this last downturn in the economy, many employers cut their most important resource — the people — as though they were a disposable resource. Plus, in an effort to cut costs immediately, many companies not only cut staff but also eliminated severance, outplacement benefits, and any form of advance notice. In many cases, these actions were done without any regard for the staff members left behind. What taste has been left in the mouths of the surviving workforce? Remember, this is the workforce that is going to be depended upon to run the business and ensure continued success tomorrow. Believe me, I hear the stories daily from many individuals and they aren’t very favorable.

Did you know that according to futurist Roger Herman, surveys suggest that 30 - 40 percent of our workforce have already "checked out," meaning they are more concerned about their next job than doing their current job? Can you afford to have this large of a percent of your workforce uncommitted to you or better yet leave you tomorrow? Not to mention, those that leave you will talk to others outside the organization and how easy will it be to attract "good replacements"?

I’m already starting to get calls from employers saying things like "...there just aren’t any qualified applicants out there...when we find one, they are snatched up in no time." Does this sound like an issue we should even need to address in an economy with such high unemployment? Absolutely, considering how little regard has been given to employee retention over the last few years combined with the fact that YES we are about to face one of the largest labor shortages in our lifetimes.

According to the Bureau of Labor Statistics, in just America alone, we will have nearly 168 million jobs to be filled by skilled workers by the year 2010 but our workforce supply will only be about 158 million. Remember those signing bonuses we had to offer in the late 1990’s when the labor market was tight? Well, they will be minimal to what we will be faced with by 2010 if we don’t start focusing on retention NOW. Sure there are a number of folks still unemployed, some good and some mediocre. But, you need to proactively create a program that will retain and attract the best today and tomorrow.

The cost of an effective retention program is minimal to the cost of your turnover. Did you know that the general rule of thumb for the cost of turnover is about 100 - 150% of the terminating employee’s salary? Can you afford this if just half of those 30 - 40 percent of your employees that are "checked out" leave tomorrow?

Employees are leaving organizations even in this tight economy. Some individuals may be hesitating or waiting for the labor market to improve but have already "checked out." So, when the economy rebounds, and it will, there will be no need for any hesitation from these "checked out" employees as employers begin begging for qualified skilled applicants.

Do you know why employees leave your organization? According to Development Dimensions International, the top five reasons why employees stay or leave an organization are:

• Quality of relationship with supervisor
• Ability to balance work and home life
• Amount of meaningful work — the feeling of making a difference
• Level of cooperation with co-workers
• Level of trust in the workplace

Have you asked your employees why they stay or leave your organization? Your best resource is to interview the employees as they leave or after they’ve been gone for a short while. Better yet, find out before they leave. Ask your employees why they like working for your company and what can you do better? Then, use the results to capitalize on your strengths and improve the areas that they bring to your attention. But, don’t ask if you have no intention of taking action. The idea of exit interviews that never result in organizational changes or improvements is similar to an ineffectively administered suggestion program. If you can’t do what they are asking, let them know and task them to come up with alternative options to make it happen.

In trying to retain good employees, you’ll quickly find there isn’t one solution. The demographics of our workforce now include more women, more minorities, various religions, and four differing generations. The combinations of these demographics will influence what you should do to retain and attract the best employees. You’ll have to be creative and implement multiple solutions that will address each individual’s needs.

Possible Solutions...
Recently, Inc. magazine published an article on "Managing One-to-One" by Leigh Buchanan stating that the best way to retain your employees is to manage each one differently. Find out what each needs and what is important in their lives. This will help you accommodate the differences as well as build trust and support with your workers.

To meet these individual needs, you will need to offer a variety of benefits or programs. Money isn’t everything anymore. Folks like things that make their lives easier and help them balance work and personal life. But, what exactly makes their life easier varies from person to person. For some, they may want more time off or flextime while others may want concierge services like onsite car wash, oil change, dry cleaning, or dinners to go. Some employees may need childcare assistance while others may need aging parent assistance. As mentioned above, the best way to find out is to ask! Many of these ideas will only cost you the time to implement and will actually fund themselves. But, as a result, your employees will feel you care about them and are trying to do things to help make their lives more livable.

Another solution involves your supervisors. One of the toughest things to do is to be both a manager and a coach. Like trying to be a mother and a friend to your child, it is easy to be one or the other but not both. But, it takes both to effectively retain your employees. The traditional more common role is the manager, which is focused on day to day issues of managing the staff including performance, feedback, discipline, and getting the job done. All of these issues are important but to ensure a trusting workplace, meaningful work, and strong supervisor relationship coaching skills are critical. Coaches help employees develop and grow within the organization and in their careers by guiding, listening, advocating, counseling, and communicating with their employees. To effectively retain employees, your managerial staff must develop both management and coaching skills.

The key to retention is realizing your employees are a valuable resource to an organization. If they weren’t then you wouldn’t need them at all. But many times, organizations fail to ensure their employees feel like they are a value or asset to the organization. One of the best places to start is by sharing the company goals with the employee and directly linking them to the responsibilities of the employee at the beginning of the plan year. This will help ensure employees know what they do contributes to the success of the company and what exactly is expected of them.

Also, to help employees feel like a value to the organization, you could implement a formal suggestion program. Who knows ways to improve the organization better than the individuals doing the work? And, when done right, employees will eagerly share their ideas and definitely feel they make a difference. You will need to have management support and commitment to the program. Plus, you’ll need to decide how you will reward and/or recognize employees for their suggestions. Many successful organizations even share the savings with the employee who makes a recommendation or at least recognize them in meetings and/or company wide publications.

To elaborate on recognition, I would recommend that you develop formal and informal ways to recognize your employees. Employees are human and humans like feedback, both positive and negative. Your managers need to be coached and trained to provide regular and ongoing feedback and recognition to their employees. Many managers struggle in providing ongoing feedback to employees. Remember, just a simple "thank you" or "I noticed you put a lot of time into..." or "you did an outstanding job on the XYZ project..." will have a huge impact on employees. To help your supervisors, you can facilitate a roundtable discussion for them share experiences or concerns with feedback or designate a person to be available to help them. These simple actions will make the world of difference. Plus, don’t forget to develop some formal recognition programs even for simple things such as employee of the week, perfect attendance, helping hand, outstanding teamwork, employee referrals, project completion, etc.

One other must for an organization to effectively retain a great workforce is communication. Have you ever heard employees in an organization complain that their company communicates too much? It’s impossible!!! You cannot over communicate and employees need to be kept informed. How you provide the communication depends on your organization. It may be through all employee meetings, memos, newsletters, emails, or one-on-one from a supervisor but the key is to communicate it several ways to ensure everyone hears the information.

If you are still saying "why should I do this?" and the facts about our labor shortage aren’t enough, then hear this: according to DDI, when retention is above average, organizations realize greater customer satisfaction, employee productivity, and most importantly profitability. And, if their research isn’t enough for you, listen to what Michael Rowan, president and CEO of Humility of Mary Health Partners quoted to Business & Legal Reports, "Our greatest resource is our people. We believe that if our employees are happy and feel fairly compensated and respected, then the hospital and patients will be the ones that would reap the most benefits."

So, like IBM says we don’t have a magic jeanie in a bottle to grant you wishes but by following some of these tips you will realize a strong competitive advantage which will in return have a positive impact to your bottomline.

Article source: Expert Articles