STAFFING MANAGEMENT

STUDENTSS MANUAL

Retentio

Contents
Chapter 1 RECRUITMENT....................................................................................... 3
INTERNAL ENVIRONMENT................................................................................... 3
Promotion From Within.................................................................................... 3
Nepotism......................................................................................................... 4
EXTERNAL ENVIRONMENT.................................................................................. 4
Labour Market Conditions................................................................................4
Legal Issues..................................................................................................... 4
INTERNAL RECRUITMENT.................................................................................... 5
JOB POSTING................................................................................................... 5
Employee Referrals......................................................................................... 5
EXTERNAL RECRUITMENT................................................................................... 6
INTERNET RECRUITING....................................................................................... 7
RECRUITMENT FOR DIVERSITY............................................................................7
Chapter 2 SELECTION............................................................................................ 8
THE APPLICATION................................................................................................ 8
SCREENING INTERVIEW...................................................................................... 9
SELECTION TESTS ........................................................................................... 9
INTERVIEWING CANDIDATES..........................................................................11
TEAM OR INDIVIDUAL INTERVIEW..................................................................12
BACKGROUND VERIFICATION AND REFERENCE CHECK.................................12
MAKING THE JOB OFFER................................................................................... 13
EVALUATING THE RECRUITMENT AND SELECTION PROCESS............................14
Chapter 3 EMPLOYEE RETENTION........................................................................15
REDUCING RECRUITMENT BY INCREASING RETENTION EMPLOYEE RETENTION15
INTRODUCTION................................................................................................. 15
PEOPLE ARE VALUABLE..................................................................................... 15
RECOGNIZING THE PROBLEM...........................................................................16
The High Cost of Employee Turnover.............................................................17
The Impact To Your Business.........................................................................17
What are you doing about the problem?.......................................................18
SOLUTIONS....................................................................................................... 18
The Basic Elements of Retention Strategies..................................................18
A :: Top Performer Profiles............................................................................. 19
B :: Orientation and Onboarding....................................................................19
C :: Performance Reviews.............................................................................. 20
D :: Career Pathing and the Two-Way Value Proposition................................21
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E :: Communication and Employee Engagement...........................................22

F :: Morale..................................................................................................... 23
G :: Competitive Compensation, Benefits and Incentive Program.................23
H :: Non-Monetary Reward Recognition.........................................................24
I :: Employee Surveys.................................................................................... 24
J :: Exit Interviews.......................................................................................... 25
K :: The Boomerang Effect............................................................................. 25
5 :: CONCLUSION........................................................................................... 26
6 :: RETENTION CHECKLIST........................................................................... 26
Flexible Firm Model........................................................................................... 27
Flexible Labour Markets.................................................................................... 28

Chapter 1 RECRUITMENT
When HR planning indicates the need for additional labour, organizations have a
number of choices to make. This may be the first step in a full-scale recruitment
and selection process, but sometimes hiring additional employees is not the best
method to obtain additional labour. It may be appropriate for an organization to
consider alternatives to recruiting, such as outsourcing or contingent labour,
instead of hiring regular employees. If this is a temporary uctuation in work
volume, the simplest solution may be part-time labour or overtime by existing
employees. The costs of recruitment and selection can be staggering; hiring new
employees should occur only after careful consideration and only when the
organization anticipates a long-term need for additional labour. Estimates on the
cost to replace supervisory, technical and management employees run from 50
percent to several hundred percent of employee salaries.
Careful HR planning must consider the overall growth prospects of the
organization and accurate forecasting of future labour needs. Recruitment
planning begins only when other alternatives have been considered and
RECRUITMENT: The process of attracting individuals on a timely basis, in
sufficient numbers and with appropriate qualifications, to apply for jobs with an
organization

eliminated

INTERNAL ENVIRONMENT
Promotion From Within
Your organizations promotion policy will have a significant effect on the
recruitment process. If the open position is above entry level, it may be
appropriate to promote someone already working for the organization. Many
organizations use promotion from within as a motivation tool and a reward for
good work or longevity with the organization. When employees see their coworkers being promoted, they become more aware of their own career
opportunities. Promotion may be especially important in a stagnant economy
where people have little chance of improving their lot by changing organizations.
Their only opportunity for career growth and increased income is to move up
within their current organization. The problem with promotion from within is that
the promoted person leaves a staffing gap in his or her former position, so there
is still a position to be filled. However, that gap is likely to be at a lower, lessskilled position, and therefore it may be an easier position to fill. The advantage
of promotion from within is that your promoted employee is already comfortable
with the corporate culture, knows organization policies and will likely get up to
speed much faster than a person new to the organization.
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The disadvantage of promotion from within is that the organization loses out on
the chance for new ideas and the creativity that can come from a new person
entering the organization for the first time. Clearly, there are pros and cons to
both promotion from within and outside hiring. Its not that one way is right and
the other is wrongit simply depends on organizational policy, the type of job
being filled and its level within the organization. Higher-level jobs are more likely
to be filled by promotion than are lower-level jobs.

Nepotism
Nepotism is the hiring of relatives. Be sure you know your organizations policy
on nepotism before one of your staff approaches you about hiring a member of
his or her family. If you hire staff relatives (or if you dont), be careful of civil
rights violations because in many situations it is illegal to discriminate in hiring
based on a persons marital status. So when your administrative assistant asks
you to hire her husband, refusing to hire him just because hes married to her
may be an inappropriate and an illegal employment decision. Many organizations
have nepotism policies, so find out where your employer stands on the issue.
When hiring relatives, most employers require family members to work in
different areas of the organization to prevent issues of favoritism and possible
morale problems among employees. It is never appropriate for family members
to be in supervisory positions where they are required to manage their own
relatives.

EXTERNAL ENVIRONMENT
Labour Market Conditions
The strength of the economy and labour market conditions will significantly
affect your organizations ability to attract and retain top-level employees. When
the economy is strong, with little unemployment, your organization may have to
compete with other employers for a limited number of skilled employees. This
may require increased compensation or benefits incentives to attract quality
applicants. The reverse may be true in a soft economy, with high levels of
unemployment. The problem then is not a shortage of qualified applicants;
instead, the problem is managing the huge number of applications that must be
pared down to find a few good hires. Local labour market conditions strongly
affect nonmanagerial and supervisory positions, and depending on your industry,
global considerations may affect your labour market for professional and
technical applicants.

Legal Issues
There are a number of laws that will affect your hiring process, particularly in
the area of discrimination. The Civil Rights Acts prohibit discrimination in
employment practices when the discrimination is based on a persons race,
colour, sex, religion or national origin.
The Age Discrimination in Employment Act extends discrimination protection to
persons aged 40 and older for organizations of 20 or more employees. Pay
attention to your discrimination laws as well. Some situations require compliance
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with age discrimination law for employers of two or more workers, and some
situations have lowered the age discrimination threshold far below 40 years old.
The Pregnancy Discrimination Act makes it unlawful to refuse employment to a
woman based on pregnancy, childbirth or any related medical condition. The
basic principle is that a woman affected by pregnancy or other related medical
condition must be treated the same as any other applicant in the recruitment
and selection process.
The Disabilities Act prohibits discrimination against qualified individuals with
disabilities in organizations of 15 or more employees. The DA also requires that
the employer offer reasonable accommodations to disabled individuals so they
have equal opportunity to apply for job openings and, if hired, to be successful in
their job functions. If you are unsure what accommodations may be reasonable,
check with your department of labour. Employers are prohibited from using an
employment test to disqualify a disabled candidate unless that test is valid for
the skills necessary in the job to which they are applying and unless the same
test is given to all applicants, not just to those with disabilities. Always contact
your department of labour for information on appropriate laws in your area and
remember that it is important that you remain current on employment law as
regulations are frequently updated. Discrimination costs employers millions of
dollars every year, not to mention the countless hours of lost work time,
employee stress and the negative public image that goes along with a
discrimination lawsuit. The best way to avoid the trauma and expense of a
lawsuit is to simply not discriminate. Focus your recruitment and hiring decisions
on job skills and qualifications, endeavouring to find the best person for the job.
For additional information on discrimination law and compliance, see the Equal
Employment Opportunity Commission

INTERNAL RECRUITMENT
Job Posting The most common method used to find qualified applicants from
inside the organization is job posting.

