avoiding six dangerous retention mistakes most companies make presented by jack smalley, sphr...

Avoiding Six Dangerous Retention Mistakes Most Companies Make

Presented ByJack Smalley, SPHRDirector, HR Learning & Development

Introduction

SHRM predicting 2011/12 employment crisis– Up to 40% turnover

Employees not satisfied with current jobs Gen Y’s first recession Gen X and Y ready to move on

Employers of Choice not waiting until crisis hits– Where does your company stand?

Preparing for the Turnover Tsunami

Wall Street Journal 5-26-10 Feb 2010

– More employees resigned than laid off/terminated since 10/08– End of 2 year trend

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

Preparing for the Turnover Tsunami Con’t.

2010 34.6% of employees satisfied with wages

– Down 7% from 1987– Wage cuts, freezes, added responsibilities, unemployed

spouses and X’rs Y’s moving back home

51% interested in their work– Down 19% from 1987

More employees feeling disengaged with their jobs

Focus Shifted from Talent Retention to Cost Reduction

2/08 Corporate leaders priority – Retention of top talent

2/09 Cost reduction/survival– Top talent retention fell to #8– We are already seeing the results

– Retention of top talent even more critical in turbulent times

Years of retention neglect catching up with employers

– Sales– Service– Quality– Safety– Productivity– Why is there no focus on Retention

Retention no longer HR issue– Must have total mgmt support

During turbulent times best employees are the ones who leave– A’s first– B’s second– Left with C’s

Poor performers hold on to paychecks until unemployment eligible

The Cost of Turnover

PricewaterhouseCoopers Saratoga Study– Turnover cost from 12% to 40% of pretax income– $25B to retrain employees annually– That can be the amount to remain in business

No longer a problem for just “large” employers

Must Work Your Way Through Various Issues

Don’t know why people quit – so count only controllable turnover is inaccurate

Excluding employees who quit or fired during probation

Supervisors holding back releasing poor performers to pad their retention numbers

Message to supervisors– “You own your team”

The Six Most Dangerous Retention Mistakes

1. Focusing on Retention Programs vs. Retention Processes

2. Supporting a Fear-Based Workplace3. Confusing Employee Engagement with Employee

Destruction4. Not Supporting a Multi-Generational Friendly

Workplace5. Not Holding Supervisors Accountable for

Retention6. Not Narrowing the Front Door to Close the Back

Door

Four Groups Projects

Traditionalists Baby Boomers Gen X’rs Millennials

– Top three factors to keep you with company– Top three benefits to attract/retain your

generation

Critical Retention Mistake #1

Focusing on Retention Programs vs. Retention Processes

Drive Retention from the Top, Because Executives Have Greatest Impact

Include turnover cost in annual report Include in strategic plans and report monthly Rewards for meeting goals Consequences for missing goals HR must change managers with influence rather

than authority Leave authority to senior management

– CFO’s must be on board

Employers of choice moving from retention programs to retention processes– Require full management participation– Accountability for process success

Retention must be on same page and receive same attention as– Sales– Service– Profits

Think!

Sales

Service

Quality

Safety

Retention

= $ Profits $

Organizational Flaws of Retention

Retention coaching conducted by HR vs. supervisor/leader– Supervisors look up to their leaders

Organizations look at HR to solve turnover– Traditional thinking vs. Progressive thinking

10 Strategies of Rethinking Retention - Richard Finnegan

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

4. Hold supervisors accountable for achieving retention goals

• Add to other measurable objectives

10 Strategies of Rethinking Retention Con’t. - Richard Finnegan

5. Develop supervisors to build trust• Relationships Trust Information Success

6. Narrow the front door to close the back door• Focus as much on hiring process as retention

7. Script employees first 90 days• Predict how long employees will stay• The most critical time during employment

8. Challenge policies to drive retention (support/hinder)

9. Calculate turnover cost to galvanize retention

10. Drive retention from the top• Exec buy-in is a must

Design Jobs for Engagement

Capture the minds and hearts of employees– Avoid the Sunday Blues

Challenging assignments– The absent Millennial

Goals with feedback Provide for personal growth and development Full partnership career development process

– Career interest forms

Hidden Obstacles to Retention

Young workers with fewer bills Growing number of entrepreneurs

Calculate Turnover Cost to Galvanize Retention

In past, HR has developed formula for turnover cost Those who have CFO endorsement have greater

opportunity for upper management support Call center identified turnover cost at $12 K per employee

– Destroyed a $12,000 obsolete piece of computer equipment to drive point

– Drove home actual cost

Delivery company put cost of driver turnover at $60 K same value as company truck

