Avoiding Six Dangerous Retention Mistakes Most Companies Make

1
Avoiding Six Dangerous Retention Mistakes Most
Companies Make

• Presented By
• Jack Smalley, SPHR
• Director, HR Learning Development

2
Introduction

• SHRM predicting 2011/12 employment crisis
• Up to 40 turnover
• Employees not satisfied with current jobs
• Gen Ys first recession
• Gen X and Y ready to move on
• Employers of Choice not waiting until crisis hits
• Where does your company stand?

3
Preparing for the Turnover Tsunami

• Wall Street Journal 5-26-10
• Feb 2010
• More employees resigned than laid off/terminated
  since 10/08
• End of 2 year trend
• 60 of employees intend to change jobs after the
  recession
• Employees advancing career
• Poor morale due to cost cutting measures
• Gen Ys comparing notes

4
Preparing for the Turnover Tsunami Cont.

• 2010
• 34.6 of employees satisfied with wages
• Down 7 from 1987
• Wage cuts, freezes, added responsibilities,
  unemployed spouses and Xrs Ys moving back home
• 51 interested in their work
• Down 19 from 1987
• More employees feeling disengaged with their jobs

5
Focus Shifted from Talent Retention to Cost
Reduction

• 2/08 Corporate leaders priority
• Retention of top talent
• 2/09 Cost reduction/survival
• Top talent retention fell to 8
• We are already seeing the results
• Retention of top talent even more critical in
  turbulent times

6

• Years of retention neglect catching up with
  employers
• Sales
• Service
• Quality
• Safety
• Productivity
• Why is there no focus on Retention
• Retention no longer HR issue
• Must have total mgmt support

7

• During turbulent times best employees are the
  ones who leave
• As first
• Bs second
• Left with Cs
• Poor performers hold on to paychecks until
  unemployment eligible

8
The Cost of Turnover

• PricewaterhouseCoopers Saratoga Study
• Turnover cost from 12 to 40 of pretax income
• 25B to retrain employees annually
• That can be the amount to remain in business
• No longer a problem for just large employers

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Must Work Your Way Through Various Issues

• Dont know why people quit so count only
  controllable turnover is inaccurate
• Excluding employees who quit or fired during
  probation
• Supervisors holding back releasing poor
  performers to pad their retention numbers
• Message to supervisors
• You own your team

10
The Six Most Dangerous Retention Mistakes

• Focusing on Retention Programs vs. Retention
  Processes
• Supporting a Fear-Based Workplace
• Confusing Employee Engagement with Employee
  Destruction
• Not Supporting a Multi-Generational Friendly
  Workplace
• Not Holding Supervisors Accountable for Retention
• Not Narrowing the Front Door to Close the Back
  Door

11
Four Groups Projects

• Traditionalists
• Baby Boomers
• Gen Xrs
• Millennials
• Top three factors to keep you with company
• Top three benefits to attract/retain your
  generation

12
Critical Retention Mistake 1

• Focusing on Retention Programs vs. Retention
  Processes

13
Drive Retention from the Top, Because Executives
Have Greatest Impact

• Include turnover cost in annual report
• Include in strategic plans and report monthly
• Rewards for meeting goals
• Consequences for missing goals
• HR must change managers with influence rather
  than authority
• Leave authority to senior management
• CFOs must be on board

14

• Employers of choice moving from retention
  programs to retention processes
• Require full management participation
• Accountability for process success
• Retention must be on same page and receive same
  attention as
• Sales
• Service
• Profits

15
Think!

• Sales
• Service
• Quality
• Safety
• Retention
• Profits

16
Organizational Flaws of Retention

• Retention coaching conducted by HR vs.
  supervisor/leader
• Supervisors look up to their leaders
• Organizations look at HR to solve turnover
• Traditional thinking vs. Progressive thinking