JOB POSTING: The procedure to inform employees that job openings exist.
The traditional method to announce a job opening was to post notice of the job
on the HR bulletin board; no doubt this is the origin of the term job posting.
Today, many organizations post jobs electronically through organization-wide
intranets or send e-mails to all employees about the job vacancy. Other
employers publish employment newsletters or distribute job announcement
yers. Whatever the method used, the job announcement should include
information about the position, the required qualifications and instructions on
how to apply. It is important that the job announcement is made available to all
employees. Adequate job posting can ensure that minority workers and other
disadvantaged groups are aware of opportunities within the organization. The
downside to job positing is employee cynicism that occurs when jobs are posted
as open, but in reality, the organization has already selected a strong internal
candidate. Such practices create resentment and mistrust among employees
when they believe the job posting is just a formality with little real opportunity
for advancement.

Employee Referrals
Some managers believe that the best method to find top performers is to hire
individuals referred by existing employees. Current employees can play an
important role in recruiting new employees, and some organizations pay a bonus
to employees for successful referrals. Bonuses typically range anywhere from a
$250 gift certificate to a $2000 cash reward, but employers have been known to
pay several thousand dollars for the referral of a successful employee in a
position particularly difficult to fill. It sounds like everyone winsthe organization
gets a successful new hire, the new employee has a job, and the referring
employee has a bonus in his or her pocket. There is a downside to extensive use
of employee referrals, though. Relying on word-of-mouth recruiting may generate
applicant pools that do not reect the diversity of the labour market and may be
discriminatory. Therefore, it would seem prudent to use employee referrals
sparingly.

EXTERNAL RECRUITMENT
Applicant pools can be generated in a number of ways. Depending on your
organizations policies and the size of your hiring budget, you may want to use
an employment agency. Private agencies and executive search firms are usually
used for recruiting white-collar employees, but they can be used for virtually any
type of position. Using job criteria provided by your organization, an agency will
generate the applicant pool and do the preliminary interviews, thereby screening
out unqualified candidates and sending you only those who are actually
qualified. This can save a great deal of time; however, private agency fees can
be costly because they are often a percentage of the positions annual salary.
This can be a significant expense, particularly when filling executive-level
positions. If you register your job opening with your state employment office, it
may send you similarly qualified referrals at no charge. Depending on the nature
of the position, you may also get some unsolicited walk-in applicants, but these
still may not generate a large enough applicant pool without further recruitment
efforts. Large organizations often hire in-house recruiters whose sole focus is to
generate qualified candidates for open positions. Recruiters are generally used in
high-tech industries and focus their efforts on technical schools, community
colleges and universities. Since in-house recruiters are employees of the
organization, applicants generally base their perception of the organization on
their interaction with the internal recruiter. Therefore, recruiters must be made
aware of the image they present during the screening interview; it can
significantly inuence the applicants attitude toward the organization. You may
choose to advertise the open position in local newspapers, trade journals, radio
and television. Advertising can range from a simple help wanted ad in the
classifieds to an extensive multimedia campaign. Help wanted ads often include
a URL for online applications well as more traditional methods for reply. Some
organizations have eliminated traditional methods altogether and accept only
online applications. Historically, local newspaper advertising was the common
recruitment method, particularly for entry-level positions, because it was low
cost and could generate a good number of applicants. If the job you are hiring for
requires technical skills not commonly found in your local labour force, you will
have to broaden your search geographically by advertising in other areas or
working with employment specialists outside of your local area. In general, the
more technically specific the job, the wider the geographic recruitment area.
Some positions lend themselves well to internships. An internship is an
arrangement in which a student is placed temporarily in a position with no
obligation by either the student or the organization to make the position
permanent. The internship may be a summer or a part-time job while the student
is in school, enabling the student to learn the organization and try out the job
before settling into a career. It also enables the organization to try out a possible
future employee before making a job offer.

INTERNET RECRUITING
The most significant change in recruiting practices has been the rise in the use of
online recruiting. Many organizations post job openings on their web sites or on
specialized sites like Career Builder and Monster.com, and some accept only
online applications, completely eliminating the hard-copy application. There are
advantages to online recruiting. First, it costs less than traditional advertising.
Its easy and quick to post an ad; responses arrive faster and in greater quantity;
and a wider range of applicants can be generated. Online processes can also
screen applications and administer some selection tests, thereby significantly
reducing the HR time required to generate a pool of qualified candidates. The
online format is immensely popular with job seekers as well because the ease of
submission allows them to send out dozens of rsums with just a few mouse
clicks. This can create a problem for HR, however. There must be processes in
place to filter out those who do not meet minimum job qualifications. The ease of
applying for a job online can generate a great number of applications, requiring
HR staff to spend time sorting through applications to glean out the few that are
actually qualified for the job. There are as many different methods of recruiting
as there are organizations, and there is no one best method for recruiting job
applicants. Most organizations use a variety of methods, depending on the
nature of the job to be filled, the time needed to properly fill the position and the
size of their recruiting budget. Your organization may already have a valid track
record for recruiting that will determine what methods work best for your
situation.

RECRUITMENT FOR DIVERSITY

Equal employment opportunity legislation outlaws discrimination based on race,
color, gender, national origin, religion, disability and age. Some organizations
abide by discrimination law simply to keep out of court, but most employers
recognize the inherent advantage of employee diversity, including greater
creativity and an expanded customer base. Employers who wish to develop a
diverse workforce must ensure the use of recruiting methods that generate
applications from a variety of individuals. It is important that recruiters receive
training in the use of objective standards because recruiters are in a unique
position in terms of encouraging or discouraging diverse individuals to apply for
positions. Recruitment yers can include pictures of minority and disabled
employees, advertisements can be bilingual, and interviews can be conducted
using translators, if appropriate. It is important that the employer generate
credibility to the image of equal employment opportunity and that these are not
just words printed at the end of a recruitment announcement.

Chapter 2 SELECTION
SELECTION: The process of choosing from a group of applicants the individual
best suited for a particular position and for the organization.

THE APPLICATION
Asking the candidate to complete an application form is generally done early in
the selection process. Despite the widespread use of application forms for
employee selection, research demonstrates that illegal (or inappropriate)
application items are still quite common. Questionable items are those that
request information on gender, race, national origin, education dates and
disabilities. The most commonly found inappropriate questions involve past
salary levels, age, drivers license information, citizenship information and Social
Security numbers. Questions about past salary are considered inadvisable since
they can perpetuate lower salaries for women and minorities as compared with
white males. If an employer bases a starting salary on an applicants prior
earnings, minorities and women will likely be offered less pay. Although the
majority of applications do not explicitly ask about age, many include inquires
about an applicants education dates (year of high school graduation), which can
be used to infer an applicants age. Citizenship information is not appropriate on
the application and can be discriminatory if used as a factor in the hiring
decision. Certainly new employees must provide the employer with a Social
Security number when hired, and it may be needed for applicant background
checks, but it is not necessary on the application, and many people concerned
with identity theft are reluctant to give Social Security numbers. Since drivers
license information can be used to obtain demographic (and possibly
discriminatory) information, it is best not to ask for that information unless
possession of a drivers license is a valid requirement for the job. If your
organization has an affirmative action (AA) plan, your applicant may be asked for
demographic data for AA records. This information must be collected separately
from the application form, and applicants must be advised that submission of
demographic information is voluntary and that the affirmative action form will be
separated from the application and stored. The information requested on an
application form may vary from organization to organization and even by job
type within an organization. Typically, though, the application form should
include sections for the applicants name, address, telephone number,
education, military background, work experience and reference information.
There should be a place for the applicant to sign and a preprinted statement that
the applicants signature indicates his or her attestation that everything on the
form is true; if not, the candidate can be released. When it is not prohibited by
state law,

many organizations include an employment-at-will statement reminding

employees that either the employer or the employee can terminate the
employment relationship at any time. And finally, the form should include a
statement from the applicant giving permission to have references checked.
Many applicants include rsums along with their applications, and HR can direct
applicants to submit forms either online or in hard copy. Most large organizations
now use automated tracking systems that require online submission. Automated
systems can scan applications and rsums for keywords, thereby eliminating
the time spent by HR in reviewing documents. Obviously, this saves time in the
HR department, but employers using automated tracking systems must be
cautious. Applicants are becoming more sophisticated in the process and stuffing
their applications and rsums with keywords even when they are not truly
qualified for the open position. Regardless of the methods used, you may get
hundreds of applications for only a few open positions, particularly in a slow
economy with high unemployment.

