RETENTION STRATEGIES NEED TO BE RE-ENGINEERED

Submitted by: Bindu Thushara. N IGTC August 23, 2013

CONTENTS
Introduction

The real total cost of losing an employee

5 ways to increase Retention Retention strategies used by firms References

INTRODUCTION
Employee retention is critical to the success of an organization. Without a focus and an understanding of people, behaviors, and what engagement and rewards strategies work best for your culture, reducing turnover can be even more difficult. People decide to switch jobs for a wide variety of reasons. Change and growth is a good thing, but a constant turnover is detrimental to performance, morale, and the overall sustainability. Some reasons are related to personal and life changes and completely unrelated to the job itself, yet turnover has its impact on the business.

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Definition : An effort by a business to maintain a working environment which supports current staff in remaining with the company. Many employee retention policies are aimed at addressing the various needs of employees to enhance their job satisfaction and reduce the substantial costs involved in hiring and training new staff. The economic value of employees over times says that the employees initially are a "cost" to the organization and that over time, with the right talent and practices, they become more and more valuable assets. The role of HR is to attract the "right people" and move them up this curve as rapidly and effectively as possible using right retention strategies.

Employee Retention

Employee Turnover

THE REAL "TOTAL COST" OF LOSING AN EMPLOYEE

Cost of hiring a new person (advertising, interviewing, screening, hiring)

Cost of onboarding a new person (training, management time)

Lost productivity (a new person may take 1-2 years to reach the productivity of an existing person) Lost engagement (other employees who see high turnover disengage and lose productivity)

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Customer service and errors (new employees take longer and are often less adept at solving problems). In healthcare this may result in much higher error rates, illness, and other very expensive costs (which are not seen by HR)

Training cost (over 2-3 years you likely invest 10-20% of an employee's salary or more in training, that is gone)
Cultural impact (whenever someone leaves others take time to ask "why?"). Influence on existing employees and fear creating factor.

5 WAYS TO INCREASE RETENTION

Provide career navigation and personal branding strategies from the getgo- involves employee training and development. Hiring the right managers makes all the difference. Right manager provides right guidance and mentoring. Work to create a culture of trust. Trust builds loyalty. Recognize good performance. Recognitions motivate and rewards encourage the employees to perform better. Hire the right kind of employees who are both a skills and culture fit. Mismatch is a mutual complication.

RETENTION STRATEGIES USED BY FIRMS

Director of people development for the San Francisco-based earthquake engineering company, Russell Kaltschmidt joined Degenkolbs executive team in 2009. The major intention behind hiring him was to increase the retention as the turnover rate reached 10% for at least a decade and sometimes touched 15 %. Closer attention was given to managers work with coaching, training and engaging the staff.

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Degenkolb company also partnered with Retention consultant Leigh Branham, founder and principal of the HR consulting firm Keeping the People Inc. in Overland Park, Kansas that helped in gradually decreasing its annual turnover rate to about 5 percent today. Tony DiRomualdo, vice president of research for the Institute of Corporate Productivity Inc., a Seattle-based workforce research firm, says its latest research on the qualities of high-performing organizations points to a greater focus on talent management, specifically better employee coaching and mentoring.

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DiRomualdo also quoted that he found that coaching turns out to be the number one practice, the one with the strongest contribution to market performance after studying close to 300 companies.

Degenkolb initially had human resources as a part-time role for the general counsel.
Degenkolb later on changed the way it considered human resources by hiring Kaltschmidt whose sole job was recruitment, retention and professional development, the 150-employee firm saw encouraging results in the job satisfaction and engagement of its workforce.

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Certain books like The 7 Hidden Reasons Employees Leave published by Branham and Hidden Drivers of Success: Leveraging Employee Insights for Strategic Advantage co-authored by William Schiemann, CEO of the Somerville, New Jersey-based Metrus Group strongly encourages better collection and analysis of the reasons for departures, allowing upcoming cases of departures to be quickly identified and addressed. These books also advise companies to create a retention index that gives early warning signs of units, roles and locations that are at high risk for employee turnover. Also, it advises to approach the employee after 3-6 months after their exit for real and honest feedback.

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Networking with alums on professional network sites like Linked-in creating company groups can be a great way to build a bridge with former employees, who can also be a source of referrals for new hires and may even return to their former employer. Companies are also encouraged to talk with departing employees three to nine months after they leave because theyre rarely honest during an exit interview. Finally, from a retention standpoint a company has to first focus on those employees who are really strategic to the mission and difficult to replace then ensure it really works to keep them.

REFERENCES
August 2013. Volume 92. Number 8, MediaTec publication Inc & Qmags digital publication platform- Workforce Management Journal-Game changers 2013 http://www.employeeretentionstrategies.com/ http://www.tlnt.com/2013/08/01/employee-retention-doesnt-justhappen-5-keys-to-a-clear-strategy/