RETENTION
Strategies for holding on to your best staff
Keeping your high-flyers requires a lot more than simply offering quick fixes such as golden handcuffs and loyalty bonuses. Progressive-thinking companies are coming up with more imaginative ways to stop their brightest staff deserting, according to the latest edition of the monthly business publication Harvard Management Update.
Are you finding it harder to stop your top talent jumping ship? It's not just the lure of those fledgling dot-coms but the tight labour market which is fuelling the battle for scarce talent. At least it's had one salutary effect, says a report in the April issue of Harvard Management Update: managers are waking up to the heavy costs of losing staff. Indeed experts reckon that the cost of replacing an employee is likely to be twice the leaver's salary.
But there are certain steps you can take to prevent your staff walking out of the door. This five-page report is packed with anecdotes and numerous practical insights for those of you who are struggling to compete for scarce talent.
It's the manager
People leave jobs for all sorts of reasons, but a recurring finding in much of the research is that dissatisfaction with pay is rarely a prime motivation for moving. What's clear from one of the world's largest studies in the area is that almost invariably employees leave bad bosses .
And despite all your best efforts, it's inevitable that some people will leave. But you can have an influence on how many people leave and when. The better job you do at building a great unit, the less likely you are to lose the very people you want to keep, Harvard Management Update says.
Retention checklist
So how are employers halting the exodus? The authors of the report asked a panel of practitioners and consultants for their recommendations.
There is perhaps nothing revolutionary in the list of techniques that they associate with effective retention. These basic principles might seem like obvious common sense, but managers do not always follow them. All too often businesses simply opt to throw money at people to prevent them from leaving. Such a piecemeal approach is unlikely to work in the longer-term.
As the battle for scarce talent rages, firms could do a lot worse than apply some of these techniques to give them the edge.
1 Hook the hottest prospects
The first essential task is to ensure that you do not recruit your own retention problems.
As the report puts it: One key to retention is crafting a job offer that attracts the people you want and who will fit best with your company. The solution, it says, is to ensure your offer includes at least four distinct points of appeal:
Total compensation package: frame the offer in terms of not just base salary, but also bonuses, benefits and even equity.
Personal growth: let candidates know what your training and development programmes look like.
Work-life: remember to communicate the quality of your company's worklife, its culture, the community where you are located, recreational opportunities and the local education system.
Corporate future: your company's reputation, its values and vision, plans for the future are all part of this recruiting hook .
2 Create a great place to work
In the seemingly endless quest for a solution to your retention problems, it is possible to overlook the obvious fact that people are unlikely to stay in a workplace that is unsatisfactory. The Harvard study is in no doubt that a powerful selling point is the working environment. Ultimately the atmosphere in a department or unit is more important to individual employees than the culture of the corporation as a whole, it says.
Ordinary human virtues such as courtesy and respect — plus the recognition that workplaces are social settings, and that managers who take an interest in employees can engender an appealing atmosphere.
In the words of professor Peter Cappelli of Wharton School who has spent many years researching retention and is now particularly known for advocating the building of elaborate social communities: Loyalty to companies may be disappearing, but loyalty to colleagues is not.
Concern about the competition for the best software engineers has driven one IT business to set up investment clubs, golf leagues and softball teams. Cappelli has the following insightful observation: Leaving the company now means leaving your social network of company-sponsored activities.
3 Share information
Many organisations give their employees too little information about the business and financial performance. Yet clear and simple information sharing is an overlooked cornerstone of effective retention.
Freely dispensed information, the report points out, tells employees that you trust them with the data and that you respect their ability to understand and contribute to the business as a whole.
4 Create great jobs
Employees are more likely to stay in workplaces where they are strongly committed to the organisation. The overriding message from this and countless other studies is that job satisfaction is one of the most powerful levers for motivating and retaining people. So, it's vital that you don't neglect the so-called intrinsic factors such as job design and job content.
Three areas need to be addressed:
Allow autonomy: people enjoy working with minimum supervision.
Let people stretch: put people in jobs before they are ready. Most people enjoy a challenge — and the feeling that their boss is entrusting them with bigger responsibilities than they had a right to expect, the report says.
Be flexible: a mounting body of evidence suggests that flexible working practices — everything from telecommuting via virtual teams to time-off to deal with domestic responsibilities — can give you the edge in the battle to retain scarce talent.
5 Ask early ask often
Rather than waiting for the exit interview, hold the discussion now. Get feedback on the work environment, suggestions for change, an individual's goals, what the organisation needs to do to keep that person.
And it's vital to get an honest assessment of your performance as a manager — if necessary do it through a third party.
Want to know more?
Title: Employee retention: what managers can do , Harvard Management Update, April 2000.
Availability: contact Harvard Management Update in Boston, USA, tel: 001 617 783 7655 or for further information email the editor jcase@hbsp.harvard.edu
Jump to the web site . . . www.hbsp.harvard.edu