SCREENING INTERVIEW
Before moving further into the selection process, many organizations prefer to
do a screening interview of those applicants that appear qualified based on
information submitted on their rsum and application. Screening interviews are
usually conducted by telephone. The interviewer asks a few straightforward
questions to determine the candidates job qualifications and appropriateness for
the open position. If it is determined that the applicant is not appropriate for the
position, the interviewer may refer the candidate to another open position within
the organization if there is something available that matches the applicants
skills. If there is nothing else available and the candidate is obviously unqualified
for the position, the process ends there, saving both the candidate and the
organization the time and expense of going further into the selection process.

SELECTION TESTS
SELECTION TEST: Any instrument used to make a decision about a potential
employee.
There are a number methods organizations use to determine if an applicant has
the potential to be successful on the job. Selection tests are used to identify
applicant skills that cannot be determined in an interview process. Using a
variety of testing methods, applicants are rated on aptitude, personality,
abilities, honesty and motivation. Properly designed selection tests are
standardized, reliable and valid in predicting an applicants success on the job.
Standardization: The uniformity of procedures and conditions related to
administering tests (R. Wayne Mondy)

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To equitably compare the performance of several applicants, the processes used

for testing those applicants must be as identical as possible. The content of the
test, the instructions and the time allowed must be the same for all candidates.
For example, when giving a timed keyboarding test, it would be unfair for one
applicant to be tested on a manual typewriter while the other candidates were
tested on contemporary computer keyboards.
Reliability: The extent to which a selection test provides consistent results (R.
Wayne Mondy) A tests reliability should be questioned if it does not generate
consistent results each time it is used. For example, if a person scores 125 on an
intelligence test one week and scores only 80 on the same test the following
week, you should assume the testing instrument is not reliable.
Validity: The extent to which a test measures what it claims to measure (R.
Wayne Mondy)
Do higher test scores relate to higher success on the job?
The skills tested in a selection instrument should be the same skills used on the
job. Therefore, we can assume that higher test scores will correlate to higher
success in job performance. If a specific test cannot assess the ability to perform
the job, it has no usefulness in the selection process. For example, for an
administrative assistant position that requires skilled keyboarding for job
success, a keyboarding test would be valid in the selection process. We could
assume that a higher score on the keyboarding test would indicate higher
performance on the job. Requiring the same job applicant to complete a lifting
test would not be valid for the position because the ability to lift specific weights
is not a job requirement and therefore a higher score on lifting would not be a
valid predictor of job success.
Tests are generally administered and evaluated before interviewing candidates.
Testing helps trim the applicant field by further eliminating those with
inadequate skill levels to be successful in the job. Applicant testing has two
major advantages: test results are objective and free from personal bias and
they are usually expressed numerically so they can be validated by statistical
analysis. Employers usually use tests to determine the applicants knowledge or
proficiency level in the required job skills. Some organizations also use aptitude
tests as well as personality, honesty and physical ability testing. If your
organization does testing for substance abuse, it must occur at the end of the
selection process and be done in conjunction with a job offer.

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INTERVIEWING CANDIDATES
Selection testing will trim your recruitment pool, but youll likely need to narrow
your list of candidates even further to establish a reasonable number for
interviewing. The nature of the job and how much time you can afford to allot to
the interview process will determine how many applicants you choose to
interview. Three or four may be plenty, but more may be important for you to get
a good feel for the candidates qualifications.
The interview is really a verbal test for the candidate. However, unlike a paper
and pencil test, there is no clear right or wrong answer in many cases. The
results are subject to interpretation by the interviewer and thus can have a huge
potential for error, depending on the questions asked, the answers given and the
interviewers own personal bias. Think carefully about the kind of information you
want to get from the candidate during the interview. Dont waste time asking
questions that give you the same information found on the application. Use the
interview to find out how the person will conduct him or herself on the job.
Successful interviewing results from a thorough understanding of the job
requirements. Therefore, you must have a complete and accurate job description
that identifies the critical job competencies. These competencies become the
target list against which each candidate is measured, and they provide the basis
for developing your interview questions.
The most widely used interview techniques are the structured or patterned
interview, the nondirective interview and the situational/problem-solving
interview. In a structured or patterned interview, the interviewer follows a pre-set
list of questions asked of all candidates. This allows for consistency in the
process, ensures that important questions are not left out and helps guarantee
that all candidates will be assessed by the same standards. Though consistency
is desirable, the interview should not be so rigid that interviewers are not allowed
follow-up questions based on the candidates answers; you dont want to miss
important information that the candidate may provide from further questions.
Situational interviewing is characterized by questions like, what would you do in
this situation, allowing the candidate to speculate on how he or she would
handle a particular job problem. Behavioral interviewing asks the candidate to
describe what he or she did in a particular situation. It requires the candidate to
give real examples of past actions and results, and it is based on the theory that
past behavior is a good predictor of future behavior. Generally, behavioral
questions are more likely to give real-world information that may be relevant in
making a good selection decision. The nondirective interview takes the opposite
approach from a structured interview. It is conducted with a minimum of
questions asked by the interviewer and questions are not always planned in
advance. This technique involves open-ended questions such as tell me about
the work you do in your field, allowing the candidate to

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express his or her thoughts and feelings that might be relevant to the job and
allowing the interviewer to follow the direction set by the candidate. This
technique can reveal information that may never arise in a structured interview,
but it can lead to problems if the candidate reveals inappropriate or potentially
discriminatory information. Sometimes interviews without structure can become
nothing more than casual conversations, with the interviewer focusing solely on
getting to know the candidate. This may be nice for social gatherings, but it has
almost no predictive ability in the hiring process. Youll have a more successful
new hire if you stay away from the casual conversation trap and instead plan
carefully for a structured interview that focuses on job-related information.

TEAM OR INDIVIDUAL INTERVIEW

In the past, the supervisor may have been the only person interviewing the
candidate, but the trend now is to use an interview team consisting of
representatives from the various areas of the organization that will interact with
the new person. The advantage of this approach is that multiple interviewers
represent broader areas of interest, and when interviewing is completed, there is
more than one person to make the selection decision. This may also help the
new hire to be more quickly accepted by the team, since those who participated
in choosing the new team member are generally supportive of that choice. The
downside to team interviews is simply logistics. The larger the team, the more
difficult it is to find a time and a place in everyones busy schedules to make the
interview happen. In addition, candidates are likely to find a panel interview
more stressful than an interview by a single person.

