Does your company have a retention problem?
- Post By: Lucy James
Why is this a problem?
Hiring lots of great people is only worth doing if they stick around for long enough to have a decent ROI. High churn has a lot of impact: instability worries clients and colleagues alike; lost knowledge can’t be quickly replaced; your reputation as an employer suffers so future hiring is more difficult; it’s difficult for the business to grow without trusted long-term employees to try new things and so on. Now that you’ve got good people, how do you keep them?
What will happen if you get it right?
It’s pretty obvious that replacing people costs money. The benefit of keeping people longer isn’t just to bring down recruitment costs, though. A stable workforce is a happy workforce, and strategy can be built around trusted and loyal colleagues who know their way around the business and have allies who can help them to achieve far more than they would be able to do alone. Your EVP improves, which wid-ens your available candidate pool, and the quality of candidate that you hire improves too.
Have you recruited well?
Be honest. Is it the employee’s fault or the business’s? Has the company made rash promises during the hiring process that couldn’t be delivered? Was the in-terview process robust enough to assess properly? In theory, both candidates and hiring managers should know what they’re letting themselves in for, but we all put our best face on during the recruitment process. Looking back on people who’ve left quickly, was the person you got the same as the person you hired? If not, why not?
Why this happening?
The obvious place to start is compensation and ben-efits, but this probably isn’t the answer, unless you’re well below market rate. There are some massive brands who pay 60% percentile as a matter of principle, but these are destination employers that people want to work for just for coolness factor or because they’re at the cutting edge of their industry and offer kudos. People will work at Starbucks for almost nothing because they’d be socialising there anyway.
When you’ve looked at compensation, examine your employee base and look at what’s important to them. Your demographics should give you a clue about what they would value in an employer, whether it’s more holiday, a pool table, company nights out or better childcare arrangements.
Generally, though, it’s not about money. Many reports now underline that money comes about halfway down the list of important factors across all age groups, from Baby Boomers to Millennials. There’s a saying that people join a company and leave a boss. So have a look at where churn is highest and dig around, and have the nerve to exit toxic managers.
If turnover is evenly high over a sustained period of a couple of years, it’s worth getting on to the oper-ational floor and listening to the atmosphere of the office. Try and get to grips with the culture of the business, not just how the top floor feels. Has there been significant change recently – a new MD, a company buy-out, new projects starting or closing, for example?
1. Find out what the market pays people in your sector and make sure you’re at least on a par. Get the most fundamental of housekeeping issues right.
2. Create a benefits package that’s right for your employees. There are lots of companies who specialise in working this out, they’ll have some great ideas about new initiatives to try.
3. Work out where the biggest problems are and find out why. Have the confidence to deal with the cause of the problem, even if it’s difficult and awkward.
4. Address obvious concerns head-on. There’s no point ignoring rumours and murmuring. Call a conference and talk, if you’ve got people on the same site; get your managers to pass on a truthful message about company direction.
5. Look at your stats over the last few years and identify the areas that work better than others.
6. Get your assessment and selection piece working well.