– Showed video of totaled truck from accident to emphasize cost

High Tech RetentionSHRM White Paper 5/2000

What is more critical than recruiting IT talent?– Answer: Retaining IT talent

Average IT employee stays 18 months at current job in good times

New IT grads will have12 employers during career

6 Elements to Retain IT Workers

1. Salary• Must be competitive• Constant survey of IT salaries/benefits in your area• IT turnover 100% to 150% of annual salary

2. Challenge • Best way to lose IT personnel

• Answer: Bore them

• Challenging work• New projects• Keep software updated

6 Elements to Retain IT Workers Con’t.

3. Training & Development• On-going training• Cutting edge technologies• Educational assistance = higher retention• Educational assistance beyond IT field

4. Flexibility, lifestyle perks & cool stuff• Compressed work weeks• Telecommunicating• Job sharing• Flexible shift schedules• Small amounts of flexibility can score big points• Solicit lifestyle desires

6 Elements to Retain IT Workers Con’t.

5. Appreciation & Rewards• All disciplines seek recognition• If cash strapped

• Extra vacations• Time off

6. Culture• Employee friendly• Manager “Is the Company”• LIVE IT !

Continued Nursing Shortage

Bureau of Labor Statistics predicts 233,000 additional nursing jobs each year through 2016

Only 200,000 pass RN test annually

Wellness Programs as a Retention Tool

45% employees at Mid and Small size companies report they would stay at job longer if they had wellness programs

26% said they would miss less work Why?

- Principal Financial Well-Being IndexSHRM 1/20/10

Top Reasons Employees Support Wellness Programs

30% Reduce personal health care cost 30% Longer, healthier lives 28% Receiving employer incentives 28% Reduce stress

---------------------------------------------------------------- 15% of employees have access to fitness

facilities 11% in 2008

Partner with your talent supplier Create a pool of contingent workers

in peak periods to give more balance to core employees

Best practice retention is on-going processes driven by upper management

NOT

Band-aid programs


Supporting a Fear-Based Workplace

Fear-based employees cannot contribute “Management by fear” is a hard habit to break

SHRM 7/1/10– Job satisfaction holding among older employees– Declining among X’s and Y’s

Gen X’s and Y’s– 2008 Job Dissatisfaction 11%– 2009 Job Dissatisfaction 19%

During economic downturns most companies focus on keeping employees with good attendance even with substandard work

This is better alternative to firing employee and waiting days to replace

Some bosses are encouraging young workers to buy new car, boat or other expensive items knowing they would have to keep job for payments

Beware “Jerk Bosses”

13 states have legislation pending on “workplace bullying”

Verbal attacks from supervisors are generating six figure settlements

37% of U.S. workers report they were a bully victim

Four times more complaints than all forms of harassment combined

Transitioning From a Fear-Based Workplace10 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• Predicting employee failures

Transitioning From a Fear-Based Workplace Con’t10 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



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

you who is the boss


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• Major gap between management and employees

Treating Employees Fairly Requires:

Distributing rewards Respect through interpersonal relationships Involving employees in difficult decision-

making Offering opportunities to question decisions


Confusing Employee Engagement with Employee Destruction

Employee Engagement

Employees who are so committed to their jobs that they want to give

Discretionary Effort

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 your 54% hanging around your 17%?

Disengagement cost U.S. economy $300B loss productivity annually

6 Essentials for World Class Employee Engagement

1. PeopleSenior leaders who excel at1. Listening2. Knowing and cherish relationship with employees3. Outstanding communication

2. WorkProviding resources for employees to over-achieve

3. Full Service Recognition1. Competitive pay2. Recognition for each generation3. One size does not fit all

4. Opportunities 1. Succession planning2. Training3. Career development

6 Essentials for World Class Employee Engagement Con’t.

5. Quality of Life Issues• Targeted benefits• Flex schedule

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

Key is holding management equally accountable to employees

Live in a world of democratic form of government

BUT Autocratic nature of business

Customer Service Focus Must Include Internal Customers

Employees first, Customers second Satisfied employees display better customer

service

How Not To Engage Your Employees

Company President– Not listening to employees– Hires a $100K consultant– Consultant listen to employees– Makes same recommendations

Not embracing 50-50 meetings– 50% informing– 50% listening

Employees Stay Because of Things They Get Uniquely From You

Write down 5 employees in your company who are critical to your success

Write answers to these questions for each employee

– Could this employee leave you for a better job?– Has the employee ever considered looking?