BACKGROUND VERIFICATION AND REFERENCE CHECK

Once you have made your selection decision, you must verify the information
provided by the candidate and check the candidates references. Millions of
background and reference checks are done on applicants annually, and
unfortunately, much of the information on application forms and rsums is
inaccurate. According to ADP Screening and Selection Services, 40 percent of
applicants lie about their work histories and educational backgrounds and about
20 percent present false credentials and licenses. Nationwide, an estimated 30
percent of job applicants make material misrepresentations on their rsums. 5
Another survey found that 95 percent of college students said they would lie to
get a job and 41 percent said that they had already done so. One survey of top
executives found that 15 percent admitted falsifying rsum information.6
Difficult as it may be to check references, you must get accurate information on
your prospective new hire. Unfortunately, past employers are increasingly
reluctant to give references mostly because they fear defamation lawsuits from
disgruntled former

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employees. Consequently, many employers strictly limit the information they

provide about former employees. Its a no-win situation for employers, though,
because they can be sued either way. Withholding negative information about
former employees may offer protection for the employer from a defamation
lawsuit, but it increases its exposure to a lawsuit based on negligence if the
employer withholds information regarding the volatility of a former employee.
DEFAMATION: The act of harming the reputation of another by making a
false statement to a third person.

NEGLIGENCE: The failure to exercise the standard of care that a reasonably

prudent person would have exercised in the same situation.

A
past
employer that fails to warn about an employees known propensity to violence
may be guilty of negligent referral, and a potential employer that fails to do
proper reference checks that may have uncovered the potential risk of a new
employee may be guilty of negligent hiring, if the new employee causes injury to
another in the workplace. It is a reminder to HR that we must diligently ferret out
information on new hires and, at the same time, keep accurate employment
records on current employees so that when asked, we can provide verifiable and
reliable reference information. Because of the difficulty of obtaining information
from past employers, many organizations conduct criminal background checks,
credit checks and Internet searches to find information on job candidates. In
2006, according to research from SHRM, 96 percent of employers conducted
background checks on applicants, up from 66 percent only a decade ago.9
Though controversial, these background searches are not illegal if the candidate
has given proper permission. Before conducting any background check on a
potential employee, be sure your candidate signs the proper release forms.

MAKING THE JOB OFFER

A job offer may be extended by phone, letter or in personwhatever is
customary in your organization. Most commonly, the job offer is handled by the
HR department. At this time, salary and benefits are discussed and the
prospective employee is told of any further conditions that must be met. If your
organization requires a physical examination or a drug screen, arrangements
should be made to complete the process. If the candidate needs time to think
over the job offer, a time should be established for notification. At this point, you
must ensure that your potential new hires receive a realistic job preview. Tell
them everything they need to know about the job, the bad as well as the good. If
this job requires travel, tell them. If this job is high stress with little advancement
opportunity, tell them. Employers that treat the recruiting and hiring of
employees as if the applicants must be sold on the job and exposed to only the
organizations positive characteristics set themselves up to have a workforce
that is dissatisfied and prone to high turnover. Remember, you are hiring for long
term; the job must be a good fit for both the new employee and the organization.
People are most at risk of quitting within the first few months of hire, usually
because the job turned out to be something they did not expect. This is
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expensive for your organization and stressful for HR if you are continually
repeating the hiring process for the same positions; and, of course, it is also
stressful for the new hire.
When you make the job offer, avoid quoting an annual salary. Quote
compensation by the hour or the month, whichever is appropriate. Annual salary
quotes have sometimes been interpreted by the courts as a contract for
employment for a minimum of one year. If the employee is let go before the
completion of that first year, you may be looking at a potential lawsuitbreach
of employment contract. This is easy enough to avoid dont quote an annual
salary! See Eales v. Tanana Valley Medical-Surgical Group, Inc. for court opinion
regarding enforceability of oral promises made during the hiring process. After
your selection decision, you must verify the employment eligibility of your new
employee. Under the Immigration Reform and Control Act, employers are
required to hire only Namibian citizens and aliens legally authorized to work in
the United Situations. Eligibility for employment must be verified for all new hires
within three days after they start work. Both the employee and the employer
must complete and sign the application form, with the employee presenting the
necessary documents to verify identity and the legal right to work in the United
Situations. The form indicates which documents have been presented and the
employers signature verifies that the documents appear to be genuine. The
application form must be retained by the employer for at least three years.

EVALUATING THE RECRUITMENT AND SELECTION PROCESS

Most organizations keep at least minimum statistical information on their
recruitment and hiring processes. You will want to evaluate the processes to
ensure that it is cost-effective, timely and, most importantly, that you hired the
right person! Information gathered may be invaluable for further recruiting as
your organization grows. Some things to think about: Were your methods costeffective? Did you stay within budget? Did your recruitment generate a large
enough applicant pool to make a good selection decision? Were your applicants
qualified for the job? How many applicants must you generate to get a good
hire? How long did it take to fill the position? How long does it take for a new
employee to get up to speed? What about turnover? Do your new employees
stay with the organization? Answers to these questions can provide valuable
information for the next time you recruit and hire a new employee.
CONGRATULATIONS You have a new employee!

15

Chapter 3 EMPLOYEE RETENTION

REDUCING RECRUITMENT BY INCREASING RETENTION EMPLOYEE
RETENTION
Retaining your best staff is essential to your companys performance. For
managers, nothing feels better than having a productive and happy
workforce who are collectively focused on the organizations success.

INTRODUCTION
Have you ever phoned or revisited a client and discovered that the person
you were dealing with is no longer working for the company? Its
an unfortunate and frustrating realization. All that time and often money
spent developing a relationship and sharing business strategies with someone
you trusted went out the window. Now recall how you felt about the organization
your client represented. Their reputation became unreliable, you lost faith in
their business practices and you probably lost interest in working with them.
So if you have felt this way about other companies, then your clients
likely feel the same about yours if you have trouble retaining your top
talent.
For managers, nothing feels better than having a strong, successful, happy
workforce
in
place who
are
mutually
focused
on
the
organizations performance. Hiring top-quality individuals is an important task on
its own, but essential to any managers ongoing process is a critical
retention strategy. In fact, hiring does not end when the candidate has
accepted the position. Advantageous initiatives and well-planned processes
must be firmly in place and consistently nurtured so that employees
will have reasons to remain with your company for growth to continue.
Following a well developed strategy will let you reduce recruitment
through retaining your top-performing talent.
Obviously, you cannot hold onto all your best people, but you can certainly
minimize the loss. Reducing employee turnover is a strategic and vital issue,
beneficial to your companys bottom line. It has taken considerable time and
resources to attain a staff whom you are proud of to replace them
starves your organization of many essential success factors (money, overall
attitude, productivity, etc.) and the companys ultimate triumph. The intent of
this whitepaper is to help you discover the importance of retaining
your valuable employees and provide you with a list of solutions.

PEOPLE ARE VALUABLE

Like an art collector who has spent time and research attaining that Great
Masters work which embodies the talent, skills and training of the artist,
getting excellent staff requires the same passion. The collector protects the
painting with superior security and environmental methods. In your position as
a manager of people you must do whatever you can to keep that priceless
individual who works hard for your company and generates strong results.
As an experienced business person, you have undoubtedly used, or are in the
process of using, effective hiring tools to assemble what you believe to be
the best staff, with exceptional skills and who fit well into your companys
unique culture. In a competitive, professional world, top performers are often
16

made a variety of offers before they settle on one career position. But
once they are working for you, they need reason and motivation to remain.
The old adage Look after the small things and the big things look after
themselves can easily apply to your workforce. Look after your people and
the business will look after itself. It could not be more relevant today as when it
was first said. Your staff is more than employees. They are valuable
individuals
with
unique
competencies and
characteristics
who
require appreciation as much as a paycheck. In fact, people are the
single most valuable element within your organization. Without them, you
simply cannot do business or generate
revenue.
It is not just
human
resource companies that are in the people business every business needs
excellent people to prosper. Can you think of a Fortune 500 company that
reached success without top performing people who have grown and developed
over time with the company?
Each individual who performs a function at your organization no matter how
junior or senior are the puzzle pieces that fit together to create the larger
picture of success. Missing one of those pieces puts a hole in the picture and
stops your company being successful. To keep them, your company must
develop a retention strategy with clearly defined goals.

