©shrm 2010 presentation title presenter’s name date what drives retention across all industries?...
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©SHRM 2010
Presentation Title Presenter’s Name • Date
What Drives Retention Across All
Industries? Accountability!Dick Finnegan June 30th, 2010
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Today’s Agenda
1. A CIA Question
2. Data: Will Good Employees Quit?
3. Principles & Strategies:
The Rethinking Retentionsm Model
4. Tactics: 3 Case Studies of Accountability & Retention
5. Free Stuff: Parts 1 and 2
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Today’s REAL Agenda
Provide you with convincing data and clear thinking so you can influence your executives to establish retention accountability across your organization, top to bottom
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CIA Story
A “milk-toasty” CIA story…
Why do CIA employees change departments?
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3 #s The Media Doesn’t Report
1. 11%
2. 31%
3. 3-5 X
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High Performers Never Concerned
1. Jobs were much harder to find in 2008
2. Many employees still quit…your chances of losing a good worker in the 2008 recession were 89% as strong as in the booming economy of 2007
3. Layoffs lead to losing muscle after fat
Therefore, it is likely that your good workers can always find jobs and they are the ones who are leaving
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“Resume Tsunami”
3 Studies on Employee’s Post-Recession Intentions
Deloitte warns companies to expect a “resume tsunami” as 49% are looking or plan to look as the economy improves (September, 2009)
Right Management reports 60% plan to look as the economy improves (November, 2009)
Execunet and Finnegan Mackenzie found more than 90% of executives would take a recruiter’s call and more than half are already looking (July, 2009)
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The Rethinking Retentionsm Model
Key Phrases are “Research-Based” and “Process-Based”
Research into all published studies, company best- practices, and academic publications…based entirely on retention results
Experience working across top US companies and on 6 continents
Elevator Speech: High-retention companies install business processes for retention as they do for sales, service, quality, and safety
Fills the Void as employee retention has no established, research-based process…until now
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Retention Processes driven by executives from the top like sales, service, quality, and safety
Retention Programs driven by HR from the side like hiring, performance management,others
Process or Program-Driven?
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Sales Service Quality Safety Retention
Accountability,tops-down in Ops
Y Y Y Y N
Recognitioncompany-wide
Y Y Y Y N
Consequences,good and bad
Y Y Y Y N
Training, skill-specific
Y Y Y Y N
Coachingfor improvement
Y Y Y Y ?
Process-Driven? Probably Not
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Research-Driven, Process-Based
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10 Points for Rethinking Retention
3 Principles…
Point #1. Employees quit jobs because they can
Point #2. Employees stay for things they get uniquely from you
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10 Points for Rethinking Retention
3 Principles…
Point #1. Employees quit jobs because they can
Point #2. Employees stay for things they get uniquely from you
Point #3. Supervisors build unique relationships that drive retention…or turnover
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7 Retention Strategies
Strategies for Supervisors…
Point #4. Hold supervisors accountable for achieving retention goals
Point #5. Develop supervisors to build trust with their teams
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7 Retention Strategies
Strategies for People Management Processes…
Point #6. Narrow the front door to close the back door
Point #7. Script employees’ first 90 days
Point #8. Challenge policies to ensure they drive retention
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7 Retention Strategies
Strategies for Top Management…
Point #9. Calculate turnover’s cost to galvanize retention as a business issue
Point #10. Drive retention from the top, as executives have the greatest impact on achieving retention goals
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Who Owns the Strategies? HR or OPS?
