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Five Strategies for Retaining Employees
by Roger Herman
Understanding Why Employees Leave
Herman believes that employees leave jobs for five main reasons:
"Many executives still cling to the outdated notion that people 'go for the gold,' that salary dictates all their employment decisions," explains Herman. "But for the most part, people want opportunities to grow and learn, to advance in their careers and to work on challenging and interesting projects. They want to be recognized and appreciated for their efforts. They want to feel a part of something that adds value to their community."
- "It doesn't feel good around here." This can include any number of issues having to do with the corporate culture and the physical working environment.
- "They wouldn't miss me if I were gone." Many people don't feel personally valued. When people don't feel engaged or appreciated, all the money in the world can't hold them.
- "I don't get the support I need to get my job done." People want to do a good job; they want to excel. At the same time, most feel like their boss won't let them do a good job. When frustrations exceed the employee's threshold, they leave.
- Lack of opportunity for advancement. "Advancement doesn't necessarily mean promotion," advises Herman. "More often it means personal and professional growth. People want to be better tomorrow than they are today. Personal growth constitutes a very strong driver in today's work force, particularly with the younger generation. People coming out of college often identify training as the primary criteria for choosing their first company. Companies that gutted their training departments during the early '90s have a lot of catching up to do in order to attract good people."
- Inadequate compensation. People want fair compensation butcontrary to most managers' beliefsmoney rarely comes first when deciding whether to stay or go. A certain percentage of people will always chase more income, but the majority of workers look at non-monetary reasons first.
Five Strategies for Retention
For more information employee retention and Roger Herman visit www.rogerherman.com.
The primary strategies for keeping good people have to do with creating and maintaining a workplace that attracts, retains and nourishes good people. According to Herman, this covers a host of issues ranging from developing a corporate mission, culture and value system to insisting on a safe working environment and creating clear, logical and consistent operating policies and procedures.
"Environmental strategies address three fundamental aspects of the workplacethe ethics and values foundation upon which the organization rests, the policies that interpret those values and translate them into day-to-day actions, and the physical environment in which people work," says Herman. "The overall goal is to make your company a place where people want to come to work."
Although these strategies run the gamut of environmental issues, they all relate in one way or another to corporate culture. According to Herman, however, one environmental issue tends to stand out above the rest.
- Clarify your mission.
- Create a values statement.
- Communicate positive feelings.
- Stay focused on the customer.
- Be fair and honest.
- Cultivate a feeling of family.
- Promote integrity.
- Do not tolerate sub-par performance.
- Insist on workplace safety.
- Reduce the number of meetings.
- Make work fun.
"More than ever, employees want a culture of openness and shared information," says Herman. "They want to know where the company is going and what it will look like in the future. How is the company doing financially? Where does it stand in the marketplace? Above all, they insist on knowing how their specific jobs fit into the grand scheme of things and what they can do to help the organization get to where it wants to go. If you operate in an open environment where managers share information, you can expect reduced turnover rates."
To assess your culture's level of openness, ask questions like:
"Take the pulse of your people on a regular basis," suggests Herman. "From time to time, bring in an outside third party to get a more objective view on how your people really feel. Find out if they really know the vision, mission and values. At the same time, give employees plenty of information about how the company is performing and where it is going. When people buy into your clearly stated corporate values and have the information they need to get the job done, they tend to stick around."
- Do our employees know how the company is doing in such key areas as sales, financials, strategy and marketing?
- Do we promote open-book management (or something approaching it) or do we keep information a closely guarded secret among the top management team?
- Do employees understand our vision, mission and values?
- Do we have a values statement that clarifies and supports a culture of openness?
- Do we give performance feedback on a regular basis or only at annual review time?
- Do we encourage individuals and departments to share information with each other?
