Avoiding Six Dangerous Retention
Mistakes Most Companies Make
Presented By
Stacy Stack
Director Of Training and Development Express Employment Professionals
Introduction
z
SHRM predicting 2012 employment crisis
– Up to 40% turnover
z Employees not satisfied with current jobs
z Gen Y’s first recession
z Gen X and Y ready to move on
z
Employers of Choice not waiting until crisis hits
Preparing for the Turnover Tsunami
Wall Street Journal 5-26-10
z Feb 2010
– More employees resigned than laid off/terminated since 10/08 – End of 2 year trend
z 60% of employees intend to change jobs after the recession
– Employees advancing career
– Poor morale due to cost cutting measures – Gen Y’s comparing notes
Focus Shifted from Talent Retention to
Cost Reduction
z
2/08 Corporate leaders priority
– Retention of top talent
z
2/09 Cost reduction/survival
– Top talent retention fell to #8
– We are already seeing the results
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Retention of top talent even more critical
Performers vs. Non Performers
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During turbulent times best employees are
the ones who leave
– A’s first
– B’s second – Left with C’s
z
What percent of your workforce is in what
category?
The Six Most Dangerous Retention
Mistakes
1. Focusing on Retention Programs vs. Retention
Processes
2. Supporting a Fear-Based Workplace
3. Confusing Employee Engagement with Employee
Destruction
4. Not Supporting a Multi-Generational Friendly
Workplace
5. Not Holding Supervisors Accountable for
Retention
6. Not Narrowing the Front Door to Close the Back
Critical Retention Mistake #1
Focusing on
Retention Programs
vs. Retention
Drive Retention from the Top, Because
Executives Have Greatest Impact
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Include turnover cost in annual report
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Include in strategic plans and report monthly
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Rewards for meeting goals
Think!
Sales
Service
Quality
Safety
Retention
=
$ Profits $
Rethinking Retention
1. People quit jobs because they can
• Companies makes it too easy to quit • No effort to hold on to our best
2. Employees stay for things they get uniquely from
you
• Build a retention brand different from others
3. Supervisors build unique relationships that drive
retention/turnover
• Employees stay for bosses
• Employees leave because of bosses • #2 Reason why people leave
Calculate Turnover Cost to Galvanize
Retention
z In past, HR has developed formula for turnover cost
z Those who have CFO endorsement have greater opportunity for upper management support
z Call center identified turnover cost at $25 K per employee
– Destroyed a $25,000 obsolete piece of computer equipment to
drive point
– Drove home actual cost
z Delivery company put cost of driver turnover at $60 K same value as company truck
The Cost of Turnover
z
PricewaterhouseCoopers Saratoga Study
– Turnover cost from 12% to 40% of pretax income – $25B to retrain employees annually
Critical Retention Mistake #2
Supporting a
Fear-Based Workplace
Warning Signs of Fear
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Fear-based employees cannot contribute
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Since 2010 SHRM
– Job satisfaction holding among older employees – Declining among X’s and Y’s
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Gen X’s and Y’s
– 2008 Job Dissatisfaction 11% – 2009 Job Dissatisfaction 19%
Beware “Jerk Bosses”
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13 states have legislation pending on “workplace
bullying”
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Verbal attacks from supervisors are generating
six figure settlements
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37% of U.S. workers report they were a bully
victim
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Four times more complaints than all forms of
harassment combined
Transitioning From a Fear-Based
Workplace
10 Early Signs of a Fear-Based Workplace
1.
Appearances are everything
• Staying longer than boss • 7:30 to 5:30 employee
• Perception is more important than reality
2.
Fear-based discussions rule over work
discussions
• Who’s stock is falling/rising
• Preoccupied with who is invited to meeting vs.
