Key employee retention is critical to the long-term health and success of your business. Managers readily agree that retaining your best employees ensures customer satisfaction, product sales, satisfied coworkers and reporting staff, effective succession planning and deeply embedded organizational knowledge and learning. If managers know this so well, why do they behave in ways that so frequently encourage great employees to quit their jobs?
Employee retention matters. Failing to retain a key employee is costly to the bottom line, in addition to organizational issues such as training time and investment, lost knowledge, insecure coworkers and a costly candidate search aside.
Various estimates suggest that losing a middle manager costs an organization up to 100 percent of his salary. The loss of a senior executive is even more costly. I have seen estimates of double the annual salary and more.
Employee retention is critically important for a second societal reason too. Over the next few years while Baby Boomers (age 40 to 58) retire, the upcoming Generation X population numbers 44 million people (ages 25-34), compared to 76 million Baby Boomers available for work. Simply stated: there are a lot fewer people available to work.
Employee retention is one of the primary measures of the health of your organization. If you are losing critical staff members, you can safely bet that other people in their departments are looking to fill positions as well.
Exit interviews with departing employees provide valuable information you can use to retain remaining staff. Heed their results. You’ll never have a more significant source of data about the health of your organization.
I’ve provided retention tips in earlier articles, but will add ten more retention tips to your arsenal with these top ten ways to retain a great employee.
1. Management thinkers from Ferdinand Fournies (Why Employees Don’t Do What They’re Supposed to Do and What to Do About It) to Marcus Buckingham and Curt Coffman (First Break All the Rules agree that a satisfied employee knows clearly what is expected from him every day at work. Changing expectations keep people on edge and create unhealthy stress.
They rob the employee of internal security and make the employee feel unsuccessful. I’m not advocating for employees jobs and responsibilities to remain static, but rather providing a specific framework within which people clearly know what is expected from them.
2. The quality of the supervision an employee receives is critical to employee retention. People leave managers and supervisors more often than they leave companies or jobs. It is not enough that the supervisor is well-liked or a nice person. The supervisor has a critical role to play in retention, starting with clear expectations of the employee.
Anything the supervisor does to make an employee feel undervalued will contribute to turnover.
Frequent employee complaints center on these areas.
- Lack of clarity about expectations
- Lack of clarity about earning potential
- Lack of feedback about performance
- Failure to hold scheduled meetings
- Failure to provide a framework within which the employee perceives he can succeed
3. The employee’s freedom to speak his or her mind freely within the organization is another key factor in employee retention. Does your organization solicit ideas and provide an environment in which people are comfortable providing feedback? If so, employees can offer ideas, feel free to criticize and commit to continuous improvement. If not, they bite their tongues or find themselves constantly in trouble – until they leave.
4. Employees seek to use their talent and skills in the workplace. A motivated employee wants to contribute to work areas outside of his specific job description. How many people could contribute far more than they currently do? You just need to know their skills, talent, and experience and take the time to tap into it.
For example, in a small company, a manager pursued a new marketing plan and logo with the help of external consultants. An internal sales rep with seven years of ad agency and logo development experience repeatedly offered to help.
His offer was ignored and he cited this as one reason why he quit his job. In fact, the recognition that the company didn’t want to take advantage of his knowledge and capabilities helped precipitate his job search.
5. The perception of fairness and equitable treatment is important in employee retention. In one company, a new sales rep was given the most potentially successful, commission-producing accounts. Current staff viewed these decisions as taking food off their table. You can bet a number of them are looking for their next opportunity.
In another instance, a staff person, just a year or two out of college, was given $20,000 in raises over a six-month time period.
Information like this never stays secret in companies; undoubtedly the morale of several other employees was affected.
Say you have a staff person who views her role as important and brings ten years of experience, an M.B.A. and a great contribution record to the table. When she finds she is making less money than this young employee, she is likely to look for a new job. Minimally, her morale and motivation will take a big hit. Did the staff person deserve the raises? Yes. But, recognize that these decisions had an impact on others.
6.Tools, time and trainingare the easiest problems to solve and affect employee retention the most. When an employee is failing at work, I ask the W. Edwards Deming question, “What about the work system is causing the person to fail?” Most frequently, if the employee knows what they are supposed to do, I find the answer is time, tools, training, temperament or talent.
The employee must have the necessary means to do their job well – or they will move on to an employer who provides them.
7. Your best employees employees that you want to retain seek frequent opportunities to learn and grow in their careers, knowledge and skill. Without the opportunity to try new opportunities, sit on challenging and significant teams, attend seminars and read and discuss books, they will stagnate.
A career-oriented, valued employee must experience growth opportunities within your organization.
8. An employee never felt senior managers knew he existed. This is a common complaint or lament I hear during an exit interview. By senior managers I refer to the president of a small company or a department or division head in a larger company.
Take time to meet with new employees to learn about their talents, abilities and skills. Meet with each employee periodically. You’ll glean more useful information while keeping your fingers on the pulse of your organization. It’s a critical tool to help employees feel welcomed, acknowledged and loyal.
9. No matter the circumstances, never, ever threaten an employee’s job or income.Even if you know layoffs loom if you fail to meet production or sales goals, it’s a mistake to foreshadow this information with employees. It makes them nervous, no matter how you phrase or explain the information.
Even if you’re absolutely correct, your best staff members will update their resumes.
I’m not advocating keeping solid information away from people; however, think before you say anything that makes people feel they need to search for another job.
10.Your staff members must feel rewarded, recognized and appreciated. I place this final tip on every retention list I develop because it is so critical to retention success. Frequently saying thank you goes a long way. Monetary rewards, bonuses and gifts make the thank you even more appreciated. Understandable raises, tied to accomplishments and achievement, also help retain staff.
Commissions and bonuses that are easily calculated on a daily basis, and easily understood, raise motivation and help retain staff. Annually, I receive emails from staff members that provide information about raises nationally. You can bet that work is about the money and almost every individual wants more.
Take a look at your organization. Are you doing your best to retain your top talent? Employ these ten tips in your organization to retain your desired, key employees and attract the best talent too.
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