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Retaining Employees in a Revolving Door World posted on Tuesday, 04 November 2008

Attrition is expensive. Retaining your top talent during times of upheaval will position your company to weather the storm.

“Our people are our greatest asset!”
How many of our organizations have something similar to this statement within their mission statement or in some other corporate document? How many of us would say the day-to-day business practices support this claim?

The reality is that most organizations would agree with this statement. On some level they realize that it is the people who do the work. The quality of the employees they hire and maintain determines the quality of output. But often, particularly in challenging economic times, employers can lose sight of the direct correlation between employee retention and bottom line results.

How critical is retention? According to a recent study conducted by Spherion Emerging Workforce:

• 31% of all employees are currently looking for a job. Even in this economy, many employees are choosing to be proactive and are looking for other opportunities.

• 48% of technology workers feel confident in their ability to find a new job.

• Less than 44% of employees feel their organizations are actively trying to retain them.

• When asked if their companies viewed employees as “an asset to be developed or a cost to be reduced”, the majority responded “a cost to be reduced,” an especially telling viewpoint when employees are bombarded on a daily basis with gloom and doom media reports about the economy.

Are we actually pushing our employees out the door, rather than focusing on retaining them? Data suggests employees don’t change jobs for salary increases as much as we may think – the seed that leads to leaving usually is planted in the soil of dissatisfaction – factors such as poor job/talent fit, a shortage of appreciation and recognition, or a disconnect between individual accomplishments and the organization’s strategy. Why should we care about declining job satisfaction? Because happy employees are effective employees – they are more productive and more efficient. They spend less time gossiping, complaining and job hunting on your dime.

Previously, professional audit firms assessed company profitability in the typical manner: assets, liabilities, revenues and expenses. Today they measure value in a much more granular way, looking at assets in terms of financial, physical, customer and employee. Managers use to regularly maintain tangible assets such as machinery and equipment. In this new reality they have to maintain employee assets. Ken Blanchard, American author and management expert, coined the term ‘The Triple Bottom Line’. Rather than focusing on profits alone, companies should measure the bottom line in relation to how well they are doing at being the Provider of Choice, the Employer of Choice and the Investment of Choice. Focusing on one over the other doesn’t give an accurate view of the viability and success of the organization. When companies have streamlined operations to be as lean as possible, improving our behavioral competencies will give us a competitive edge by retaining talent and thus enhancing knowledge and productivity.

New Competencies for a New Workplace
The single greatest reason for leaving cited on employee exit surveys is a poor relationship with their immediate manager or supervisor. Enlightened organizations know that strong people skills will determine an organization’s success. Hands-on, relational leadership will be the key differentiator, as the changing demographics, and economics, of the workforce require a new style of management.

So what are these new workplace competencies? Let’s consider two:

• Managers need to be relationship builders – take the time to understand what motivates our employees. When we consider today’s diverse workplace in terms of age demographics alone, the need for a deeper awareness of those we lead is evident. Consider your organization’s rewards mechanisms – what motivates a baby-boomer may not be as attractive to the GenX’er. Could your management style use a little “flexing” to meet the needs of a diverse workplace?

• Managers need to become better team-builders. Poorly managed workgroups, where morale is low, is the key reason for low productivity and profitability, as well as high turnover. Managers spend a disproportionate amount of time putting out fires, leading to situations where projects are completed late and of poor quality, and the organization becomes 44% less profitable. Building better teams comes back to that relationship thing – putting the right people together, getting them rallied around a common goal, then maintaining a culture that encourages creativity and productivity.

One-size-fits all management is a thing of the past. Organizations that are able to clearly see how relationships, culture and communication have a direct impact on employee retention, productivity and financial performance will prove among the most successful in the coming years.

In two weeks, part two of this article will spell out specific next steps on how to retain your employees in a revolving door world.

Pattie Vargas, co-founder of the San Diego-based career transition services organization NextWork™, and CPO with CUSTOMatrix™, Inc, utilizes her vast experience in the executive/management/team development industry to help individuals identify their personal strengths to gain clarity on how to achieve career fulfillment and effective results. She is the author of Extreme Project Manager Makeover, practical tips for managers. For more information on the services that NextWork provides, call (760) 420-8444 or visit www.nextworkservices.com.

Posted by Pattie Vargas