Firm Advice on Retention

1
Firm Adviceon Retention

• Retaining Talented People Through Total
  Compensation Strategies

2
Author

• Dennis Doverspike
• Center for Organizational Research
• University of Akron
• Akron OH 44325-4301
• www.uakron.edu/cor
• dd1_at_uakron.edu
• 330-972-8372

3
Turnover The Problem

• One in six people will leave their job during the
  year.
• Probably higher in State of Georgia

4
Turnover The Problem (cont)

• One recent survey of U.S. workers found that 34
  percent of respondents were likely to leave their
  jobs once the economy improved.
• In an August 2003 study by Accenture, 48 percent
  of U.S. middle managers surveyed said they were
  looking for another job or planned to do so when
  the economy recovered.

5
Turnover The Problem (cont)

• Only twenty percent of all U.S. employees want to
  be with their current employer in two years.
• Over half expect to be in a new job within five
  years.
• Turnover rate about 17, 1 in 6 per year, for a
  year.
• Varies lower in public sector

6
In Public Sector Higher in Some Areas

• Teachers 25
• Teachers After 5 years 50
• (Przygocki, 2004)

7
Turnover - Nutshell

• So 1 in 6 gone in year
• 50 in 5 years
• May get even more extreme around 2008 because of
  increase in retirements

8
Why do you stay?

• Given all that why do you stay in your job?
• What are the 3 reasons you stay in your job?

9
National Data Main Reasons for Employee Turnover
(Turnover not Staying)

• Career opportunities (78)
• Dissatisfaction with salary and benefits (65)
• Poor management (21)
• But career opportunities are difficult as
  organizations flatten.
• Increasing salaries and benefits are too
  expensive.
• Thus organizations turn to
• Management
• Leadership
• Communication

10
Purpose of Talk

• Retaining talent requires strategies aimed at
  total compensation and the total person.
• In the past, the HR person has often been left
  out of retention planning.
• The purpose of this presentation will be to look
  at how HR, through total compensation strategies,
  can be a partner in developing solutions to
  turnover problems.

11
5 Main Areas We Will Cover

• Changing the three myths that hold us back
• The three basic principles of retention
• The types of turnover
• Identifying the causes of turnover (including
  tools for identifying turnover)
• Public Sector Solutions
• Turnover
• Retention

12
In Terms of the Process

• Change our attitudes toward turnover
• Changing myths
• Basic principles
• Collect data
• Identifying causes
• Determine reasons for turnover
• Types of turnover
• Set Goals
• Implement strategies
• Organizational interventions
• Evaluate progress toward goals
• Revise strategies

13
5 Main Areas We Will Cover

• Changing the three myths that hold us back
• The three basic principles of retention
• The types of turnover
• Identifying the causes of turnover (including
  tools for identifying turnover)
• Organizational level solutions

14
Dispel 3 Basic Myths -Myth Number One

• Myth Top level executives and HR (Human
  Resources) departments spend large amounts of
  time, effort, and money trying to figure out how
  to keep people from leaving.
• Reality Top level executives and HR departments
  appear to study turnover data and figures
  primarily as a way of planning for future
  employment needs and not for the purpose of
  reducing turnover.
• Reality Primarily to determine how many people
  they will have to replace and what it will cost
  them.

15
Dispel 3 Basic Myths Number 2

• Myth HR has nothing to do with retention.
• Reality unfortunately often seems to be true.
• How can HR people in organizations, private or
  public, not be involved in retention? That could
  only be true if your organization is simply not
  interested in retention.
• Change in Attitude Lets say right away that
  is false. HR must have a place at the table when
  it comes to retention. Everyone in the
  organization must play an active role in
  retention, including HR.

16
Dispel 3 Basic Myths Number 3

• Myth We should be an employer of choice because
  it will make money or save money?
• Reality It is nice to say I want to be an
  employer of choice. But everyone can say that.
  You have to back it up. . . So just saying it
  or putting it in a mission statement is not
  enough. It must be backed up by strategic
  action, by policies, by communication and by
  leadership.

17
5 Main Areas We Will Cover

• Changing the three myths that hold us back
• The three basic principles of retention
• The types of turnover
• Identifying the causes of turnover (including
  tools for identifying turnover)
• Organizational level solutions

18
3 Basic Principles of Retention - One

• Give them what they want.
• Two factors are way up there (especially in
  leaving)
• Money
• Careers
• Problem whether organization has much control
  over these factors.
• Solution Make people happy in other ways.

