Investing In Your Employees
How To Make the Most of Your Assets

by Andrea Bargsley and Patti Hill of BlabberMouth

How much would you invest to keep your employees focused and happy?

This is the question on the minds of CEOs and managers worldwide as the technology boom lifts and the employment market opens up. Gone are the days of retiring from the first job you ever held. Employees expect more from their jobs, including a healthy working environment and a sense of accomplishment.

From the employer's perspective, employees are an investment. You interview to make sure an individual has good work ethic, motivation, and drive. Most of the time, employees are considered a financial investment. Yet there's much more to it than that. There is a significant emotional investment that is crucial to accelerating business strategies and reaching organizational goals.

Let's think about it this way. You probably know someone who owns an outdated, overused vehicle but won't even entertain the thought of trading it in even though they can well afford to upgrade. Why, you might ask, do they keep it? Well, the owner of the vehicle has probably invested substantial time, money, and care into keeping it in tip top condition, not to mention the dependability that has taken them to countless doctors appointments, baseball practices, and events. Now it seems senseless to throw it all away. Plus, the cost of replacing the vehicle would be enormous compared to the cost of upkeep on the old one. Even with inanimate objects, we become accustomed to its personality and quirks, and we develop a common trust between the object and ourselves.

When this same logic is applied to employees, we find the cost of replacing employees comparable to that of investing in a new automobile. Recruitment, hiring, benefits, and administrative costs all put an organization upside down on the investment.

Thankfully, companies have come to realize that keeping employees is much more cost-effective than replacing them. Retaining valuable employees has other benefits, as well - retaining the vault of knowledge that's been accumulated, skills learned, and trust and relationships they have built with customers and co-workers.

People Are Not Easily Replaced

Even though today's pool of unemployed workers is deep, organizations choose to spend more time and resources on retaining existing employees than starting from scratch. Companies are finally realizing that employees are their most valuable assets and should be treated as such. Yes, there are financial reasons behind this focus on retention. However, there are many other contributing factors such as the effect attrition has on customer service, corporate culture, and employee morale and loyalty. All of these factors can and will be affected by turnover. Basically, when good people leave an organization they take their training and knowledge, and often times, relationships with them.

Drivers of Turnover

Turnover is often driven by corporate restructuring and tight competition for key talent. For many firms, "surprise" employee departures can have a significant effect on the execution of business plans and may eventually cause a parallel decline in productivity. According to studies noted in Survivors - How to keep your best people on board by Gayle Capplan and Mary Teese, this phenomenon is especially true in light of current economic uncertainty and following corporate downsizing when the impact of losing critical employees increases exponentially.

When managers or supervisors are asked why good people leave, most respond by saying, "it's about money." Or, they simply dismiss the departure matter-of-factly by stating that the employee "received a better offer." Contrary to popular beliefs, research indicates that money is not even on the list of top five reasons employees give when asked why they are leaving an organization. Michael O'Malley, author of Creating Commitment - How to attract and retain talented employees by building relationships that last offers us the following views on what makes a "healthy" organization from both the employees' and organization's perspectives.

When viewed from the employees' perspective, a "healthy" organization is one in which people are generally satisfied with the quality of their work life. On most days they feel good about going to work. They feel empowered to help shape decisions that affect them, they have the resources and skills to satisfy customer needs and they are generally confident in the abilities of the leadership team.

From the organization's perspective, the organization is "healthy" if it is viable as measured by its profitability, competitive market position, and customer satisfaction. A healthy organization also responds well to the need for change; it is adaptive and thereby ensures its future-meaning that following a major upheaval or transition, the healthy organization rebounds and employees remain committed.

Bottom line, it is the role of the manager, that most influences an employee's decision to stay or depart from an organization. People will leave if they don't like their manager-even when they are well paid, receive recognition and have a chance to learn and grow. In fact, disliking or not respecting the "boss" is the primary reason for talent loss. Research shows the reasons for employee departures are (in descending order):

  1. Employee/manager relationship
  2. Inability to use core skills
  3. Not able to impact the organization's goals, mission
  4. Frequent reorganizations; lack of control over career
  5. Inability to "grow and develop"
  6. Employee/organization values misalignment
  7. Lack of resources to do the job
  8. Unclear expectations
  9. Lack of flexibility; no 'whole life balance'
  10. Salary/benefits

It is very important to know that the above factors are often NOT the ones mentioned in most attrition studies published by individual organizations. Additionally, this information does not match the data frequently obtained during an employee's exit interview when asked about the reasons for departing. The rationale behind this discrepancy is that "exit interviews" are frequently conducted by the departing employee's manager or Human Resource Manager, hindering their honest responses. Typically, employees are hesitant to tell these 'company representatives' the truth about their decision to leave for fear of 'burning bridges' or "getting a bad reference."

