For a while now I have done research into what people within HR and Businesses believe by retention. The following statement summarises what the average view is:
Employee retention is the effort by employers to encourage current employees to remain employed with the organisation. Programs such as learning and development, rewards, and recognition, succession planning and providing policies and practices that address their needs are examples of ways of retaining employees.
I believe that although this is true it also fails to properly define true retention. Retention is often overlooked regarding knowledge and skills. It is impossible for a business to retain the employees forever. Businesses need to ensure that their retention plans also achieve to retain knowledge and skills, with the right training plans and mentoring in place businesses should be able to ensure nothing is lost from the business.
Like most things with HR I believe it’s important to get the balance right, if done correctly the employee, mentor and business will benefit and become more competitive.
Given the economic pressures most businesses are facing at the moment most would assume that a retention strategy would be the last thing on a businesses mind? Yes most of the time the news is full of businesses going into administration and struggling, but I believe that a few businesses have proved how vital a retention strategy can be. Some businesses have had to adapted by reducing the number of hours each employee works to reduce overheads during the dip in sales. Working out the costs of redundancy and rehiring/training when the time is right it makes perfect businesses sense to look long term and have adaptive strategies to suit.
Recently I’ve come across some businesses that seem to approach different strategies altogether, with blinkers on and being driven by money they seem to make quick decisions that suit their needs that month. A month or so later the business is trying to fix the issue by bringing in a consultant to bridge the gap! Why pay more money and have to try and fill the gap of skills lost when you could better plan, not only long term does it save money but it shows to your employees that you won’t just terminate their contracts as a quick solution. Working with your staff and together to solve business issues will lead them to feel empowered and more productive.
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.
The new pay code for city bankers is featured regularly at the moment; even I have mentioned it before in my blogs. The argument against the code is generally that it will drive away talent, but will it really? Other business sectors have high flying executives that get bonuses, they attract the elite or are very talented.
Retention is not just about money, it takes a lot more to develop a truly complete package than just a monitory reward. Big rewards do work over a year but developed over a long term i.e. 5 years there are plenty of other things that can be included. Job satisfaction is another away of retaining staff, the banking industry is well known for being stressful taking some stress out of the bankers role might appeal to some.
It’s all about building the complete retention package that works for both the employee and employer.
Whats the difference in a well organised office?
Will answer the question soon!
Knowledge Banks are an ideal way of coping with the major issue of capturing the vital knowledge of your experienced staff. We are experiencing the start of a problem of an aging workforce and a skills shortage issue with younger potential employees.
I believe that utilising Knowledge Banks and working directly with the education system to guarantee education is relevant, using your experienced employees to bridge the gap solves many problems in a cost affective and efficient way.
FULL ARTICLE COMING SOON!
A hot topic currently in the news is the public sector pay schemes.
In the public sector pay increases are around 3-4 % on average across the sector, which is above the rate of inflation 2.1% and inline with the “experts, true” rate of inflation, 3.9% but is it enough?
Private sector businesses seem to recognise that retention amongst their best employees and pay increases occur and reflect the efforts. You make the company money and they will pay you accordingly! The average pay increase in this sector is around 5-10%.
Public sector businesses have seen pay increases of around 2.9%, however some believe the true value to be lower. Public sector businesses have more restrictions and don’t have the advantages of operating to make a profit. I believe this to be the main reason why pay increases are limited. It is difficult to obtain authorisation for pay increases in private companies, never mind a new pay scheme that has to be passed by government.
In my opinion private sector businesses run to make profit, thus it is sensible to invest in the assets that make you your profits. The main and most common retention technique involves pay increases, but where private sector businesses excel the most is with putting together a bigger overall salary package through extra benefits, bonuses and training and development to increase retention.
Private sector businesses tend to have higher and bigger pay bands, yet the Public sector businesses are the soul of the nation, teachers, nurses and police, shouldn’t steps be taken to increase their pay? They might not make some shareholders money, but support the infrastructure and economy private sector workers can be productive at work.
Due to the skills and necessary drive to increase the retention within the Public sector, the basics of a good salary structure that reflects the true benefits and demands of the employee in that job should be in place. Businesses should implement retention techniques to keep the skills, knowledge and best practices within the organisation. If pay is an issue why can’t experienced experts within the field be offered “ Advisor/Consultancy/Coaches/Mentors” roles to train and pass on knowledge before you cannot retain them any longer?