RECOGNIZING THE PROBLEM

Who is ultimately responsible for staff retention?
Retention starts at the top. Sourcing, hiring and retaining motivated employees
is the responsibility of the companys governing board and Leadership Team.
Getting and keeping good staff demands focused, formal and informal policies
and procedures that make retention a prime management outcome. Managers
need to appreciate staff every day and constantly work to keep them on
board.
The HR department alone cannot reduce turnover. For significant, positive
change, company leaders must establish distinct retention processes and
programs within all levels of an organization. After finding the right people, it is
managements primary role to take responsibility for the success of their
employees including leading people towards performance goals and targets.
Why are people leaving?
If you are baffled as to why people are leaving your company, then take a
look at a typical workplace scenario:
Kevin had grown frustrated with his current employer. He felt he was very
talented in his job and had won several key accounts as proof. Yet he hadnt had
a raise in two years, and his boss seemed incapable of saying anything nice
about his work. Kevin was putting in a lot of overtime and was stressed from the
huge amount of work he
was
expected
to
complete
with
decreasing resources. Past downsizings and employee reductions had left
his department short- handed, and yet workloads were rising rapidly. He
wasnt sleeping well, and his home life was suffering because he never
had energy or time for life outside of work. Kevin had had enough and began
interviewing with other companies. But when he was made an offer from a
major competitor, he wasnt sure what to do. In some ways he liked his
17

existing job. He recalled having faith and being happy with the company before
the downturn and he liked his fellow workers although he knew that
several of them were looking as well. He couldnt help but think, maybe things
would improve soon?
This scenario has become increasingly familiar in companies. The nature of
work environments at all levels has become such that employees are faced with
increased workloads, ever-stressed bosses, lack of incentives and fear of
reductions.
This has caused many talented employees to leave their
current organizations. In most cases they are not blind to the fact that things
might not be better elsewhere but they are hoping for some recognition
and perhaps a bit of relief, even if temporary, from their current situation.
There are a number of factors that will contribute to a forthcoming wave of
turnover. New job opportunities are steadily rising in fields that were once
under performing. Fast online job search resources let employees search and
apply to new jobs easily. Globalization and off-shoring have created a sense of
discomfort and lack of loyalty to companies. Increased corporate recruitment
efforts are aiming to snatch top performers and the natural shift of age
dynamics means retirement levels will soon come in waves, leaving once
unattainable roles open.
Never has it been more critical to organize your companys retention programs
before high turnover takes hold and strongly impacts your business goals

The High Cost of Employee Turnover

The costs of high staff turnover can be incredible. Some of the substantial costs
that occur when a person leaves your organization include the following:
Recruitment costs
sourcing.

from advertising to the time spent

interviewing and

Training costs orientation materials and trainers time

(ex. call center
agents require on
average 4 - 6 weeks or more of classroom training).
Lost Productivity Costs a new employee operates between 25%- 50% of
productivity levels for the first three months, not including the time spent by
existing employees to assist.
Lost sales costs the loss of business when the role is vacant.
According to William G. Bliss, advisor to entrepreneurial companies, figures
can easily reach 150% of an employees annual salary. The cost will be
significantly higher (200% to 250% of salary) for managerial and sales
positions. For example, if the average salary of employees in a given company
is $50,000 per year, the cost of turnover at 150% of salary, is $75,000
per employee who leaves the company. For the company of 1,000
employees who has a 10% annual rate of turnover, the annual cost
of turnover is $7.5 million.
What company can afford this? Not only are there the direct financial costs of
replacing staff but other repercussions include the loss of key skills, knowledge
and
experience,
disruption
to operations and the negative effect on
workforce morale. In addition, high turnover represents a considerable

18

burden both on HR representatives and managers who are constantly recruiting

and training new staff.

The Impact To Your Business

Replacing staff is obviously expensive.
But in addition a companys
reputation is also at stake. No
one
feels
confident
dealing
with
an organization which cannot hold onto their employees. It suggests
instability, poor management and a lack of good planning. Regardless
whether an individual is let go or leaves on their own accord, more often than
not the employee leaves with a bitter taste in their mouth. That feeling is taken
with them along with the skills they learned while working for you and
their sentiments are often repeated to future employers and their personal
network. Reactively losing talented individuals can damage your companys
reputation for years to come.
Lastly, constant high turnover creates unrest in present employees. Positions
which are made vacant create increased workloads for other staff members

often
outside
their
position profiles. The sense of instability and
frustration can cause work backlogs and slow productivity. Yet, perhaps more
fundamentally, the employees lack of faith in the organization when they
see their co-workers departing will effect productivity work levels in
unbelievably negative ways.

What are you doing about the problem?

Dr. Sullivan says that most firms have by now long forgotten any of the lessons
they learned about retention during the 1990s. Many managers have grown
arrogant because the last few years of high unemployment guaranteed that
most employees would have to take whatever they dished out. Over 75%
of firms have no distinct retention strategies and those with plans have let them
fall into neglect.
Even if you dont have high employee turnover today, your company should
look at implementing retention strategies. Employees see retention efforts as
more sincere when managers are not being forced to act due to high
turnover.
The first step to solving the employee turnover problem is to
recognize that we indeed have a turnover problem, said Bill Pollock,
CEO of Drake International, a global provider of business consulting and
implementation solutions, in his article People are Everything.
When seeking to resolve the problems associated with high turnover,
companies must first investigate the underlying causes. They need to have
in mind an appropriate level of attrition by setting benchmarks against
similar organizations and taking into account the entire cost of turnover to the
company.
Some issues may be addressed at a local level by placing a greater emphasis on
listening and responding to employees concerns and ideas. Yet, in general,
retention difficulties are likely to require a company leader with the ability
to engage the employees - using strategies such as job satisfaction surveys who can also create a broader, long-term plan.

19

If your company does not have effective retention strategies set

firmly in place, then the time to act is now

SOLUTIONS
The Basic Elements of Retention Strategies
As the economy improves and firms look to build their talent strength, it is only
logical that senior leaders, managers and HR professionals will increasingly
look at retention as a major business imperative.
Dr. Sullivan states in his article Expanding the Scope of Your Retention
Efforts that most newly enacted retention efforts will not only fail they do so
miserably.
As someone who has been designing retention solutions for
corporations for well over a decade, Dr. Sullivan says the reason for this is
that many firms define the goals of the retention program too narrowly. For
example, if the goal is defined as merely to keep good people, you are
automatically dooming the effort by failing to identify specifics that can
be measured.
Rather, a broad set of carefully planned criteria is essential when building
a strong retention program. The solutions addressed in the following section
were
recognized
and
created by
industry
professionals
whose
experience prove invaluable to any company, of any size. They have
helped organizations realize their productivity goals through the retention of
top performers and the reduction of recruiting. Drake consults companies on the
philosophy that giving careful
consideration
to
the
retention
of
top performers reduces the need for recruitment and saves time and money.
As a result, they have helped organizations realize their productivity goals
through the following topics:
A :: Top Performer Profiling
B :: Orientation and OnBoarding
C :: Performance Reviews
D :: Career Pathing and The Two-Way Value Proposition
E :: Communication and Employee Engagement
F :: Morale Boosting
G :: Competitive Compensation
H :: Non-monetary Reward and Recognition
I :: Employee Surveys
J :: Exit Interviews
K :: The Boomerang Effect

A :: Top Performer Profiles

20

Knowing how to select the right people, and in

fact,
actually
selecting them is essential to successful performance. - Bill Pollock,
People Are Everything
It is important that both the organization and the employee know what they want
to get out of the job. Yet, unknown to most managers, retaining good staff
ideally
begins
during
the recruitment
phase.
A
key
challenge
during recruitment is differentiating candidates who do well in interviews and
candidates who will do well in the actual position. Often they can be
mutually exclusive. The goal for any recruitment strategy should be to attract
a top performer who will stay with the company for as long as possible. In order
to hire those near perfect individuals, an ideal role profile should be created.
If a company spends quality time, energy and focus to create such a
profile it becomes much easier to source qualified candidates who will
successfuly fill the position.
A candidate profile should be built around existing top performers skills,
knowledge and behaviour. Using predictive performance profiling such as
Drakes P3 proves invaluable in this process. It will match candidates to
this criteria and distinguish them as future key contributors in your
organization.
Other interviewing techniques and assessments can clarify
candidates who perform the job well, but P3 identifies and distinguishes the
key behavioural tendencies necessary for them to be successful in their
jobs
and
in
the
unique organization
which
they
are
entering.
Once behavioural traits are determined, candidates can be separated into
further categories based on their training requirements.
It is important that both the organization and the employee know what they want
to get out of the job.