17
10 Strategies of Rethinking Retention -
Richard Finnegan

• People quit jobs because they can
• Companies makes it too easy to quit
• No effort to hold on to our best
• Employees stay for things they get uniquely from
  you
• Build a retention brand different from others
• Supervisors build unique relationships that drive
  retention/turnover
• Employees stay for bosses
• Employees leave because of bosses
• Hold supervisors accountable for achieving
  retention goals
• Add to other measurable objectives

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10 Strategies of Rethinking Retention Cont. -
Richard Finnegan

• 5. Develop supervisors to build trust
• Relationships Trust Information
  Success
• 6. Narrow the front door to close the back door
• Focus as much on hiring process as retention
• 7. Script employees first 90 days
• Predict how long employees will stay
• The most critical time during employment
• 8. Challenge policies to drive retention
  (support/hinder)
• 9. Calculate turnover cost to galvanize retention
• 10. Drive retention from the top
• Exec buy-in is a must

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Design Jobs for Engagement

• Capture the minds and hearts of employees
• Avoid the Sunday Blues
• Challenging assignments
• The absent Millennial
• Goals with feedback
• Provide for personal growth and development
• Full partnership career development process
• Career interest forms

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Hidden Obstacles to Retention

• Young workers with fewer bills
• Growing number of entrepreneurs

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Calculate Turnover Cost to Galvanize Retention

• In past, HR has developed formula for turnover
  cost
• Those who have CFO endorsement have greater
  opportunity for upper management support
• Call center identified turnover cost at 12 K per
  employee
• Destroyed a 12,000 obsolete piece of computer
  equipment to drive point
• Drove home actual cost
• Delivery company put cost of driver turnover at
  60 K same value as company truck
• Showed video of totaled truck from accident to
  emphasize cost

22
High Tech Retention SHRM White Paper 5/2000

• What is more critical than recruiting IT talent?
• Answer Retaining IT talent
• Average IT employee stays 18 months at current
  job in good times
• New IT grads will have12 employers during career

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6 Elements to Retain IT Workers

• Salary
• Must be competitive
• Constant survey of IT salaries/benefits in your
  area
• IT turnover 100 to 150 of annual salary
• Challenge
• Best way to lose IT personnel
• Answer Bore them
• Challenging work
• New projects
• Keep software updated

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6 Elements to Retain IT Workers Cont.

• 3. Training Development
• On-going training
• Cutting edge technologies
• Educational assistance higher retention
• Educational assistance beyond IT field
• 4. Flexibility, lifestyle perks cool stuff
• Compressed work weeks
• Telecommunicating
• Job sharing
• Flexible shift schedules
• Small amounts of flexibility can score big points
• Solicit lifestyle desires

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6 Elements to Retain IT Workers Cont.

• 5. Appreciation Rewards
• All disciplines seek recognition
• If cash strapped
• Extra vacations
• Time off
• 6. Culture
• Employee friendly
• Manager Is the Company
• LIVE IT !

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Continued Nursing Shortage

• Bureau of Labor Statistics predicts 233,000
  additional nursing jobs each year through 2016
• Only 200,000 pass RN test annually

27
Wellness Programs as a Retention Tool

• 45 employees at Mid and Small size companies
  report they would stay at job longer if they had
  wellness programs
• 26 said they would miss less work
• Why?
• - Principal Financial Well-Being Index
• SHRM 1/20/10

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Top Reasons Employees Support Wellness Programs

• 30 Reduce personal health care cost
• 30 Longer, healthier lives
• 28 Receiving employer incentives
• 28 Reduce stress
• --------------------------------------------------
  --------------
• 15 of employees have access to fitness
  facilities
• 11 in 2008

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• Partner with your talent supplier
• Create a pool of contingent workers in peak
  periods to give more balance to core employees

30

• Best practice retention is on-going processes
  driven by upper management
• NOT
• Band-aid programs

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Critical Retention Mistake 2

