Top Management Story

Writen by Pam Kennett

In the last five years, employee turnover has increased by more than 25 percent. Recent studies reveal that at any one time, one third of employees plan to resign within the next two years. Successive surveys in the UK of employee turnover show that in retailing, hotels and restaurants, call centers and other lower paid groups turnover is often in excess of 50% per annum.

Why is this happening?

Since the late 1980s when organizations began to downsize to reduce costs, employees got the message that everyone was expendable. When organizations cut back a little too much there were always other willing recruits to join. Other processes which historically reinforced the employee/employer 'contract', such as training and development and succession planning, were also cut back. The security of life time employment was gone and individuals learnt that 'making their own way' meant managing their own career first and foremost. This often meant leaving the organization to get ahead and today the most common reason people leave is to seek promotion outside the organization (53%).

What to do about it

No single retention strategy will work across a diverse organization as each group of employees will have different retention issues. For instance, clerical workers may well need to feel they are 'being treated with respect'. Management may be 'looking for opportunity for advancement'. Here are some guidelines:-

1. Manage entry into the organisation

A great deal of employee turnover consists of people resigning or being dismissed in the first few months of employment. Even if people stay for a year or more, they may well have decided to leave based on their first few weeks in the job. To aid retention, give prospective employees a realistic job preview at the recruitment stage. Don't overstate the requirements of the role but give a true representation - warts and all. During the first few critical weeks make line managers accountable for ensuring new joiners are taken through a well planned induction process.

2. Develop potential

It may be stating the obvious but high potential employees need opportunities to develop and stretch. New job assignments, cross functional moves, profit and loss responsibility, and a chance to lead a new business activity all send out the message that we value your input and are prepared to invest in your future. Organizations which drive their employees into the ground to deliver short term targets risk damage long term.

Maximise the impact of training by making sure it is relevant to the job otherwise employees will feel that they are wasting their time. Use training to expand experience and support forward promotion.

3. Communicate

This takes two forms. Research undertaken by the Hay Group shows that a major 'dissatisfier' which contributes to employee turnover is a lack of clarity about company direction and strategy. Therefore, to increase retention, make sure all managers in the business are communicating the company mission, vision and strategy at every possible opportunity.

Secondly, communication is two way. Ensure wherever possible that employees have a 'voice' to provide feedback back to the organization via discussion forums, attitude surveys and grievance systems. Where there is no opportunity to voice dissatisfaction, resigning feels like the only option.

4. Reward good management

Reward managers whose record at retaining people is good by including the measure in performance appraisals. Use competencies or other behavioral measures to provide feedback to managers who demonstrate good listening skills, excellent coaching and who give effective feedback. Train line managers in these skills before appointing or promoting them in to leadership roles

5. Tackle underperformance

Studies have shown that many people leave their jobs because they are unhappy with their boss. Individuals respect organizations that are prepared to tackle underperformance head on. Weed out marginal performers in the management ranks.

Finally, defend your organization against penetration by headhunters and others seeking to poach your staff. Keep internal email addresses confidential, train secretaries to spot calls from agencies and avoid giving them any useful information, refuse to do business with agencies who have poached your staff and enter into pacts with other employers not to poach one another's' staff.

Pam Kennett is a business consultant with more than 20 years experience working with organisations to help them understand the talent of their staff through the implementation of competency models. She has an MBA from City University Business School (London), is a Fellow of the Chartered Institute of Personnel and Development and is a registered member of the British Psychological Society.

She is the founder and Director of Chiswick Consulting Limited and can be contacted at +44 208747 1886 or http://www.chiswickconsulting.com

Pam welcomes any feedback on this or any of her other articles. Please contact her at pam@chiswickconsulting.com.