Effective retention strategies: what works
With evidence that employee turnover is on the rise again, what do we really know about effective retention strategies? Not as much as we need to, but enough to realize that generic solutions are not the answer, according to presenters at a recent seminar.
The seminar discussed state-of-the-art research into retention strategies and also provided a case study of a large retail organisation.
Turnover: how big a problem?
Dr Louise Metcalf, from Macquarie University and Pax Leader Labs, quoted surveys by the Australian Human Resources Institute (AHRI) and Talent Drain that recorded labour turnover for all reasons (including redundancy and retirement) as increasing from 18% in 2008 to 25% in 2010. The rate varied widely between sectors in 2010 (eg 37% in Retail and 19% in Mining. Metcalf added that the overall cost of replacing and employee is increasing).
A general observation was that many employees have remained cautious about seeking other jobs because of recent memory of the global financial downturn of 2008‚ 2009, however, many of those employees have ‚ ’emotionally resigned’ from their jobs. Also, some employees who had wanted to retire have reluctantly decided to remain working for longer because the downturn reduced their superannuation entitlements and forced them to postpone their plans.
Theories of retention: not much help
Metcalf analysed various research studies into retention, but found the results to be inconclusive and not very helpful. She claimed this demonstrated that the issue of retention was much more complex than any generic solution is able to cope with.
Earlier analyses tended to be along the lines of‚ ‘it’s not us, it’s you’, with focus on issues such as job satisfaction, employee commitment and person versus organisation fit. Things have now moved the opposite way to‚ ‘it’s not you, it’s us’. This takes into account issues such as diversity, remuneration, group job satisfaction, organisation support, perceptions of procedural justice, alleviating work versus family conflict, career development, employment security, autonomy, union presence at the workplace and a learning (as distinct from training) focus. While it is true that successful attention to any of those factors can contribute positively towards retention, Metcalf said that this list is simply too big and too complex for a simple analysis. She claimed that so far there have not been enough studies of retention and most of those that have occurred have been too generalised to be of much value. Another problem is that researchers have tended to bundle groups of solutions together, again with inconclusive results.
So what might actually work?
Each organisation is unique and requires its own solution. The trouble with many commercially available tools such as surveys is that they do not take this into account and are too simplistic. For similar reasons, bench-marking is a flawed strategy.
Metcalf recommended the following approach instead:
- Focus on the full employment lifespan of each employee ‚ from induction to retirement ‚ and adjust your strategy and employer branding to suit the employee’s changing circumstances.
- To do so requires an intensive one-on-one approach to keep in touch with what is important to employees and why they choose to stay.
- Focus on your top talent employees, instead of employees across the board. They are the ones that it is most important to retain.
- Identify the factors in these key employees that both drive their performance and encourage them to stay.
- Identify the psychological contract with each key employee and then use your employer branding to manage their expectations.
To summarise, focus on the unique aspects of your organisation and each individual employee.
Caryn Katsikogianis, general manager HR ‚ Supermarkets, Woolworths, outlined the retention strategies of her employer, an organisation with 190,000 employees spread over 3000 work sites and with 2700 store managers.
Katsikogianis made the point that any retention policies and programs are only as effective as the managers who have to implement them; therefore, Woolworths makes it clear that talent development and retention are a management responsibility and not an HR one. Therefore, the focus is on building the capability of those managers.
Woolworths has adopted the following strategy:
- It identified the core leadership qualities as being humble, principled, responsible, purposeful, composed and open. Strategic qualities flowing from these are the need to be visionary, empowering, customer-centric, disciplined and collaborative.
- Managers need to understand the importance and contribution of high employee engagement, and the factors that affect it.
- A 360-degree feedback tool focuses on the leadership qualities and identifies what managers need to do about them.
- Forums and networks are arranged for new employees to meet each other. They are also supported by buddies and transitional coaches for their first 90 days.
- An online engagement survey of all employees is conducted, replacing previous regional ones. The first one (just completed) attracted a 40‚ ¨50% response rate.
- The point that managers must take responsibility for talent development and retention, not HR, is repeatedly reinforced.
- Executives have quarterly meetings with the CEO at which they are required to discuss their talent management initiatives, including what they have been doing and who (if anyone) they have lost.
- To make work more meaningful, Woolworths shows each employee how his/her job is linked to the organisation strategy, and what that strategy means for the individual.
- Opportunities for project work and relief work in higher positions (such as fill-ins for annual leave) are regularly provided.
- There is an emphasis on cross-divisional career paths, both to improve the career depth of employees and to emphasise that multiple career opportunities are available to them.
Further information: Article sourced from Workplace Info (02/08/2012) www.workplaceInfo.com.au – The seminar was conducted by the Australian Human Resources Institute (AHRI) in Sydney on 27 July 2012. More information is available from AHRI.