For Supervisors…
Point #4. Hold supervisors accountable for achieving retention goals MORE OPS
Point #5. Develop supervisors to build trust with their teams MORE HR
For People Management Processes…
Point #6. Narrow the front door to close the back door MORE HRPoint #7. Script employees’ first 90 days MORE HRPoint #8. Challenge policies to ensure they drive retention MORE HR
For Top Management…
Point #9. Calculate turnover’s cost to galvanize retention as a business issue MORE OPS
Point #10. Drive retention from the top, as executives have the greatest impact on achieving retention goals MORE OPS
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Accountability Secret Sauce
Point #3. Supervisors build unique relationships that drive retention…or turnover
Point #4. Hold supervisors accountable for achieving retention goals
Point #6. Narrow the front door to close the back door
Point #9. Calculate turnover’s cost to galvanize retention as a business issue
Many of these ideas used to cut call center turnover 50% and nurse turnover 54%
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Executives Managers Supervisors
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Experience tells us that the best way to make things happen in organizations is to drive them from top to bottom…think sales, service, quality, safety
Intuitively, the same should be true for retention but is there data from respected research that tells us this is true?
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Supervisors’ Impact on Turnover
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“If you have a turnover problem, look first to your managers”…Gallup
Primary reason for seeking a new job is disliking boss’s performance…Yahoo
Employees stay for managers first and co-workers second…salary.com
Poor leadership causes over 60% of all employee turnover…Saratoga Institute
“When employees stay, it is because of their immediate managers”…National Education Association
Employees who stay primarily for their supervisors stay longer, perform better, and are more satisfied with their pay…TalentKeepers
Given the high cost of turnover, it is clear that poor managers…dramatically increase the cost of operations…Kenexa
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The Real Power of Supervision
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More importantly, a study by Kenexa confirms that employees’ satisfaction with pay, benefits, learning, development, and advancement is “mediated” by their relationships with their supervisors and concludes:
“Offering a higher salary or developmental/advancement opportunities may not be enough to retain employees”
So it appears that poor supervision overcomes the benefits of pay and development…and leads to higher turnover
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4 Thoughts to Ponder
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1. Poor supervisors will trump good employee programs
good programs + good supervisors = retentiongood programs + poor supervisors = turnover
2. Poor supervisors also trump good pay and development, and drive higher turnover
3. “Supervisors” refers to anyone who supervises people including executives and senior managers so all must have retention skills
4. If one or more of your supervisors fails to build effective retention relationships, what other legitimate advantages do you offer your employees that your competition for talent does not?
4 Thoughts on Supervisors and Retention
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Accountability Drives Retention!
Additional Landmark Studies…
Supervisory accountability is the first recommended solution for retention of nurses and teachers
How many organizations hold supervisors accountable for retention? 14% in one study, 11% in another
Retention accountability is a “butterfly effect” initiative
Moves retention discussions from “co-dependency” to accountability
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An Accountability Clue
2-ball off the 6-ball:
The secret to influencing the CEO to set retention goals is to ask the CFO to put a $ cost on turnover first…then both the CEO and CFO become advocates for what you’ve always known, that retention must be managed on the operations side of your company as well as in HR
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Why Finance?
Because Finance is the keeper of all things about measuring $...essential for moving retention from an HR-only issue to a company-wide initiative?
Because the CEO and other operations executives listen to Finance and the CFO?
Because Finance has more credibility on financial matters than HR?
Because Finance is more likely to support their own findings than yours?
Because Finance might under-estimate the cost of turnover until they study it, and then will become your strongest ally for establishing retention goals?
Answer: All of the above
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Cost Per Exit
• Direct costs…exit processes, temporary help, recruiting and hiring costs, training and onboarding
+• Indirect costs…Revenues per FTE divided by 240,
weighted for contribution; multiply times # days to fill vacancies and half # days to ramp up
=• Starter cost of turnover…does not include lost morale,
turnover due to turnover, other immeasurables
• Full cost model www.TheRetentionFirm.com
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Setting Retention Goals
Base metric on history and think short-termMonthly might be better than annual, and first-90-days
might be best based on your tipping point
Drive goals top to bottom, from CEO to firstline supervisors
Reinforce with reports, performance appraisals, bonus, incentive, pay
How do you reinforce sales, service, quality, and safety?
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Reporting Retention Results
Who reports? Finance…because Finance reports the important #s
How? $s saved/lost compared to goal> “In May our retention goal was ___% and achieving it
would save us $___ . We achieved that goal and we did indeed save $___”
> “The leading departments/managers who achieved their goals were ___ and the ones who missed their goals were ___.”