Relationship strategies have to do with how you treat your people and how they treat each other. Developing effective relationship strategies begins with three basic steps:
Other relationship strategies that impact retention include:
- Give your managers and supervisors plenty of relationship training. Recognize that (in all but the smallest companies) people work for their supervisor, not you. Their paycheck may say "XYX company," but their primary work relationship is with their supervisor. "If your supervisors have the knowledge, training and sensitivity to work effectively with people on an individual level," explains Herman, "you'll probably get the bonding you need to retain employees."
- Ask employees why they work for you. When you do, two things happen. One, employees reinforce to themselves why they work for you. Two, you gain a better understanding of what attracts people to your company. You can then use that information to recruit new employees, saying, "Here's why people work for us. If you value these things, perhaps you ought to work for us, too."
- Once you have the information about why people work for you, ask, "What can we do to make things even better around here?" Do it in a positive way so it doesn't become a gripe session, then listen closely to what your employees say. Out of these conversations will come many good ideas, not only for improving conditions for your employees but for all facets of your business.
- Use behavioral style assessment tools, such as Myers-Briggs or DISC, to help people better understand themselves and each other and communicate more effectively.
- Help employees set life goals and get focused on where they want to go. Then help them see how their goals match up with company goals and that they can achieve their goals by staying with the company. "If people believe they can achieve their goals and objectives by working in your organization," notes Herman, "they will think twice before going somewhere else to work."
- Whenever possible, get the family involved:
- Write a letter of commendation and send a copy to the family.
- Write a letter to the family thanking them for supporting your employee.
- Have an open house. Invite the families for a tour to see what the spouse/parent does.
- Send flowers or a gift to the spouse.
- Hold social activities such as family picnics, holiday parties, special events. Celebrate birthdays.
- Have costume days (i.e., Halloween).
- Take people out to dinner to celebrate an achievement.
- Give out tickets to movies (buy them wholesale in blocks to save money).
- Pass out lottery tickets.
- Hold public celebrations when the company hits major milestones.
"Ultimately, relationship strategies help build a sense of family," explains Herman. "In families, people have conflict and disagreements but they learn how to work them out. They stick together through good times and bad and support each other's growth. Families have an 'all for one and one for all' mentality. It's a lot harder to leave a family than to leave someplace where you just go to work."
- Build mentoring relationships with people to increase their emotional ties to the organization.
- Be firm and fair. Avoid second-guessing employees.
- Celebrate longevity.
- Encourage humor in the workplace.
- Focus on building individual self-esteem.
- Stick up for your people.
- Give recognition strategically and deliberately.
Support strategies involve giving people the tools and equipment to get the job done. When people feel they have what they need to perform, job satisfaction increases dramatically. All support strategies stem from three basic principles:
According to Herman, support starts with you and your managers' attitudes. Do you see employees merely as cogs in a wheel or as valuable resources who make the company go? Do you expect high performance or mediocrity from them? Believing that people want to excel (they do!) rather than perform at minimum levels will lead you to treat them in a much more positive manner.
Another key support area involves information. The more information you give people about what they are doing, what the company is about and why you do things the way you do, the more valuable it becomes. Help people understand all the nuances of their jobs. Why is what they do important to the company? What are the expectations of the customer?
- People want to excel.
- People need adequate resources to get the job done.
- People need moral and mental support from you and your managers.
Let people know what is going on. Give them sales figures and some of the financials. You don't have to disclose salaries and other sensitive information, but let them see performance measurements, particularly as it affects their jobs.
According to Herman, other support strategies include:
- Give people productive work to do.
- Provide challenges.
- Remove obstacles and barriers to getting the job done.
- Adjust jobs to fit strengths, abilities and talents.
- Keep the promises you make.
- Establish effective communication systems.
- Clearly define job responsibilities and accountabilities.
- Encourage people to take initiative.
- Encourage, recognize and reward creativity and innovation.
- Avoid micro management.
- Reduce reporting requirements.
- When possible, offer job flexibility.
