How to retain your employees
Businesses are often harmed by failing to upgrade their employee practices. Employee retention, in particular, can save many apparent costs.
The departure of a top employee everyone else looks up to and tries to emulate can be unsettling to the team and vertical. In small organizations, the fall-out and cascaded repercussions can be downright catastrophic.
What is employee retention?
Why do employee leave?
Why is employee retention important?
Employee retention strategies
HR’s role in employee retention
C-suite’s role in employee retention
Challenges is employee retention
Understanding Employee Retention
What is employee retention?
The bane of an organization is talented employees leaving it. When an employee decides that their tenure in the company is up and state their decision to move on, it is up to the Human Resource personnel, the line and staff managers, to find out the reasons for the step. This activity, in which the middle to senior management makes efforts to convince the employee in question to continue offering their services to the organization is called employee retention.
Employee retention can be defined as the process, including negotiation efforts and resources deployed, to prolong the employee’s association with the organization so that it may progress on its mission.
Does an employee deciding to leave spell doom for a corporation?
In a single word, the answer is no. Employee retention begins with finding out the reasons for the employees turning their backs.
The reasons for leaving could be many. Relocation, personal reasons such as drastic changes in life stages, health concerns, family emergencies or any other. The most common reason is better pay being offered elsewhere, better working conditions, the chance to influence bigger decisions… and the list goes on.
A simple and common example of women leaving the workplace is the incidence of pregnancy. Women with young children might be hesitant about finding their way back into the workplace, especially if the organization does not have new-parent friendly policies for their workforce. When this is the case a clear selling point of a job for such an employee is the child-friendly workplace or one that offers child-care options. Flexible timings, thoughtful managers, and planning can go a long way in convincing new parents to come back to the corporate space.
Another common example is when employees over a certain age come to be regarded as senior employees, and they find it hard to convince employers to value their skills over, say, someone who has entered the workforce more recently and has comparable skills. The resultant disillusionment in which an employed might feel like they have been edged out of the workplace based on ageist factors and replaced by younger employees can cause them to find their way out. As younger people move into managerial echelons, they must find ways to make team members of all ages feel engaged and valued.
Does employee retention have a foregone conclusion?
It helps to carry out employee retention in a kind and mutually beneficial manner even in the event it does not succeed. This is because it is worth going the extra mile to show the employee that their efforts have been valuable to the organization. Employees who separate from the organization on good terms are likely to share their good experiences with their new coworkers and friends. This can attract fresh new talent to the organization and work as a good example of positive word-of-mouth.
Such a state can ensure that the company only has to dip into their reserve of cold-calls, cold-emails, and applicants who come in unsolicited without the HR recruitment cell having to send out messages and recruitment calls. From a man-hour and expense perspective, this is like money in the bank.
This is a prime reason among many others to ensure that employee retention is carried out mandatory and in good faith. However, it helps to remember that the outcome of employee retention itself is not a foregone conclusion. Irrespective of the outcome, it can help in building better awareness of market conditions when employee retention is carried out with active listening. The interviewer must also keep an eye out for what the employee might not be saying, and use knack to draw them out.
Retention is an activity that can go either way. But it is only possible (and recommended) that an employee should be retained only if both the organization and the employee continue to be satisfied by the steps taken. Both parties should benefit from the continued association.
Employee Retention – not as simple as pulling a switch
Retention is not a short-term solution or a ploy to keep a performer from advancing. It is about keeping a value-generating resource inside the organization and showing them that they are valuable participants in the business entity. It can make the employee feel recognized, especially if they had come to doubt the significance of their role in the revenue-making machinery.
- Is employee retention inevitable? Yes, in most cases. Get started on the why. It can help fix niggles in the operations.
- Employee retention should make both the business owner and worker happy
- Retention is cost-effective
Why do employees leave?
Top reasons why employees leave an organization
Employee retention is an activity carried out by companies of all sizes and stages of evolution. While the saying goes that employees leave a bad manager, there is more to it than simply one person holding another down and making them leave.
Lack of positive affirmation / reinforcement: More than financial reasons, this is the biggest factor that causes employees to walk out of an organization. When they do not receive recognition for a job well done or a pat on the back after finishing a crucial project, employees are apt to feel that they have been taken for granted.
Lack of autonomy: A professional who is inducted and welcomed into a role in the company needs several cohesive forces and running machinery to keep them going. When they are not given the lead in making a decision within the purview of their role, employees feel constrained. They can neither act positively with confidence nor take proactive steps towards resolving problems. This can cause them to feel they are not trustworthy. No employee wants to feel this.
Lack of development opportunities: Employees enter an organization with a certain amount of skill which they hope to maintain, and eventually advance in depth and breadth. Today’s workforce is deeply resentful of not being trusted with development opportunities like training/certification, possibilities of growth, and the ability to influence larger undertakings. No one is ready to be stuck in a dead-end job.
Hospitality bulwark Hilton is renowned for its employee-friendly development opportunities. They believe in treating their workforce with as much regard and consideration that they extend to their guests. Hilton supports clear communication and brainstorming of ideas through its platform ShareCast.
Lack of challenge: When an employee’s full arsenal of skills is not put to test, they are left sitting around, trying to put their skills to use. Sooner or later, they would find a better job that challenges their skills and appeals to their motivation levels. The heady feeling of having finished a tough task is hard to replace. Especially with complacency. In companies that don’t pay attention to “job fit“, employee retention becomes much harder to carry out successfully.
Lack of inspiring leadership: This is the factor that often gets called ‘bad manager’. It need not be the manager who lops up all the credit for the subordinate’s hard work. It could be a leader who does not take inputs during decision-making, someone who doesn’t show respect for their team-mates, or even someone who robs the employee of their desire to do a good job.
In the article, ‘Facebook Knows the Secret to Increasing Retention—and It Starts With Managers’, the author Maxwell Huppert details how Facebook’s People Analytics surveys loyal employees to find what holds them to the organization. Then, they focus their efforts on letting people work in the area they prefer regardless of whether this requires a lateral movement along the organizational structure, or whether it means letting an employee gain new skills that will ultimately help them advance in their careers.