• Supporting a Fear-Based Workplace

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• Fear-based employees cannot contribute
• Management by fear is a hard habit to break
• SHRM 7/1/10
• Job satisfaction holding among older employees
• Declining among Xs and Ys
• Gen Xs and Ys
• 2008 Job Dissatisfaction 11
• 2009 Job Dissatisfaction 19

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• During economic downturns most companies focus on
  keeping employees with good attendance even with
  substandard work
• This is better alternative to firing employee and
  waiting days to replace
• Some bosses are encouraging young workers to buy
  new car, boat or other expensive items knowing
  they would have to keep job for payments

34
Beware Jerk Bosses

• 13 states have legislation pending on workplace
  bullying
• Verbal attacks from supervisors are generating
  six figure settlements
• 37 of U.S. workers report they were a bully
  victim
• Four times more complaints than all forms of
  harassment combined

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Transitioning From a Fear-Based Workplace10
Early Signs of a Fear-Based Workplace

• Appearances are everything
• Staying longer than boss
• 730 to 530 employee
• Perception is more important than reality
• Fear-based discussions rule over work discussions
• Whos stock is falling/rising
• Preoccupied with who is invited to meeting vs.
  meeting agenda
• Predicting employee failures

36
Transitioning From a Fear-Based Workplace
Cont10 Early Signs of a Fear-Based Workplace

• 3. Distrust rules
• Off the record conversations
• Coded messages
• Back alley meetings
• Backstabbers thrive
• Your failure is my success
• 4. Numbers rule
• Total obsession w/ metrics
• Vending machine, ear plugs
• Record profits and now unpaid lunches
• Stock price vs. People price
• 5. 6,417 workplace policies
• Overdependence of rules vs. common sense
• Ordering a stapler
• Coffee cup receipts
• 15 page parking policy

37
Transitioning From a Fear-Based Workplace
Cont10 Early Signs of a Fear-Based Workplace

• 6. Management discourages lateral conversations
• Fear of employees comparing notes
• No one has authority to authorize meetings
• Loss of sharing ideas
• 7. Information is restricted
• Information leads to success
• Why some managers restrict information
• Knowledge Power
• Destroys trust

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Transitioning From a Fear-Based Workplace
Cont10 Early Signs of a Fear-Based Workplace

• 8. Brown-nosers rule
• Kissing up at all levels
• Who said it rules over what was said
• Fear-based leaders surround themselves with yes
  men and yes women
• Right answer vs. truth
• 9. The boss is so out of touch its almost
  comical
• Even though they are clueless, they constantly
  remind you who is the boss

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Transitioning From a Fear-Based Workplace
Cont10 Early Signs of a Fear-Based Workplace

• 10. Management leads by fear
• Most decisions made in secret
• Information is given in drips
• Company culture Be glad you have a job
• Leadership is based on keeping employees in the
  dark
• Major gap between management and employees

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Treating Employees Fairly Requires

• Distributing rewards
• Respect through interpersonal relationships
• Involving employees in difficult decision-making
• Offering opportunities to question decisions

41
Critical Retention Mistake 3

• Confusing Employee Engagement with Employee
  Destruction

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Employee Engagement

• Employees who are so committed to their jobs that
  they want to give
• Discretionary Effort

43
3 Buckets of Employee Engagement - N. Davis,
Editor, HR Magazine - G. Sherrill, VP HR,
Wal-Mart

• 17 actively disengaged
• Unhappy
• Undermining co-workers
• 54 not engaged
• Sleepwalking thru workday
• Putting in time w/o passion
• Fence sitters
• 29 work with passion
• Do you want your 54 hanging around your 17?
• Disengagement cost U.S. economy 300B loss
  productivity annually

44
6 Essentials for World Class Employee Engagement

• People
• Senior leaders who excel at
• Listening
• Knowing and cherish relationship with employees
• Outstanding communication
• Work
• Providing resources for employees to
  over-achieve
• Full Service Recognition
• Competitive pay
• Recognition for each generation
• One size does not fit all
• Opportunities
• Succession planning
• Training
• Career development

45
6 Essentials for World Class Employee Engagement
Cont.

