Retaining Your Best People
Author:
Karin Lanigan
One of the biggest issues facing businesses both small and large in recent times has been staff retention. Having successfully recruited talented and qualified personnel in a tight labour market, it is important that you can engage and retain this valuable resource.
Some level of staff turnover in a business is to be expected and can even be beneficial. However, to grow and to maintain competitive edge, companies should have a strategy in place to retain their top performers and intellectual capital.
The costs of staff turnover can be significant both financially (recruitment costs) and also in terms of the impact on an organisation’s reputation and internal morale. When a key member of a team leaves, they take with them their knowledge, expertise and the business relationships they have developed both internally and externally. Addressing the loss involves investing time and money in training up other staff members which can put pressure on the resources of the business. A well-devised staff retention policy will reduce the impact on your business.
Why People Resign
The first step in putting in place your staff retention policy is to establish and understand the reasons why your people are resigning. Some practical steps to implement include:
Exit interviews
Conducting detailed exit interviews will help you ascertain the reasons people are choosing to move on. These interviews should be structured, detailed and probing as employees may not always be forthcoming with information for fear of leaving on a bad note. Ideally the interviews should not be conducted by the line manager.
Surveys
Conducting confidential surveys and questionnaires periodically can also be beneficial.
Performance Indicators
Using staff retention as a Key Performance Indicator for the management team assists in tracking and monitoring trends and helps drive management initiatives to retain key personnel.
Reasons People Leave A Job
The recent IIN Business Members Survey (2007)* identified the main reasons people leave a job as follows:
-Opportunity for advancement elsewhere
-More interesting and varied work
-Work / life balance
-Better compensation / renumeration
-Dissatisfaction with employer / manager
-Desire to travel
Improving Retention
Communication
Employees like to feel involved in the organisation. Holding regular meetings and briefings can assist with this. Sending regular updates by email can also prove beneficial. A company must ensure that it is on the same wavelength as its employees and that it communicates in a manner that is understood at all levels. Good communication helps employees feel more involved and builds on their commitment levels.
Stimulating ideas
Encouraging your people to contribute ideas, solutions and suggestions can be a worthwhile exercise. Setting up a suggestions box where employees receive a small reward for their proposal can inspire employees to be creative. Holding a competition for new ideas and a business plan can also stimulate the flow of ideas, encouraging employees to become more involved and to feel they are making a meaningful contribution. This helps foster loyalty and involvement.
Employee Referral Schemes
Many organisations have found the introduction of an employee referral scheme has reaped rewards when it comes to hiring additional talent.
Team / company events
Organising regular employee events will help to develop relationships internally and generate a stronger team bond. The events do not have to involve spending huge amounts of money and can be as simple as a social event held in-house.
Establishing and maintaining a defined appraisal process
Setting up a professional, defined and regular staff appraisal process will facilitate improved levels of interaction. It is essential that employees are aware of, and understand, their goals and objectives and that there is no misunderstanding in relation to expectations. It is also a useful forum for agreeing future goals and timelines as well as providing constructive feedback.
Robust HR policies
The existence of robust HR policies and procedures in areas such as training, bullying and harassment, discipline and recruitment can contribute to the overall professional operation of a business. This will ensure that issues are dealt with in a consistent manner and will inspire the confidence of the staff, thereby contributing to morale and confidence in the business.
Companies that pay attention to environmental and corporate social responsibility can reap benefits when it comes to employee recruitment and retention.
Mission Statement
To maximise potential, companies should have a mission statement, instil their corporate values in the company culture and follow through in a strong brand and sense of ethics. Increasingly employees are interested in, and aware of, policy in areas such as environmental responsibility, corporate social responsibility and community and charitable issues.
Employees like to be associated with organisations that demonstrate consideration for these areas. Companies that pay attention to these issues can reap the benefits by becoming more attractive as an employer while at the same time enhancing their corporate reputation and brand.
Challenge Your Team
A good performance appraisal process will support higher levels of job satisfaction and motivation. Ensuring that good performance is recognized and rewarded is essential. Rotation programmes where employees have the opportunity to gain experience in various roles and cross-functionally can also benefit an organisation immensely. For employees with strong potential providing them with responsibility at an early stage is motivational and can prove advantageous to the company.
With more and more people having to spend long hours commuting, flexible working arrangements are appreciated and valued by employees and can result in greater productivity levels.
Training and Development
As part of the appraisal process employees should be encouraged to partake in regular and continuous training to develop their full potential within their role and also with a view to progressing their career.
Setting out and agreeing a training plan individually with employees and providing them with a personal development programme will ensure that they can see their future career and development plan clearly. They will appreciate the commitment the company is making to them and their personal development. This will prove motivational and will encourage them to stay.
Encouraging Work/Life Balance
In a time when more and more people have to spend long hours commuting there is less of an appetite for working overtime. Therefore employers that offer flexible working arrangements and that encourage the promotion of a work/life balance ethic can be very attractive to employees and potential employees. Flexible working arrangements are very much appreciated and valued by employees and inspire them to go the extra mile when the need arises. The facility to work from home is also recognised as a major perk. This can also work in the employer’s favour as productivity levels can be higher.
Offering Flexible Benefits Packages
A flexible benefits package is very appealing to employees. It allows them the option to choose and tailor benefits to suit their individual requirements. They are allocated a specific value/amount which they can then use to purchase various perks and benefits from a selection which can include pension, health insurance, holidays, etc. This arrangement gives the employee greater choice and freedom and guarantees they are receiving the best possible benefit for them personally. The tax aspects must be made clear to avoid any shocks. Companies need to be creative and offer not just the traditional inducements to attract and retain quality staff.
Counter Offers
An increasing phenomenon in the Irish employment market has been the practice of counter offers. In many instances where a key employee hands in notice, companies try to entice the individual to stay by offering a more attractive salary and package and / or a promotion or promise of same. This is often a short-term solution as research has shown that in many cases employees leave the role anyway within 12 months. Frequently the relationship between the company and employee has been damaged and this can cause tensions. From the employee’s perspective they will wonder why they were not offered a better deal in advance of resigning. In some instances an employee handing in notice can be a wake up call for the company: they realise they can not afford to lose this resource. In these circumstances, a counter offer allows the company the potential to retain the employee while at the same time benefitting the individual but, in general, counter offers are a knee-jerk reaction in a crisis situation. If a company has a robust staff retention policy in place the likelihood of having to resort to this process is significantly diminished.
Conclusion
The ultimate aim for a business and its managers should be to make every employee feel valued and proud of their individual contribution and the specific role that they play. You should strive to develop a work culture that encourages diversity, ingenuity and commitment. This in turn will assist in the retention of staff and will also serve to improve their performance and productivity.
Adopting a strategy for staff retention can be challenging but the results will benefit both the organisation and its employees now and into the future.
Note
* See pp 44-46 of this issue.
Karin Lanigan is Careers Advisory & Placement Executive at The Institute of Chartered Accountants in Ireland.