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Avoiding Six Dangerous Retention Mistakes Most Companies Make


Avoiding Six Dangerous Retention Mistakes Most Companies Make Steve Puckett, SPHR Director, Corporate Human Resources Most Turnover Occurs Within 90 Days Set ... – PowerPoint PPT presentation

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Title: Avoiding Six Dangerous Retention Mistakes Most Companies Make

Avoiding Six Dangerous Retention Mistakes Most
Companies Make
  • Steve Puckett, SPHR
  • Director, Corporate Human Resources

  • Employers facing Talent Paradox
  • Relatively high unemployment (peaked in 2010)
  • Increasing shortages in areas where attracting
    and retaining employees is most critical
  • Loss of high-potential talent
  • Spike in voluntary turnover after a downturn
  • Employees advancing careers
  • Poor morale due to cost cutting measures
  • Gen Ys comparing notes

The Cost of Turnover
  • Can be significant and can result in
  • Loss of productivity
  • Lost institutional knowledge and relationships
  • Added burdens on employees who must take on more

The Cost of Turnover
  • Direct Placement Costs
  • Accrued paid time off and replacement costs
  • 50-60 of annual salary
  • Indirect Placement Costs
  • Disruptions to team-based work
  • Lost clients
  • Decreases in overall service or product quality
  • 90-200 of annual salary
  • 12-40 of Pre-tax Income
  • No longer a problem for just large employers

Voluntary Turnover
  • 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

4 Paths to Turnover
  • Employee is dissatisfied with job
  • Employee has better alternatives
  • Employee is following a plan
  • Employee is leaving without a plan

Additional Factors
  • Organizational commitment and job satisfaction
  • Quality of the employee-supervisor relationship
  • Role clarity
  • Job design
  • Workgroup cohesion

Focus Shifted from Talent Retention to Cost
  • 2/08 Corporate leaders priority
  • Retention of top talent
  • 2/09 Cost reduction/survival
  • Top talent retention fell to 8
  • Once again, retention on our radar screens
  • Retention of top talent is even more critical as
    economic conditions improve

The Six Most Dangerous Retention Mistakes
  1. Focusing on Retention Programs vs. Retention
  2. Supporting a Fear-Based Workplace
  3. Confusing Employee Engagement with Employee
  4. Not Supporting a Multi-Generational Friendly
  5. Not Holding Supervisors Accountable for Retention
  6. Not Narrowing the Front Door to Close the Back

Critical Retention Mistake 1
  • Focusing on Retention Programs vs. Retention

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 encourage managers to lead with
  • influence rather than authority
  • Leave authority to senior management
  • - CFOs must be on board

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

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

10 Strategies of Rethinking Retention (cont.) -
Richard Finnegan
  • 5. Develop supervisors to build trust
  • Relationships Trust Information
  • 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
  • 9. Calculate turnover cost to galvanize retention
  • 10. Drive retention from the top
  • Executive buy-in is a must

Design Job 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

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

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

Best practice
  • Retention is an on-going process driven by upper
  • NOT
  • a Band-aid program

Critical Retention Mistake 2
  • Supporting a Fear-Based Workplace

Managing Through Fear vs. Trust
The boss is always right. Who knows whos right? Lets brainstorm ideas.
The most important thing I do is make sure we hit our goals. The most important this I do is remove barriers for my team (so they can hit goals).
If someone goofs up, I write them up. If something goes wrong, we talk about it to get the learning.
  • Managing Through Trust vs. Fear, a Human
    Workplace E-Workbook by Liz Ryan

Managing Through Fear vs. Trust
I need to let people know whos in charge. I need to make sure people know I have their back.
Incentives penalties make employees perform. Carrots sticks are for donkeys. Treat people like adults watch them succeed!
We need lots of policies controls because people cant be trusted. Why would I work among people I dont trust? We solve problems in context.
  • Managing Through Trust vs. Fear, a Human
    Workplace E-Workbook by Liz Ryan

  • During economic downturns most companies focus on
    keeping employees with good attendance even
    though their work is substandard.
  • This seems to be a better alternative to firing
    the employee and waiting days, weeks or months to
  • Some bosses are encouraging young workers to buy
    a new car, boat or other expensive item knowing
    they would have to keep their job to make the

Beware Jerk Bosses
  • Since 2003, 24 states have introduced legislation
    on workplace bullying, however no laws have
    been enacted
  • 9 states with 12 bills active as of 3/25/13
  • 37 of U.S. workers report they were a bully
    victim 12 have witnessed workplace bullying
  • Verbal attacks from supervisors are generating
    six figure settlements
  • Four times more complaints than all forms of
    harassment combined
  • According to the Workplace Bullying Institute

Transitioning From a Fear-Based Workplace10
Early Signs of a Fear-Based Workplace
  • Appearances are everything
  • Staying longer than boss
  • Worrying less about quality of work than how
    theyre perceived
  • 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