Lack of direction: An employee would appreciate being shown exactly how they fit into the system in the workplace. They need a line manager and several higher-ups who recognize and understand the purpose of the sphere of work they fulfill. When the feel direction-less, they scramble to find meaning in their jobs. Authority can never replace thoughtful, intuitive leadership.
Lack of support: Many employees look for acknowledgment of their work along with a host of other factors – such as a grievance redressal system. They ought to know exactly who they can turn to when they face any trouble. They need a bunch of support features that cater to both hygiene factors and motivators.
Lack of communication: Today’s organizations operate in the Information Age where reliable communication is of increasing importance. Rumors get spread with ease. It does not end with a lack of communication fudging up performance or deliverables. It eats away at morale and an employee whose appeals are not addressed begins to feel that they are not important.
Lack of planned execution: Delivering on a deadline is an employee’s responsibility. But no one likes to be on a perpetual deadline. When an employee is clearly working for longer than the usual hours, putting in overtime or extra effort perpetually, it means the work has not been planned adequately. It could mean any number of glitches ranging from staffing to project management. This can make the employee look for a more orderly workplace.
Lack of work-life balance: This is more relevant now than, say, a decade or two before. Everyone is now more aware of the balance they need to command in their lives. An employer who does not recognize the employee’s need for a life outside of work makes way for attrition to take over. When a job requires an employee’s personal time, family time, and free time to be replaced by the company’s own concerns, employee retention becomes near impossible. No employee would appreciate their entire life being taken over by their work.
The signs of restlessness among employees may be hard to comprehend. But repeated complaints or the complete shutdown of communication can be an ample warning sign for managers. They would immediately need to explore the causes and effects of dropping productivity or other signs of trouble.
Employee retention – a bag of tricks that an astute manager knows when to pull out
An adroit manager would use the subtle cues, changes in manner, or casual remarks made by an employee to gauge where the motivation levels are. A sudden dip in morale, change in the way the employee engages with the team or other tell-tale signs are enough for such a manager to keep an eye trained on a particular member.
Even the direct approach and attempt to resolve any niggling troubles that an employee might be facing can be met with gratitude. It can go so far as to help the employee feel cared for. When leaders and top management recognize signs of trouble early and address them (or at least acknowledge the fact), they earn brownie points with the leader. They also save several costs down the line in having to motivate the sufferer through perks.
A manager who is ready to lend an ear to the challenges being faced by an employee increases the possibility of the employee bringing up troubles to them at a later date instead of looking for drastic solutions such as announcing a resignation. This is a lot of escalation, discomfort, and bitter feelings saved for all parties.
If ignored, all of these reasons can lead to growing attrition numbers.
This is why it makes sense that ways to preserve top talent are now a focused study.
- Reasons for leaving are usually a combination of factors. It helps to learn a worker’s unique pain-points
- Money isn’t the only motivator for an employee to leave. Their engagement levels, quality of their leisure, and need for a challenge make up their decision.
- A manager benefits for paying attention to subtle non-verbal cues and active listening
Why is employee retention important?
Why does it make sense to preserve top talent?
Top performers are those who understand the vision, mission, and daily requirements of their role with near-perfection. They deliver consistently and help their team do the same. In addition to all this, they have an excellent attitude towards the work they do, and the organization that allows them to perform.
These people are assets to have in the team and in the organization. Their infectious spirit is emulated by their team members and lauded by their managers.
When this person(s) leaves the organization, the entire team can get disillusioned. They may fear that if a top-performer has decided to leave, perhaps they should too. This example outlines the importance of maintaining morale among the team. Team members who bond well see that the ousting of one of their close coworkers can easily spell doom for their prospects in the company.
Another, more immediate, consideration is that the performance metrics of the team or even the entire division may plummet when a top-performing employee exits. A manager who sits back and watches as a tier-1 performer leave is labeled as indifferent at best and untrustworthy at worst. Such a manager would be open to questioning from higher-level management.
Retaining a top-performer, on the other hand, has many benefits.
It is a farsighted measure that saves the company costs that would have otherwise been spent in carrying out fresh recruitment drives, subsequent training, and so much more. The idea behind retaining top-performers is to ensure that the company’s short-term and long-term goals continue to be met. The important thing is to make sure that retention activity is carried out in a way that is also beneficial to the employee in question.
The 2019 Retention Report: Trends, Reasons, and A Call to Action also mentions “preventable turnover” meaning that the savings from retention are direct and actionable. It goes on to state that a saving of nearly 485 billion accounts as controllable costs for US companies in 2016.
Here are the top reasons why retaining top performers is a gain for the long run:
Minimized turnover: This is good for any going concern; it means that bringing in some fresh faces who need training, familiarization with the practices and the environment, and the extra wait time before they start progressing on the learning curve are cut out.
In the article, ‘Retaining Your Employees In A Constantly Changing World’, the author remarks how Nike is one of the favored employers with a ‘Bliss Score’ of 4.47 and a voluntary turnover rate of 9%. The article emphasizes the importance of creating a company culture that is worth subscribing and further cites the commitment to creating quality the employees internalize as part of the company culture.
Cost-effectiveness: A related point to the above one is the saving in cost when fresh interviewing and selection processes need not be carried out.
Effective recruitment: Retention is a process of learning about the company’s work environment. Based on feedback gained during this process, the recruitment methods may be refined and made more effective for the future.
Morale boost: Employees who undergo and benefit from retention realize their value afresh. They tweak their own working styles to become more effective at their roles, and the same goes for their immediate superiors. Both parties function with greater awareness as a fall-out of this process.
Protects productivity: By ensuring that the employee continues to offer their best efforts at the organization, the team and entire functional area will keep up the high-grade performance that they had hitherto logged.
Protects company performance: An employee on the way out is highly likely to join a competitor; an incidence that can be a double whammy for the organization. They lose while the immediate benefactor is their rival. This scenario has to be prevented at all costs.
