Staffing Management

Is There Anything New to Learn About Retention?

By Staff Report

Oct. 27, 2011

Dear The Best Are Leaving:

It may be years before we return to the kind of “war for talent” we experienced in the mid-1990s. Still, there is plenty of evidence that after enduring almost three years of recession, downsizing, budget cuts and lowered morale, many employees are restless to move on. Survey after survey has revealed that as many as two-thirds of the U.S. workforce would like to change jobs, of which about 25 percent are high performers.

The problem is graver in some industries, such as health care, where the rate of job growth has outstripped the available talent numbers. The important thing is that you are now concerned about it and interested in taking action. To answer your question, you bet: There are always new things to learn about retention strategy, tactics and practices.

It’s good that you are cost-sensitive regarding pay and bonuses, but remember that money spent can be money invested—some new practices may require spending more than you wanted, but they can pay you back more both near and long term. Consider the typical cost of having to replace a lost employee: 50 percent to 150 percent of compensation (generally rising as salary rises), counting a few months of lowered productivity.

The best practices fit your organization’s mission and business objectives. Who are the 20 percent of employees who bring 80 percent of the value? Tailor your practices to the most critical talent first, and then move on to the rest.

Some examples: Having enough nurses is a perennial challenge, so Winchester Hospital in Massachusetts decided to train them in the art of difficult conversations and by pushing decision-making authority forward toward the front-line, patient-facing positions. Result: a nurse vacancy rate of 2 percent, down from 16 percent.

• Restaurant chain Chick-fil-A decides to close on Sundays, but provides its mission-critical store managers with a piece of each month’s profits. Result: the highest retention rate of store managers in the industry.

• Google knows autonomy and creativity are what their best workers crave, so it gives them one entire day per week to work on a project of their own choosing that could pay off big for the company. Result: more ideas—and more profitable ideas.

Make sure to conduct a third-party engagement survey that helps you clearly define the root causes of disengagement and makes specific recommendations for corrective action. But don’t survey employees if you aren’t committed to acting in a timely way on their input.

Don’t take your eye off the rest of your workforce—you need the B players and solid citizens, as well. Many of them are engaged “just enough” at work and don’t seek the stress of higher positions (and the extreme work-life imbalance that often comes with it). Their ambitions may be limited, but they are definite assets. Find out what they want by asking them. Invite a cross section to a focus group, tell them how much you value them, and ask them, without promising anything: “What can we do to make your employment experience better?” Individual and group stay interviews are much more effective than exit interviews at uncovering root causes, enabling you to address them and keep the person from leaving.

Based on my analysis of more than 20,000 post-exit surveys conducted by the Saratoga Institute, I identified seven distinct hidden reasons employees leave. I say “hidden” because most managers think pay is the main reason, while only 12 percent of those exit-surveyed by Saratoga chose to leave mainly because of pay. The most common reasons:

1. The job or workplace was not as expected or as promised (main cause of short-term turnover).

2. Job-person mismatch (usually traceable to poor hiring practices).

3. Lack of performance coaching and feedback (62 percent of employees say they don’t get enough feedback, while nine out of 10 millennials say they expect feedback once a day).

4. Not using their talents, not learning/growing, and/or not seeing a rewarding or realistic future role or position for yourself in the organization (the most important reason for those under 35).

5. Not feeling valued, including: simple disrespect, feeling underpaid or unfairly paid, not having input into decisions that affect you, not getting information, not being recognized for your achievements, not getting resources, having to put up with unsavory surroundings, and the like. (This is the main reason for most people.)

6. Stress or burnout issues arising from work-life imbalance, inflexibility and excess of work hours and schedules, understaffing, poor health benefits, substance abuse and work-family complications.

7. Loss of trust and confidence in senior leaders.

All of these reasons are eminently correctible by management, most without spending money. However, they do require time and mental energy to address. Managers, not human resources, should be most responsible for keeping turnover reasonably low. That means selecting the right people as managers, coaching them on solid people practices, and holding them accountable by checking their engagement survey scores, tracking leading indicators such as first-year turnover rate, regrettable turnover rate, percentage of employees trained, percentage of employees moving to high-growth positions, plus 360-degree feedback, skip-level meetings, occasional terminations and serious performance/career conversations.

The way to correct and prevent turnover is to find out which of these root causes are issues with which employees, and then ask them to help you with ideas on ways to make sure they stay and stay engaged.

SOURCE: Leigh Branham, Keeping the People Inc., Overland Park, Kansas

LEARN MORE: Some experts believe providing better work-life balance to employees is a key retention tool.

The information contained in this article is intended to provide useful information on the topic covered, but should not be construed as legal advice or a legal opinion. Also remember that state laws may differ from the federal law.

Schedule, engage, and pay your staff in one system with


Join over 52,000 of your HR peers

Don't miss out on the latest tactics and insights at the forefront of HR.