Transitioning From a Fear-Based Workplace
(cont.)10 Early Signs of a Fear-Based Workplace
  • 3. Distrust rules
  • Off the record conversations
  • Coded messages
  • Back alley meetings
  • Backstabbers thriveWould this be your knife in
    my back?
  • Your failure is my success
  • 4. Numbers rule
  • Total obsession w/ metrics
  • Employee is sum of numeric goals
  • Record profits and now cutting back on
    perkscoffee, etc.
  • Stock price vs. People price
  • 5. Too many workplace policies
  • Overdependence of rules vs. common sense
  • Lengthy, tedious policies
  • Ordering supplies, scheduling a business trip or
    vacation day

Transitioning From a Fear-Based Workplace
(cont.)10 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 ideasNo Brainstorming Allowed!
  • 7. Information is restricted
  • Information leads to success
  • Lack of transparency
  • Knowledge Power
  • Destroys trust

Transitioning From a Fear-Based Workplace
(cont.)10 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
    comicalThe Office
  • Focuses on keeping ones head down, taking no
    risks and sucking up to anyone in management

Transitioning From a Fear-Based Workplace
(cont.)10 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, stop
    whining and get back to work
  • Leadership is based on keeping employees in the
  • Major gap between management and employees

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

Critical Retention Mistake 3
  • Confusing Employee Engagement with Employee

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

3 Buckets of Employee Engagement - N. Davis,
Editor, HR Magazine - G. Sherrill, VP HR,
  • 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 the 17 hanging around your 29?
  • Disengagement costs U.S. economy 300B in lost
    productivity annually.

6 Essentials for World Class Employee Engagement
  • People
  • Senior leaders who excel at
  • Listening
  • Knowing and cherishing relationship with
  • Outstanding communication
  • Work
  • Providing resources for employees to
  • Full Service Recognition
  • Competitive pay
  • Recognition for each generation
  • One size does not fit all
  • Opportunities
  • Succession planning
  • Training
  • Career development

6 Essentials for World Class Employee Engagement
  • 5. Quality of Life Issues
  • Targeted benefits
  • Flex schedules
  • 6. Company Culture
  • Live your practices
  • Diversity
  • Company reputation
  • Performance management
  • Every employee must understand
  • How their job impacts organizations success

Employees First and Customers Second - Vineet
Nayar HCL Technologies
  • Key is holding management equally accountable to
  • Live in a world of democratic form of government
  • BUT
  • Autocratic nature of business

Customer Service Focus Must Include Internal
  • Employee first, Customers second
  • Satisfied employees display better customer

How Not To Engage Your Employees
  • Company President
  • Not listening to employees
  • Hires a 100K consultant
  • Consultant listens to employees
  • Makes same recommendations
  • Not embracing 50-50 meetings
  • 50 informing
  • 50 listening

Employees Stay Because of Things They Get
Uniquely From You
  • Write down 2-3 employees in your company who are
    critical to your success
  • Write answers to these questions for each
  • Could this employee leave you for a better job?
  • Has the employee ever considered looking
  • Now write down reasons you feel they have stayed
  • Tangibleshift, schedules
  • Intangiblenew skills, good supervisor

Critical Retention Mistake 4
  • Not Supporting a Multi-Generational Friendly

Traditionalists (Veterans)
  • Born before 1945
  • Long term careers
  • Loyal
  • Tech-challenged
  • Like structure
  • Respect authority
  • Law order
  • Hard workmax effort
  • Duty before pleasure
  • Honor

Baby Boomers
  • Born 1945-1964
  • Motivated by position, perks
  • and prestige
  • Competitive
  • Goal-oriented equate work
  • position with self-worth
  • Independent
  • Prefer to meet face-to-face
  • Believe you have to pay your dues
  • to get ahead in the workplace

Generation X
  • Born 1965-1980
  • Technologically savvy
  • Like informality
  • Learn quickly
  • Work/life balance
  • Embrace diversity
  • Like to work independently
  • Like casual work environment
  • Short attention spans

Generation Y (Millennials)
  • Born after 1980
  • Communicate through
  • texting, social networking,
  • email
  • Family-centric
  • Embrace diversity
  • Expect to advance quickly
  • Attention craving
  • Participation vs.
  • accomplishments
  • Good at multitasking

Major Increase in Employment Replacing Exiting
1 Personal Financial Advisors
2 Dental Hygienists
3 Civil Engineers
4 Market Research Analysts
5 Computer Systems Analysts
6 Physicians and Surgeons
7 Computer Appl. Software Engrs.
8 Management Analysts
9 Accountants and Auditors
10 Registered Nurses
Top Job Opportunities for Next 10 Years
The best paying, fastest growing jobs will grow
up around one of the richest and fastest growing
segments of the population the retiring Baby
24/7 Wall St.
Generational Expectations of Succession Planning
Traditionalists My dedication and service have been rewarded.
Baby Boomer Its about time! Ive paid my dues.
Gen X What do you mean I cant be promoted yet? I have delivered the results for which you asked.
Gen Y Whats my next career move? Ive been here for 12 months and havent been promoted yet.
How Generations View Change
Traditionalists Boomers Gen Xers Gen Ys
Somethings Wrong Caution Potential Opportunity Improvement
Using Social Media to Engage Workers
  • Gen Y will make up 36 of U.S. workforce by 2014
    46 by 2020
  • Opportunities for career progression
  • Opportunities for personal development
  • Collaborative work environment
  • Flatter them motivate them
  • Employers must embrace social media to enhance
    learning opportunities

