Retention strategies aim to ensure that key people stay with the organization and that wasteful and expensive levels of employee turnover are reduced. They will be based on an analysis of why people stay and why they leave.
The reasons why people remain with the organization can be established through attitude surveys. These could segment respondents according to their length of service and analyse the answers of longer-serving employees to establish if there are any common patterns. The survey results could be supplemented by focus groups that would discuss why people stay and identify any problems.
An analysis of why people leave through exit interviews may provide some information but they are unreliable – people rarely give the full reasons why they are going. A better method is to conduct attitude surveys at regular intervals. The retention plan should address each of the areas in which lack of commitment and dissatisfaction can arise. The actions to be considered under each heading are listed below.
Problems arise because of uncompetitive, inequitable or unfair pay systems. Possible actions include:
- reviewing pay levels on the basis of market surveys;
- introducing job evaluation or improving an existing scheme to provide for equitable grading decisions;
- ensuring that employees understand the link between performance and reward;
- reviewing performance-related pay schemes to ensure that they operate fairly;
- adapting payment-by-results systems to ensure that employees are not penalized when they are engaged only on
- tailoring benefits to individual requirements and preference;
- involving employees in developing and operating job evaluation and contingent pay systems.
Dissatisfaction results if jobs are unrewarding in themselves. Jobs should be designed to maximize skill variety, task significance, autonomy and feedback, and they should provide opportunities for learning and growth.
Employees can be demotivated if they are unclear about their responsibilities or performance standards, are uninformed about how well they are doing, or feel that their performance assessments are unfair. The following actions can be taken:
- express performance requirements in terms of hard but attainable goals;
- get employees and managers to agree on those goals and the steps required to achieve them;
- encourage managers to praise employees for good performance but also get them to provide regular, informative and easily interpreted feedback – performance problems should be discussed as they happen in order that immediate corrective action can be taken;
- train managers in performance review techniques such as counselling;
- brief employees on how the performance management system works and obtain feedback from them on how it has been applied.
Learning and development
Resignations and turnover can increase if people are not given opportunities for learning and development, or feel that demands are being made upon them that they cannot reasonably be expected to fulfil without proper training. New employees can go through an ‘induction crisis’ if they are not given adequate training when they join the organization. Learning and development programmes should be developed and introduced, which:
- give employees the competence and confidence to achieve expected performance standards;
- enhance existing skills and competencies;
- help people to acquire new skills and competencies so that they can make better use of their abilities, take on greater responsibilities,
- undertake a greater variety of tasks and earn more under skill- and competency-based pay schemes;
- ensure that new employees quickly acquire and learn the basic skills and knowledge needed to make a good start in their jobs;
- increase employability, inside and outside the organization.
Dissatisfaction with career prospects is a major cause of turnover. To a certain extent, this has to be accepted. More and more people recognize that to develop their careers they need to move on, and there is little their employers can do about it, especially in today’s flatter organizations where promotion prospects may be limited. These are the individuals who acquire a ‘portfolio’ of skills and may consciously change direction several times during their careers. To a certain degree, employers should welcome this tendency. The idea of providing ‘cradle to grave’ careers is no longer as relevant in the more changeable job markets of today, and this self-planned, multiskilling process provides for the availability of a greater number of qualified people. But there is still everything to be said in most organizations for maintaining a stable core workforce and in this situation employers should still plan to create career opportunities by:
- providing employees with wider experience;
- introducing more systematic procedures for identifying potential, such as assessment or development centres;
- encouraging promotion from within;
- developing more equitable promotion procedures;
- providing advice and guidance on career paths.
This can be increased by:
- explaining the organization’s mission, values and strategies and encouraging employees to discuss and comment on them;
- communicating with employees in a timely and candid way, with the emphasis on face-to-face communications through such means as briefing groups;
- constantly seeking and taking into account the views of people at work;
- providing opportunities for employees to contribute their ideas on improving work systems;
- introducing organization and job changes only after consultation and discussion.
Lack of group cohesion
Employees can feel isolated and unhappy if they are not part of a cohesive team or if they are bedevilled by disruptive power politics. Steps can be taken to tackle this problem through:
- teamwork – setting up self-managing or autonomous work groups or project teams;
- teambuilding – emphasizing the importance of teamwork as a key value, rewarding people for working effectively as members of teams and developing teamwork skills.
Dissatisfaction and conflict with managers and supervisors
A common reason for resignations is the feeling that management in general, or individual managers and team leaders in particular, are not providing the leadership they should, or are treating people unfairly or bullying their staff (not an uncommon situation). As the saying goes, people tend to leave their managers, not the organization. This problem should be remedied by:
- selecting managers and team leaders with well-developed leadership qualities;
- training them in leadership skills and in methods of resolving conflict and dealing with grievances;
- introducing better procedures for handling grievances and disciplinary problems, and training everyone in how to use them.
Recruitment, selection and promotion
Rapid turnover can result simply from poor selection or promotion decisions. It is essential to ensure that selection and promotion procedures match the capacities of individuals to the demands of the work they have to do.
Creating unrealistic expectations about career development opportunities, tailored training programmes, increasing employability and varied and interesting work can, if not matched with reality, lead directly to dissatisfaction and early resignation. Care should be taken not to oversell the firm’s employee development policies. This can be achieved by using realistic previews (telling people as it is) as part of the selection process.
The aims of the flexibility strategy should be to provide for greater operational and role flexibility. The steps to be considered are:
- take a radical look at traditional employment patterns to find alternatives to full-time, permanent staff – this may take the form of segregating the workforce into a ‘core group’ and one or more peripheral groups;
- outsourcing – getting work done by external firms or individuals;
- multiskilling to increase the ability of people to switch jobs or carry out any of the tasks that have to be undertaken by their team.