Reputation management: Once word gets out that even top-performers are not retained in a certain organization, the reputation of the company and its mission are in question. Perhaps they’re folding up operations entirely? Is that top talent is making for the door? A sincere, worker-oriented business needs to handle sensitive matters with care and foresight.
Loyalty benefits in question: A related point is that if a company does not care for employee loyalty, is there much else it cares for? New talent would think twice before applying to such an organization if word spreads that top employees are let go without a murmur.
The magic of numbers: It doesn’t take a Math whiz to see that recruitment, selection, and training of a new-hire is a company-wide effort that involves the tweaking of so many people’s schedules. Retention, on the other hand, is carried out by a single line of hierarchy, often by the line manager. This is a far more pertinent action.
Protecting trade-secrets: When an ex-employee is out in the market, they are no longer bound by the dictum of non-disclosure. Their knowledge of their ex-employer’s practices is now available to them to reveal freely to the public, or worse, to competitors. This can cause a lot of damage which the organization would be hard-pressed to counter.
For these reasons, it is obvious that retaining existing top employees is very high on a company’s priority run-down.
In the face of a resigning employee – What to do
When a new manager is met by an employee who holds out a resignation letter, it is easy for the former to get nonplussed. All the ill-effects of this departure, consternation centered around how to fill this employee’s place, worry about what can be done if these incidences multiply through the team can all cross the employer’s mind in a flash.
Some might be inclined to show indifference, while others might get ready to move mountains to keep the employee from leaving. Both these extremes are counter-productive. It is important to be the calm one in the discussion and attempt to find out the reason(s) behind such a step.
An organization’s personnel department and the entire hierarchy up to the chiefs would be ready to support the manager in the quest to handle the employee retention scenario, and intervening interview, with elegance and poise.
- Retention reassures the work (and the team) that their contribution matters
- It helps both the owner and the worker reassess their priorities and their fit in the scheme of the business
- It helps the management keep tabs on the negatives and correct them effectively
Employee retention strategies
Long-term planning for employee retention
With the importance of retention being established, a look at the common retention strategies currently followed in the corporate sphere is in order.
Companies think of many classic, established retention strategies such as offering more money and more power to an employee. There are also several outside-the-box, unconventional measures taken up. After all, companies pride themselves on thinking in an empathetic and futuristic fashion.
Not all retention strategies begin once the employee has announced the decision to leave. On several occasions, they are in force from the moment they step into the organization.
Some of the methods that can be adopted from the beginning are
Encourage openness: When it comes to knowing if something is wrong, the earlier it is, the better. A manager who keeps not only the ears but the other senses open to understanding the pulse of employees’ morale is a wise one. Such a manager picks up the scent of any discomfiture, restlessness, or change in the manner of their employees. Further, they keep the channels of communication open through honest and relaxed conversations.
Show appreciation: Even the most reticent employees respond to praise. It is good to acknowledge team members for a job well done. The praise sticks in their minds and they would strive to repeat instances of good behavior or performance. This positive reinforcement, therefore, taps into the employee’s motivation to do well consistently and frequently.
Forming a connection: This is something every human looks for, much more so at a workplace where the importance of connections is several folds greater. A birthday celebration, a life-stage recognized openly, or an allowance made for a special circumstance makes the connection between an employee and the organization that much stronger.
UK’s professional services outfit Ernst & Young helps along the morale boost and human touch by encouraging diversity. They comb through local talent and also welcome worthy employees regardless of age. The positive effects of this show in the camaraderie that the staff builds.
Conveniences and perks: If compensation is the primary factor, for many employees, the convenience of, say, getting to work, flexible hours, or taking time off is a close second.
Let there be light! Knowledge is often compared to light for a reason. Employees value development opportunities – training, knowledge gained on the job, a set of marketable tools, and the all-important experience. Let employees gain new skills and expertise in areas, and they’ll thank you in the long run.
Find your key players and give them more sway: Not only will the recognition offered to good performers keep them in a good mood, but it will also inspire others as well to perform better and exceed expectations. Added responsibility and power to do more can make an employee feel trusted and honored. Soon, more members of the team will be vying for those key positions and greater visibility.
Make those office hours’ worth living for: After all, every employee spends a major chunk of the day (or night) at work. It makes sense to have them feel good to come and spend those long hours.
Solid employee benefits: Insurance, discount plans, support from within the administration and in the peer group are a norm these days. Provide a good work atmosphere and even the best employees will find it hard to leave such an environment.
These are not only good retention measures that can turn an employee’s head but also are workplace best practices that make an employee comfortable and discourage them from thinking of moving away in the first place.
The A-game in Employee Retention – how the firefighting ought to go
Of course, there are pointed retention practices that can be brought into play when the big guns decide to move away from the organization. These are clear tactics that can help defray the detrimental effects of attrition.
Retention interview: This is more or less the very first step to be taken once a manager hears of an employee’s decision to stop working at the company. It is the most essential step because it is the best way to find out, from the horse’s mouth, why the decision to leave has come about. Only when the reasons for dissatisfaction or displeasure with the current role are understood well, a supervisor can take action to mitigate the circumstances or try to address the concerns.
Encourage frankness: Although this is a good practice to have even under normal business conditions, frankness is appreciated and recommended at this stage. The manager conducting the retention interview should invite and inspire confidence. Sharing an employee’s grievance that has come to such a stage that they have decided to leave the organization is in itself a serious scenario. When such a situation cannot be saved, the manager can at least help others who face a similar issue.
Financial reward: This is something of a no-brainer. Since many employees leave for greener pastures which are in many cases better paying than the existing situation, offering a higher compensation is one of the simplest and most straightforward approaches that management can take to retain an employee who has decided to quit. The numbers can make one re-think the decision to walk out of the door.