Washington Post Survey3400 SurveyedEmployee
Retention Desires
1 Telecommuting 548 16
2 Educational Assistance 396 11.6
3 Flextime 379 11.1
4 Benefits 375 11
5 Bonuses 370 10.8
6 Fitness 357 10.5
7 Money 334 9.8
8 Other Perks 302 8.9
9 Time Off 227 6.7
Critical Retention Mistake 5
  • Not Holding Supervisors Accountable for Retention

Hold Supervisors Accountable for Achieving
Retention Goals
  • All levels of supervisors should have retention
  • Should be weighted same as productivity, safety,
    other goals
  • Talent Keepers recent survey
  • Only 14 supervisors have retention goals

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?

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

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

Supervisors Build Unique Relationships That Drive
  • 1 factor in retaining employees is immediate
  • 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

Supervisors Build Unique Relationships That Drive
Retention (cont.)
  • Yahoo Hot Jobs Survey
  • 70 of employees surveyed were interested in
    getting a new job due to dislike of boss
  • Florida State University study on supervisors
  • Failed to keep promises (39)
  • Failed to give credit when due (37)
  • Gave silent treatment to employees (31)
  • Made negative comments about employees to other
    employees (27)

What Employees Seek from Leaders
  • Trustworthiness 79
  • Cares about others well being 67
  • Encourages development of talent in the
    organization 56
  • Highly visible to employees 42
  • Manages financial performance successfully 42

Treating Employees Fairly Requires
  1. Fair distribution of rewards
  2. Heightened awareness of interpersonal
  3. Involving employees in decision making
  4. Offering opportunities to question decisions

Develop Supervisors to Build Trust with Teams
  • According to 80 of employee surveys, TRUST is
    the most important factor employees seek from
  • Relationships lead to
  • Trust leads to
  • Information leads to
  • Success

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

Behaviors of a Non-Trusted Supervisor (cont.)
  • Fewer individual meetings
  • Group and one-on-one
  • Meetings cut short
  • Tight agenda
  • Meetings postponed/cancelled
  • Employee survey scores nose dive
  • Production suffers
  • Productivity declines
  • Blame game
  • No accountability
  • Increase in turnover

Turnover Retention
Traditional Thinking Progressive Thinking
Most important supervisory skills for retention communication, feedback, coaching Supervisors who cannot build trust have little credibility regardless of other skills
To reach their positions, supervisors/managers have already learned their trust skills Some supervisors are trustworthy and some are not
  • Trust begins with relationships
  • Only one chance for making a good first impression

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
Traditional Thinking Progressive Thinking
Supervisors cannot control all reasons employees leave Like sales supervisors strongly influence results
Pay other policies are outside supervisors control Supervisor can impact pay decisions
Supervisor wont fire poor performers to pad retention numbers Manage supervisors towards right decisions
Supervisors are a small part of a big problem Supervisor takes ownership of team
A Great Retention Story
  • Who was your best boss?
  • Why?
  • Vice President of HR
  • Good communicator
  • Held me accountable
  • Not afraid to offer praise and/or criticism
  • Became a good listener
  • Relationship builder
  • Trustworthydid what he said he would do
  • Good sense of humor
  • Supervisors build relationships based on trust

Critical Retention Mistake 6
  • Not Narrowing the Front Door to Close the Back

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

Most Turnover Occurs Within 90 Days
  • Set retention goals
  • 90 days
  • Annual
  • Adding a few months to Average Length of Service
    can increase ROI tremendously
  • Doubling length of service cuts turnover in half
  • Do not classify the employee who quit as a slacker

Increasing Retention Involves Improving Employer
  • 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

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
  • For those about to Rock, we recruit you
  • Kick a service, served fresh daily
  • Rock stars wanted, come perform for a packed

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

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

Stay Interviews (cont.)
  • Broaden employees awareness
  • What do you look forward to as you come to work
    each day?
  • Which parts of your job are most enjoyable?
  • Which parts of your job are the most challenging?
  • What are you learning here and what else do you
    want to learn?
  • How do you like the people you work with?

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 when they began the job

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

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

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

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
  • Schedule applicant to meet with high performance

  • 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

Narrow the Front Door to Close the Back Door
Traditional Thinking Progressive Thinking
We source all employees who meet our qualifications We take extra effort to source older applicants because they stay longer
We pay good money for employee referrals We market our employee referral program to meet employees needs
We give applicants a tour We have a formal job preview program
Encourage Employee Embeddedness (Is that a word?)
  • Provide mentors
  • Design work in teams
  • Foster team cohesiveness
  • Encourage employee referrals
  • Provide clear socialization and communication
    about the companys values and culture
  • Provide financial incentives based on tenure
  • Provide unique incentives that may not be common

Express Employment Professionals Wishes You Great
Retention Success
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