All’s Fair in Love and Retention
In the current candidate’s market, employee retention can seem like war, but it doesn’t have to be. Often, when top-grade managers leave their organization, it is because of reasons that could be addressed by company leadership and has little to do with salary.
In our own internal surveys that we use with candidates, “Company Culture” is the number one motivation for making a career move. As recruiters, we often see candidates willing to take up to a 20-25% cut in base pay for an opportunity that provides more of a challenge, a better company culture, more work/life balance and a “runway” to their future goals.
To get your people to stay, you may be thinking, “Well – I’ll just increase their compensation and that should do it.” Or – when presented with an employee that is leaving, “I will make him a counter offer he can’t refuse.” Worst case, your budget may not allow for it. Best case, you may get another year or two out of the employee but the underlying issues for them wanting to leave still remain. The good news is that it is not just about compensation. The bad news is that if you’re not taking steps to address employee retention and understand why your talent is leaving, it is open season on your people.
We have identified many clients and companies we work with that have excellent employee retention and they all share the same four components that we call L-O-V-E (L for Learning and Development programs, O for a great Onboarding experience, V for Values and Culture, and E for Engagement). Thus, when it comes to retention, think about making LOVE not War.
Learning and Development
How many of us have said to ourselves at points in our career, ”Did I learn anything new today or was it just another day at the mill?” Learning and development programs are proven ways to boost engagement and loyalty. According to Ellie Bertani, Director of HR Strategy and Innovation at Walmart, “I believe business needs to stop looking at employees as a cost center and realize they are an investment. Training them is an investment that will pay dividends in the future.” There are external factors at work as well. According to Niall McKinney, president of AVADO, “As more jobs become automated, employers need to help employees re-deploy in new or more advanced areas. Around 32% of current workers ages 16-54, regardless of their position, may need to retrain within the next 12 years.
Research also shows that workers are leaving your company because they don’t see the career path and opportunity they’re looking for. They may have higher expectations, or they simply need guidance. They also may have been thrown into a position without proper onboarding or training and are learning simply by making mistakes, which can be soul-crushing. In a recent Udemy “Workplace Boredom Report,” 46% of employees are looking to leave their companies because of a lack of opportunity to learn new skills. This is where a more experienced counterpart or mentor can provide the training, skills, career/life guidance, coaching and patience that can help them learn the position, see their fit within the company and culture, and see a future.
Do you offer continuing education, seminars, training programs and other developmental programs that will keep your employees learning new skills? Do you have a portion of your meetings dedicated to best practices or learning something new, or even a simple sharing of information? There is a measurable ROI to upskilling your employees, and often it is in the form of productivity gains and reduced turnover.
Onboarding is a great tool for welcoming a new team member and first impressions here are lasting. Think about your own career. How many of us on our first day in a new job had to find a temporary workspace since our workstation wasn’t ready? They may not have had our email setup yet and didn’t even have new business cards printed. “I’m sorry, I didn’t get the email that you were starting today,” was often a common refrain. You can feel the love and sense of belonging in your new company, right?
According to ServiceNow, 80% of workers experienced some issues when starting a new job. One third stated they received no training at all, while 28% were unsure of their responsibilities and goals. 20% felt they were not fully onboarded after three months on the job! In fact, that same 80% would rather go on an awkward first date then attend a new job onboarding session or orientation.
What do new hires want out of onboarding? In the ServiceNow survey, 58% want a walk-through of key processes or want a “buddy” or mentor they can turn to for questions. According to a recent Harris Poll, 93% of employers agree that a good onboarding experience is critical to influence the new hire’s decision to stay with the company. In fact, nearly 1 in 10 new hires leave a company due to a poor onboarding experience and the attrition rate can be up to 22% in the first 45 days of a new hire.
The solution? Have a comprehensive plan for onboarding new hires. Your onboarding may include: a pre-boarding with your new hire (welcome packet and schedule, including a welcome letter from the CEO, sent prior to their first day); scheduled walk-throughs with key department heads; a longer duration for getting acclimated (most successful onboarding plans take weeks or even months); and the assignment of a coach/mentor to help them learn the new job quickly and immerse them into your company culture.
Values & Company Culture
Company values and culture are more important than ever when it comes to retention. Are you giving people insight into the company’s mission, values, vision and purpose? A good thing to do is write it down, not just have it on your web site, but have it visible throughout your entire operation. According to Bretton Putter, Founder and CEO of CultureGene, “The success or failure of a company can often be directly linked back to how well the company’s culture is understood and leveraged.
Alignment of the employee to your company’s values and culture is a key component in retaining your talent, and this should be thoroughly vetted up front by your recruiter. According to Lauren Mason, Principal of Mercer’s Global Rewards Practice, “Top performers leave when the organization fails to deliver an experience that motivates them, engages them and aligns with their personal and professional aspirations.”
How important are your company values and culture? According to findings in a recent Glassdoor survey, “Culture is actually more attractive to candidates than money, and it’s a story that we seem to be hearing more and more often.” Culture is the “secret sauce” that makes companies successful and attractive to others— especially the best and the brightest you want to come work for you.
A question we often ask candidates in our interview process is: “Describe the workplace culture or environment where you feel you would be happiest?” We get answers along the lines of “one where I am valued and recognized,” “a collaborative team environment,” and “one where I am engaged and challenged.” Then when asked about their current company values, vision and purpose, most either weren’t sure what they were or if they existed. This is inexcusable and it is no wonder they are looking for a change. After all, don’t we all want to know that our work has meaning and purpose?
Poor career options, lack of new experiences, inflexible schedules, poor diversity and dismal working environments can all leave a bad taste in the mouth of top performers. Couple these with mediocre pay and they will be constantly looking for a way out. According to John Jones, Talent Business Leader at Willis Towers Watson, “Ultimately, it comes down to engagement. Although there are aspects of the work and the environment that top performers may really enjoy, too many factors that disengage employees outweigh staying.”
How can you address lack of engagement? Look for signals of your employee(s) getting ready to move on. Performance issues, lack of interest and boredom, and increased social media activity (LinkedIn) are all signs. What to do? Keep them busy and moving. Get out in front of it with candid conversations (“Are you being challenged and supported?”), engagement surveys, and then get to the root of the issues and address them head on.
According to Denise Moulton, VP of Talent and Research at Bersin, Deloitte Consulting LLC, “Employees are looking for more than a paycheck, they are looking for meaningful work and an opportunity to grow their skills. Employees want a career path and need to understand what success looks like today and in the future.” Offer your top people new and interesting projects, promote new skills, and let them know that you and the organization want them to grow.
SHRM estimates the average time to fill a given position is 42 days. Even replacing an entry-level position can cost up to 40% of an employee’s salary. In addition, there is the lost productivity and ROI in the gap that occurs when your employee first leaves until a new one is hired and brought fully up to speed. No question that turnover is expensive and employee retention has to be among your top priorities.
Retention ultimately comes down to the Golden Rule: Treat people as you would like to be treated. Think about your first day on the job. What did you like and what worked? What didn’t you like? When it comes to retaining your best and brightest, it is always better to make LOVE not War.
HR Dive: Why employers are spending more on learning and development (January 15, 2019)
Udemy: Workplace Boredom Report
HR Dive: Workers say onboarding is often more painful than a bad date (January 25, 2019)
Human Resource Executive: The Increasing Importance of Onboarding
TLNT: Your Culture is Important So take the Time to Write It Down (January 25, 2019)
HR Dive: Why are your top performers leaving? (January 22, 2019)
SHRM Report on Average Cost per Hire
If your company is ready to strategically address, improve and invest in the hiring of the most important part of any company – it’s people — contact us today!