• 5. Quality of Life Issues
• Targeted benefits
• Flex schedule
• 6. Company Culture
• Live your practices
• Diversity
• Company reputation
• Performance management
• Every employee must understand
• How their job impacts organizations success
• Irrelevance

46
Employees First and Customers Second - Vineet
Nayar HCL Technologies

• Key is holding management equally accountable to
  employees
• Live in a world of democratic form of government
• BUT
• Autocratic nature of business

47
Customer Service Focus Must Include Internal
Customers

• Employees first, Customers second
• Satisfied employees display better customer
  service

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How Not To Engage Your Employees

• Company President
• Not listening to employees
• Hires a 100K consultant
• Consultant listen to employees
• Makes same recommendations
• Not embracing 50-50 meetings
• 50 informing
• 50 listening

49
Employees Stay Because of Things They Get
Uniquely From You

• Write down 5 employees in your company who are
  critical to your success
• Write answers to these questions for each
  employee
• Could this employee leave you for a better job?
• Has the employee ever considered looking?
• Now write down reasons you feel they have stayed
• Tangible Intangible
• Shift New skills
• Schedules Good supervisor

50
Critical Retention Mistake 4

• Not Supporting a Multi-Generational Friendly
  Workforce

51
Four Groups Projects

• Traditionalists
• Baby Boomers
• Gen Xrs
• Millennials
• Top three factors to keep you with company
• Top three benefits to attract/retain your
  generation

52
Major Increase in Employment Replacing Exiting
Boomers
330 Boomers turning 60 every hour
Top Job Opportunities for Next 10 Years
53

• Job Satisfaction Levels Significantly Declined
  for Younger Employees During Recession -
  SHRM
• 19 of Xs, Ys dissatisfied with their
  jobs - SHRM
• To retain Xs and Ys, companies must
• Keep them engaged
• Find ways for them to grow
• Management must become accountable to employees

54
Generational Expectations of Succession Planning
55
Generations View Change
56

• 1 benefit desire for employees with families
• Retirement
• 1 benefit desire for singles
• Time Off
• SHRM

57
Gen Xs and Ys

• 42 have looked for other jobs to balance
  work/life issues
• 65 of employees would give up 21 of salary for
  more family time
• - Coopers Lybrand Survey
• Pre Recession
• SHRM

58
Using Social Media to Engage Workers

• Gen Y will make up 40 of U.S. workforce by 2014
• They have overwhelming desire to collaborate
• Text while talking
• Employers must embrace social media to enhance
  learning opportunities

59
Challenge Policies to Ensure They Drive Retention

• Career Builders and Robert Half survey of 1,000
  managers and 900 employees found
• Most attractive benefits for retention
• Flexible schedules
• Telecommuting

60
Washington Post Survey3400 SurveyedEmployee
Retention Desires
61
Critical Retention Mistake 5

• Not Holding Supervisors Accountable for Retention

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Hold Supervisors Accountable for Achieving
Retention Goals

• All levels of supervisors should have retention
  goals
• Should be weighted same as productivity, safety,
  other goals
• Talent Keepers recent survey
• Only 14 supervisors have retention goals

63
Holding Supervisors Accountable for Achieving
Retention Goals

• Top methods for setting retention goals
• Transitioning from consoling counseling to
  accountability counseling
• Consoling conversation
• Sad we lost Susan
• Really going to miss her
• It may take weeks to replace her
• I am sure you will do a great job
• Accountability conversation
• How did we lose Susan?
• She earned highest rating
• What could/should we have done to save her?
• What changes will you make to prevent from this
  happening again?

