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Keeping Top Talent: Employee Retention Strategies

What can managers do to minimize the chances of losing  valued employees and reduce employee attrition levels? Should any action be taken or is attrition just part of the environment? Here’s nine ways strong leaders work to include employee retention strategies as a part of their operations plans.

In the short term, the unexpected loss of valued employees reduces the likelihood of goal achievement and negatively influences productivity and work group morale. Long term, attrition significantly diminishes an organization’s ability to maintain its competitive edge, intellectual capital, sales, profitability, and market share.

The cost of attrition to an organization in terms of dollars can be significant and that cost grows as the loss affects senior staff. Garter forecasts 2010 attrition levels for technology companies to be 22%. The report estimates that staff turnover costs range from 50% to 150% of annual salary depending on the role and level of seniority. So, using round numbers, in a company with 250 employees earning an average annual salary of $50,000 each, and using an expected staff attrition rate of 22%, the cost of turnover for that company would be more than $3 million per year. Furthermore, if that same company had annual revenues of $30 million and a profit margin of 12%, staff attrition would represent 10% of total revenues – and 85% of profits.

It is clear from these numbers that the development of effective staff retention strategies should be high on the agenda for every organizational leader.
So, How Do You Keep Employees Happy And Motivated?

A proactive approach by all managers can enable positive and immediate retention of the talent pool. Following are suggestions to help leaders at every level keep employees happy, motivated and recognized.

For organizational leaders:

  • Create a Retention Strategy Plan- Identify concerns and elicit behavioral feedback from direct reports. This involves not only identifying corporate goals but also repeatedly requesting feedback on employee satisfaction, performance, and expectations. This data will help drive an actionable plan and time line.   
  • Perform an Attrition Risk Analysis- Identify top performers who may be at risk of leaving. From your surveys and direct conversations quantify those who are most likely to leave and implement targeted plans to either retain or replace them. Your attrition risk analysis should include the same weighted questions and identifiers for employees at all levels. These may vary from company to company but can include drivers such as: a) I am provided with opportunities to increase my skills b) My manager tells me when I have done a good job and c) I am appropriately involved in decisions that affect my work
  • Identify the areas that will have the biggest effect to a particular employee’s departure. Would that loss directly impact a particular customer, overall sales, the release of a product, or general moral? Determine an action plan to mitigate these issues before they occur.

For all managers:

  • Listen to your people – make your employees feel you are interested in them personally. Use individual or group meetings to gain the insights and information to help you plan your retention strategy around areas most important and relevant to your staff
  • Reward and Recognize – build your employees’ esteem. Show them you value their opinion and ideas and that you’re watching their performance. Sometimes a simple monthly ‘Star Performer’ Award handed out by a Divisional Manager in front of co-workers can have a far greater impact on motivation and retention than any financial reward
  • Career development – craft career development planning strategies for individual employees that align with each employee’s needs and desire for future growth. It may mean keeping certifications up to date, sending employees to seminars, or just providing subscriptions to magazines and journals. Whatever the effort you make to help this person’s career it will long be remembered
  • Provide challenges – employees should be given new job assignments to keep them alert and challenged. What better reason to stay with a company than to snare a new job or project assignment? Providing employees with challenge and excitement can encourage them to stay; they won’t want to risk missing a good opportunity
  • Mentors – partner inexperienced and experienced workers together so both can benefit from the other person’s knowledge. The experienced worker may impart technical skills, for example, while the new person may bring social/cultural lessons to the relationship.
  • Note that none of these examples focus on compensation. McKinsey and other recent research confirms what management gurus have maintained for decades: as long as salary is in the general range for a particular role, most employees will not consider it a deciding factor in either job satisfaction or as reason to move on. Often perks can take the place of a significant increase in salary such as assistance with child care, gym memberships, cell phone plans or work from home policies.Results
    Improved retention ratios, continuity of productivity, and increased employee morale and commitment—these results go straight to your bottom line and translate into increased profitability. Often, merely the act of these exercises will affect morale and retention by showing employees that they matter.You can’t achieve your goals if you can’t keep your people. While one short article can’t detail all of items to be taken into account when considering retention policies, the above should provide focus and direction for organizations in every industry.

 

Until next time,

Crowe Mead

www.betterleadershipblog.com

 

 

 

 

 

 

Crowe Mead

www.betterleadershipblog.com

 

 

 

Posted on by Crowe Mead in Leadership, Management, Productivity

4 Responses to Keeping Top Talent: Employee Retention Strategies

  1. Ken Davis

    Thanks for an inspiring article. It’s nice to see someone promoting the “how to” instead of just the “why.”

    I check your site almost daily. Keep up the good work!

  2. K. Kearns

    Hi Crowe! Glad to see you published in last months newsletter! Want to do a regular column?

  3. Michael A.

    It’s about time someone starting focusing on keeping people instead of replacing churn. Knowledge loss through attrition is one of the leading factors in loss of innovation and competitive edge.

  4. Anon

    Great article and right on the spot.

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