19
3 Basic Principles of Retention - Two

• The Golden Rule
• Treat people right
• Job satisfaction - Affirmation
• Communication
• Leadership
• Trust follows from communication and leadership

20
3 Basic Principles of Retention - 3

• Treat the whole person.
• Organization and job fit
• Family and friends (work-life balance)
• Career
• Community

21
5 Main Areas We Will Cover

• Changing the three myths that hold us back
• The three basic principles of retention
• The types of turnover
• Identifying the causes of turnover (including
  tools for identifying turnover)
• Organizational level solutions

22
Turnover Understanding Turnover More Myths

• Yes or no? - People leave because they are
  dissatisfied with their jobs?

23
Turnover Understanding Turnover More Myths

• Yes or no? - People leave because they are
  dissatisfied with their jobs?
• Yes but not always. Some people may leave who
  are very satisfied.

24
Turnover Understanding Turnover More Myths

• Yes or no? - People leave because they are
  dissatisfied with their jobs?
• Yes but not always. Some people may leave who
  are very satisfied.
• Yes or no? Staying is the opposite of leaving
  Retention is the opposite of turnover.

25
Turnover Understanding Turnover More Myths

• Yes or no? - People leave because they are
  dissatisfied with their jobs?
• Yes but not always. Some people may leave who
  are very satisfied.
• Yes or no? Staying is the opposite of leaving
  Retention is the opposite of turnover.
• No the factors that lead to staying seem to be
  different from the factors that lead to leaving.
  And factors that lead to recruiting are different
  from the factors that lead to retention.

26
Turnover Understanding Turnover

• Yes or no? Money makes people stay.

27
Turnover Understanding Turnover

• Yes or no? Money makes people stay.
• No money is important but does not make people
  stay. Does seem to make people leave.

28
Turnover Understanding Turnover

• Yes or no? Money makes people stay.
• No money is important but does not make people
  stay. Does seem to make people leave.
• Yes or no? - Factors that lead to retention are
  same for all employees.

29
Turnover Understanding Turnover

• Yes or no? Money makes people stay.
• No money is important but does not make people
  stay. Does seem to make people leave.
• Yes or no? - Factors that lead to retention are
  same for all employees.
• No women seem to leave or stay for much
  different reasons than men. Women more likely to
  be influenced by work-family conflicts.

30
Different Types of Turnover

• Traditional
• Function Dysfunctional
• Voluntary Involuntary
• New Classification Next Slide

31
5 Types of Turnover (Based on Mitchell et al.,
2001)

• Forced Leave
• Forced out
• Layoff
• Pre-planned Leave (5)
• Sudden Event - Shock (6)
• Satisfied - Better Offer (52)
• Dissatisfied (37)

32
5 Types of Turnover (Based on Mitchell et al.,
2001)

• Forced Leave
• Forced out
• Layoff
• Pre-planned Leave (5)
• Sudden Event - Shock (6)
• Satisfied - Better Offer (52)
• Dissatisfied (37)

33
Pre-planned Career Leave (5)

• Probably higher if you include retirements and
  pregnancies as pre-planned career leaves
• Person planned to leave the job at a certain
  point
• Uses it for training
• Internship
• Seasonal
• Work while in school

34
5 Types of Turnover (Based on Mitchell et al.,
2001)

• Forced Leave
• Forced out
• Layoff
• Pre-planned Leave (5)
• Sudden Event - Shock (6)
• Satisfied - Better Offer (52)
• Dissatisfied (37)

35
Sudden Event (Shock, 6)

• Just leave no other job
• Non-job related
• Spouse relocation
• Pregnancy
• Car breaks down
• Illness
• Sudden event at work
• Takeover
• New boss
• Missed promotion

36
5 Types of Turnover (Based on Mitchell et al.,
2001)

• Forced Leave
• Forced out
• Layoff
• Pre-planned Leave (5)
• Sudden Event - Shock (6)
• Satisfied - Better Offer (52)
• Dissatisfied (37)

37
Satisfied - Better Offer (52)

• Offer you cannot refuse
• Large group
• Satisfied
• But receive much better offer from someone else

38
5 Types of Turnover (Based on Mitchell et al.,
2001)

• Forced Leave
• Forced out
• Layoff
• Pre-planned Leave (5)
• Sudden Event - Shock (6)
• Satisfied - Better Offer (52)
• Dissatisfied (37)

39
Dissatisfied (37)

• Also a fairly large group
• Just cannot take it anymore
• Long term dissatisfaction
• Some have another job offer but some leave
  without a job offer (7)
• Very few left because of money
• Left because of general job dissatisfaction

40
Nutshells

• About 52 leave over money but were not
  dissatisfied
• 37 leave because of job dissatisfaction
• You need to identify
• The level of dissatisfaction among your employees
• What are potential shocks and what if anything
  can be done about them
• OK so how do we do that????

