How Effective is Your Employee Retention?
by Roger E. Herman

Retention of competent workers has not been too much of a problem over the past few years. During the go-go years of the late 1990s, holding onto good people was a real challenge. There were all sorts of jobs available; people could pick and choose where they wanted to work. Recruiting and retention were serious problems for employers when every other employer in town seemed to want to hire the same people.

When the economy slowed, so did employee turnover. For many employers, the problem all but disappeared. With the improvement in the economy, many companies - who would love to have your fine people on their payroll - will be recruiting again.

How vulnerable are you?

Beware of the tendency to gloss over this question. Pause for a few minutes and give this question some serious consideration. If you have a partner in the management of the business, engage in a focused conversation about the stability of your workforce. Look realistically at each and every employee - full-time, part-time, and even occasional.

Next, talk with your people. Conduct these private interviews as if they were hiring interviews. Ask questions about what they look for in a job, what they like best about their job, and what they'd change if they could. Listen to their words and be alert to their body language and their emotions. From these interviews, you'll gain a good sense of the stability of your workforce and what opportunities you might have to improve employee relations.

Based on what you learn, you will be able to make some plans about what sort of hiring you might have to do. Consider your growth potential. When people in your community have a little more money to spend - from a combination of a stronger economy and their own personal employment situations, would that higher consumer confidence show up in your cash flow? Be sure you're well-staffed so your customers really feel cared for.

Why People Leave

You can improve your employee retention if you have a higher sensitivity about why people leave their jobs. Here are five principal reasons that we've learned from our ongoing research.

  1. It doesn't feel good around here. This is a company culture issue in most cases. Workers are also concerned with the company's reputation; physical conditions of comfort, convenience, and safety, and the clarity of mission. Do all your employees agree about their shared purpose and values as members of your team?

  2. They wouldn't miss me if I were gone. Even though leaders do value employees, they don't tell them often enough. If people don't feel important, they're not motivated to stay. No one wants to be a commodity, easily replaced by someone off the street. If they are regarded as expendable, they'll leave for a position where they're appreciated.

  3. I don't get the support I need to get my job done. Contrary to opinions heard all-too-often from management, people really do want to do a good job. When they're frustrated by too many rules, red tape, or incompetent supervisors or co-workers, people look for other opportunities. Check your systems: is everything working smoothly? Ask your people for their suggestions on how you can make it easier for them to work together to serve your customers. This discussion can be done well as a group brainstorming exercise.

  4. There's no opportunity for advancement. No, we're not talking about promotions, although many deserving people would like to move up. The issue here is learning. People want to learn, to sharpen their skills and pick-up new ones. They want to improve their capacity to perform a wide variety of jobs. Call it career security. The desire is for training and development. If workers can't find the growth opportunities with one company, they'll seek another employer where they can learn. Think about all you can teach your people about your industry. Help them grow.

  5. Compensation is the last reason people most leave. That's a brash statement, but it's true. Workers want fair compensation, but the first four aspects must be strong. If they're not, but money's high, you'll hear people say "you can't pay me enough to stay here." Even with these values in place, there are a lot of employees who feel they can better themselves just by chasing more income.

Your employees are your most valuable-and most volatile-resource. Give them the care they deserve!

Roger Herman is author of Keeping Good People (Oakhill Press, 1999). He is an internationally recognized visionary leader and consultant in the field of employee retention. For more information or assistance in employee retention, e-mail or call (800) 227-3566.

Many more articles in Motivation and Retention in The CEO Refresher Archives


Copyright 2004 by Roger Herman. All rights reserved.

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