Growth strategies deal with personal and professional growth. Good employees want to develop new knowledge and skills in order to improve their value in the marketplace and enhance their own self-esteem. However, cautions Herman, don't just "throw" education and training at your people in a random fashion. Instead, organize and structure your training so that it makes sense for the company and the individuals who work for you.
"Take time to explore your employees' different needs and the best way to provide those needs," suggests Herman. "There are many ways to help your people with personal growth that not only makes a difference in their lives, but bonds them more closely to the organization."
Training and education can include:
The last bullet point, notes Herman, offers a real opportunity for employers to differentiate themselves and have a big impact on retention. For example, most people own a car. Yet, how many really know how to buy car insurance? Set up a brown-bag lunch that teaches people the ins and outs of car insurance and how to get the best buy. Or, offer sessions on how employees can help their children in school, get involved in community activities and other similar subjects that enable people to become better.
- In-house curriculum for skill training and development
- Outside seminars and workshops
- Paying for college and continuing education
- Audiotape, videotape and online learning
- Having employees present workshops in their areas of expertise
- Bringing in outside experts to educate employees about subjects that affect their personal lives
"When you offer these kinds of learning opportunities, it sets you apart from other employers and shows you truly care about your employees," states Herman. "It's one thing to provide training that helps them do a better job because your company benefits from it. It's another thing altogether to offer education on how employees can improve their lives. They don't expect that. It shows that you care about them as people, not just workers who can make money for you."
Other recommended support strategies include:
- Establish a learning culture.
- Create individual learning plans.
- Encourage people to join professional and trade associations.
- Invest in career planning.
- Operate a corporate mentoring program.
- Provide incentives for learning.
- Take advantage of Internet learning.
Effective compensation strategies stem from one fundamental principlemoney alone will not retain most employees. In the old days, companies essentially paid people for their time. Today, more and more companies pay for performancein every position, not just sales. To retain employees, your compensation plan needs to incorporate this trend.
"Pay for performance plans come in a variety of shapes and sizes," explains Herman, "but they all involve two basic activities: defining the job and checking performance against expectations. When people exceed expectations, give them a bonus. It helps to lay the plan out ahead of time so employees understand your expectations and know what they have to do to get the bonus. But make sure you base it on pre-defined profit goals so you don't pay out if the company doesn't make money. If you're not offering some type of incentive or pay for performance plan, you're putting your company at a terrible disadvantage."
Smart employers use a variety of hard (monetary) and soft (non-monetary) compensation strategies to make it difficult for other companies to steal their people away. According to Herman, these include:
As an employer, Herman especially likes the notion of spontaneous bonuses.
- Discuss total compensation (salary, benefits, bonuses, training, etc.).
- Design reward systems to stimulate employee involvement.
- Use flexible benefits to respond to a changing work force.
- Offer stock options.
- Offer time off, sabbaticals and other forms of non-financial compensation.
- Provide childcare and/or eldercare.
- Provide employee assistance programs.
- Arrange for discounts on purchases.
- Arrange for professional services.
- Fund fitness club memberships.
- Provide spontaneous bonuses.
- Offer matching funds for 401(k) programs.
"These have a tremendous impact on employees and they cost a pittance," he says. "Handing out five, ten or twenty dollars on the spot (you can pay up to $50 without having to report it for tax purposes) along with some verbal praise, not only helps to retain employees, it also improves performance by rewarding the kinds of behavior you want. The trick is to be very specific about the behavior. Don't just give out the money and say 'nice job.' Instead say, 'I like the way you handled that customer on the phone,' or 'Thanks for putting in the extra effort to get the project done on time.'
"Keep in mind that compensation constitutes only one piece of the puzzle. If all the other piecesthe environmental, relationship, support and growth strategiesdon't fit together into one interlocking whole, you won't be able to pay people enough to work for you.
"In today's market, employees have control. They say, 'You're lucky to have me working for you.' If you don't believe that and treat them accordingly, they will quickly find another employer who will. That's why you need to have all five of these strategies in place."
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