41
But Quick Comment on Identifying Talent

• Need to treat people as a whole and as
  individuals
• Yes, also important to understand differences
  between people
• Many ways to segment employees
• Talent
• High Performers
• Average Performers
• Low Performers
• All three are important

42
Total Retention

• Total Retention emphasize retention of
  employees regardless of talent level.
• Groups most prone to turnover are high and low
  performers.
• Three-prong approach (do you know who these
  people are?)
• 1. High Performers Talent retain
• 2. Average Performers the big middle retain
  and turn into high performers
• 3. Low or poor performers retain and turn into
  average performers (This may be the most
  difficult).

43
5 Main Areas We Will Cover

• Changing the three myths that hold us back
• The three basic principles of retention
• The types of turnover
• Identifying the causes of turnover (including
  tools for identifying turnover)
• Organizational level solutions

44
Identifying Turnover

• National surveys
• Local Data
• Exit interview
• Exit survey
• Retention surveys
• Retention interviews

45
Identifying Turnover

• National surveys
• Local Data
• Exit interview
• Exit survey
• Retention surveys
• Retention interviews

46
National Data

• Turnover rate around 17
• Government Rate around 1.2 per month or 14.4 per
  year
• For important occupations 50 over 5 years
• Quits (involuntary terminations) are about half
  of separations

47
Turnover Rate

• National Data Available from a number of sources
• Bureau of Labor Statistics
• http//www.bls.gov/jlt/home.htm

48
National Data on Public Sector
49
Strong Interest in Government Employment

• The U.S. Office of Personnel Management (OPM)
  found that by a nearly 6 to 1 ratio, the
  respondents preferred a job with the federal
  government (41 percent) over the private sector
  (7 percent).

50
Appealing Features of Government Employment

• Helping people and making a difference (85 of
  respondents)
• Having job security (80 of respondents),
• Having good pay and benefits (79 of
  respondents), and
• Serving your community and country (76 of
  respondents).

51
Presidential Management Fellows' Survey

• More than 9 out of 10 of the respondents
  indicated that they wanted to work for the
  federal government.
• More than half say a sense of patriotism attracts
  them to working in the federal service.
• There is almost unanimous belief that the federal
  government provides competitive benefits and
  opportunities for advancement.

52
Positive Factors of Public Sector

• Personnel Today survey of 2000 students
• Appeals to those interested in
• healthy work-life balance
• flexible work schedules
• social life
• higher job security

53
Identifying Turnover

• National surveys
• Local Data
• Exit interview
• Exit survey
• Retention surveys
• Retention interviews

54
(No Transcript)
55
(No Transcript)
56
(No Transcript)
57
Georgia

• High turnover in low grades
• High turnover in service occupations
• High turnover where this is high public contact

58
Identifying Turnover

• National surveys
• Local Data
• Exit interview
• Exit survey
• Retention surveys
• Retention interviews

59
Exit Interview

• Used by 88 of companies
• But research tends to suggest exit interview is
  of little value
• People just do not provide accurate information
  Use to identify shocks

60
Good Example of Exit Interview - Survey

• State of Connecticut
• Contact Martin Anderson
• http//www.das.state.ct.us/HR/Exit_Interview/

61
Sample Exit Interview

• See Appendix A

62
Identifying Turnover

• National surveys
• Local Data
• Exit interview
• Exit survey
• Retention surveys
• Retention interviews

63
Exit Survey

• Few companies do it
• Survey sent to employees after they have been
  gone from the organization for several months
• Often carried out by consultant

64
Identifying Turnover

• National surveys
• Local Data
• Exit interview
• Exit survey
• Retention surveys
• Retention interviews

65
Retention Surveys

• Attitude Surveys used for retention
• Basic idea simple
• Relatively few companies (less than 20) use
  attitude surveys for retention
• Not sure why you would use a specific retention
  survey I would just use attitude survey for
  retention purposes
• Example in Appendix B

66
Identifying Turnover

• National surveys
• Local Data
• Exit interview
• Exit survey
• Retention surveys
• Retention interviews

67
Retention or Stay Interviews

• Idea instead of asking people why they leave
  ask them why they stay
• Dont ask leavers why they are gone (exit
  interview)
• Ask people who stay why they stay (retention
  interview)

68
The Retention Interview (RI) How to Keep the
Horse in the Barn.

• Two RI Approaches
• 1) Long-Term Strategy to Manage/Minimize
  Turnover.
• 2) Urgent Fix.

69
As a Long-Term Strategy to Manage/Minimize
Turnover.

• Basically leadership or good management
• Formal retention conversations starting day 1 and
  every 2-3 months thereafter.
• Establish
• 1) What attracted individual to job
• 2) What motivates them within job
• 3) What is a job maker or job breaker

70
Long-Term Strategy to Manage/Minimize Turnover.
(cont.)

• Important Point Not just always content but also
  process.
• Process - Establish communication, trust and
  comfort with manager.
• Goal Employee will discuss thoughts of leaving
  early and manager can do something to prevent it.
• Goal Employee will let you know about shocks.

