TRANSFORM YOUR ORGANIZATION FROM HIGH TURNOVER TO HIGH RETENTION
This is Part 2 of a two part series.
While many leading companies place more effort in employee retention, most are clueless. They accept employee turnover as a normal part of doing business. High turnover organizations spend disproportionate amounts of resources on recruiting and replacing their workforce, while smart organizations invest in employee retention. Yes, there is going to be turnover no matter what you do, but blindly ignoring the reasons for turnover is foolish and expensive.
Just consider the turnover replacement costs by industry.
|Industry||Dollars per Employee|
|Trade & Transportation||$12,500|
|Professional & Business||$15,500|
|Education & Health||$14,000|
|Leisure & Hospitality||$ 7,000|
Source: Employment Policy Foundation tabulation and analysis of Bureau of Labor Statistics, Employer Cost of Employee Compensation data.
Employee retention begins by paying attention to what causes low job satisfaction as well as what attracts, retains, and motivates your workforce. Here are a few items to consider:
Create a positive work environment. Money and benefits may bring employees through the front door, but poor work conditions drive them out the back. In its National Study of the Changing Workforce, the Families and Work Institute showed earnings and benefits have only a 3 percent impact on job satisfaction. “Job quality” and “workplace support” have a combined 70 percent.
Develop an “Onboarding” program for the first 90 days on the job. Don’t hire and abandon your new employees. Insure they get the support, training, and assistance they need. Quint Studer, CEO of the Studer Group, a consulting firm in Gulf Breeze, Florida, finds companies that take steps to “re-recruit” new employees can improve performance and reduce turnover in their first three months by as much as 66 percent.
Enhance connections between co-workers, managers, and the organization. To build stronger bonds between the top management and employees, one corporate office practices something called Employee Scavenger Hunt. Once or twice a year, they give every executive or manager five names of employees. They find each person, meet them, and learn about them as individuals. The process builds a better bond, improves communication, and builds trust within the organization.
Hire the best and avoid the rest. Research shows those organizations that spend more time recruiting high-caliber people earn 22% higher return to shareholders than their industry peers. Cisco CEO John Chambers said, “A world-class engineer with five peers can out produce 200 regular engineers.” Instead of waiting for people to apply for jobs, good organizations are always on the lookout for high-caliber people.
Provide learning opportunities. For many people, learning new skills is as important as the money they make. Identify career paths and provide developmental opportunities for employees early in their jobs with the organization. Promote on-going, two-way communication between employees and their immediate managers regarding career progress. In a study by Linkage, Inc. people said they would consider leaving their present employer for another job with the same benefits if that job provided better career development and greater challenges.
Make people feel appreciated. People want to be paid well, but also would like to be treated with respect and appreciation. Find creative ways to make people feel good about their job. We have helped organizations set up something called, “peer recognition.” Peer recognition allows people to reward each other for doing a good job. It works because employees are in the best position to catch people doing the right things. TD Industries in Dallas, Texas, helps their employees feel valued by using one wall within the company to place photographs of all employees who have been with the them more than five years. They also try to make everyone feel equal and have no reserved parking spaces for executives. That is one reason why TD Industries was listed by Fortune magazine as one of the Top 100 Best Places to Work.
Measure attitudes of your workforce. High-retention workplaces are using employee climate assessments to measure the attitudes and feeling of their workforce. Every organization should conduct some form of climate assessment periodically during the year.
Focus on individuals. You must manage retention one employee at a time. Focus on the key jobs that have the most impact on profitability and productivity. Everyone has a different set of needs and expectations about their jobs. By conducting an individual retention profile, managers can quickly identify the employee’s unique motivations, goals, level of job satisfaction, as well as other expectations.
Focus on the family. One small company gives their employees’ children a $50 Savings Bond twice a year when they get straight A’s on their report cards. Another survey of 1,000 companies showed half of them let workers stay home with mildly ill children without using vacation or sick days. Two-thirds permit flextime defined as allowing employees to adjust work hours on a daily basis.
Training your managers and providing them with the right retention tools can save your organization hundreds of thousands of dollars in turnover costs. Contact us so we can provide you the best strategy to reduce turnover. The longer you wait the more costly it becomes.