meeting agenda
Transitioning From a Fear-Based
Workplace Con’t
10 Early Signs of a Fear-Based Workplace
3. Distrust rules
• Off the record conversations • Coded messages
• Back alley meetings • Backstabbers thrive
• Your failure is my success
4. Numbers rule
• Total obsession w/ metrics • Vending machine, ear plugs
• Record profits and now unpaid lunches • Stock price vs. People price
5. 6,417 workplace policies
• Overdependence of rules vs. common sense • Ordering a stapler
• Coffee cup receipts • 15 page parking policy
6. Management discourages lateral
conversations
• Fear of employees comparing notes
• No one has authority to authorize meetings • Loss of sharing ideas
7. Information is restricted
• Information leads to success
• Why some managers restrict information • Knowledge = Power
• Destroys trust
Transitioning From a Fear-Based
Workplace Con’t
Transitioning From a Fear-Based
Workplace Con’t
10 Early Signs of a Fear-Based Workplace
8. Brown-nosers rule
• Kissing up at all levels
• “Who said it” rules over “what was said”
• Fear-based leaders surround themselves with “yes
men” and “yes women”
• Right answer vs. truth
9. The boss is so out of touch it’s almost
comical
• Even though they are clueless, they constantly remind
Transitioning From a Fear-Based
Workplace Con’t
10 Early Signs of a Fear-Based Workplace
10. Management leads by fear
• Most decisions made in secret • Information is given in drips
• Company culture “Be glad you have a job”
• Leadership is based on keeping employees in the
dark
Critical Retention Mistake #3
Confusing Employee
Engagement with
Employee Engagement
Employees who are so committed to their jobs
that they want to give
3 Buckets of Employee Engagement
- N. Davis, Editor, HR Magazine - G. Sherrill, VP HR, Wal-Mart
1. 17% actively disengaged
• Unhappy
• Undermining co-workers
2. 54% not engaged
• Sleepwalking thru workday • Putting in time w/o passion • Fence sitters
3. 29% work with passion
“Do you want the 71% hanging around your 29%?
6 Essentials for World Class Employee
Engagement
1. People - Senior leaders who excel at
z Listening
z Knowing and cherish relationship with employees
z Outstanding communication
2. Work
z Providing resources for employees to over-achieve 3. Full Service Recognition
z Competitive pay
z Recognition for each generation
z One size does not fit all 4. Opportunities
z Succession planning
z Training
6 Essentials for World Class Employee
Engagement Con’t.
5. Quality of Life Issues
• Targeted benefits • Flex schedule • Telecommuting
6. Company Culture
• Live your practices
• Diversity
• Company reputation
• Performance management
*Every employee must understand
• How their job impacts organization’s success • Irrelevance
Employees First and Customers Second
- Vineet Nayar
HCL Technologies
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One level up service
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Key is holding management equally
accountable to employees
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Live in a world of democratic form of
government BUT Autocratic nature of
business
How Not To Engage Your Employees
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Company President
– Not listening to employees – Hires a $100K consultant
– Consultant listen to employees – Makes same recommendations
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Not embracing 50-50 meetings
– 50% informing – 50% listening
Critical Retention Mistake #4
Not Supporting a
Multi-Generational
Friendly Workforce
Four Groups Projects
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Traditionalists pre 1946
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Baby Boomers 1946-1964
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Gen X’rs- 1965-1980
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Millennials 1980
– Top three factors to keep you with company – Top three benefits to attract/retain your
Major Increase in Employment
Replacing Exiting Boomers
330 Boomers turning 60
every hour
Generational Expectations of
Succession Planning
Traditionalists My dedication and service have been rewarded
Baby Boomer It’s about time! I’ve paid my dues
Gen X What do you mean I can’t be
promoted yet? I have delivered the results for which you asked
Gen Y What’s my next career move? I’ve
been here for 12 months and haven’t been promoted yet
Using Social Media to Engage Workers
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Gen Y will make up 40% of U.S. workforce
by 2014
– They have overwhelming desire to collaborate – Text while talking
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Employers must embrace social media
to
Washington Post Survey
3400 Surveyed
Employee Retention Desires
1 Telecommuting 548 16% 2 Educational Assistance 396 11.6% 3 Flextime 379 11.1% 4 Benefits 375 11% 5 Bonus 370 10.8% 6 Fitness 357 10.5% 7 Money 334 9.8% 8 Other Perks 302 8.9% 9 Time Off 227 6.7%
Critical Retention Mistake #5
Not Holding
Supervisors
Accountable for
Retention
Hold Supervisors Accountable for
Achieving Retention Goals
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All levels of supervisors should have
retention goals
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Should be weighted same as productivity,
safety, other goals
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Talent Keepers recent survey
Holding Supervisors Accountable for
Achieving Retention Goals
Top methods for setting retention goals
z Transitioning from consoling counseling to
accountability counseling
z Consoling conversation
– Sad we lost Susan
– Really going to miss her
– It may take weeks to replace her – I am sure you will do a great job
z Accountability conversation
– How did we lose Susan? – She earned highest rating
– What could/should we have done to save her?