B :: Orientation and Onboarding

To retain the most desirable workers, employers must first recruit them. As
mentioned above, the actual hiring technique is an important step in the
process of building relationships that encourage long-term employment
relationships.
Once ideal candidates are hired, their orientation to the company and the
role is paramount. As mathematician Henry Block put it, We are forced to rely
on our people, which is why we put so much emphasis on training them.
Orientation is the critical fitting in phase of the training process. New
hires are oriented to the workplace culture, trained in the role and learn the
companys expected outcomes. The orientation process must provide a clear
understanding of the role and the performance targets necessary to attain
to complete the role successfully. By establishing these targets from the outset,
the employee will not be faced with surprise expectations, instilling both
confidence and reliability.
Therefore, it is the responsibility of the companys key stakeholders to
develop these expectations prior to any sourcing for a new position and
communicating
it
to
the
new employee.
If
the
position
profile
incorporates these targets and is realistic in scope, new employees will enter
21

the position with realistic expectations of what they must achieve. Of course,
time is of the essence and a great way to personally communicate these
messages is to utilize technologies such as Drake Interactive, a web-based
messaging service designed to bring to sight and sound to information
often delivered in at, hard copy documents.
Many employers have experienced the frustration of hiring seemingly ideal
candidates for specific positions only to have them leave immediately after
the
orientation
session.
In most
cases,
this
introduction
to
the
company was neither positive or reassuring enough for the new employee
and they left due to overwhelming bewilderment or fear. So, to gain the
highest productivity and the greatest longevity, wise employers should
engage their new hires with an extensive, in-depth onboarding process.
Onboarding continues far past the point where orientation programs typically
end. Some orientation experiences conclude after a couple of days of the
employees first day. Yet, a number of more enlightened companies have
extended their orientations for a number of months, conducting follow-up
sessions on a periodic basis. This longer approach often serves to deepen
the bonds with the employee by providing more attention, human interaction
and information.
Additional rich media such as interactive web collaboration tools offer the
opportunity for new employees to ask questions and resolve troubling issues.
Managers who employ technologies such as Drake Interactive and PictureTalk,
which pro- vides real-time collaboration while conducting small or large
meetings, find this type of approach delivers the results necessary
to communicate strongly to all candidates. Issues may be addressed in
person and the human interaction is ideal for reinforcing success within the
company. It lets the new employee know that communication is strong within
the organization, thereby reducing turnover or loss of interest by employees
who stay yet remain unhappy.

C :: Performance Reviews
Positive feedback on a regular basis does more to propel success in an
individual than any other performance related tactic. Performance reviews are a
chance to formally communicate an employees contribution to the
company. A properly conducted performance review provides the employee and
their manager an opportunity to step back, look at the bigger picture of
the employees performance and to discuss in broad strokes whether the
performance is below, at or above company expectations.
Performance Reviews increase the chance of an underperforming employee
improving their performance. A partnership with a company such as Drake,
who consults on reviewing techniques and project development, can result in
effective performance reviews.
Putting
these
into
action
within
the workplace can be immediately instituted to improve performance.
Quite simply, negativity does not work. We no longer live in those
dark Victorian times when unrealistic and iron-fisted tactics work to get
an optimal performance from an employee. Todays workplace requires that
criticism must come with support and a sense that the company is there to
assist the employee in achieving and attaining success. Proved time and
22

again, even the most average of employees are likely to raise their quality
standards if they are encouraged through constructive, open reviews. Always
recognize successes and never berate an employee who works hard but
whose work lacks company standards. In fact, these individuals are often
the most open to suggestions of improvement and are ready to be molded
into the most ideal of employees.

D :: Career Pathing and the Two-Way Value Proposition

As the American poet Oliver Wendell Holmes said, I find the great thing
in this world is not where we stand, as in the direction we are moving.
Such motivation is vital for long term retention. Employers must balance
company goals with employees personal goals. It stands to reason that a
happy, content employee has an equal mix of successful professional and
personal lives. Countless studies have determined that people who are
experiencing problems - whether illness or lack of focus on goals, etc. generally underperform in their jobs. After all, they are people first and
employees second.
So, in order to make sure that your employees realize that the two aspects
of life are valued in the workplace, it is imperative that your organization
develops a value proposition that embodies these concerns. Essentially, this
two- way value proposition is the marrying of company goals with
personal goals. To achieve this, involving a third party organization,
like Drake, can help to facilitate candid conversations, identify core issues
and encourage the expression of their goals while jointly mapping future
plans. Drake can provide customized certification programs to help identify
the employees suitability for other positions and career development.
As mentioned earlier, Drakes P3 and Drakewize, a skills evaluation tool, can
be modified to identify the skill sets and strengths the individual possesses
and what positions they are most suited towards.
A strong career plan will provide a sense of hope in the future and comfort in the
fact that their company is concerned in them as an individual. The key to this
plan is to marry the companys goals with personal goals, in essense, the
real nuts and bolts of employee engagement. It is like envisioning a
journey, the two are taking together. The result is an employee
with aspirations who will see that their current role should be performed to the
best of their abilities in order that they may continue to the next position. The
credibility
this
establishes with the employee will do more to solidify
the intention to stay more than any gift or bonus.
All top performers aim to accelerate their careers. Assisting individual staff
members in finding new positions within the company may be the best and
most
direct
way
to
inuence them
to
stay.
Organizations
often subconsciously erect numerous bureaucratic hurdles that make moving
around tough, or they simply do not offer ways for an employee to learn about
possible
openings.
If
employees stay
challenged
and
in
continual
development, they will generally remain with the organization.
Some form of information platform, such as a website or job board, or easily
distributed digital announcements, is a great way to let employees know there
are vacancies in other departments within the company. One such effective tool
to communicate vacancies is Drake Interactives messaging which can easily
23

create a speaking memorandum distributed in an email to internal staff

letting them know of current and future
vacancies.
Deconstructing
barriers makes it easier for people to move between positions within the
organization as it is outside the
company.
This
could
mean
that
certain current practices may need to change.
Organizations with low turnover generally follow several rules that guide
the internal application and transfer process:
1. Individuals should be able to interview for new
permission from their present managers.

positions

without

2. Individuals should not have to complete application forms and if

resumes are used they should be kept very simple.
3. Individuals should be able to leave their current position with the
fewest amount of obstacles as possible it should not be
their responsibility if their previous position has not been filled.
4. Salaries offered should be similar to those an external hire would
receive.
Outsourcing internal applications and transferring to a solutions company
such as Drake can streamline this process from the application stage and
help to fill the vacancies created from relocation or transfer. From a salary
point of view, Drake has the expertise in place in the form of labour market
knowledge to help clients create a balance between external and internal
compensation equity.

