Proven Strategies to Enhance Retention and Become an Employer of Choice

Love’em or Lose’em

By: Bogdan Damjanovic, P.Eng.

Owner, Express Employment Professionals

What’s missing?Managers identified the following soft skills as

being the most important at their organizations:

• Organization Skills 87%• Verbal Communication 81%• Teamwork & Collaboration 78%• Problem Solving 60%• Tact & Diplomacy 59%• Business Writing 48%

Definition of Turnover

Turnover Cost Factors * : Annual Salary

Benefits/Burdens

Expected Length of Vacancy

* Calculations include conservative estimates and assumptions based on research by Price Waterhouse's Saratoga Institute and the University of Wisconsin

http://www.expresspros.com/us/turnover.aspx

Number of SeparationsTotal Number of Workforce

= Turnover

TRUTHS ABOUT TRUTHS ABOUT TURNOVERTURNOVER

Truths About TurnoverTruth #1 – Turnover happens

– 0% turnover is not realistic nor desirable – Good employees quit & leave– Bad employees quit & stay

Truth #2 – Some Turnover is Desirable - New employees bring new ideas, approaches & attitudes

Truth #3 – Turnover is costly– Cost of turnover varies from $1,000 for an entry level employee

to several thousand for an executive

Truths About Turnover

Truth #4 – More $money$ is not always the answer– 89% of managers surveyed think money is the

primary factor of turnover.– However, most employee surveys rank money

as 9th or 10th reason for turnover.– Employees do want fair & competitive pay.

Truths About TurnoverTruth #5 – Manager is the best person to fix the problem.

– 50% of worker satisfaction is related to their relationship with their leader.

– Managers, not HR Departments, should be the driver of employee retention.

– Areas of leader’s ownership:• Hiring• Performance appraisal• Influence senior managers for needed change.• Most important – EMPLOYEE RECOGNITION

Truth #6 – Turnover demands commitment

WHY SO MUCH WHY SO MUCH TURNOVER?TURNOVER?

March 2010

• The national unemployment rate remained unchanged at 8.2% • Employers added 18,000 jobs• This is the sixth employment gain in the past eight months • Job gains were seen in Ontario, Quebec, and Saskatchewan as follows:

• Construction: + 21,000• Manufacturing: + 3,900• Trade: + 13,700• Transportation & Warehousing: - 19,600• Finance, Insurance, Real Estate & Leasing: - 7,400• Professional, Scientific & Technical Services: + 38,400• Business, Building & Support Services: - 26,300• Educational Services: + 6,200• Healthcare & Social Assistance: + 5,100• Information, Culture & Recreation: - 6,500• Accommodation & Food Services: - 3,300• Public Administration: + 7,900

Why So Much Turnover?

1. Higher expectations People want more than a job They want time off and $$ Career opportunities earlier Employers no longer viewed cradle-to-grave

Why So Much Turnover?

2. Longer hours, more demanding work Productivity increased 6.9 percent in the

nonfarm business sector during the fourth quarter of 2009 as unit labor costs fell 5.9 percent

From 1977 to 1997, average workweek grew from 43.6 hours to 47.1 hours.

More overtime expected with no notice. 33% of employees bring work home. 64% of all employees want to work less.

Why So Much Turnover?

3. Family demands Day care Elder care

• 25% of workforce provides 11 hrs per week

Men are just as likely as women to adjust schedules for elder care

DO I NEED A DO I NEED A RETENTION PROGRAM?RETENTION PROGRAM?

Take the Quiz(If you score more than two “no’s” you need to get serious about retention.)

TEN REASONS GOOD TEN REASONS GOOD PERFORMERS LEAVEPERFORMERS LEAVE

Ten Reasons Good Performers Leave

1. No link between pay & performance2. They don’t perceive advancement opportunities3. Their contributions are not recognized4. They don’t get to use their natural talents5. They have unclear or unrealistic expectations6. They will no longer tolerate abusive managers7. Management’s cutback on administrative help8. Constant reorganization of management9. Management not taking time to clarify goals &

objectives10. Management favoritism

Note: All Ten Reasons Involve Managers

EXIT INTERVIEWSEXIT INTERVIEWS

• The worst time to do them is on the last day

• Conduct them after employee departure One to two weeks Call at home Employees are more willing to speak Better to meet in person due to body language Use the opportunity to begin recruiting them back

• Interviews are superior to surveys Prepare for both Ask detailed questions Expand as necessary They are as important as employment interviews

Exit Interviews

• What caused you to seek other employment?

