Retention
Issues Make Growth More Difficult
by
Harry W. Love
In spite of the
usual mixed bag of economic news, business indicators point to better
conditions ahead. Service sector employment indices are setting new
records by the month. Full-time employment statistics show gains in
recent weeks. The American Staffing Association’s 2003 annual report of
growth adds weight to the argument that we are on the leading edge of an
expanding job market. Do you have the talent in your organization to
expand your business as the environment improves? Do you know who are
your most valuable and vulnerable people? Are you taking
effective steps to encourage your best people to stay and grow with your
business?
Why do employees stay or leave?
Since the
mid-1940’s, organizational researchers have been studying factors that
influence employees to build long-term careers with their companies.
Across businesses of all types and sizes, the results have been
remarkably similar throughout the last sixty years. Unfortunately, the
research also highlights a persistent disconnection between managers and
employees when it comes to ranking the importance of the factors that
are most likely to influence retention.
When asked to rank a
standard list of ten factors, managers tend to place tangible
factors in the top five:
-
Good wages
-
Job security
-
Promotion and
growth
-
Good working
conditions
-
Interesting work
Employees usually
list intangibles as most important when asked to rank the same
factors:
-
Full
appreciation for work done
-
Being filled in
on things
-
Help with
personal problems
-
Job security
-
Good wages
This long-running
divergence in manager and employee perceptions doesn’t come from
intentional bad management. However, it is a sign of how we can easily
forget not only what motivates our staff, but also what motivates us.
When a business is under pressure, especially in a downturn, paying
attention to the “intangibles” consumes precious management time and
energy. When the job market is soft, it is easy to be less attentive to
the concerns of your people, believing they will not leave under such
conditions. Experience shows that it’s a pretty good bet your people
will hang on through the downturns, but their motives may not be in the
best interest of your business.
Recent research by
Towers Perrin HR Services
sheds new light on a phenomenon they call “rational endurance”, a play
on the 90’s catchphrase “irrational exuberance”. According to this
comprehensive study, workers have remained surprisingly resilient in the
face of two years of business and economic blows. While most respondents
acknowledged that their employers have made progress in some important
aspects of the work environment, they also seem to be driven by a sense
that helping their employers will help preserve their own job and
financial security.
What happens as
business conditions improve? Frederic Herzberg’s research since the
1950’s holds true today. As employees regain confidence in financial and
job security, they begin to focus on the intangibles such as
interesting work, opportunities to learn new skills and advance in their
careers. Watson Wyatt’s research
demonstrates that this is particularly true for high performers. In the
absence of these factors, high performers tend to look for new
employment, most often citing “company management” and “lack of
advancement opportunities” as their reasons for leaving.
How can you encourage your best
performers to stay with your company?
Demonstrate positive
leadership.
Leadership is emotional – not intellectual, and it’s the
employees’ hearts you have to win, not their brains. Encourage your top
performers to think like owners – tap into their experience and
enthusiasm to help define the mission, vision and goals of your
business. Communicate a winning strategy, guide change and inspire
commitment to achieve success. Behave with integrity, be consistent and
truthful.
Listen. Get to know
your best performers personally, and take an interest in their
well-being.
They don’t expect you to solve all their personal problems – just remove
the barriers that prevent them from achieving their potential at work.
Provide them with informal feedback that is knowledgeable, fair,
accurate, voluntary, detailed, immediate and positive.
Provide training and
development that is directly related to improving their performance.
Recent studies
show that training unrelated to the current job (AKA “just-in-case”
training) can be linked to a 5.6 percent decrease in a company’s market
value. Adding to the damage, newly-trained workers who see no
advancement prospects often take their new skills to a new job with one
of your competitors.
Carefully select and
develop the people who will help sustain your business.
If you want your best performers to grow with your business and take on
management responsibilities, they need to know what you expect. You
don’t have to make promises about promotions, just tell them why you
think they have a bright future in your organization.
The entire
organization benefits when managers pay attention to the intangibles and
create an environment that promotes retention. Competent people want to
work with other competent people. In the long run it enhances the
company’s stability, performance and success.
Do you have the
talent in your organization to take advantage of the market upswing? If
so, invest the time now to show those talented people how
important they are to your business, before they are tempted to look
elsewhere. If not, maybe you should be recruiting key new talent now, to
help jump-start your next growth cycle. The right people, carefully
chosen and developed are always a good investment in the future of your
business.
Harry Love, an
independent management consultant in Loveland, Colorado helps businesses
improve their performance by aligning their people processes and
business goals. For more information, contact him at
hlove52@msn.com.
©Harry Love. This
article cannot be reprinted or published without the written consent of
the author.
Thompson, R., “Build It and They Will Stay: Secrets to Employee
Retention”, Innovative Approaches to Organizational Success in the
New Economy, American Productivity and Quality Center, 2001
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