71
Second Use As an Urgent Fix

• Org. on the brink of disaster
• The Retention Interview used as part of an
  aggressive campaign to re-recruit the employee
• Example in Appendix C

72
Conclusion

• Use retention or stay interviews
• Not only source of information
• Method for introducing retention-related
  leadership

73
5 Main Areas We Will Cover

• Changing the three myths that hold us back
• The three basic principles of retention
• The types of turnover
• Identifying the causes of turnover (including
  tools for identifying turnover)
• Organizational level solutions

74
Rewards - Monetary

• To maximize retention
• Have a logical, fair system
• External equity
• Market surveys
• Justify market position
• Internal equity
• Logical grading system
• Fair system of raises
• Emphasize benefits (especially retirement aging
  of Baby Boomers and family friendly practices
  aging of Generation X)

75
Rewards Non Monetary

• Organizational Level Rewards
• Affirmation
• Effective leadership as a reward
• Communication as a reward

76
Leadership

• Probably most critical factor
• Leaders must be committed not just to performance
  but to people
• Leaders must be committed to organizations
  values
• Congruence between leaders values and
  organizations values
• Managers and HR must both serve as employee
  champions (Ulrich)
• Be visible and accessible
• Servant leadership
• LEADERS serve employees
• Participative - Emphasize a balance between
  performance and people
• Communicate about work (send positive messages)
• Help people deal with shocks and stress
• Identify and remove
• Abusive supervisors
• Those who do not share values

77
Leadership The Tough Part

• Not so easy what happens when high performing
  leaders are not committed to values or to people?

78
Communication

• Communication
• Listen
• Not just verbal or written communication
• Actions not just words
• Role of symbols and ceremony in communication
• Communication through culture

79
Public Sector as a Value

• A unique opportunity that public sector
  organizations have is to emphasize public service
  as a value.
• Surveys suggest public service is a major
  reason that people want to work in public sector.
• Helping people and making a difference
• Serving your community and country
• Sense of patriotism
• This is unique to public sector and it is a value
  that will retain people.
• Clearly this is important to people especially
  Generation 9-11

80
Questions to Ask?

• Do you emphasize public service in
  communications?
• Do your employees think of themselves as public
  servants?
• Does each employee know why what they are doing
  is important to the public service?
• Do they see how it related to the public good?
• Do they see themselves as heroes?

81
Increasing Satisfaction Customer Contact Jobs

• Reduce demands
• Reduce number of deadlines
• Reduce workloads (reduce lines)
• Set priorities
• Increase resources
• Increase employee control and autonomy
• Teach people to handle verbally abusive members
  of the public
• Provide workshops on dealing with stress.
• Treat psychological safety as being as important
  as physical safety

82
Low Grade Employees

• Look at basic survival needs and soft perks
• Transportation
• Housing
• Child care help
• Social work
• On site health clinics
• Food company lunch room
• Make sure income level is adequate
• Flexibility farming etc

83
Retention Checklist - Analysis

• Collection of data
• Do you study national turnover data?
• Do you collect your own data on turnover?
• Determine reasons for turnover
• Do you conduct exit interviews or surveys?
• Do you conduct retention attitude surveys or
  general attitude
• Surveys.
• Determine reasons for staying
• Do you conduct stay or retention interviews?
• Set Goals
• Do you set goals for reducing turnover overall in
  your organization?
• Do you set goals for reducing turnover in
  different job classes?
• Do you evaluate progress toward your goals on an
  annual basis?

84
Retention Checklist Intervention (Monetary)

• Pay
• Do you do some time of market analysis and
  justify your position?
• Do you do some type of internal analysis
  grading system?
• Do you have a fair system of raises?
• Do you offer competitive benefits?

85
Retention Checklist Interventions (Non-monetary)

• Leadership
• Do you evaluate and reward leaders based on their
  consistency with your values?
• Do you emphasize participative leadership?
• Communication
• Does top management communicate in an honest
  manner with all employees?
• Are all employees encouraged to communicate with
  top management?
• Are there concerns responded to?

86
Retention Checklist Interventions (Additional)

• Public Service
• Do you emphasize public service in
  communications?
• Does each employee know why what they are doing
  is important to the public service?
• Public Contact
• Do you have in place special programs for
  individuals in public contact jobs?
• Are you trying to reduce deadlines and workloads
  for these?

87
Retention Checklist - Additional

• Low Grade Jobs
• Do you offer transportation assistance?
• Do you offer housing assistance?
• Do you offer child care help?
• Do you offer health care?
• Are you sensitive to work-family issues?
• Do you offer flexible work schedules?