Promotions and ad-hoc responsibilities: It is so often the case that when a company is looking to staff a new role or a new division, they wish to bring in someone from outside freshly for that role. While this is acceptable, someone within the same company who is already well-versed with the company’s practices, ethics, and values, can fit in even better. The required competency can be learned through a short training or course.
Promoting from the internal, existing staff immediately has the spin-off that a person who is already part of the family has been recognized for their capabilities. This can be a great morale boost for the employee picked.
Employee development opportunities: As discussed before, this is a valuable perk that all modern employees look for. As good as it is to be appreciated for one’s existing value, someone who is fostered with great care so that they can fulfill a bigger position and more responsibility at a later date builds trust within the employee. An employee picked for building new skills will be eager to prove that they have absorbed the new lessons and can offer more value.
The 2019 Retention Report: Trends, Reasons, and A Call to Action states that 3 out of 4 separations could have been retained if employers had identified reasons for retention accurately. Far ahead of 9 out of 100 employees leaving for better pay, 22 employees out of 100 resigned for better career improvement opportunities elsewhere.
Show you care: This is the main job of the immediate supervisor. It not only means being empathetic about work difficulties, leave requests or special requests, but also picking up subtle clues on where an employee might seem to lag in confidence. Something as simple as the acknowledgment of a work anniversary, personal milestone, or even a day out with families for the employees sponsored by the company can make them feel that the company promotes a work-life balance and views them as a human resource who is truly valuable.
A little can go a long way in maintaining the human touch with resources. Truly it is a process that begins from the moment the employee walks into the company for the first time.
Also read: Employee gifting, rewards & recognition
Here’s a closer look at each stage of the employee’s journey and how retention relates to each of the areas in which retention activity might be required:
Finding the right kind of candidates for an organization so that they will lead it on its path of fulfilling its objectives is the main purpose of recruitment. It is, more or less, an ongoing activity. Companies recruit depending on their growth rates and hire new staff to meet the spiraling requirements and widening objectives.
The trouble with tumultuous growth is that the process of hiring has to be expedited. In a hurry, and to meet the demand of increasing project requirements, sometimes employees are hired without the requisite care.
This can lead to the hiring of candidates whose philosophies, approaches to work or ethics do not match the company’s. A clash of culture to some extent is inevitable. But a polar opposite view can be bad for the team. When care is not taken to weed out an employee who, for instance, doesn’t respect company property, or does not honor the non-disclosure agreement of company data is an immediate and apparent threat to the functioning of the organization.
This is why care has to be taken at the recruitment stage before such an employee enters the team.
Correcting a hiring mistake – at what stage is employee retention a worthy effort?
If at a later stage, such a hiring mistake is discovered, senior management would do well to neutralize the threat by trying to convince the employee to get on board with the company policy. When a consensus cannot be arrived at, it makes sense for such an employee to be separated from the organization, if at the cost of increasing the attrition rate for a time.
The problem of faulty hiring is to be rooted out at the very outset. It means that under no circumstances should hiring be done in a hurry. A company ought to spend time figuring out, agreeing on, and then documenting the desired list of qualities they would like to see in a potential entrant.
Even more important is the need to identify the ‘deal-breakers’ – the traits or behaviors for which the company has zero-tolerance. For instance, a publishing company would have a zero-tolerance policy on plagiarism. Under no circumstances can pilferage of others’ work as one’s own can be tolerated on the part of an employee.
By taking preventive care at the recruitment stage, the obligatory need to separate an employee from the herd after the damage is done is averted. It ensures that the consternation caused by such a step among the team and the hierarchy is avoided altogether.
There are several steps and stages through which a company learns more and more about an employee. Each of these steps, such as the various stages of interview, induction, training, and the learning curve on the job are instructive in revealing the personality of a new-hire.
A red-flag can be obvious as early as during the induction period. Sometimes called Orientation, this is the process in which new hires are made familiar with the ongoing practices, core standards, and values of the company. The newly hired cohort is also shown around the office premises and explained how the entire hierarchy of personnel, the team, and everyone else in the building ought to behave with one another.
This step has the advantage of showing the new hire what the dos and don’ts of the company are.
Retention or not, some iron-clad rules are for keeps:
Always treat the employee with respect.
Even in disagreement, while offering feedback – positive and negative, offering criticism, or even admonishment, it is important to never make a personal attack on an employee.
Employees who are treated right from the beginning would recall that they were treated politely from the beginning. This would count in favor of the company. On the other hand, caustic remarks and remonstrances that are baseless can sever the relationship fasts.
When push comes to shove, retention becomes difficult.
When a trained employee finally hits the shop-floor, they are expected to have all the rules and requirements of the company well understood and noted. They are well on their way to learning the ropes of the project, and they are pretty much on their own.
From this stage onward, it becomes the responsibility of the line manager to keep a close eye on the newest entrant in the team. Deviant behavior is to be addressed immediately and effectively to prevent repeated mistakes.
As a rule, all managers have to treat their subordinates equally. Keeping the good effects of positive reinforcement in mind, it helps to offer praise for work well done in public so that commendation is met by popularity and approval from others. At the same time, critique or suggestions for improvement have to be offered in private so that an erring employee has the time to mull over a less-than-ideal incidence and return to the workstation with a balanced view and better understanding of how they can perform better.
When these tiny but important facets of bringing in new staff are kept in mind, the reasons for dissent to develop at a later stage are minimized. There are statistics to support equitable and respectful treatment of employees from the beginning. If and when ennui or discontent does creep in, all parties can be brought to the table for a purposeful, profitable discussion so that differences are solved amicably.
Recruitment is an activity that is at the root of all this. It has to be done with care and deliberation.
The salary or periodic wage earned for services rendered is the primary motivation that keeps employees going. Monetary compensation is high on employees’ list of priorities while assessing how suitable and rewarding a work situation might be.
The very top reason for even a seasoned employee to leave an organization and make a beeline to another is when better pay and non-monetary benefits that can be easily translated to liquid earnings are offered. These latter ones can range from insurance packages, health insurance to e-sops, and discounts at a variety of stores including retail outlets, but they all count as thoughtful, realizable benefits when offered along with good pay.