Now write down reasons you feel they have stayed

Tangible IntangibleShift New skillsSchedules Good supervisor


Not Supporting a Multi-Generational Friendly Workforce

Four Groups Projects

Traditionalists Baby Boomers Gen X’rs Millennials

– Top three factors to keep you with company– Top three benefits to attract/retain your

generation

Major Increase in Employment Replacing Exiting Boomers

1 Sales

2 Customer Service

3 Financial

4 Social Work

5 Software Development

6 Administrative

7 IT

8 Nursing

9 Mechanical Engineering

10 Sales Executive

* 330 Boomers turning 60 every hour

Top Job Opportunities for Next 10 Years

Job Satisfaction Levels Significantly Declined for Younger Employees During Recession

- SHRM 19% of X’s, Y’s dissatisfied with their jobs

- SHRM To retain X’s and Y’s, companies must

– Keep them engaged– Find ways for them to grow

Management must become accountable to employees

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.

Generations View Change

Traditionalists Boomers Gen Xers Gen Ys

Potential Opportunity

Improvement Something’s Wrong

Caution

#1 benefit desire for employees with families– Retirement

#1 benefit desire for singles– Time Off

SHRM

Gen X’s and Y’s

42% have looked for other jobs to balance work/life issues

65% of employees would give up 21% of salary for more family time

- Coopers & Lybrand SurveyPre RecessionSHRM

Using Social Media to Engage Workers

Gen Y will make up 40% of U.S. workforce by 2014– They have overwhelming desire to collaborate– Text while talking

Employers must embrace social media to enhance learning opportunities

Challenge Policies to Ensure They Drive Retention

Career Builders and Robert Half survey of 1,000 managers and 900 employees found:– Most attractive benefits for retention

Flexible schedules Telecommuting

Washington Post Survey3400 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%


Not Holding Supervisors Accountable for Retention

Hold Supervisors Accountable for Achieving Retention Goals

All levels of supervisors should have retention goals

Should be weighted same as productivity, safety, other goals

Talent Keepers recent survey

– Only 14% supervisors have retention goals

Holding Supervisors Accountable for Achieving Retention Goals

Top methods for setting retention goals Transitioning from consoling counseling to

accountability counseling 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

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

again?

In reality, many supervisors would say

“Susan was not as good as we thought”

In Order to “Own Your Team”

Supervisors must be part of the hiring process– You hire it– You coach it– You are responsible for outcome and results

Adjust retention goals for economic downturns Compare to the best not the rest

Supervisors Build Unique Relationships That Drive Retention

#1 factor in retaining employees is “immediate supervision”

Best working conditions, world class benefits, employer of choice branding– Will be over-shadowed by ineffective supervisor

Average benefits and pay may be overlooked for great supervisor relationships

Employees join companies for “things” but stay for people

Supervisors Build Unique Relationships That Drive Retention Con’t.

Yahoo Hot Jobs 2008 Survey– 70+% of employees surveyed were interested in

getting a new job due to dislike of boss

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

other employees


Top supervisory skills for retention1. Trust

2. Trust

3. Trust

4. Trust

5. Trust

6. The need to feel important

* You stay with employers who:• Look out for you• Make you feel good about yourself

Fellinger/Brink


Great attention getter– Surprise gift box for management meeting– #1 driver of retention

Supervisors Build Unique Relationships That Drive Retention

Supervisor/Employee relationships can withstand most causes of turnover

Supervisors score their impact on employee retention a 5 on a scale of 1-10

Employees score it at a 7-8

What Employees Seek from Supervisors

Recognized for individual contributions Sufficiently respected Practice ethical behavior Treat people fairly

Treating Employees Fairly Requires

1. Fair distribution of rewards

2. Heightened awareness of interpersonal relationships

3. Involving employees in decision making

4. Offering opportunities to question decisions

MBWA

Practice– MANAGEMENT BY WALKING AROUND

Work side-by-side with employees Kick up your exit interviews Must act on employee issues

Develop Supervisors to Build Trust with Teams

According to 80% of employee surveys, TRUST is the most important factor employees seek from supervision

Relationships to Trust to Information to Success

Top Behaviors To Avoid Mistrust

1. Communication• Availability of information – not withholding• Listening• Valuing others opinions

2. Competence• Awareness• Knowledge of the job• Decision-making• Sharing direction/vision• Not micromanaging

3. Consistency• Following through on promises• Fairness• Consistent direction

Top Behaviors To Avoid Mistrust Con’t.

4. Courage• Supporting and being an advocate for your staff• Standing up for beliefs/principles• Being assertive in place of conflict

5. Character • Keeps confidences• Does not take others credit• Honesty• Does not act in self-serving ways

Behaviors of a Non-Trusted Supervisor

Kiss up vs. kiss down Rumor central

– Caught up in employee rumors

Employees clam up– Employees polite but not engaging– Conversations very short

Complaints bubble up– Most complaints hidden– Playing favorites– Bullying– Retaliatory behavior

Behaviors of a Non-Trusted Supervisor Con’t.