64

• In reality, many supervisors would say
• Susan was not as good as we thought

65
In Order to Own Your Team

• Supervisors must be part of the hiring process
• You hire it
• You coach it
• You are responsible for outcome and results
• Adjust retention goals for economic downturns
• Compare to the best not the rest

66
Supervisors Build Unique Relationships That Drive
Retention

• 1 factor in retaining employees is immediate
  supervision
• Best working conditions, world class benefits,
  employer of choice branding
• Will be over-shadowed by ineffective supervisor
• Average benefits and pay may be overlooked for
  great supervisor relationships
• Employees join companies for things but stay
  for people

67
Supervisors Build Unique Relationships That Drive
Retention Cont.

• Yahoo Hot Jobs 2008 Survey
• 70 of employees surveyed were interested in
  getting a new job due to dislike of boss
• Florida State University study on supervisors
• 39 failed to keep promises
• 37 failed to give credit when due
• 31 got silent treatment from boss
• 27 made negative comments about employees to
  other employees

68
Supervisors Build Unique Relationships That Drive
Retention Cont.

• Top supervisory skills for retention
• Trust
• Trust
• Trust
• Trust
• Trust
• The need to feel important
• You stay with employers who
• Look out for you
• Make you feel good about yourself
• Fellinger/Brink

69
Supervisors Build Unique Relationships That Drive
Retention Cont.

• Great attention getter
• Surprise gift box for management meeting
• 1 driver of retention

70
Supervisors Build Unique Relationships That Drive
Retention

• Supervisor/Employee relationships can withstand
  most causes of turnover
• Supervisors score their impact on employee
  retention a 5 on a scale of 1-10
• Employees score it at a 7-8

71
What Employees Seek from Supervisors

• Recognized for individual contributions
• Sufficiently respected
• Practice ethical behavior
• Treat people fairly

72
Treating Employees Fairly Requires

• Fair distribution of rewards
• Heightened awareness of interpersonal
  relationships
• Involving employees in decision making
• Offering opportunities to question decisions

73
MBWA

• Practice
• MANAGEMENT BY WALKING AROUND
• Work side-by-side with employees
• Kick up your exit interviews
• Must act on employee issues

74
Develop Supervisors to Build Trust with Teams

• According to 80 of employee surveys, TRUST is
  the most important factor employees seek from
  supervision
• Relationships to
• Trust to
• Information to
• Success

75
Top Behaviors To Avoid Mistrust

• Communication
• Availability of information not withholding
• Listening
• Valuing others opinions
• Competence
• Awareness
• Knowledge of the job
• Decision-making
• Sharing direction/vision
• Not micromanaging
• Consistency
• Following through on promises
• Fairness
• Consistent direction

76
Top Behaviors To Avoid Mistrust Cont.

• 4. Courage
• Supporting and being an advocate for your staff
• Standing up for beliefs/principles
• Being assertive in place of conflict
• 5. Character
• Keeps confidences
• Does not take others credit
• Honesty
• Does not act in self-serving ways

77
Behaviors of a Non-Trusted Supervisor

• Kiss up vs. kiss down
• Rumor central
• Caught up in employee rumors
• Employees clam up
• Employees polite but not engaging
• Conversations very short
• Complaints bubble up
• Most complaints hidden
• Playing favorites
• Bullying
• Retaliatory behavior

78
Behaviors of a Non-Trusted Supervisor Cont.

• Fewer individual meetings
• Group and one-on-one
• Meetings cut short
• Tight agenda
• Meeting postponed/cancelled
• Employee survey scores nose dive
• Production suffers
• Productivity declines
• Blame game
• No accountability
• Turnover rises with new supervisor

79
Turnover Retention

• Trust begins with relationships
• Only one chance for making a good first impression

80
Employee Retention is a Significant Factor to be
Considered for Managerial Promotions
Wegman Food Stores, Rochester, NY (10 Fortunes
100 Best Employers) Requires front line
management accountability for retention
81
A Great Retention Story

• Who was your best boss?
• Why?
• Ron Sybert
• Great listener
• We are going to have great days
• Bad days
• I may be difficult
• Internal conflict
• You may want to resign
• I get the chance to fix the problem
• Supervisors build relationships based on trust