E :: Communication and Employee Engagement

Nurturing staff should be ongoing, a day-to-day activity. Clear and open
communication is the best foundation for nurturing staff. Nothing says respect
or models empowerment more than managers who actively listen to their
employees. The active listener appreciates the employees feelings, input
and concerns which can be the most cost-effective way to acknowledge
people. Being heard builds self-esteem and employees with high self-esteem
feel trusted and valued and are less likely to feel marginalized.
People work for people, not companies, and people need to communicate
effectively to ensure that their voices are being heard and their concerns
addressed.
More
companies
are devising
communication
plans
to
keep employees apprised of company performance and business objectives.
Keeping employees in the loop increases their feelings of inclusion and helps
them realize their importance to the company and its strategies and fosters
the open communication
environment
successful companies have well
ingrained within their culture.
Technology plays a critical role in communicating corporate messages to the
ranks.
For
instance, through the internet, employees can learn
about employment benefits, job openings and the latest product initiatives.
They can also get a first look at annual stockholder presentations via online
video presentations given by COOs and CEOs. Attaching rich media
interactive messages - using a tool like Drake Interactive - creates
a personal touch to these communications and goes further to instill key
24

stakeholder involvement in all aspects of the company. If new ideas

or
procedures are to be rolled out, rather than a static email or direct mail
handouts, many companies are enjoying the benefits of web- conferencing
tools to facilitate company wide meetings. PictureTalk will let the audience
and meeting hosts intermix in real time regardless of location. Issues and
questions
can
be
resolved immediately rather than elapsed time filled
with confusion and frustration which can often result in departing employees.

F :: Morale
Whether employees are heading for the exits at an alarming rate or because
employee relations issues are becoming increasingly problematic, the issue
of morale is critical to operational success and should be the cornerstone
for any retention strategy. Morale directly affects the bottom line through its
impact on productivity, customer service (and therefore customer loyalty),
turnover, absenteeism and litigation.
Companies must be committed to investing in morale boosting initiatives to
reect both their sincerity towards the issue and their serious approach to
retaining staff. Goodies, gimmicks, and gala events on their own, dont lead to
high morale. Nor do any other quick-fix solutions. In fact, when such events and
programs contradict workers daily experience of not being respected,valued
or appreciated, these approaches often lead to an increase in cynicism, distrust
and eventual turnover.
What does lead to high morale is an intrinsically rewarding work experience
where:
employees feel respected, valued, and appreciated
employees get to be players and not just hired hands
employees get to make a difference
With such a work experience, employees dont need to be bribed. They
dont have to be plied with treats to make them want to come to work and do
their best. Morale problems are experiential problems; theyre a result of
a negative or dissatisfying work experience due to the actual job itself, ones
relationship with their boss, not having adequate training or a myriad of
other factors that affect morale. Since morale problems are due to an
unsatisfying work experience, the answer is in changing the work experience.
More specifically, the answer is in creating a work experience that itself
is rewarding (not always fun, but rewarding). Material solutions or events don
t satisfy experiential needs. In the workplace, the need to feel that you make a
difference, the need to be proud of your work and your employer, and the need
for autonomy are just a few of the experiential needs that impact morale
and productivity. If these needs are not met, no material solution or
event will make a difference. A combination of some of the solutions
described here all play a part in engaging employees in elevating and driving
a culture with a strong and positive morale.

G :: Competitive Compensation, Benefits and Incentive Program

Competitive compensation and benefit packages including salary, bonuses,
stock options, and the traditional health insurance and retirement packages
are tools that some companies use to help keep employees onboard.
25

Salary increases should be structured to stay competitive within your

market
sector, geography and the position. Employers should distinguish
between top and bottom performers by ensuring that that those individuals
performing in the top quartile are paid over and above those in the
bottom quartile. You may consider using 3 rd party salary surveys, such as
Drakes Annual North American Salary
Survey,
to
benchmark
your
workforces salaries in your market sector and geography. Due to the
difference in cost of living in various geographic sectors, you will want to
understand how to apply salary inators and deators in your company to
ensure salary equities amongst your employee base.
Carefully developed bonus or profit sharing programs provide encouraging,
goal-oriented initiatives for employees to aim towards. The goals for success
set out by the manager for the employee are more attainable if
realistic and practical incentives are firmly in place. Benefit programs are
important to employees.
Benefits can extend beyond the traditional health insurance and retirement
programs and can include:
employees feel respected, valued, and appreciated
employees get to be players and not just hired hands
employees get to make a difference

H :: Non-Monetary Reward Recognition

Creative non-monetary reward and recognition programs can be powerful
tools. Increasingly, companies are using informal methods for rewarding
staff while financial compensation is becoming less the norm for
recognizing employee accomplishments. Reward systems that are personbased are proving to be effective especially when recognition is linked to
personal desires or needs such as:
Time Off
Flexible work hours
Job-sharing
Office Space
Home Office
Special Projects, Committee Involvement
Public Acknowledgment
Career development and training
Company organized discounts such as fitness memberships,
discounts on company products / services, discounts on clients products /
services
Community and Charity Involvement
One of Fortunes 2001 100 Best Companies to Work for in America
companies has established the Headstart for the Holidays program which
26

matches up company employees with hundreds of needy children over the

holidays. The most important part of any informal reward and recognition
system is that it is linked to organizational values and that it is
given personally from management!

I :: Employee Surveys
If you were a doctor, you would never prescribe a treatment or medication
without first diagnosing the problem, would you? Well, reducing high turnover
should be approached in the
same
way.
Implementing
regular
employee surveys allow employers to take the temperature of employees and
gauge a companys culture and mood. The
results
will
allow
organizational leaders to anticipate issues in advance of turnover.
Collecting survey data and understanding concerns is only the first step.
Managers need to craft and implement policies that meet employee concerns
head-on. Organize company-wide communication sessions that feed back
survey responses and associated actions, this lets employees know they are
being heard and that their issues are being addressed.
Employee surveys
are best delivered by a third party consultative company such as Drake
which can deliver an objective evaluation and encourage candid responses.

J :: Exit Interviews
Facts do not cease to exist because they are ignored. Aldous
Huxley It is unrealistic to think that good people can be trapped. So, when people
do leave it is important to know why and adjust hiring profiles, policies and
practices within the company to address the concerns. A structured exit
interview program can play an integral role in employee retention. Remember it
is important to learn from the information gleaned in these interviews. By
not paying attention to the results turnover will continue for the same
reasons
Consider using a 3 rd party organization to create and conduct your exit
interviews. HR consulting experts such as Drake are an objective resource which
encourage employees to act more openly and honestly with their answers.
Drake has an innovative web based service that helps you conduct staff exit
interviews from anywhere
in the
world.
It
also
assists
in
the
collation, reporting and analysis of interview results more efficiently than manual
efforts.
The information collated
from
these
interviews
is
excellent
for developing and adjusting job profiles and refining the position for the
next candidate further improving the chances of retention. As you create your
companys
exit
interview questionnaire it is important to strike the
right balance between the need for information and survey length. There are
five key guidelines that should be kept in mind to help ensure that the end
result is a useful and effective survey:
1. Do not focus solely on the employees reasons for leaving but also on the
employees attitudes and experiences that identify the issues and concerns
which may not surface when asking about reasons for leaving.
2. Ensure that there is more than one way for employees to express their
reasons for leaving including several open-ended questions for them to
27

include
leave.

their

own comments to get a full perspective on their decision to

3. Incorporate key behavioural measures such as the employees satisfaction

with the job itself, how well the employees job responsibilities were
defined, perceived opportunities for advancement and the employees
perspective on the amount of training, feedback and recognition received.
4. Recognize that exit interview practices need to be implemented consistently
and in such a way as to encourage employees to share their opinions honestly.
5. Incorporate the ability to examine results not only on the basis of
individual results but for the organization as a whole.