Compensation becomes a matter of dissent and a reason for an employee to look for better situations elsewhere when the possibilities of receiving hikes, incentives, and bonuses are not carried out in a planned fashion.
Compensation used pointedly towards employee retention is done in two ways: Satisfiers – to satisfy existing wants, such as store loyalty cards or discounts, grocery coupons and the like. The other type is motivators – this takes the form of incentives that come over and above the fixed salary and impel the employee to work harder to meet a goal. A common example is the commissions earned by salespeople and retail agents.
Another crucial factor is that the industry-standard. When this golden mean is not met, employees are apt to pick up on the fact and look for greener pastures. In fact, it is recommended that the top performers are compensated far above the industry standard so that they remain satisfied in terms of financial benefits.
Although the industry standard varies from one job family to another and even between different roles within a job family, hikes and bonuses are expected as a common part of the compensation package. The absence of it simply won’t do.
To quell this problem, HR policy towards compensation is formulated in such a way that bonuses and yearly appreciation is offered after a complete appraisal of the employee’s performance, possibly being linked to their performance in several metrics. This is a fair method of offering monetary benefits when they are rolled out in a uniform and equitable manner without prejudice.
An engaged employee is one who participates in the daily business of their sphere of work while also keeping an eye out for the bigger picture of the organization’s image, its practices, and the code of conduct within.
They pay heed to their organization’s long-term vision and objectives and incorporate these aims into their day-to-day practices. This attention shows up in their work and they inherently mean well toward the company.
The work culture at Adobe Systems is a case in point about how thoughtful employee engagement practices lead to direct dividends in reducing turnover. Their initiative, ‘Check-in’, calls for open interaction and discussion of performance issues and metrics between workers and the management. It creates an open space that contributes to their high retention figures.
What does it do for them in return?
An engaged employee is not merely occupying a desk. They are recognized for their presence and their work. They are acknowledged as a part of the team and the bigger system – an important cog in the wheel of the company’s machinery. They know exactly how their work is important in taking the organization forward, and they want to do well with this end goal in sight.
An engaged employee is clear on what is expected of them today, next month, and for the foreseeable future. Since there are open lines of communication both ways above and below the ladder of the hierarchy, they are not above asking questions, adding to their understanding, and refining and the modes of working accordingly.
Employee engagement is clearly a long-term factor in preventing turnover and making an employee feel at home.
Openness in communication, which is a crucial factor in making an employee feel trusted and valued, has to be practiced in an ongoing fashion gives the employee a sense of what to expect and includes them in the plan of achieving the long-term objectives of the business.
The activities included in employee engagement are designed to cater to the needs and preferences of the employees in question to as large an extent as possible. A thoughtful, goal-oriented employee engagement activity carried out by HR would be focused on the workforce’s qualities not just as a team but as individuals.
For instance, a closer look at the youngest generation of workers will reveal that they revel in the use of smartphones, technology, and gadgetry. They are also the most opinionated ones who have a rich selection of media and avenues to express themselves. These are facets that can be explored while designing outings, competitions, recreational areas and fun for employees.
When it comes to employee retention, employee engagement is also the area in which creativity matters the most. An employee who is not noticed as an individual contributor who matters is quickly pushed into a metaphorical corner. This would, in turn, affect the quality of work the employee brings to the table. This is such a valid argument that organizations of today notice plummeting productivity and bring out thoughtfully-crafted employee engagement missions to ensure that their workforce is sufficiently rejuvenated, challenged, and aligned once more with the company’s goals.
Training and Development
Given that digitization has taken workplaces by storm, it is no wonder that training of some depth is essential in every rank and function of the organization. Even the proactive learners who keep themselves ahead of the pack need training in new initiatives, changes in technology packages, upgrades, and the variety of tools used.
Learning itself is a joyful journey that makes one feel alive again. An employee who taps into explored parts and learning centers of the mind because of being cooped up at the cubicle delivering on projects month on month would feel refreshed by taking up a course and acing an exam or certification.
The technological development of today offers something new for everyone to learn. Training your employees to be better at what they do – more efficient, accurate, or thorough – can make them value the guidance offered. Someone who values learning will come to respect the additional benefit of being able to grow in a secure and learner-friendly environment. In return, they are the employees that you would turn to when you need a quick and realistic learner. This is because their ability to learn and thrive has already been established.
Being offered time and resources to learn an expensive, trending course also tells the employees that their employer trusts them. Employees are quick to see that their calendars have been shuffled around to accommodate training or certification that adds value to them, not to the company’s coffers.
Today’s learning-oriented employees realize fully that learning from a respectable institution or tutorship set-up requires less fortunate workers to take a career break, meaning a break in their inflow of income. Being able to attend work (at least in part) and making themselves ready for a new set of responsibilities is a considerable investment and employees would be grateful for such opportunities.
It helps them add to their existing skills and gets them ready for a promotion, better-paying assignments, or job roles in the long run. That an employer cared to nurture this growth and learning mindset is something that will stay with them.
The offer of learning and development opportunities should ideally be present for all ranks and performers in the organization. It pays well even in the case of under-performers as it shows them the pathway to get better at their jobs. Transitioning into better performance would help an employee rise up with confidence and prove themselves better. This way, it is an excellent venture for workers down the performance list.
For the top-performers, training and development opportunities are an excellent way to help themselves and then aid the trainers in helping others. AS they learn and perfect new tools, they can hand-hold new learners who come after them into the classes and offer them lifts over the tough parts. Knowledge cascaded this way is effective while it also allows team-building to happen alongside.
Workers in a cohesive project should have a common goal to work towards.
Goals and agendas are set at the very outset. But it helps to keep communication open and reiterate the need for the goal and the means of achieving it so that employees do not stray off the path and proceed in warring directions.
This is why project managers, team leaders, and middle-level managers keep track of employees’ progress and offer suggestions on what needs to be changed or fine-tuned. Internal communication is the purpose of keeping all the employees on the same page, and to give feedback on how their work so far has fared.