– What changes will you make to prevent from this happening
What Do We Usually Say?
In reality, many supervisors would say
“Susan was not as good as
we thought”
In Order to “Own Your Team”
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Supervisors must be part of the hiring process
– You hire it – You coach it
– You are responsible for outcome and results
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Adjust retention goals for economic downturns
Supervisors Build Unique
Relationships That Drive Retention
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#1 factor in retaining employees is “immediate
supervision”
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Best working conditions, world class benefits,
employer of choice branding
– Will be over-shadowed by ineffective supervisor
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Average benefits and pay may be overlooked for
Supervisors Build Unique Relationships
That Drive Retention Con’t.
z
Yahoo Hot Jobs Survey
– 70+% of employees surveyed were interested in
getting a new job due to dislike of boss
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Florida State University study on supervisors
– 39% failed to keep promises
– 37% failed to give credit when due – 31% got silent treatment from boss
– 27% made negative comments about employees to
Supervisors Build Unique Relationships
That Drive Retention Con’t.
z
Great attention getter
– Surprise gift box for management meeting – #1 driver of retention
Develop Supervisors to Build Trust
with Teams
z
According to 80% of employee surveys,
TRUST
is the most important factor
employees seek from supervision
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Supervisors who cannot build trust have little
credibility regardless of other skills
Behaviors of a Non-Trusted Supervisor
z Kiss up vs. kiss down
z Rumor central
– Caught up in employee rumors
z Employees clam up
– Employees polite but not engaging – Conversations very short
z Complaints bubble up
– Most complaints hidden – Playing favorites
– Bullying
Behaviors of a Non-Trusted Supervisor
Con’t.
z Fewer individual meetings
– Group and one-on-one – Meetings cut short
– Tight agenda
– Meeting postponed/cancelled
z Employee survey scores nose dive
z Production suffers
– Productivity declines – Blame game
– No accountability
Employee Retention is a Significant Factor to
be Considered for Managerial Promotions
Traditional Thinking Progressive Thinking
Supervisors cannot control all reasons employees leave
Like sales – supervisors strongly influence results
Pay & other policies are outside supervisor’s control
Supervisor can impact pay decisions
Supervisor won’t fire poor performers to pad retention numbers
Manage supervisors towards right decisions
Supervisors are a small part of a big problem
Increases supervisor ownership of team
Wegman Food Stores, Rochester, NY (#10 Fortune’s 100 Best Employers)
Critical Retention Mistake #6
Not Narrowing the
Front Door to Close
the Back Door
Narrow the Front Door to Close the
Back Door
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Hiring the wrong employees puts you on a direct
path to turnover
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Don’t forget the basics
z Blocking
Increasing Retention Involves
Improving Employer Branding
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Texas Instruments
– “Think Big, Think Bold, Think Texas
Instruments”
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General Mills
– “A Great Place to Start; A Great Place to
Stay”
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eBay
– “You can find a lot of cool things on eBay
but nothing cooler than our jobs”
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Children’s Healthcare of Atlanta
Increasing Retention Involves
Improving Employer Branding Con’t.
z
Delta
– “Delta employees don’t just travel the
world, they work to improve it”
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Barnes & Noble
– “If you love books why not work at a
place surrounded by books”
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Hard Rock (25,000 employees)
– “For those about to Rock, we recruit you” – “Kick a– service, served fresh daily”
– “Rock stars wanted, come perform for a
Build a Realistic Job Preview Program
z More than just a tour
z Working conditions
z Pay
z Benefits
z Succession planning
z Co-workers
z Use subject matter experts to build job description
z Schedule applicant to meet with high performance employees
Script the First 90 Days
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At one time Wal-Mart had lost 65% of its
employees in the first 90 days
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University of Florida study states most
employees form opinions in first 30 days
which impact their decision to leave within 90
days
Most Turnover Occurs Within 90 Days
z
Set retention goals
– 90 days – Annual
– Adding a few months to average length of service can
increase ROI tremendously
– Doubling length of service cuts turnover in half
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Handshake agreement
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Conduct “Stay Interviews”
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Do not classify the employee who quit as a
slacker
Express Employment Professionals
Wishes You Great Retention Success