Fewer individual meetings– Group and one-on-one– Meetings cut short– Tight agenda– Meeting postponed/cancelled

Employee survey scores nose dive Production suffers

– Productivity declines– Blame game– No accountability

Turnover rises with new supervisor

Turnover Retention

Traditional Thinking Progressive Thinking

Most important supervisory skills for retention: communication, feedback, coaching

Supervisors who cannot build trust have little credibility regardless of other skills

To reach their positions, supervisors/managers have already learned their trust skills

Some supervisors are trustworthy and some are not

Trust begins with relationships

Only one chance for making a good first impression

Employee Retention is a Significant Factor to be Considered for Managerial Promotions


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)

Requires front line management accountability for retention

A Great Retention Story

Who was your best boss? Why?

Ron Sybert– Great listener– We are going to have great days– Bad days

“I may be difficult”– Internal conflict

“You may want to resign” “I get the chance to fix the problem”

Supervisors build relationships based on trust


Not Narrowing the Front Door to Close the Back Door

Narrow the Front Door to Close the Back Door

Hiring the wrong employees puts you on a direct path to turnover

Tips for hiring employees who stay– Don’t forget the basics

Blocking Tackling

– Compare to the best http://www.weddles.com/awards/index.htm

Most Turnover Occurs Within 90 Days

Set retention goals– 90 days– Annual– Adding a few months to A.L.S. can increase ROI

tremendously– Doubling length of service cuts turnover in half

Do not classify the employee who quit as a slacker

Increasing Retention Involves Improving Employer Branding

Texas Instruments– “Think Big, Think Bold, Think Texas

Instruments” General Mills

– “A Great Place to Start; A Great Place to Stay”

eBay– “You can find a lot of cool things on eBay

but nothing cooler than our jobs” Children’s Healthcare of Atlanta

– Video of how jobs impact children's health

Increasing Retention Involves Improving Employer Branding Con’t.

Delta– “Delta employees don’t just travel the world, they work

to improve it” Publix Supermarkets

– “Where shopping is a pleasure”– “If you think shopping at Publix is a pleasure, try

working here” Barnes & Noble

– “If you love books why not work at a place surrounded by books”

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 packed

house”

Script the First 90 Days

At one time Wal-Mart had lost 65% of its employees in the first 90 days

University of Florida study states most employees form opinions in first 30 days which impact their decision to leave within 90 days– #1 on their list is disrespect from supervisors

Stay Interviews

Employers of choice are focusing on stay interviews– Equal importance as exit interviews– Educating supervisors why employee stay– “Someone cares that I stay”– Concerns are addressed

Supervisors must be trained how to conduct stay interviews

– Not complaint sessions– Clear focus of meeting purpose– Avoid “implied contract”

Stay Interviews Con’t.

Broaden employee’s awareness– What do you look forward to coming to work each

day?– Which parts of your job are most enjoyable?– Which parts are most challenging?– What are you learning here and what else do you

want to learn?– How do you like the people you work with?


According to Bureau of Labor Statistics– The length of time an employee stays with a job

increases with their age they began the job

Employee Referral Programs

3M Texas Instruments Fidelity Investments McDonnell Douglas

Reduced hiring cost 75-90%

Implement Employee Referral Program

Include taxes and gross up awards– $100.00 = $73.87

Match rewards to employee needs– Cash– Trips

Present awards publicly One big prize annually

Build Programs to Attract Older Workers

2012 – 20% of workforce age 55+ 60%-75% plan on working past retirement age

due to recession Beat back misconceptions

– National Council on Aging Reports 97% older workers reliable

AARP National Employer Team– www.aarp.org/money/work/articles/national_employer_team.html

Partner with your staffing firm– Bring them into your culture– Recruit year round– Full service approach

Temps Temp to hire Direct hire Professional placement

Track length of service– Non exempt 90 days– Exempt 1 year

Build a Realistic Job Preview Program

More than just a tour Working conditions Pay Benefits Succession planning Co-workers Use subject matter experts to build job description Schedule applicant to meet with high performance

employees

Probe for past resignation reasons– What drove you to look– Go for detail

Google professional candidates– 35% of executive candidates have been turned down

due to internet information – Look for high level accomplishments/memberships in

professional organizations



We source all employees who meet our qualifications

We take extra effort to source older applicants because they stay longer

We pay good money for employee referrals

We market our employee referral program to meet employees needs

We give applicants a tour We have a formal job preview program

Express Employment Professionals Wishes You Great Retention Success

avoiding six dangerous retention mistakes most companies make presented by jack smalley, sphr...

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