Internal communication should always be polite and formal. The chaff can be cut out of emails and memos by eliminating redundant messages, ‘thank you’s, and acknowledgments. Instead, a system has to be worked out and maintained faithfully so that uniformity is maintained across teams and verticals.
Another effective form of internal communication that also seeps into employee engagement is the sharing of good news. The company’s good performance in the market, among competitors or in the R & D segment, and any form of acknowledgment from respectable bodies and authorities has to be communicated to the employees. This spreads the feel-good factor that they are associated with a winner, and that they are on the right tracks.
Even within the company, laurels won by a team member, or anyone in the hierarchy have to be cascaded to the relevant groups so that winners feel recognized and lauded. Not only does this keep them motivated, but it also helps them understand what it means to tick all the right boxes and become a valued employee. When there is a live example of someone who has done it all right standing in front of one, it becomes easier for others to follow the performer’s lead.
This sets up a positive atmosphere of “give and take”, and good-natured competition. It can lead to every employee performing to the best of their ability and reveling in their work.
Even without attrition being a major cause of concern on the horizon, performance evaluation is a period of tense moments for employees and extended hours of detailed work for the managerial cadre.
They evaluate the employees’ performance over 6 months to a year and give a rating based on which target-linked incentives, promotions, bonuses, and host of other rewards and recognition tokens are dependent.
While top performers walk away with all the accolades, it is the middle-level performers that hold their breath on whether they can hope for a promotion or a monetary bonus in the assessment period. Also, this is the time when bitterness shows and employees are quick to be on the offense if their genuine efforts are not recognized.
Managers and employees would have differing views of their good performance (or bad). While an employee might be quick to rationalize bad performance or attempt to offer explanations, a team leader is in the process of finishing the appraisals of all the team members and returning to Business-As-Usual (BAU).
However, it makes sense for both parties to give their attention and time to this all-important activity of performance appraisal. This is when both the manager and the team member would communicate their differences in opinion and arrive on the same page. This mutual understanding leads to better cohesion when they go back to BAU.
The downside of not paying heed to the importance of performance evaluation is that an employee can get disillusioned with the work, the team setup, and even the entire organization if they feel that they have been adjudged wrongly.
Some would even come to the conclusion that they are better off in an organization where their manager understands them better or listens to them more actively. These are situations in which all the core standards of behavior ranging from politeness to effective communication and mutual respect ought to be in force.
Critique and praise can both be offered in a constructive, outcome-led fashion so that the person being evaluated does not feel attacked.
The sandwich model: most managers know that offering criticism is an art. For critique to be offered artfully, sometimes they start with the positives, talk about areas of improvement, and again end on a positive note.
The method of sandwiching areas of opportunity in between positives gives the employee something to feel good about. Further, showing how the employee can improve, and offering modes of tracking performance so that improvement becomes a clear, measurable goal is a method followed by the most successful and respected managers.
The consideration of attrition resulting from a round of performance appraisals is a realistic one – one that all middle and senior-level managers would do well to prepare for.
When an employee expresses their wish to resign from their position because of the way they have been evaluated, there are a slew of ways to counter this. The very basic one is to maintain composure and show the dissident employee that the mode of evaluation is not based on any single metric, but is a combination of several – it ought to be, for the evaluation to be fair.
Numbers, graphs, and instructive examples can help the employee see exactly which incidence led to a score.
Evaluation should always go with a guide-map and feedback for the future that the employee can immediately start to work on. It goes to show that the management believes that the team member is capable of improving, and cares to lead them on the path to better performance in the coming months.
Even more crucial is to not let the positive vibes die down. Revisiting the goals set periodically can help boost the motivation levels towards actually getting better.
Retention of employees at this crucial hour is a test to all the leadership qualities, empathy, and negotiation skills a manager possesses. One would need to show genuine care, skill in pointing out errors without touching a nerve, and follow up patiently. This multi-pronged approach can make clear to the team leader who the true performers are, and which of the low performing ones care to improve with a will.
- Step-by-step check of areas of dissatisfaction of one employee can give insights into others’ pain-points and team morale
- Analysis of reasons to leave can throw light on areas that are glossed over. Correcting these can help improve employee engagement, work culture, and much more
- It can help the management benchmark performance, compensation, and strategy in real-time
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HR’s role in Employee Retention
Human Resource personnel act as a support function to the main functions of the organization – say production, development, design, or R & D. When this is the case, an employee’s line manager would be first in line to address and mitigate the question of an employee’s resignation.
Human Resource personnel can only advise managers on the best practices to be followed to ensure that an employee feels valued and adequately compensated. They cannot make the decisions for them or execute them across functions to reach the employee directly.
In the background of retention, however, HR has the most critical support function. They make the retention policy that guides managers on how to go about retention and makes tools of retention available to a manager so that they can handle retention negotiations with confidence.
It might be necessary to offer more money, opportunities for learning and development, or offer greater responsibilities and promotions as part of a retention interview. At that stage, the manager should not, ideally, have to go back and forth between the personnel department and the employee. In fact, such elbow room and time to spare are unavailable when employees are in the mood to take drastic steps.
At such a time HR rallies behind the manager and supports their negotiation. The manager can consult negotiation terms to see how far they can go and the offers they can make to the employee in terms of growth opportunities, better pay or flexibility benefits, or possibilities of being considered for a promotion.
This way, the HR department also looks out to satisfy the needs of the employee within realistic limits.
In truth, Retention is the activity that brings together line and staff managers, and a host of functions including HR, Finance, and Compliance committees, in addition to the employee’s original functional area.
A road map of how Retention works
Step 1: Retention as a process is relevant from the moment an employee informs their immediate manager that they would like to quit.
The manager has some quick thinking to do here. They have to express regret at the unfortunate scenario that the employee has come to decide not to continue working for the company.
Step 2: The onus is on the manager to look through the employee’s performance and deduce whether is it worth the company’s while to retain this particular worker or not.
