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Employee Retention
Head’s Up: What kind of a Life Line Do you need to Throw Employees So they don’t Jump Ship?
by Barb Miller
Will your company be able to avoid a brain drain when the economy improves?
How can you, as a manager, retain your talent?
Business Week, November 16th Issue reported that employees are holding on for dear life during the recession. However, pent up frustration with their jobs, may mean that there will be a massive exodus once the economy turns around.
Read article:
A Watson Wyatt survey found that the engagement or loyalty of top performers has dropped a whopping 25% in just one year.
Spherion Staffing Solutions found a huge discrepancy between what managers thought would retain employees and what employees actually indicated they wanted in order to remain on the job.
Managers thought they were the most important element in an employee’s decision to stay or leave. However in the Spherion research, employees reported that pay and benefits, or lack thereof, were the major reasons why they would jump ship when they had the opportunity to do so.
During the recession promotions, compensation and benefits have been frozen. Employees may feel that the only way they can play ‘catch-up’ is by jumping ship and negotiating a better package with a new employer.
But there may be something else that will help managers retain staff when the economy turns around. Employees report they are looking for flexibility… especially Millennials, especially new parents, especially those who care for elderly relatives, especially those considering retirement. Perhaps the company that comes out on top when staff start looking for new opportunities is the company that provides flexible work schedules, telecommuting, or part-time job opportunities.
Now is an opportune time to start experimenting with these options. It would be a great way to show your workforce that even though you cannot raise salaries, you are seeking ways to help support their personal needs. These efforts have no cost or minimal cost associated with them. Even if your entire company does not support these practices, managers can experiment with their own teams and then demonstrate to others in the company the successes they have experienced. If managers are able to retain talent, they may be a role model for other managers in the organization.
Many companies are using flexibility in another way during this recession.
Companies are cutting hours in order to avoid layoffs. This strategy can boost morale. Employees who may be anxious about impending pink slips, are relieved when they learn that their employer is doing everything possible to avoid layoffs. By cutting back everyone’s hours, companies save money and demonstrate their caring and compassion. Managers may need to revisit both individual and team goals to determine what is actually a priority to accomplish given that everyone is working fewer hours. Avoiding layoffs can increase employee loyalty and commitment resulting in higher retention rates.
The estimates for the cost of replacing one mid-level employee ranges from 150%-250% of salary. This estimate does not even reflect the cost of lost institutional knowledge and the time it takes for a new employee to come up to speed.
What’s stopping you from experimenting?
Artemis Management Consultants can help you create an engaging work environment to retain your human capital as the economy improves. Don’t let your talented employees work for the competition. Stop the brain drain.
Barb Miller, President, Artemis Management Consultants and Co-Founder Virtual Connection
www.ArtemisManagement.com
www.VirtualConnection.biz
BMiller@ArtemisManagement.com
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7 Answers
Barb, this is a well-written article. Here is what I would add. Employees want to work in a place where they can connect to a noble cause. They want to feel that their work has meaning. No one wants to be the top sales rep in a company that is selling air. No one wants to be an HR representative for a company that makes widgets. We all yearn for our lives to have meaning. By aligning our company, function and department to a greater good, we engage the hearts and minds of our employees. Engagement comes from pull, not push and nothing pulls in employees better than a noble cause.
Tony
You are so right. It is especially important to provide meaningful work to the Millennial generation. They will not remain in jobs that do not engage them. Thanks for your comment.
Barb
it is a dilama, commitment for company regulations & system, and decrease retention, i think it is more related to company culture.
The company culture is no more important that the company atmosphere. There is a big difference in having one but not the other. Both have to work in the same manner. We all want to have meaning in our lives, this is true. However, most people are looking for that slight edge that prevents them from 'jumping ship'. But, employers are too focused on the economic times and unusual slump in sales to see what is going on. I think retention will be a huge hot button in the years to come, as long as the economy gets back on track. So how does that work for employers? They better prepare for everything they can imagine in the years ahead. And I mean everything, nothing is untouchable anymore.
Barbara, I hate to say this, but what's new. Tell me one time that this hasn't happened when we've cycled through a recession. Nothing has really changed about engagement and employers aren't going to change their behaviors, they've demonstrated it over and over again.
Everything you wrote is 100% accurate and right to the point. I'm starting to believe that there is a more significant issue that needs to be addressed. Why do organizations and more specifically leaders ignore data. Every board discussion that I participate in is the same, we all have the answers, but it doesn't appear that the decision makers are interested in the solutions.
I also believe the nature of the working relationship between employees and organizations has changed drastically. I see trust levels at an all time low and I believe that employees are more concerned about themselves and their family then they are their company, this of course is very different that what we've experienced in the past. Employers can no longer dangle the job carrot in front of employees believing that they can get them to jump through hoops, this will change and is already starting to change.
During the month of February this year, more employees quit their jobs than were laid off, that is very telling.
I am love Tony’s comments. He has made a great point, but one that is seldom heard. Today’s workers are interested in connecting to something important more than ever before. The pull rather than push is a great way of expressing this powerful idea.
I spend much of my time measuring employee and customer loyalty. The ability to move employees from company detractors or a passively satisfied employees, to becoming loyal employees is a powerful way improve employee engagement and reduce turnover We find that pay and benefits are almost never the primary issues. Here are the issues we see most often.
1. My ideas are not sought and I’m not heard when I do offer suggestions for improvement
2. My job is not important…I’m just a small part of what’s going on
3. I don’t have the training or tools to do my job as well as I could; therefore I’m not making much of a contribution.
These or variations on these themes are the most often cited reasons for employees who are not yet at a level of loyalty. Just like going to the doctor, once you understand what’s wrong, you can treat it.
In situations where it is difficult to offer employees the monetary rewards that serve as motivation to stay on the job, resourceful managers and company leaders need to think in terms of the whole "compensation package"and identify a host of non-monetary rewards that can collectively provide a reason for employees to stick with the company through lean times. This is the time to review many aspects of the employee's work life from their perspective to see where minor alterations might be easily made that result in better working conditions for them,which boosts morale even when they are not receiving the pay the would like. Such things as relaxing internal policies that may be perceived as rigid or cumbersome, more frequent informal and formal recognition for good work, sponsoring occasions or arranging work schedules to foster strong social relationships within the company, more personal attention and support from management, greater input into decisions, and flex-time may create a strong organizational culture that can really boost morale and loyalty. People rarely walk away from positions they love because the company is struggling and can't pay them well. People leave when they are unhappy AND not getting the money they want. So the bottom line is to create a perception that you are watching out for employees and care as much about taking care employee needs as you do about maximizing profit; this will create a stable motivated workforce even through difficult periods. Perception is everything & it often doesn't cost as much as people think it will to create a positive one - it just means being willing to objectively view internal operations from the employees' perspective and being willing to alter minor operational norms and patterns.
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