The major challenge of finding skilled workers among young people continues to be prominent among employers as the number of adults heading towards retirement increases. Studies reveal that the greatest challenge of 85% HR executives is recruitment and retention of decent managers and employees.
To paint the picture, let’s look at an example. The CEO, say, Jane Doe, is in charge of a company with a high turnover. Jane’s HR department spends money and time recruiting and training new employees, who end up living within the first year of their employment. This has a direct impact on customer satisfaction, overall speed and professionalism of the staff decrease due to the constant flow of newcomers, etc.
After researching and taking feedback, Jane and the HR team have decided to experiment with new employee retention strategies, improving leaders program, offering further managers training, etc. This resulted in the company being able to attract better talent and focus on retaining best performers. Not only the Human Resources staff are happier they are not spending the time consistently training employee substitutes.
This overly simplified example fails to show how much the failure of employee retention can impact businesses’ bottom line. On average, a company will have to invest anywhere between $7500 to $15000 to train a fitting replacement for a typical employee. The investment number reaches six-digit numbers when key manager positions are in question. With these kinds of expenses, you can’t help but question how does a business survive when millions of dollars have to annually flow towards recruitment?
To improve the ability to attract, retain and up performance, businesses refer to the five-step process known as PRIDE:
P – Provide a Positive Working Environment
R – Recognize, Reward and Reinforce the Right Behavior
I – Involve and Engage
D – Develop Skills and Potential
E – Evaluate and Measure
Provide a Positive Working Environment
Creating a positive work environment starts at the top. Wise executives realize that the responsibility of retaining and bring back assets cannot be delegated. It can’t be stressed enough especially as the main reason for employees quitting is the first-line supervision. Exactly for this reason, manager training is a critical aspect of employee turnover strategy. Having managers properly trained has a direct impact on their action and decision-making resulting in effective recruitment and, especially, retention. Training gives managers the opportunity to understand the importance of retention and provides them with the tools to implement employee engagement plans.
Recognize, Reward and Reinforce the Right Behavior
Financial compensation and benefits work wonders attracting assets to a business, yet there is something more than that what has to keep them in. People have a natural need of wanting to feel recognized and appreciated for what they do, especially if they do it well. The implementation of reward programs is the right step towards meeting the need.
Few businesses recognize that a reward and recognition program does not have to be expensive or complicated to be successful. Companies choose to invent traditions and awards, which may not be worth much but help bond the team. Some get even more creative and focus on making it personal. Take a look at Graham Weston, CEO of Rackspace Managed Hosting who rewards his staff by handing over the keys to his BMW M3 Convertible for a week. Sure, money’s good, but you never forget driving around in your CEO’s M3 with the roof down for a week.
Involve and Engage
Showing up for one is one thing, but actually feeling engaged and being productive is totally different. This only happens when the employee has the opportunity to contribute one’s suggestions and ideas.
Take Sony as an example. Sony Corporation puts an effort to give its scientists and engineers the sense of ownership by sponsoring annual Idea Exposition. The exposition helps foster ideas and technological advancements as well as creates a healthy environment for innovation.
Develop Skills and Potential
Hardly any professional wants to remain at the same spot for the entirety of their career. Most people value career opportunities no less, if not more, than the payment they receive. Accounting to a study conducted by Linkage, Inc., over 40% of respondents admit they would consider leaving their current place of employment for a different employer with better career opportunities.
Deloitte, a company listed among the “Top 100 Best Place to Work”, conducted a survey several years ago gather feedback from all the talented people leaving the company. They found out that over 70% of respondents decided to take new jobs outside Deloitte could have had the same career within the company. With this data at hand, Deloitte has immediately worked out a solution and created a career and development coaching program. During the very first week of the program running 2000+ current employees have considered internal job openings and opted for the program.
The implementation of the program has helped Deloitte eliminate the feeling of a dead-end job and as a result, motivated talented people to remain in the job with actually seeing their future in the company.
Evaluate and Measure
Last but not least in P.R.I.D.E. is the willingness to continuously improve and evaluate. With evaluation, the primary purpose is to stay up to date on your progress and what dissatisfies your staff. Measuring engagement level, morale, attitude, and turnover should always be included in your evaluation. To top it off, include these:
- Hold annual employee satisfaction surveys.
- Interview people coming and leaving the company seeking to discover real reasons.
- Review your hiring process to ensure employee skills are a good match for a job
- Implement flexible working hours for parents and older employees.
- Update the measurements on turnover costs.
- Give manager responsibility for retention within their departments.
- Begin by focusing on jobs with greatest profitability and impact.
- Research departments with the highest turnover for improvement insights.
- Work out and implement an effective employee orientation program.