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3 Paths to Accountability & RetentionFor High-Turnover Industries
#1: SunTrust Banks: Driving accountability through turnover’s cost
#2: Florida Hospital Flagler: Using cost and LOS data to define specific accountability
#3: Hilton’s Call Centers: Specifying accountabilities for HR, Training, and Operations
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#1: SunTrust Banks
Situation:
My career launcher…CEO said cut turnover, I said “You don’t understand…”
Finance conducted cost study for 6 cascading job groups, CFO announced results
Top operations executive set goal for all branches to cut turnover 10% over previous year/tied to bonus
Bob from back of the room, “Now let me get this straight…”
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#1: SunTrust Banks
Turnover fell 19%, saved $4 MM
Primary retention tool was monthly accountability report with managers’ names, employees lost,
progress toward goal
No pay increases, no new benefits, no additional manager training…just accountability connected to annual bonus
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#2: Florida Hospital Flagler
Situation:
99 bed hospital, part of a Adventist hospital corporation whose executives directed us to their most troubling retention hospital
Overall turnover 21%
Completely decentralized hiring with few common processes
Top management concerned, open to change
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Job Group Results
Job Group Example Jobs ‘08 T/O % ‘09 Proj T/O %
Non-skilled Nurses aid 20 17
Skilled Hourly Phlebotomist 24 9
Licensed Hourly
Rehab therapist 13 19
Nurses Surgical nurses 23 29
Exempt All top managers 18 7
TOTAL 29.6 21.3
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Leavers by LOS
0-3 mos
4-6 mos
7-12 mos
1st yr Lvrs
13-36 mos
37 mos +
Non-skilled 30% 3% 17% 50% 33% 17%
Skilled hourly
22 9 18 49 27 24
Licensed hrly
10 5 29 44 24 33
Nurses 33 14 22 69 17 14
Exempt 8 8 8 24 50 25
Total 25% 9% 21% 55 27% 18%34
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Hospital Retention Plan
Reduced nurse turnover 56% by…
Establishing nurse retention goals for the organization, departments, and managers for 90-, 180-, and 360-day retention
Implementing other tools to support goal achievement including new hiring and onboarding processes, specific leadership training with post-training assignments, and other initiatives
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#3: Hilton’s Call Centers
Situation
> 5 centers averaged 55% annual turnover and company reported annualized turnover and monthly turnover
> Missing was knowledge that 50% of new agents failed to reach 90 days
> Challenge included what to measure and what goals to set
> Accountability was perplexing as many touched new hires in the first 90 days
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Hilton’s Call Centers
Reduced turnover in half in 4 months…Structuring retention accountability for HR, training, and operations via 91-day meetings
Requiring managers send a 90-day retention report to the CEO
Implementing new standards for 90-day retention, app/hire ratio, and employee referrals
Assigning new hires to best supervisor
Tracking new hires “retention likelihood” weekly with coaching
Implementing a facilitated realistic job preview
Designing structured interview to measure intent to stay
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3 Paths to Accountability
Driven by $ Data
“When” IDs Metric
Goals with Accountability
SunTrust Yes No/Company-
wide
Absolutely
Florida Hospital
Yes Yes/Job- specific
Absolutely
Hilton’s Call Centers
Yes Yes/Job-specific
Absolutely
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Research-Driven, Process-Based
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Free Stuff, Slide 1
For Information On…
1. Retention accountability for nurses and teachers
2. Exit interviews managers conduct with supervisors
3. Realistic Job Previews
4. Employee Referrals to obtain 50% of new hires
5. New Hire Interview Questions
6. Stay Interviews
Please write your “order” on the back of your business card
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Free Stuff, Slide 2
Module #1 of the online
Certified Employee Retention Professional Program
(CERP)
Earn 1 HRCI credit for completing Module #1 Earn up to 26 HRCI credits for completing the CERP program
Please write “Module #1” on your business card
Contact: [email protected]
407.694.3390