Many organisations are now realising the bottom-line effect on employee retention. Retaining quality performers quite simply adds to increased productivity and morale, while reducing the associated costs of turnover altogether. As a business executive, doesn’t it make sense to have business processes that add efficiencies to how you conduct business to reach your corporate objectives and provide a positive perception in the marketplace and to your customers?
Why is Employee Retention Critical to Business Success?
- The US of Labor Statistics showed an always increased shortage with the highest 69 percent in 2019.
- There are about 670,000 more job vacancies than there are unemployed potential workers.
- Employee turnover’s greatest cost is lost business and productivity.
Experts believed that the subject of identifying and retaining top talent is always one of the critical items executives like to improve upon. However, when asked what strategy is in that regard, experts often either mention that they’ve found this great recruiting firm that is going to do nothing but send them top-level talent, or that they don’t know the people that have left were no good to begin with, basically rationalising the cause of turnover.
See also: Perks vs. Culture – What It Takes to Retain and Attract Talents
There are a couple of flaws with this line of reasoning. First, just because a recruiter has sent you top-level talent doesn’t mean that this employee is going to stay and prosper with your organisation. There are many examples where talented employees leave organisations because they were either miscast for the job, management style, or corporate culture. Secondly, never assume a turnover problem exists just because the employee was no good to begin with. Job fit and performance go well beyond just having a talented employee. As with any business goal, HR and managers have to implement a proven process and strategy to attain that goal.
The following outline a seven step strategy to increase employee retention, one that helped one Fortune 500 Company increase their retention in the first year of implementing all seven steps.
- Conduct job analysis audits to provide realistic job previews. Conduct job analysis audits with behavioral assessments, cognitive reasoning assessments, job simulations, and hard skills assessments (e.g., computer skills, etc.) to objectively define the core competencies required for success in each role (competency modeling). This helps in providing a realistic job preview for candidates and managers. Oftentimes what managers think they need for a certain role is different from that they actually need.
- Implement a well-designed assessment and selection process. Include behavioral assessments and structured behavioral interviewing techniques to increase the likelihood of hiring people that can, and will, do the job at a high level in your environment and for your managers (job fit assessment).
- Provide good employee orientation. The people you hire today are potentially your greatest resource for corporate success in the years ahead. As a senior leader, your participation in new employee orientation sends a vital cultural and leadership message: “We’re all involved here in the drive toward what we want to be in the future.” Everyone—even the newest employee—has value.
- Implement programs for employee training and development. Provide ongoing professional development to show your willingness as an organisation to develop your greatest asset—your people.
- Improve manager and employee relationships. Concentrate on the people that stay with you to learn what makes them happy and then give them more of it! “People leave managers, not companies. If you have a turnover problem, look first at your managers,” Marcus Buckingham and Curt Coffman write in First, Break All the Rules.
- Provide an equitable or fair pay system. Be competitive!
- Encourage succession planning. Identify roles for which employees may be suited in the future and work with them on designing their succession plan within the organisation. Invest in cross-training, job shadowing, coaching, mentoring, and cross-experience.
In summary, many organisations are already using several of the aforementioned steps, but might be lacking or deficient in the other steps. Each step is critical to the overall success of a comprehensive employee retention plan.
Read also: The Right Programs to Retain Healthy Workers: Q&A with Dr Jeremy Ting, President and Co-Founder of Naluri