Bonuses, holiday days, office parties, and flexible working are many of the tools in a business owner’s arsenal revolve around rewarding employees for a job well done and motivating them to produce similarly stunning results in the future. But surely the leaders who dole out these types of perks are only focusing on half of the picture.
There are “two issues generally going on with employees at any given time: there are ‘shoves,’ things that demotivate people, and then there are ‘tugs,’ the things that motivate you, that tug at you to stay at the organisation,”. While these factors will differ for every employee, leaders often make the mistake of focusing on the motivators without adequately considering what rubs people the wrong way.
We often talk about retention and keeping people within a business, but during this period of slow growth are companies taking advantage of implementing “positive turnover” into their retention strategy?
What is “Positive turnover”?
In a Business setting, the goal of employers is usually to decrease employee turnover, thereby decreasing training costs, recruitment costs and loss of talent and organisational knowledge. By implementing lessons learned from key organisational behaviour concepts employers can improve retention rates and decrease the associated costs of high turnover. However, this isn’t always the case. Employers can seek “positive turnover” whereby they aim to maintain only those employees who they consider to be high performers.
A business needs to ensure that any attempts to implement “positive turnover” is done carefully, as if not done with the appropriate benchmarking criteria then it could become discriminatory to employees.
A lot of people carryout projects and work around retention and employers often spend a lot of time and money thinking up complicated business wide retention schemes. I am a believer that one of the best retention techniques a company can adopt is sitting down with employees once they know they are unhappy or thinking about leaving and being able to discuss the situation over. This gives a clear view of why the employee is making the decision.
Talking to staff on a one to one basis provides the opportunity to find out the issues but also resell the business to the employee whose view might have taken a negative turn over their time working at their current employers. It is only human nature to think that the grass is greener on the other side and conducting an exit interview or speaking with the employee before they have decided to leave might make them realise that they are in the best job for them at the current time.
The average daily commuting time has dropped to a 10 year low to 47.5 minutes. There are many reasons why the daily commute could have dropped but having employees living closer to their place of work has many benefits for both the business and employee. A lot of the time little decisions and pieces of information often get over looked when people seek new employment.
It is important for a solid retention strategy that all areas that could affect the employee’s decision are identified and investigated.
A dispute between Aer Lingus and its cabin crew over working hours has been resolved after the company agreed to more “family-friendly” rosters. The airline industry is a heavily regulated sector and recruiting new recruits to fill gaps if employees had chosen to leave and if the dispute had not been resolved would have come at a high price to the company. Retention is a very important issue within the airline sector, working with employees and hopefully being able to provide working rotas will help manage employee expectations through these difficult times, especially when employees know pay rises and other benefits will not necessary happen or have already had them capped.
Recently employees at Blackpool Council have agreed to a voluntary pay cut to reduce compulsory redundancy. The initial figures of compulsory redundancy was thought to be about 1000, but has now been reduced to under 400 due to the agreements from the staff. It is a good short term retention measure to keep hold of good employees but in the long term it will need to be closely managed and the employees rewarded for their help dealing with a difficult situation. Will it work in a real business environment long term? Employees are often willing to accept short term measures for the long term success of a business but if the business does not respond and recognise what staff have done it could turn into a potential major thorn in the side of the council.
Fingers crossed for staff at Blackpool Council that the pay cut works and gets them through this difficult time.
Paul Levett commercial director for SHL Group sent a letter to People Management commenting that he is very concerned that major UK employers have cut their graduate recruitment schemes. Paul states that graduate trainees are the future managers and leaders, brought in fresh and eager to learn. I am a graduate only graduating from university a few years ago, I agree with the statement but don’t think that it fits with all graduates. I know a lot of graduates who believe the time they spent at university warrants the graduate scheme and the schemes are commonly seen as a set fast track route to the top without much effort.
Paul also states that with business commentators starting to talk of “green shoots”, it is crucial that employers continue to invest in talent. I agree again with the statement but I don’t agree that graduates are the only people to be able to offer this, there are a lot of talented people who never go to university. I believe that graduate schemes should not exist and that there should be one common “fast/acceleration” route giving the employer the option to add employees that have been identified during employment or direct from school/collage. Having one talent identification scheme can also be linked easier to an affective retention strategy.
People Management featured an article within their Law At Work section on 27 August 2009 about rehiring redundant employees. The article was very interesting calling the employees “boomerang employees” and stating that many US companies are already rehiring employees previously made redundant. The article is quite positive about the benefits of doing such practices and that it works in the businesses favour during recessions through various quotes such as “Rehiring ex-staff can be a quick and sensible fix. They know the business, have the right skills and usually require only a basic refresher course to get back up to speed.” It all sounds promising but I think it is a horrible mistake to think this, as any future retention scheme will be very difficult to sell to the employees.
The employees will have a bad view of the company affecting the culture, they know that the company will hire and fire as needed for short term gains. The cost of making someone redundant and then hire them again will mean that the business has spent quite a bit of money when it might of been able to better plan its HR resources ; save time, money and giving employees a positive image of the employer.
Planning a retention strategy is not just about the short term, when devising schemes and planning other aspects of HR practices retention should always be in the back of the employers minds to make sure it does not get neglected and lead to a negative impacted on the business.
There are lots of articles surrounding this issue at the moment but are businesses really planning long term? Many businesses are pulling recruitment and looking to reduce employees hours but are there other ways of doing drastic money saving exercises? Yes there are, even the most affective industry is ignoring the blanket cost cutting exercises… the banking industry have published statements saying they will keep paying bonuses otherwise they will lose talent.
A recent article in the People Management magazine regarding The War on Talent report found that while a quarter of the 705 respondents have had to downsize, 97 per cent have consciously preserved their top talent. A further 18 per cent of firms are actually placing more emphasis on identifying, developing and retaining talent.
It is time that HR professionals show they can deliver what they preach, but helping an employee retain their job through this difficult period also means that they keep them when the recession is over and other businesses don’t tempt them way once the economy has recovered.
As previously mentioned the banking industry is openly stating they will keep paying bonuses despite making a loss and being bailed out by government. However, what if the publicly known retention strategy turns customers away for life? A true HR professional these days has to be aware that things they do affect the business directly, having no customers as a result of a public HR strategy has to be a bad move.
I personally feel that within the banking industry the HR professionals have not thought about the greater impact on the business, yes they will keep the top talent but they might not have any customers!
Could they not have altered their long term thinking and offered an “on hold” policy on the incentive scheme, which would then reward employees more in the future as a way of thanking them? Therefore, their retention strategy would be more affective because when the economy has recovered, their employees could possibly end up being greater rewarded and the business would regain customer support.
When we think of retention we need to remember we need a business to employ the employee.
We constantly hear on the news about redundancies at the moment, does this mean that businesses don’t have to worry about retention techniques because there will be more people to recruit from? Well I believe the opposite is true. Being able to keep your best employees and helping your employees to feel secure in their job will help your business to come out of the “recession” a much better business.
Some businesses might make some redundancies as a quick win solution for cutting costs but this will negatively affect the company in the long run. Good examples are what Vauxhall and other car companies have had to do. They are being open and honest with their employees and hopefully the employees will recognise this and in the long run it will benefit the company. Too many companies will terminate employees contract, but will find it more expensive to replace them in the long run and lose confidence in staff they keep and future potential employees.
Business is not about the quick win solutions!
Whats the difference in a well organised office?
Will answer the question soon!