Traditional views of staff retention are no longer appropriate. It is neither sensible nor possible to offer long term employment for all and long service does not equal commitment and loyalty. It is not appropriate to retain all staff and it is the quality not the quantity of staff that are retained that is important. Rather than recruit and retain – attract, recruit, induct, develop, reward, retain and then separate. There are no quick fix solutions to staff retention but the problem can be resolved. It requires effort, hard work, commitment, planning, awareness, analysis and a variety of policies. Keeping staff is a challenge.
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Over 50% of the people recruited into an organisation will leave within 2 years.
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1 in 4 people recruited will leave within 6 months.
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Nearly 70% of organisations report that staff turnover has a negative impact.
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Nearly 70% of organisations report having difficulties in replacing staff.
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Approximately 50% of organisations experience regular problems with employee retention.
Reducing uncontrolled employee turnover is a major strategic challenge for practically every employer in the developed world. With an increasingly diverse workforce it is imperative that employers both attract and retain their key staff. Managers must take responsibility for their own employee retention. A wise employer will learn how to both attract and retain good employees and must be prepared to be collaborative, supportive, and nurturing of their people.
At one time, employers were concerned about keeping all staff regardless of their quality or potential, but this view has changed quite radically over recent years and understandably so. The process was very much one of attract, recruit, induct, develop, reward and retain. The fundamental addition to this process is separation. Acknowledging that separation is inevitable and separating positively so that staff can return if necessary and if not, that they at least have a positive view of the organisation when they leave, is important. Organisations cannot keep paying more and more simply to attract and retain key staff.
So when does staff retention begin? It begins long before individual members of staff join an organisation. The image an organisation portrays and how attractive it is to potential employees is crucial. Understanding why employees leave and asking why some people do not want to work for an organisation or reject job offers is a useful starting point in trying to determine whether an organisation has a staff retention problem.
How do you identify the reasons behind retention issues? By using a variety of assessments and measurements, for example surveys, discussion groups, exit interviews and questionnaires, 1:1 interviews and examining staff turnover, stability and retention rates can also help demonstrate difficulties. Until the problem can be identified and understood, effective solutions cannot be implemented. However, care should be exercised in using any assessment and measurements as employees may not be totally honest and staff turnover rates provide an overview of problems without focusing on specific issues. Stability and retention rates are often more helpful providing an indication of how many staff remain in an organisation as a percentage of those leaving/joining.
So just why do some staff leave and some stay? The reasons are complex and inter-related and to a certain extent are dependant upon individual needs and preferences. The very reasons why some staff stay can be the cause of others leaving. It is therefore important to understand staff and address their needs where feasible and practical. In order to retain staff, strategies need to be put in place both in the short and long term. Strategies should in general be applied equally and fairly. For example, flexibility of employment and practices to address work life balance issues should not be exclusively for staff with family responsibilities. Indeed, many young people and other staff too, enjoy flexible working practices as it enables them to pursue hobbies and other interests. Nevertheless, some strategies may need to be put in place to address specific groups including talent.
A person’s decision to leave is influenced by push & pull factors. Employee satisfaction, commitment, the way they are managed and a range of other 'push' factors affect their disposition to stay or leave. The relative buoyancy of the labour market, particularly relative pay levels, the number of suitable vacancies etc.. can act as 'pull' factors. Organisations can only influence the 'push' factors, and should resist blaming the 'pull' factors. Decisions to leave are rarely linked to Pay Satisfaction. Overall, around 10 per cent of leavers across all organisations resign because they are unhappy with their pay. Not an insignificant amount, but by no means the majority. Most employers, however, place pay-related measures at the heart of their retention strategies.
The main decisions to leave are linked to the following key areas:
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Intrinsic work factors such as, varied & challenging work, work which uses employees' skills to the full.
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Climate & culture - many studies have shown strong links between an individuals' 'fit' with the dominant culture of the organisation and their propensity to resign.
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Leadership style - in most organisations, line managers influence most of the 'push' factors which can lead to resignation or retention. These include induction, training, job content, promotion & progression, rewards, feedback, job satisfaction etc. Good managers usually deliver high retention as a by-product.
Expecting 'blanket' solutions to retention problems to work is unrealistic. Retention strategy should seek to address both the retention climate of an organisation, together with specific measures which address the needs of 'high risk' groups. The decision of a valued employee to leave is often a symptom of deeper organisational problems. Retention measures which treat the symptom rather than the underlying cause will be expensive and ineffective.
Staff Retention can be extremely beneficial although it is important to consider the drawbacks associated in high rates of retention and maintaining a ‘healthy’ rate of staff turnover can have its advantages. New staff can bring new ideas and skills. Retention can cause career blockages, lack of promotion opportunities, an older workforce and lack of new ideas/skills. It is sometimes easier to introduce change and redesign jobs during staff turnover and also reduce costs by employing staff on lower pay scales.
But the costs of staff turnover in terms of temporary replacements/overtime, recruitment/selection, induction/training, loss of productivity, loss of skills, lost business, disruption to customer/client services, low morale and potentially increased staff turnover are primary drivers for focusing on retention. Whilst there are some costs associated with staff retention they do not need to be high and should be viewed as an investment and beneficial in comparison to staff turnover. Even apparently insignificant things like saying ‘Thank You’ and recognising performance can be vital and cost nothing.
Strategies to Handle Retention
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Good data. Be able to identify turnover ‘hot spots’, high risk groups, costs and trends over time.. Avoid spending too much time on benchmarking - it is internal trends and patterns which are the most revealing.
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Reasons for leaving data. Use well structured exit interviews or leavers surveys to highlight reasons which are in your control. Differentiate between voluntary resignations and other forms of turnover. Identify which factors have 'pushed' staff out (eg dissatisfaction) and which have 'pulled' them out (eg better prospects).
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Risk analysis. Establish, by looking at the likelihood and consequences of resignation, to what extent you have employees in the danger zone. Target your effort on those most likely to leave & those whose departure would have most serious business consequences. Prevention, they say, is better than cure.
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Recruitment. Avoid recruiting turnover by matching people to posts and by not inflating recruits expectations before they join. In your eagerness to fill vacant posts, resist the temptation to 'over-sell' the job.
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Training & development. Tailor and deliver training and development opportunities to the needs of both the organisation and the individual. For many, professional development is critical to their capacity to do their job and stay at the forefront of developments in their field. Don't believe the mythology saying that if you train people they just leave. There is much more evidence supporting the notion that people will stay after training than leave. I.e., people are much more likely to leave if you don't train them.
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Management style. Ensure the managers have the skills to manage people and that they understand that the way they manage can increase or lower staff turnover. Generally, good managers experience lower turnover among their staff. Setting clear goals, giving constructive feedback, making people feel valued and involving them in decision-making all make a contribution to improved motivation and retention.
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Job content. Allow as much autonomy, team-working and control as practical. Ensure flexibility does not meet only the organisations needs. If you want people to do a good job, give them a good job to do!
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Rewards. Use loyalty bonuses only where nothing else will work, and even then don’t expect their effects to last. Ensure rewards are seen to be fairly determined and distributed. You should aim to pay the market rate, but paying well, by itself, won't buy loyalty, motivation and commitment.
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Flexible working. Ensure that employees with a need for flexibility in hour or location feel that the organisation is responsive. There is now much more evidence that, when choosing between employers, potential employees are now looking for working patterns which allow them to balance work and life and which avoid unnecessary long-hours working. With growth in the number of women in the labour market expected to continue, flexible working is here to stay.