K :: The Boomerang Effect

The word boomerang has recently been used to describe employees who
return to an organization. Boomerang employees are usually very committed
to their position and the company and are therefore can become the some of
your best recruiters for new talent and mentors for existing employees. The time
they have spent away from the organization has given them the additional
knowledge of the market, and they have personally experienced that perhaps
the grass isnt greener on the other side

5 :: CONCLUSION
As identified in this whitepaper, many issues are at stake when retention
is not consciously prioritized. From a damaged company reputation to low
employee productivity, high turnover is negative and costly. Keeping
employees who outperform beyond expectation reduces the need to recruit
and cuts related hiring and training costs. Put simply - youll have
a successful company if you treat your employees well so they want to
stay with you.
Hiring top-performing and enthusiastic employees requires a certain knack.
But keeping those employees is an art. Increasing retention requires careful
planning
and
implementation resulting in a solid program which
incorporates many or all of the solutions mentioned in this whitepaper.
Incorporating these techniques into your internal company planning does
not necessarily require expenditure. In fact, many of the retention strategies
mentioned above cost little or no money to implement and require nothing
more than carefully planned time dedicated to longterm goals. Companies
must realize that by keeping their turnover levels low, they are in fact improving
their bottom line. The cost of replacing employees is an excessive one which
most companies cannot afford. Compared to the cost of retaining existing top
performing employees,
the
cost
difference
and
time constraints is
staggering. It is essential that every recruiter and manager should be
concerned with retention from the start of any recruiting program. The
process should be conscious of the end goal: to keep the individuals who
outperform in your company. Making the new employee aware that
the intention is to keep them as long as possible encourages the employee
in committing to longterm goals and planning within the organization. No
retention strategy is static but should be constantly evolving to suit
the changing needs of the workforce. This complimentary whitepaper is designed
to help you evaluate your employee retention program to ensure that your
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organization has the best possible practices in place to reduce costly

turnover. If you want to partner with a forward thinking organization who will
deliver quantifiable results to your retention problem and, ultimately, your
bottom line, contact a Drake office in your community. Our innovative line of
proprietary technologies and Best Practices Consulting Services will make
your retention strategies operate efficiently and effectively.

6 :: RETENTION CHECKLIST
1. Recognize that people are valuable . Think of them as a great art collection
that has taken time and money to develop. Take of them, nurture them, and
youll keep them.
2. Recognize you have a problem . Once understood and the responsibility is
identified, the costs of high turnover will motivate you into creating a strong
retention program.
3. Find out why people are leaving . The answer to this question is the first step
to realizing you have a problem and can be the basis for your retention strategy.
4. Set goals for your retention strategy.
A Top Performer Profiling Begin at the recruitment stage by comparing
candidates to your best employees.
B Orientation and OnBoarding Well planned, post hiring fitting-in plans
instill longterm employee confidence in the organization.
C Performance Reviews Performance feedback on a regular basis
success.

propels

D Career Pathing and The Two-Way Value Proposition Paralleling company goals
with personal goals and planning for success in the future creates
motivation to outperform in current positions.
E Communication Listening commands respect and representation.
F Morale Boosting - Respect, value and appreciate employees does more than
financial compensation to increase retention
G Competitive Compensation 3 rd party salary surveys allow you to stay
current and your employees to stay with the company.
H Non-monetary Reward and Recognition A variety of rewards will increase
employee gratification and happiness.
I Employee Surveys Let your employees be heard and listen to their concerns.
J Exit Interviews Learn from the recently departed and change the existing
profiles and perhaps company structure.
K The Boomerang Effect Tap the resource of returning employees whose
experience and connections are invaluable.
5. Utilize the unique and innovative solutions to solve your retention problems

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Flexible Firm Model:

Atkinson and Meagers model of exible firm identifies four types of exibility
that companies seek:
1.
Functional: This refers to a firms ability to adjust and deploy the skills of
its employees to match the tasks required by its changing workload, production
methods. This is done by multi-skilling / dual skilling / dismantling of traditional
rigidities between occupational groups (horizontal and vertical exibility). This is
designed to improve efficiency and reduce costs.
This is a core area of traditional conict within the division of labour between
distinct skilled groups and between the skilled and the non-skilled (Penn, 1985).
2.
Numerical: This refers to a firms ability to adjust the level of labour
inputs to meet uctuations in outputs. There is increased use of part-timers,
temporary, short-term contract staff, job sharers and agency workers.
There is a contrast between core permanent workforce and peripheral nonpermanent. The general idea is that an increasing mixture of non-standard
employment forms will be more efficient and cheaper.
3.
Distancing Strategies: This refers to the increased use of other firms that
undertake non-core activities such as catering, cleaning and transport. Such a
strategy will be cheaper.
4.
Financial: This refers to achievement of exibility through the pay and
reward structure.
5.
Temporal exibility: It is concerned with the pattern of hours worked and
linked to the demands of the business. Seasonal or demand work is provided
leading to Flexi-time systems. In addition, annual hours contracts allotted with
increase in evening working.

These exibilities are achieved through a division of employees into:

Core workforce: The core group is composed of high-skill and high-pay

workers recruited from the primary labour market. These workers are expected
to deliver functional exibility. Core group workers have brighter career and
promotion prospects and they usually are provided with comprehensive training
and development.

Peripheral workforce: The peripheral group consists of two-types of group.

The first group consists of generic-skill (e.g.: word processing) workers recruited
from external labour market. The second group consists of workers recruited as
required on variety of contracts (e.g.: Government trainees, job sharers, subcontract labour, temps etc.). This group workers have low job security.

Flexible Labour Markets. - Benefits and Disadvantages

Flexible labour markets involve a minimum of government intervention, they are
labour markets which work efficiently and are competitive. Many supply side
30

economists argue exible labour markets are of great importance in reducing

unemployment and improving the competitiveness of the economy.
Advantages:
1.

Opportunity to exploit 24-hour economy

2.

Contributes to an improvement in the ination-unemployment trade off

3.
Flexible wages and exible employment helps to ensure that markets clear
rapidly eliminating any excess supply or demand, so economies automatically
move into long run equilibrium at potential output.
4.
Higher productivity growth in the long run (which then helps to improve
competitiveness)
5.

Flexible employment suits more exible life-styles

6.

Stronger employment creation during an economic upturn

7.

Flexibility makes the economy more attractive to inward investment

8.
The economy can respond more exibly to an external economic shock
because wages and employment are more exible
9.
Increases Labour Participation Rates: Flexible labour markets can be
beneficial for workers. This is because it gives them more options of, when and
where to work. This is particularly helpful for women with young children, for
example, they can work part time and still look after their children. However,
although exible labour markets have created work in the part-time, service
sector, there has been less success in creating permanent, full time jobs.

10.
Flexible labour markets help to reduce costs for firms; for example,
workers can be employed when they are needed. It is not necessary to pay for
workers who are not productive. This will help attract inward investment. It is
argued one reason, for higher unemployment in France is that there are costs in
hiring and firing workers, this reduces the incentive for firms to expand.

However, although they have some benefits, these advantages of exible labour
markets are not equally shared. In particular, there are concerns over the
negative impact on job insecurity. Criticisms are made based on its
disadvantages:

Reduce Classical (Real Wage) Unemployment

Real wage unemployment occurs when wages are set above the equilibrium, for
example, through trades unions or minimum wages. Flexible labour markets help
to keep wages close to the equilibrium and therefore avoid creating
unemployment.
However, it is worth noting that minimum wages and trades unions don't always
cause unemployment. For example, if firms have monopolistic power, wages can

31

be kept below the equilibrium. A true exible labour market would require both
workers and firms to lose their market power.
However if labour markets are very exible workers may have greater job
insecurity, and this can lead to lower productivity

Reduces Wage Price Spirals

If workers have too much market power they can bargain for higher wages, this
can lead to ination.

Rising inequalities
There are concerns about a lack of training for workers on short term contracts
which has a long term effect on their ability to regain employment if they lose
their jobs.
Shorter term contracts might lead to job insecurity for some people, the
concept of job security is being gradually replaced by the concept of
employability. Frequent job changes for workers can be unsettling for them and
for their families.
Shorter term employment contacts and eligibility for occupational pensions may
lead to increased pensioner poverty in the long run, many people on short term
contracts do not enter into any occupational pension.
Longer term social implications of labour market exibility the 24 hours per
day work culture and the possible effects on family life.
Income uncertainties - as the balance of risk in the workplace shifts from the
employer to the employee

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