The presentation discussed retaining employees, which is important because turnover can be costly and hurt business performance. It reviewed turnover statistics and types of turnover. Dysfunctional turnover of top performers is most harmful. The presentation recommended identifying top performers, showing them they are valued, aligning individual and company needs, and providing opportunities for advancement to help retain them. It also provided steps to create an effective retention plan, including assessing if turnover is a problem, implementing broad-based or targeted strategies, and evaluating results.
4. Retaining Your Most Important Asset: Employees
25% - 60% national turnover rate
55% of all job seekers are currently employed
6% of organizations have a retention plan in
place
RETENTION STATISTICS
5. Retaining Your Most Important Asset: Employees
DISCUSSION OBJECTIVES:
Turnover and Why it Matters
Retaining Top Performers
• How to identify top performers
• How to retain top performers
How to Create a Retention Plan
7. Retaining Your Most Important Asset: Employees
Turnover is the rate at which an employer gains
and loses employees.
“How long an employee tends to stay” or
“The rate employees leave an organization”
WHAT IS TURNOVER?
8. Retaining Your Most Important Asset: Employees
TURNOVER
Voluntary
Functional Dysfunctional
Avoidable Unavoidable
Involuntary
TURNOVER HIERARCHY
9. Retaining Your Most Important Asset: Employees
2 TYPES OF TURNOVER
1. VOLUNTARY - is initiated by the employee
Ex. An employee leaves for another job
2. INVOLUNTARY - is initiated by the organization
Ex. An employee is fired for poor performance
10. Retaining Your Most Important Asset: Employees
UNDERSTANDING VOLUNTARY TURNOVER
1. FUNCTIONAL - turnover does not hurt an
organization.
Ex. An exit of a poor performing employee or employee with
easy-to-replace skills
2. DYSFUNCTIONAL - turnover harmful to the
organization
Ex. An exit of a top performing employee or employee with
hard-to-replace skills
11. Retaining Your Most Important Asset: Employees
DYSFUNCTIONAL TURNOVER
(2 Types)
1. Avoidable - stems from causes that the
organization may be able to influence.
Ex. An employee who leaves because of low job
satisfaction. Employer could improve the situation by
redesigning job to offer more challenge
2. Unavoidable - stems from causes that the
organization cannot influence.
Ex. An employee who leaves because of health reasons
or being relocated as a result of a spouse’s position
12. Retaining Your Most Important Asset: Employees
1. IT IS COSTLY
(DIRECT COST)-Replacement cost for employees can cost any where
from 50% - 60% of an employee’s annual salary.
(INDIRECT COST)-loss of production, reduced performance levels,
unnecessary overtime and low morale
2. IT AFFECTS BUSINESS PERFORMANCE
(HIGH TURNOVER) – Businesses with poor production and low
employee morale
(LOW TURNOVER) – Businesses with high production and high
employee morale
3. IT BECOMES VERY DIFFICULT TO CONTROL
―Talent Crunch,‖ aging work population, and even off-shoring has increase
the challenge of controlling turnover.
THE IMPORTANCE OF TURNOVER
(3 Key Reasons)
13. Retaining Your Most Important Asset: Employees
WHY DO EMPLOYEES LEAVE?
(“Unfolding model”) 4 reason’s employees leave:
1. LEAVING AN UNSATIFYING JOB – The employee no longer
enjoys the task of the job.
2. LEAVING FOR SOMETHING BETTER – Typically, means
employee has found a job that is better in pay and or job
satisfaction.
3. FOLLOWING A PLAN – ―A life Plan‖(i.e., a birth of child)
4. LEAVING WITHOUT A PLAN – ―Shock Event‖ (i.e., a colleague
is promoted to a position an employee wanted and results in that
employee leaving).
14. Retaining Your Most Important Asset: Employees
WHY DO EMPLOYEES STAY?
“LINK”– connections with other people, groups, or organizations.
“FIT”– The extent an individual feels they are compatible to their
job.
“SACRIFICE”– represents the ―value‖ an employee would give
up if he/she left her job
15. Retaining Your Most Important Asset: Employees
HOW TO MANAGE TURNOVER
ADDRESS ISSUES OF DISSATISFACTION
Monitor workplace attitudes and manage the drivers of turnover
identified earlier.
BETTER ALTNERNATIVES
Ensure that your organization is competitive in terms of rewards,
developmental opportunities, and the quality of the work environment.
Be prepared to deal with external offers for valued employees.
PLANS
Have flexible alternatives for your employees to maintain work-life
balance.
NO PLANS
Analyze the types and frequencies of shocks that are driving
employees to leave. Provide training to minimize prevalent negative
shocks (such as harassment or perceptions of unfair treatment).
17. Retaining Your Most Important Asset: Employees
1. Having the attitude of being a “leader” vs. the attitude of an “order taker”
2. Commitment to work excellence vs. working the minimal needed
3. Possesses values that integrates with the company’s needs vs. values
clashing with organizations
4. Having a far-sighted vision beyond the pay vs. working just for the pay
5. Having the humility to learn and reflect vs. habitual ignorance and
arrogance
6. Take self responsibility vs. avoidance to fail and tendency to blame and
complain
7. Takes calculated risks vs. risk adverse and total risk avoidance
8. A positive relationship builder vs. negative and participates in gossip
and negative discussion of the organization.
9. Possess clarity of career goals vs just work for the moment and see what
happens
10. Helps organization to Excel and Improve.
HOW TO IDENTIFY TOP PERFORMERS
(CHARACTERISTICS OF TOP PERFORMERS)
18. Retaining Your Most Important Asset: Employees
1. SHOW THEM THEY MATTER – Let them know that they are valued and you want them to stay.
2. ALIGN INDIVIDUAL & COMPANY NEEDS – Top performers want to be involved in their development.
3. DELEGATE REAL RESPONSIBILTY – High potential employees thrive when they’re truly accountable
for something.
