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Avoiding Six Dangerous Retention Mistakes Most Companies Make

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Title: 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

9
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

18
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

19
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

20
Hidden Obstacles to Retention
  • Young workers with fewer bills
  • Growing number of entrepreneurs

21
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

23
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

24
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

25
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 !

26
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

28
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

29
  • 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

31
Critical Retention Mistake 2
  • Supporting a Fear-Based Workplace

32
  • 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

33
  • 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

35
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

38
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

39
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

40
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

42
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

48
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

62
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

83
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
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