• Why did you accept a new position?

• Describe working for our company.

• Rate compensation and benefits.• Benefit improvements

• Describe training.

• Did you observe teamwork?

• Describe the relationship between your department and others?

• Could the company have prevented your leaving?

• What needs were not met?

• Did you get to do what you do best?

Exit Interviews

Suggested Questions

• Identify specific things you would change.

• How would you rate the company on:Ethics HonestyIntegrity Trust

• How would you describe your leader?• Treated fairly• Recognized for your contributions• Fair appraisals• Treated consistently as other department members

• Would you recommend this place to a friend or relative?

• Would you consider re-employment?

Exit Interviews

Suggested Questions

• Utilize internal focus groups to analyze turnover.

• Survey employees on why they stay.

Exit Interviews vs. Stay Interviews

EMPLOYEES DON’T QUIT THEIR COMPANIES,

MOST QUIT THEIR BOSSES!

OBSERVATION:

Common Core Elements of Organizations That Excel at Retention

•ETHICS

•INTEGRITY

•HONESTY

•TRUST

No benefits, compensation program, gimmicks or rewards can replace the four core elements.

The organizations excelling in the four core elements win the war for talent.

Ethics, Integrity, Honesty, and Trust

Common Core Elements of Organizations That Excel at Retention

How do you measure your commitment to the four core elements?

Ask yourself: Does your organization?

Conduct business according to professional standards?

Does your company culture support disclosure of truth even when it hurts?

Does your company base its business decisions on established values?

Common Core Elements of Organizations That Excel at Retention

• Has your CEO earned the trust of your employees?

• Does your leadership team accept responsibility for failures or blame others?

RECOGNITIONRECOGNITION

Facts on Recognition

According to an article in Compensation and Benefits review:

81% of workers claim they do not receive any reward for increase in productivity.

60% of managers report the same.

Only 3% of base salary separates average from outstanding employees.

Most companies have overused giveaways such as:Coffee Cups, Pens, T-shirts, Certificates

Facts on Recognition

Employees’ favorite form of recognition:

PRAISE

Why Employees Leave and Stay Employees and Managers are somewhat disconnected

on “WHY” employees leave and stay

Good wages:Job security:Promotion/growth:Good working conditions:Interesting work:Personal loyalty to employees:Tactful discipline:Full appreciation of work done:Sympathetic help on personal problems:Feeling “in” on things:

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ManagerRanking

Best Practice Retention Elements

Saratoga Institute survey of 40 Fortune 100 companies including:

Dell Honda of America

Verizon UPS

• Innovative compensation & benefits/stock options

• Formal rewards & recognition programs

• Good performance management Aligning employees goals with business goals

• Strategies & measures for increasing employee retention

• Formal career planning

• Work/Life strategies

• Mentoring programs

Best Practice Retention Elements

Recognition Gestures Can Be Simple

Hewlett-Packard Golden Banana Award

Tektronix – Beaverton, OR “You Done Good” Cards

NASA – Johnson Space Center “Thanks a Million Award” 10 – $100,000 candy bars

Kory Electronics – Seattle, WA President Head Shaving

Recognition Gestures Can Be Simple

• Supplying ice cream or Popsicles on a hot day.

• Hiring someone to clean windshields in parking lot on a snowy day.

• Lottery tickets Grab as many as you can from a fish bowl

• Hiring H.S. students to wrap holiday gifts.

• Being creative on job titles. Sales Manager vs. Salesperson

• On-site child care for $250/mo• Laundered workout clothes• Golf – Tennis – Dance Classes• Cafeteria w/piano music – Families welcome• Art on every wall• Free health clinic• Elder care coordinator

Retention Techniques

SAS Institute – Cary, NC - Software Developer

Ranked 3rd in 100 best companies to work for

• Financial planning for college & retirement

• SAS spends $45K annually on 22 tons of candy

SAS Turnover Rate: 3.7%

20% below industry average

DESPITE:

NO STOCK OPTIONS

COMPETITIVE SALARIES

Note: Based on 5,000 employees SAS is losing 850 less than the industry average

• IBM employees in Atlanta wear cutoffs and sandals to work.

• Employees at Tech Data Corp., Tampa, FL enjoy meals prepared by an executive chef.

• Electronic Arts – Canada, has a 70 seat movie theater.

• Construction Equipment Co., Louisville, KY, gives employees’ children a $50 savings bond for straight “A” report cards.

• Workers at Netscape, Mountain View, CA., can bring dogs to work

Retention Techniques

Anheuser-Bush, St. Louis, gives every employee two free cases of beer each month.

