Avoiding Six Dangerous Retention Mistakes Most Companies Make Presented By Jack Smalley, SPHR...
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Transcript of 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
Critical Retention Mistake #2
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
Transitioning From a Fear-Based Workplace Con’t10 Early Signs of a Fear-Based Workplace
Transitioning From a Fear-Based Workplace Con’t10 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
you who is the boss
Transitioning From a Fear-Based Workplace Con’t10 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• 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
Critical Retention Mistake #3
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
Critical Retention Mistake #4
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%
Critical Retention Mistake #5
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
Supervisors Build Unique Relationships That Drive Retention Con’t.
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
Supervisors Build Unique Relationships That Drive Retention Con’t.
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
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)
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
Critical Retention Mistake #6
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?
Narrow the Front Door to Close the Back Door
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
Narrow the Front Door to Close the Back Door
Traditional Thinking Progressive Thinking
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