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Dispel the six deadly myths of employee retention in your company today.
By Craig Buffkin, Managing Partner, Buffkin & Associates
Admittedly, times are tough right now. Many of today's cash-strapped employers can't always (or in many cases, often) reward valued employees with the raises, bonuses, and other incentives that were routine during the high-flying days of the late nineties.
But, contrary to popular belief, employee retention isn't all about money, as many human resource professionals and management executives are now realizing. Faced with the challenge of trying to keep their best people on-board amid shrinking budgets and, in some cases, steadily declining office morale, many companies are beginning to realize that they need to be proactive and creative - even experimental - in exploring viable solutions to their retention challenges.
Amidst this realization, there has been significant hype surrounding the employee retention issue. With all of this hype, it is important that you maintain a clear understanding of retention realities. Hype usually generates myths, and recognizing and eliminating the myths surrounding retention is a step in the right direction.
Following are some of the more prevalent misperceptions:
Myth 1 - Show me the money.
There's no question that increased compensation is a very powerful lure to entice employees to accept new opportunities. But money is not necessarily the "be-all and end-all."
A recent survey on employee retention, conducted by Drake Beam Morin, found that people in career transition value career development and a challenging work opportunity more than money as an incentive to stay with an employer. In fact, a result of that same survey found that, of the most frequent reasons given for resignations, remuneration ranked fourth on the list. Lack of career path, lack of advancement opportunities, and long working hours all outranked compensation.
Myth 2 - Recruitment is a separate issue.
An effective retention strategy begins at the earliest stages of the selection and recruitment process. Selecting the "right" people - those whose skill sets and attitudes fit the organization's needs and values - and ensuring that these people are provided with comprehensive orientation programs, can have a significant impact on retention. A large percentage of employee turnover is due to "bad chemistry" or poor orientation.
Implementing solid recruitment practices can help to counter this. An extra interview - perhaps offsite for dinner or lunch - or making sure that a few extra reference calls have been placed can help you be sure that the candidate is the perfect fit for your organization. And, of course, the more relationships a candidate already has in the organization, the better.
Myth 3 - Investing in training and development will only make employees more marketable.
Ironically, while providing employees with the latest in learning opportunities may indeed raise their market value, training and development tend to have a positive impact on retention.
When companies provide the opportunity for their employees to acquire new skills, job satisfaction increases and those employees are more likely to stay. In other words, offering your employees access to training and development opportunities - whether in-house or through local training centers, vendors, or trade associations like the Direct Marketing Association - is a very worthwhile retention strategy.
Myth 4 - Retention? But, we're in the middle of a merger!
It is precisely during times of significant corporate change that organizations need to be mindful of how employees are likely to perceive future changes.
Many employees today are all too ready to leave a company if they fear the organization's new direction, or dislike the way the change was introduced or managed. Effective retention is achieved by helping all employees understand the change through regular company meetings, by having individual conferences with valued employees, or through company e-mail or newsletters.
It is important to help employees understand the situation and to articulate how they fit into the new organization. This involves cementing their commitment to company goals and integrating them into the structure, strategy and culture of the new organization.
Myth 5 - We can't hold onto good people.
The notion of "holding on," which companies often use in a figurative sense, may mask a more literal problem. The traditional view of retention, to which many companies still adhere, is the ability to keep employees in their present functions.
Today's reality is that companies need to adopt a more flexible and understanding approach to meeting individuals' needs by creating an environment in which employees want to stay and grow. Employees need to be viewed as free agents, not fixed assets. This might entail helping them chart creative career tracks, enriching skills through training or offering an array of career development options. Putting such resources at your employees' fingertips will help keep them from looking outside your company to find them.
Myth 6 - Once they leave, who cares?
The traditional approach to employee separation is to send departing employees on their way and to get on with business. However, valuable lessons may be learned from those who leave - particularly through exit interviews.
Gathering and analyzing staff feedback is a critical component in creating a retention strategy that will be right for your organization, and exit interviews are the most effective way to understand why people are leaving and how to address your company's own unique obstacles to employee retention.
To ensure that the information collected from exit interviews is honest and thorough, it is helpful to utilize a third party to conduct the meeting - someone with whom the departing employee can be open.
As companies look to solve retention issues, it is especially helpful to look at practices that are common to the retention leaders across America. Kepner-Tregoe in 2000 conducted a comprehensive analysis of the employee retention issue. The firm surveyed 1,290 managers and workers, examined the financial impact of employee churn, and undertook a quality assessment of 11 top "retention leader" companies, including Corning, Hallmark, Hewlett-Packard, Johnson & Johnson, Motorola and Steelcase.
Kepner-Tregoe isolated seven practices common to these organizations:
- Don't manage retention, manage people.
- Create a culture of caring, balanced with a tradition of excellence.
- Construct a stair-stepping process for conflict resolution.
- Keep an eye on the high performers.
- View people management as a strategic business issue.
- Remain relentless in the pursuit of continuous improvement.
- First take stock, then take action.
In short, retention leaders make retention a high priority. As the new year begins - and both you and your employees evaluate your objectives for 2002 - perhaps it's time to ask yourself: Are you ready to become a retention leader?
Craig Buffkin is the managing partner of Buffkin & Associates, a retained executive search firm that concentrates on the placement of board, executive and senior level executives. Mr. Buffkin leads the direct marketing practice and is dedicated to the work of direct marketers.
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