Retention Techniques

A COMMON FAVORITE:

• Retention bonus• Busing or transportation support• Wash employee’s cars in the parking lot• Allowing employees to select job titles• Giving every employee business cards• Donating to employees’ children’s sports teams• Free gardening plot on company land• Free limo service on wedding day• Free Starbuck’s coffee• Two-week paid leave for new fathers• Free infant car seats for new parents• Free breakfast

Other Out-of-Box Retention Techniques

HIRE THE RIGHT PERSONHIRE THE RIGHT PERSON

• Hiring for talent over experience Do not become fixated on key knowledge areas

• Be Prepared when Hiring Not the Warm body approach Use Updated job descriptions

• Balance with analysis Avoid Hiring by gut feeling alone

• Avoid “Search for Superman” syndrome Do not have too many people involved in the process

Hire the Right Person

• Encourage Diversity Discourage “Hiring in your own Image”

• Avoid “Politically Motivated” hiring Including: the manager’s neighbor’s friend’s

cousin’s boyfriend, or the “I owe a favor” approach

Hire the Right Person

• Bahavioural Interviewing - proof of performance Competency based interviews Give me an example when….

• Accurately describe the job Mix the good with the bad

• Consider the internal candidate Internal Job posting Don’t allow managers to hold onto talent

• Encourage employee referrals Produces the highest source of long term hires

Hire the Right Person

HELP YOUR TEAM AVOIDHELP YOUR TEAM AVOIDFIRST DAY DISASTERSFIRST DAY DISASTERS

1. No parking pass.

2. You had to watch 28 videos on how great it is to work here.

3. You signed a 300 page employee handbook stating you fully understood everything in it.

4. Your cubicle is being used as storage.

5. You were kept in the lobby for three hours.

Typical Disasters Employee’s First Day

6. You signed two dozen forms asking for info you didn’t bring.

7. You go meet your boss only to learn that s/he is on vacation.

8. Your name tag is misspelled.

9. The senior vice president calls you at home and tells you of a reorganization.

Typical Disasters Employee’s First Day

NEW HIRE CHECKLISTNEW HIRE CHECKLIST

New Hire Checklist

Orientation is a process, not a program!

• Provide key written material such as handbook, etc.

• Arrange for office furnishings, computer, telephone, supplies, etc.

• Consider taking the new hire to lunch prior to the 1st day.

• Plan how you want the new hire to spend their first day Who to see Set schedule

• Have contact person call to answer questions

• Leave your own calendar open at the beginning and end of the first day

• Send a welcome basket or flowers to home (include spouse)

New Hire Checklist

Prior to the First Day:

• Meet with your employee early in the day to establish performance objectives and expectations.

• Introduce the new employee to as many people as possible, including the CEO Let them make their own opinions

• Review organization charts thoroughly.

• Have business cards available.

• Consider having a surprise welcome party.

New Hire Checklist

Day one:

• Have someone tour them through the facility.• Assign a first week mentor

• Schedule orientation sessions in groups where possible and have them in the afternoon or on the second day.

• Provide a new employee a reserved parking spot.

• Provide them with some company logo merchandise.

New Hire Checklist

Day one:

• Introduce new employee very enthusiastically during a group meeting.

• Newspaper announcements

• Pair up the new employee with a peer.

• Schedule one-on-one meetings with key personnel.

• Give an appropriate and challenging assignment during the first week.

• Schedule any necessary training.

• Check in with new employee from time to time in first week.

New Hire Checklist

During week one:

• Schedule a 3-month feedback session.

• Allow employee to re-write their job description, if outdated.

• Have employee complete new hire survey.

New Hire Checklist

The first three months:

SUMMARYSUMMARY

• You cannot achieve excellent retention without an excellent hiring process.

• Create dialog between employees and managers on work/life issues.

• Have managers re-recruit their employees regularly.

• Conduct employee opinion surveys regularly to measure job satisfaction and react to the results.

Summary

• Hold annual benefit and communication sessions to educate your employees.

• Conduct exit interviews to find out why they are leaving.

• Train managers and hold them accountable

• Keep management’s attention on turnover.

• Orientation is a process, not a one day program.

Summary

BECOME AN EMPLOYER OF CHOICE

Summary

Contact Details:Contact Details:

Bogdan Damjanovic, P.Eng., OwnerBogdan Damjanovic, P.Eng., OwnerExpress Employment ProfessionalsExpress Employment Professionals

Tel: (416) 590-9948Tel: (416) 590-9948