Calculating the Cost of Attrition

Measuring the cost of employee turnover can be a real challenge…and a real eye opener. Let's not forget to include both hard and soft costs, direct and indirect, as well as replacement costs. An organization might experience loss of productivity, overtime pay to those covering job duties, hiring costs, and recruiting fees.

What Matters Most

The one advantage an organization can leverage over competitors is the quality of the human equation - the relationships, attitudes, service, commitment, stability, motivation, health and reliability of its people.

Employee retention doesn't involve throwing money at employees when they threaten to leave or seem unhappy with their jobs. It's about establishing a multi-level relationship between management and team members. Knowing how to interact with and manage employees can help attitudes and commitment, and all the organization's positive qualities shine through.

Strong relationships at work are key to retaining an organization's people. With the use of various tools and resources the process of communication and understanding between manager and employee can be accelerated. One such tool is the Insights Discovery System, an organizational training and psychometric system based on the work of Swiss psychologist Carl Jung. The Insights Discovery System can be successfully utilized to promote team effectiveness and team building.

How Insights Can Help Build Strong Manager/Employee Relationships

The Insights Discovery System is based on perspectives and 'attitudes', which are highly relevant to understanding organizational and cultural requirements and the needs of people in relation to motivation and leadership. The understanding of individual differences that Insights provides is fundamental to improving communication, co-operation and building effective and high morale teams. This understanding is what bridges the gap between manager and employee. It can be used as a tool for enhancing communication and helping managers to better understand the motivational drives and interests of each employee. Insights can further be utilized as a vehicle for providing feedback about performance and style. The Insights Discovery System generates reports that reveal personal preferences or triggers of each individual - including issues that cause stress in the work environment. In essence, Insights can bring about a closer relationship between employee and manager to enable both parties to better adapt, connect and understand one another.

The truth is the employee may be highly competent but his or her style may be very different from that of their direct manager. The "Value to a Team" section of an Insights report provides crucial information to a manager who tends to evaluate all employees against one set of standards. Insights can help managers recognize the value and uniqueness of each person's contributions then reward them accordingly.

In these turbulent times when change is constant and re-organizations are the "norm", Insights can accelerate the process of understanding between manager and employee, resulting in increased job satisfaction and commitment to the organization as a whole. Without these tools mutual understanding may take months, years or may never develop at all.

Insights also serves as a communication vehicle for discussions about an employee's current and future interests. Further, Insights helps managers and employees to better identify what values (needs) are most important to each individual and how these values impact the person's attitude towards work. Values can range from an employee feeling stable and secure to someone enjoying challenge.

For instance, a person motivated by a high degree of autonomy is likely to resign if he/she is micromanaged; an individual motivated by challenge is more apt to terminate if he/she is assigned to an old project using old technology; and so forth.

The Insights Discovery System is a powerful workforce enhancement tool. It can:

  • Enhance the effectiveness, commitment and retention of an incumbent workforce though increased understanding of human behavior;
  • Motivate and retain employees whose basic monetary and material needs may have been satisfied, but who are seeking to find their internal "drives;"
  • Improve human resource planning and development in organizations;
  • Identify motivational and managerial issues related to interpersonal style;
  • Reduce the impact of turbulence and organizational transition on employee commitment and productivity

This article was based on the work of Barbara J. Kreisman, Ph.D. with Insights Denver. Kreisman's white paper and research can be found at www.insightsna.com/retention .


Andrea Bargsley and Patti Hill are co-owners of BlabberMouth, an Austin-based full service marketing and public relations agency specializing in branding, creative design, and strategic communications. BlabberMouth helps businesses 'get the WORD out' to target markets with substance and style. For a free marketing analysis and information about services, visit www.BlabberMouthPR.com .

About Insights Learning & Development, Inc.

Insights Learning & Development Ltd, founded in 1988, is an organizational development and learning company with offices in over 18 countries. Executives of some of the world's largest corporations and government agencies use Insights leading edge psychometric testing and personal development tools to enhance areas such as team building, strategic direction, creative change, and sales success. Insights products are supported by a worldwide network of learning centers that offer training and consulting services by means of assessments, workshops, coaching, and e-learning. For more information, visit www.insightsworld.com, www.insightscompass.com or www.insightsna.com .

About Insights Discovery System™

Today's business environment demands that people from every part of the organization work together as a team to tackle not only the tasks at hand, but to achieve long-term success. Understanding the dynamics of individuals as well as team dynamics can greatly improve productivity and ensure the success of projects.

The Insights Discovery System™ is a program designed for individuals, groups, management teams, or entire organizations to help understand and improve the communication and interpersonal dynamics within their group and with their customers. Based on the Psychological Type work of Carl Jung, the Insights Discovery System was developed in the UK and is now used across the world as a practical application of Jungian Psychology for the workplace. For more information, visit www.insightsworld.com, www.insightscompas.com or www.insightsna.com.


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