How to Retain TalentPosted in : HR Updates on 13 January 2016 Issues covered:
If you are looking for a focus for January which doesn’t involve staying away from the booze or high calorie foods, have a think about an extremely important ‘R’ word (that isn’t Resolution!).
The word is Retention!
The turnover of experienced and talented employees should very much be on your agenda in January (if it wasn’t before). It is one of the most costly and devastating issues employers can face and it tends to peak around now!
We summarise some key facts around this issue and some great advice shared by recruiters and experts in the field of Talent Management. December and January are peak months for job moves. Recruitment industry experts tell us that not only are they seeing an upsurge in recruitment, after many years of decline following the economic crisis, they can also see a distinct trend within the annual recruitment cycle in which, armed with some unspent budgets, many organisations search for new employees around November and December, with a view for a January start.
Active job seekers, as well as ‘warm passive talent’ (those who are open to talking to recruiters) find that December and January are months in which they are reflecting more on how happy they are at work and whether they want to make a new start for the year ahead.
In December, many find it easier to excuse themselves for an hour or two to attend interviews, in the mix of festive parties and shopping. Come January, many have already made the leap or are very advanced in their job search.
Why should we be concerned?
Retaining talent is a key function for HR. Some report that their organisations fail to understand the cause and effect link of failing to take preventative measures in time, or simply underestimate the cost of replacing and training up that talent. According to research by Oxford Economics, staff turnover costs UK business at least £4.13bn every year. Their research suggests that new employees take up to eight whole months to reach optimum productivity levels.
In case you need to add weight to your business case, consider also the costs per individual. The average cost associated with replacing a departing staff member is £30,614! This figure comprises two typical amounts – £5,433 for ‘logistics’, such as agency fees and advertising, and pay during the time when a new employee is yet to reach optimum productivity level, believed to be an average of 28 weeks at a cost of £25,182.
IT and other technology industry is most affected by high staff turnover. The overall sector figure is approximately £1.9bn per year. Workers take more than seven months to reach their peak, at a cost of £31,808.
Out of all the industries surveyed, the cheapest employees to hire are retail workers, costing an average of £20,114 over 23 weeks (and that is certainly not cheap!).
How likely is it that your talent will leave?
As mentioned above and according to the LinkedIn research, your potential leavers are made up of two groups, active job seekers and those who are open to discussion (the warm passive talent). Because the economy has improved over the past 4 years, more people are open to new opportunities. Both active job seekers and warm passive talent are up from 48% in 2011 to almost 60% today. That means that more than half of your staff may be open to moving on right now!
What causes people to consider leaving their employer?
LinkedIn published a report called ‘How and Why People Change Jobs’ based on a very large group of job switchers. The report shows that the number one reason cited is career advancement.
Unsurprisingly the top reasons cited change per sector. For example, in the retail sector a high proportion of people leave to achieve greater work-life balance. Overall the top three reasons given were:
- Lack of advancement opportunities
- Better compensation and benefits
- Unsatisfied with recognition and reward
The really interesting part to take note of in this research is that a whopping 43% of respondents (of 10,000+ recent job switchers) said they might have stayed at their previous employer if they had done something.
Whilst the LinkedIn research is helpful, we know there are other insights to this which are important. Marcus Buckingham and Curt Coffman famously said that people don’t leave jobs, they leave managers. They cite issues like constant re-organisation, lack of support and failure to recognise or appreciate peoples' work as key factors which turn people into active job seekers.
How then to retain your talent?
This is certainly not an easy problem to find a solution to and is wholly dependent upon individual preferences, the organisation, it’s leaders and its culture.
We offer some advice provided by Talent Management professionals and LinkedIn themselves, following their extensive research:
1: Good basic communication
The first and most obvious quick win, which can be accomplished right now is to simply ask! Managers can gain a lot of hugely valuable information simply by having a talk with their team members about how they are feeling about their work and progression. Let them know how highly they are valued and ask them if there are simple ways to improve their happiness and engagement with work. If done well, this information can be collated and used to make really positive changes to reduce turnover organisation wide. It is a form of exit interview done before the event. It’s not rocket science, but it is done surprisingly rarely. Good conversations require good management relationships.
A longer term consideration for HR is to review the way in which line managers themselves are measured and appraised. Managers who clearly do not manage people well should be held accountable (simple, but again relatively rare) and those who do well with people should be rewarded for doing so.
2: A sense of purpose
A sense of purpose and engagement can often be a factor which prevents people from moving to active job seeking:
How connected to your goals are your key employees? Be clear about what you’re trying to accomplish as an organisation.
What’s your purpose; what do you aspire to? What is their part in creating that? How will you measure success? Find ways to reenforce that message regularly.
3: Career paths and new opportunities
This may come in the shape of career roadmaps for larger organisations but may simply be via individual discussion about performance and potential and identifying a route to greater opportunities.
Research suggests that setting clear expectations and giving visibility to opportunities is likely to improve the engagement of your talent. It’s importance is paramount given that career advancement is the number one reason cited by leavers. Regular (quarterly or more regular) career development meetings are useful. The pressure of daily business often moves these kinds of conversations off the agenda, so they need to be built into your framework of performance management and development in order to ensure these crucial discussions are had.
Goals and needs can be discussed, expectations clarified and praise and recognition is given. Regular check-ins are a show of individual care and concern and a space in which the employee can raise any potential issues before they can grow into serious problems.
Ensure that vacancies are open in-house first where possible and increase visibility.
Ensure that internal communication includes explanation on a regular basis of all the ways employees can progress within the company.
4: Pay and Compensation
74% of job switchers receive larger compensation packages when they move on, so it is important to look at ways in which you can remain competitive. Often smaller touches can make a huge difference such as in house discounts, gift cards, assistance with travel costs or car allowances and so on.
Look at perks which involve work life balance, such as flexibility to work occasionally from home or half day Fridays in the summer months . Think about where you could add perks which may be difficult for others to replicate.
5: Regular Recognition
Celebrate meaningful milestones. Work anniversaries and birthdays should be noted and marked in some way. Take the time to make a fuss when someone has exceeded performance expectations or made an outstanding contribution. A little thanks goes a very long way. A simple thank you helps people feel valued. In an age where everything is typed, the value of a hand written thank you can go far beyond expectations.
An example of that in practice was cited by Campbell’s soup. The company experienced a surge in productivity and performance. This was partly attributed to the 30,000 hand written thank you notes penned by the former CEO, Douglas Conant, during his tenure there.This article is correct at 13/01/2016
The information in this article is provided as part of Legal-Island's Employment Law Hub. We regret we are not able to respond to requests for specific legal or HR queries and recommend that professional advice is obtained before relying on information supplied anywhere within this article.