There are usually a few grey areas here. The employee’s performance as recorded in the time they have worked with the organization should be available at a glance.
In most cases, it would make sense to retain the employee than to look for someone to fill their place. The latter is a tedious, time-consuming process that also calls for additional training and induction processes to be carried before a new employee is up to speed and ready to fill the incumbent’s shoes.
Step 3: The manager then schedules a ‘retention interview’ with the employee. By this time, the manager would’ve consulted with higher managers, the HR personnel, and the C-suite.
This interview throws light on why the employee has decided to discontinue working for the company. A manager should react politely and appropriately to the revelations and not get on the defensive. Only then can a smooth dialogue be engendered so that the employee is amenable to retention.
Step 4: When a new deal – a better pay/promotion/learning opportunity or any other offer – is made to the employee, there will be a time gap during which the employee decides whether to take the deal or continue on the way out.
The role of HR Department in employee retention
The HR department plays the role of an avuncular well-wisher and buddy to all the employees in the company. Where Retention is required, HR makes the manager’s job easier by making it possible to award an employee’s exceptional performance through a company-wide event. They send out encouraging emails celebrating employee’s recent successes and milestones met.
A common and easy-to-understand example of how the HR calendar and scheduling activity makes a difference is when an email comes out thanking a loyal employee for a certain number of years’ faithful service. Such a simple token of appreciation coming from HR could keep the employee smiling all day. They can induce vigor and vitality into the days of the team through simple activities that make the entire feel glad for being part of the institution.
HR works hand in glove with the managers and senior managers of the company, helping them keep their reporting personnel happy and fulfilled. Short-term motivational plans, incentive-driven targets, and long-term plans for adding to the skills of the employees are thought-out and scheduled by HR so that employees continue to be productive while also adding to their skills.
The importance of the duties of HR is felt right from the moment an employee is shortlisted for an interview. The personnel guide candidates through the motions of the interview, announce their findings and help onboard the new executives. From this point, the HR personnel work hand in hand with the line managers and other executives to train and build a group of productive staff. When the incidence of employee retention arises in view, the HR policies that have been in action right from the stage of selection are now apparent.
If the right kind of candidate has entered the organization, they would have little or no trouble in aligning their interests with those of the company’s. If, on the other hand, the candidate has opposing views, this should ideally reveal itself at the interview stage itself. If this is revealed at a later stage, HR should be the one to negotiate terms.
In rare cases, the clash of ideals is so stark that so an employee will decide to leave despite all attempts at retention. In such cases, the isolated case of employee retention activity may go unsuccessful. It is to be noted here that this isn’t the worst thing – an unaligned employee might find productivity and happiness elsewhere, and the company too can find better workers who suit its ethos.
Such an incidence is a lesson in the organization to improve recruitment practices. HR should make sure to ask pointed questions in the interview which reveal whether a candidate’s ethos line up with the company’s ideologies. Since people are apt to lie in interviews, accurate testing is possible when a combination of interview techniques and testing methods are employed. Depending on how important a set of values is to the organization, they can dedicate that much importance – time, number of questions and questioning methods during the interview to a particular skill-set.
The most important finding here in recruitment practices is that HR and top management should be ready to learn from mistakes. Documenting mistakes and learnings from them can become a guiding principle for future recruitment practices.
Employee retention and recruitment are, therefore, interdependent activities. The learning from one can and should be used at the other place so that precious learning gained from one experience is put to use at the other place. This saves time, shaves off redundancies, and increases efficiency in the HR function as well as in the entire organizational hierarchy.
There are areas in which HR only follows a suggestion role:
HR itself is a support function
It helps the entire organization carry out the main function smoothly. This is why HR doesn’t directly interfere with the roles and tasks of each employee. Rather, it ensures that all the amenities, equipment, and features necessary for the functions to be carried out are in place and running.
Job role: The exact nature of duties that an employee is expected to keep up daily is entirely up to the functional head and the various subsidiary members in the hierarchy.
The level of difficulty in a job, the skills needed for a role, and the market-rate or value of these skills is only understood by the managers after a dedicated market study done by human resource personnel. They work in congruence with the Accounting department to understand the company’s revenue model and framework and draw up a compensation package for each role.
Also read: Role of HR in Employee wellness
- HR clarifies its stand on issues and evaluates the specific situation to crystallize rules and objectives
- A framework of action needed for retention can be formulated
- Learn from history – document and reinvent practices as the market evolves
Role of C-Suite in Employee Retention
Chief Executive Officers, Chief Operations Officers, and Chiefs of HR should keep an eye out for the most current, relevant trends in the industry when they look to attract and retain talent. A company that does not keep up in technological advancements and workplace practices would be left in the lurch as the cream of the staff makes their way to other, friendlier organizations.
Long gone are the days when the CEO was enclosed in glass cabins all day and met only the big shots to strike deals. Today’s top executives are visible and approachable. They interact with all rungs of the hierarchy and keep close tabs on several factors in addition to the numbers.
The top management plays a key role in ensuring that attrition is brought down organically. The retention numbers climb up and loyalty stays put when the executive echelon works actively to make the workplace, its policies, and working conditions better for the employees.
The real change-makers are the business owners who have brought all the employees together under one roof. They get to put into practice what they preach by making rules, defining standards, and clarifying through employee handbooks and chain of command what is acceptable and what isn’t.
The top echelon of leaders should practice what they preach. They should:
Encourage bonding of the whole team towards a single goal
Once it is spelled out and everyone on the team is on the same page about how to make it happen, the shared purpose binds them together.
A leader who makes it easy for employees to share their ideas is one who will benefit from a multitude of perspectives in handling a problem. Spinning off these ideas and analyzing them can put the entire team on the path towards resolving the said problem.
Inspire respect among one another by showing respect first
Not even the topmost rung of bosses can get away with bad behavior towards their staff. They have to be respectful to inspire respect.