82
Critical Retention Mistake 6

• Not Narrowing the Front Door to Close the Back
  Door

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Narrow the Front Door to Close the Back Door

• Hiring the wrong employees puts you on a direct
  path to turnover
• Tips for hiring employees who stay
• Dont forget the basics
• Blocking
• Tackling
• Compare to the best
• http//www.weddles.com/awards/index.htm

84
Most Turnover Occurs Within 90 Days

• Set retention goals
• 90 days
• Annual
• Adding a few months to A.L.S. can increase ROI
  tremendously
• Doubling length of service cuts turnover in half
• Do not classify the employee who quit as a slacker

85
Increasing Retention Involves Improving Employer
Branding

• Texas Instruments
• Think Big, Think Bold, Think Texas Instruments
• General Mills
• A Great Place to Start A Great Place to Stay
• eBay
• You can find a lot of cool things on eBay but
  nothing cooler than our jobs
• Childrens Healthcare of Atlanta
• Video of how jobs impact children's health

86
Increasing Retention Involves Improving Employer
Branding Cont.

• Delta
• Delta employees dont just travel the world,
  they work to improve it
• Publix Supermarkets
• Where shopping is a pleasure
• If you think shopping at Publix is a pleasure,
  try working here
• Barnes Noble
• If you love books why not work at a place
  surrounded by books
• Hard Rock (25,000 employees)
• For those about to Rock, we recruit you
• Kick a service, served fresh daily
• Rock stars wanted, come perform for a packed
  house

87
Script the First 90 Days

• At one time Wal-Mart had lost 65 of its
  employees in the first 90 days
• University of Florida study states most employees
  form opinions in first 30 days which impact their
  decision to leave within 90 days
• 1 on their list is disrespect from supervisors

88
Stay Interviews

• Employers of choice are focusing on stay
  interviews
• Equal importance as exit interviews
• Educating supervisors why employee stay
• Someone cares that I stay
• Concerns are addressed
• Supervisors must be trained how to conduct stay
  interviews
• Not complaint sessions
• Clear focus of meeting purpose
• Avoid implied contract

89
Stay Interviews Cont.

• Broaden employees awareness
• What do you look forward to coming to work each
  day?
• Which parts of your job are most enjoyable?
• Which parts are most challenging?
• What are you learning here and what else do you
  want to learn?
• How do you like the people you work with?

90
Narrow the Front Door to Close the Back Door

• According to Bureau of Labor Statistics
• The length of time an employee stays with a job
  increases with their age they began the job

91
Employee Referral Programs

• 3M
• Texas Instruments
• Fidelity Investments
• McDonnell Douglas
• Reduced hiring cost 75-90

92
Implement Employee Referral Program

• Include taxes and gross up awards
• 100.00 73.87
• Match rewards to employee needs
• Cash
• Trips
• Present awards publicly
• One big prize annually

93
Build Programs to Attract Older Workers

• 2012 20 of workforce age 55
• 60-75 plan on working past retirement age due
  to recession
• Beat back misconceptions
• National Council on Aging Reports
• 97 older workers reliable
• AARP National Employer Team
• www.aarp.org/money/work/articles/national_employer
  _team.html

94

• Partner with your staffing firm
• Bring them into your culture
• Recruit year round
• Full service approach
• Temps
• Temp to hire
• Direct hire
• Professional placement
• Track length of service
• Non exempt 90 days
• Exempt 1 year

95
Build a Realistic Job Preview Program

• More than just a tour
• Working conditions
• Pay
• Benefits
• Succession planning
• Co-workers
• Use subject matter experts to build job
  description
• Schedule applicant to meet with high performance
  employees

96

• Probe for past resignation reasons
• What drove you to look
• Go for detail
• Google professional candidates
• 35 of executive candidates have been turned down
  due to internet information
• Look for high level accomplishments/memberships
  in professional organizations

97
Narrow the Front Door to Close the Back Door
98
Express Employment Professionals Wishes You Great
Retention Success