4. BE FLEXIBLE – Finding creative ways that respect lifestyle needs and still provide means of
advancement can differentiate employers.
5. ALIGN EFFECTIVE MENTORS – Top performers want access to people in the the hierarchy they
respect.
6. FOSTER VISIBILTY – Exposure to top decision makers
7. MAKE LEARNING AND ADVANCEMENT UNLIMITED- Invest in their skills and make available
opportunities to move up within the organization.
8. MAKE ASSESSMENT TEST TRANSPARENT – Morale suffers when employees say the selection
process is unfair or built around favoritism.
9. PART ON GOOD TERMS – Separate on good terms. Employers can still keep employees within their
plans even after they leave for other opportunities.
HOW TO RETAIN TOP PERFORMERS
19. Retaining Your Most Important Asset: Employees
HOW TO CREATE A RETENTION PLAN
20. Retaining Your Most Important Asset: Employees
Step 1: IS TURNOVER A PROBLEM?
Calculate Turnover
Identify the type of employees that are leaving your organization
Benchmarking
Compare the organizations turnover rate to companies within the same industry.
Needs Assessment
INTERNAL- Assess current skills and talents within the org. and align them with the
orgs. strategic goals.
EXTERNAL – Evaluate orgs. needs in the future
Turnover Rate = Average number of employees leaving X 100
# of employees
21. Retaining Your Most Important Asset: Employees
Step 2: HOW SHOULD WE PROCEED?
Broad-based Strategies
Concentrates on overall turnover rate in comparison to the market.
Ex. Retention Research, Best Practices, Benchmarking Strategies
Targeted Strategies
Designed for organizations specific turnover concerns.
Ex. Exit Interviews, Current Employee & Focus Groups,
Needs Assessment
INTERNAL- Assess current skills and talents within the org. and align
them with the orgs. strategic goals.
EXTERNAL – Evaluate orgs. needs in the future
22. Retaining Your Most Important Asset: Employees
IMPLEMENTATION
Need top management support prior to implementation
Generate a communication plan
• Try to anticipate objections
• Minimize initial communications to management staff
Implement Selected Strategy
Initiate steps for Broad-Based, Targeted or a combination of both.
EVALUATE RESULTS
How many employees are leaving after implementation?
Which employees are leaving (esp. for orgs. implementing a targeted
strategy)?
What return your company is getting on its investment in the strategies?
Step 3: IMPLEMENTING PLAN & EVALUATING RESULTS?
23. Retaining Your Most Important Asset: Employees
TOP 10 RETENTION INITIATIVES
(WorldAtWork Survey)
62% Market adjustment/base salary increase
60% Hiring bonus
49% Work environment
(e.g. flexible schedules, casual dress, telecommuting)
28% Retention bonus
27% Promotion and career development opportunities
24% Above-market pay
22% Special training and educational opportunities
22% Individual spot bonuses
19% Stock programs
15% Project milestone/completion bonuses
24. Retaining Your Most Important Asset: Employees
1. Recruitment & Selection
2. Socialization
3. Training and Development
4. Compensation and Rewards
5. Supervision
6. Employee Engagement
6 RETENTION PRACTICES
25. Retaining Your Most Important Asset: Employees
RECRUITMENT
Hire the Right Person — Employers are adopting the strategy of "hire for
fit, train for skill."
Realistic Job Preview (RJP) –present accurate information and
expectations of the job to perspective candidates.
SELECTION
“Fit vs. Skill” – The concept that an employees fit within an organization
culture than their skill and ability.
Using bio-data – Using questionnaires and analyzing responses and
determining characteristics of those who tend to stay at organizations.
Weighted Application Blank– Comparing candidates responses to those
employees with high tenure and high-performance.
1ST – RECRUITMENT & SELECTION
26. Retaining Your Most Important Asset: Employees
2nd – SOCIALIZATION
Develop a comprehensive Orientation Process— ―on-boarding
process‖ Pair up new hires with mentors.
Feedback– Especially new hires, give employees a feedback on
performance and identify areas of strength and areas of
improvement.
27. Retaining Your Most Important Asset: Employees
Opportunity to obtain skills for the job– Employees tend to
stay when there is a feeling that employer is investing in them.
Career development– Employees like to know their career path
within an organization.
3rd - TRAINING AND DEVLOPMENT
28. Retaining Your Most Important Asset: Employees
4th – COMPENSATION
Salary and Benefits — Employers need to ensure that their
compensation packages are competitive.
Tailor rewards to individual needs – i.e., flextime, incentive pay,
etc…
Promote justice and fairness in pay and reward decisions
Explicitly link rewards to retention
29. Retaining Your Most Important Asset: Employees
Ensure managers are exercising fairness in the workplace–
Statistically, employee’s have a increase chance of leaving
when an employee has a ―bad‖ boss.
Employer need to ensure that managers are properly
trained– Especially, in areas of employee engagement.
5th – SUPERVISION
30. Retaining Your Most Important Asset: Employees
6th – EMPLOYEE ENGAGEMENT
Note: highly engaged employees were five times less likely to quit
than employees who were not engaged.
31. Retaining Your Most Important Asset: Employees
6th – EMPLOYEE ENGAGEMENT
Note: highly engaged employees are five times less likely to quit than
employees who are not engaged.
32. Retaining Your Most Important Asset: Employees
CONCLUSION
Analyze the nature of turnover in your organization
and determine if it is a problem.
Show employees that they are important to the
organization
Increase ways for employees to communicate with
management