Communicate for clarity
In a team, there is no room for hidden agendas. Above-board communication about roles and responsibilities ensures that everyone fills their requirements carefully. In the end, the whole is greater than the sum of its parts. The results of clear-headed communication give off a better efficiency with reduced wastage of resources. The ultimate aim is transparency among all rungs so that instructions are not lost in translation.
Google’s Head of HR relates how encouraging transparency has worked out well for their staff. Staff and management benefit from a flat organizational structure in which workers also offer criticism to their bosses. In the article, ‘This is Google’s secret to making work less awful, Ben Geier states that they favor more frequent performance appraisals as opposed to fewer. Most of all, Google’s mantra is about hiring people who are quintessentially humble and down-to-earth to align with their goals of reaching excellence.
Among the out-of-the-box thinkers, some leaders do “jump-level” meetings. An employee has a meeting with the top management every once in a while so that they can discuss matters that they have not been able to get resolved by speaking to their immediate manager. This skip-level meeting or jump-level meeting helps the top-manager keep tabs on the lower rungs of employees to see what goes on at the operational level where they don’t continually monitor progress.
Create equitable opportunities
When an employee is promoted, offered a raise, or greater responsibility from among a team of hopefuls, it is up to the top management to observe whether fair means were adopted in making the choice of the candidate. Without such checks, middle managers get to have the final word on who gets promoted and dissidence emerging later would become impossible to handle.
Top managers can become the source of healthy competition among workers when they lead with good performance at their own tasks. A leader who is exemplary in performance and manner becomes an inspiration that helps everyone else work towards good metrics in their own roles.
Top management should be approachable despite the many levels of workers working under them. Even more important is their ability to glean from a scenario what the potential pitfalls could be. When there is a disagreement that escalates to the top runs of the management, it means that there are more sides to the chain of occurrences and they need to be heard patiently.
This is where it helps to have policies and procedures in place for every eventuality. Guidelines can be laid out in the employee handbook, on the company’s intranet and elsewhere so that employees have a handy guide to when they need assistance.
Also read: How to build an everlasting company culture
- Encourage transparency and keep communication clear
- Engage with employees as personalities and not mere resources
- Promote bonding between employees and teams
Challenges in Employee Retention
The answer in a single word is no. Merely having the procedures and resources in hand does not guarantee successful retention. Investigating the reasons for an employee’s decision to depart is only half the battle.
There are several cases in which employee retention hits a roadblock. Some of the scenarios are:
The employee refuses to communicate reasons
It is impossible to reason with an employee who will not share the reasons behind the decision. It is also the same situation when an employee offers spurious reasons for making for the door. The right reasons cannot be addressed and the employee retention activity cannot proceed fruitfully.
The employee has unreasonable expectations
Whether it is a question of compensation, workplace conditions, workload, or any other matter when an employee has expectations that are far above the company’s standards, allowances cannot be made to extend/bend rules to make the situation acceptable for one employee.
A repeated occurrence
This is rare, but not unheard of. When an employee merely threatens to leave to get what they want, it is not a healthy approach to any problem. Such repeated threats will only devalue the employee’s credibility. Sooner than later, the company decides that it is better to let go of an employee who remains dissatisfied through repeated efforts at retention and will decide to cut its losses.
Dissatisfaction with compensation packages
Often, industry standards are not the only reason a certain number is decided upon as a far salary. When an employee constantly compares one salary against another, no amount of explanation of the constraints can suffice. In such cases, the employee should find a different situation where they are compensated in keeping with their expectations. Trying to extend the organization’s budgets can only throw the entire revenue model out of balance.
Warring logistical constraints
An employee should be able to fill out the logistical requirements of staying at the workplace for a fixed period, commuting to and from there, and fulfilling the requirements of the role. For instance, a travel job cannot accommodate a worker who cannot leave the city due to family or health constraints. Such circumstances should be weeded out early on in the selection process.
New job opportunities
With the job market often being talent-centered, it is impossible to keep employees from leaving when they receive job offers from other businesses. In such a case, employee retention activity should be crafted for the long term, creating an environment that dissuades the top talent from wanting to leave.
Apple, Intuit, and other top technology players often clamor for the same talent group and have gone so far as to drafting ‘anti-poaching agreements’ with their employees. This casts light on the demand top talent has in the job market.
The 2019 Retention Report: Trends, Reasons, and A Call to Action states that job openings have increased by over 138% in the intervening period of 2010 to 2018.
It suggests that organizations are vying with one another to attract talent. The declining unemployment rate also suggests that lower supply of educated, talented workers are available to fill the growing job openings.
Indifference stemming from repeated chores
As much comfort as there in working in a familiar environment, human nature would long for novelty. An employee might decide to step away from their organization simply because they have been around for too long. The leadership, in this case, would figure out from the employee retention interview that there is not much to hold the employee back in their role. They should simply treat this as an opportunity for new talent to come in.
Whatever is the scenario in which an employee decides to leave an organization, it certainly needs to be addressed in as much truth as possible. This is possible when both parties are clear and honest about their constraints and interests.
In the example of Google as a top destination for employees, its retention plan itself makes it attractive to applicants. The salaries at Google are higher than the market average. Google’s HRM focuses on Mentorship for its top performers and grooms leaders from within.
In many situations, the apparent need to sever connections with one organization is a valid one and cannot be handled by the mere extension of benefits or promises. The true spirit of employee retention is upheld when both parties communicate openly about their needs.
Then, the fall-out of the retention interview or exit interview would be an outcome that both the organization and the employee are on board with, not only for the time being but for the longer term.
- Sometimes employees have irrational expectations or ideas about their job.
- This is an opportunity to craft roles with better awareness and vision for the development of the role
- Retention helps HR and top management figure out limitations and possibilities
The best, fail-safe method of employee retention is a strategy for the long-term: it comprises the creation of an environment and set-up the employees do not want to leave behind. It consists of a combination of factors in which they are compensated above adequate level, have opportunities for growth, development, and elevation, and are challenged adequately in the job so that they will want to keep learning and growing by virtue of the position they hold.