Are You Wasting Time and Money on the Wrong Retention Strategies?
Jan 24, 2019
Here's a late-breaking bulletin: employees leave their jobs because they're dissatisfied with their compensation. Are you shocked? We weren't either. But when results of i4cp's latest survey on Retention Strategy and Execution confirmed the top reason workers bail, we decided to take a closer look. Mean responses from all participants found non-work-related events/issues (spouse relocation, health, etc.) in second place, with poor work/life balance ranking third among departure drivers across all company sizes and industries.
Because the Institute for Corporate Responsibility's (i4cp) mission is to empower organizations to become high performers, we dissect our research results with great care, digging deep to find the strategies and behaviors that separate top firms from the also-rans. And we do this across the five domains that influence organizational performance: strategy, leadership, talent, culture and market. This recent survey points out that key retention questions for leaders within the talent domain are these:
—Do people leave high-performing and lower-performing organizations for different reasons?
—Do companies wait until it's too late to ask why workers abandon ship?
-—Are companies' retention strategies accurately targeting the turnover drivers at work in their particular situations?
When it comes to the number-one turnover motivator in high-performing firms, our results revealed that unhappiness with compensation also was the primary culprit. However, respondents indicated that workers depart lower-performing companies because they have poor relationships with their managers: Two very different situations requiring diverse interventions.
We look to our members and other top firms for real-world strategies that enable leaders to act on the issues that challenge their organizations. In the case of retention, we learned that both high market performers and their lower-performing counterparts list learning opportunities as their top strategy for retaining talent. Base salary increases and training in retention skills for managers—strategies that seem more likely to address the turnover drivers we identified—ranked much lower in respondents' arsenals. Does that mean that companies are investing in the activities that are most likely to help them effectively improve retention? Maybe not. The struggling economy has helped keep turnover levels down...for now. But business leaders can't afford to let retention slip off the radar. Or to invest tight budget dollars unwisely.
Perhaps the best advice on retention strategies comes from the employee resources director of a leading high-tech firm that participated in the Institute's study. He points out that it doesn't cost a lot to "maintain vigilance and awareness," adding that "time and attention should be a day-in and day-out management responsibility." Yet the majority of respondents confirmed that exit interviews are their tool of choice for identifying issues that drive turnover. This is a decidedly late and re-active approach. Moreover, fewer than 20% say they act on the information they discover about the causes of turnover.
Clearly, identifying not only the factors that cause employees to grow dissatisfied and leave but also the elements of a workplace that engage and retain talent provides the kind of accurate information companies need to pro-actively address the real issues that shape their workplaces. Internal surveys provide an ideal means of assessing such issues. Indeed, pinpointing such critical insights, a large utility firm told us, will enable their organization to "come up with an action plan to increase/improve retention and help in our goal of being a great place to work."
The Institute's 4-Part Recommendation:
1. Build a better understanding of retention, engagement and other crucial, rapidly changing talent issues affecting today's organizations. Institute members will find a wide range of strategic resources and relevant survey results by accessing the Talent Domain section of the website.
2. Leverage the power of opinion-sampling tools to gain a true picture of the elements that influence your workforce. The Institute, for example, partners with companies to conduct customized climate surveys designed to reveal the factors affecting employees' work experiences before valuable talent is ready to walk out the door.
3. Ensure that the strategies your organization chooses to support retention are in alignment with the realities of your workplace. If employees tell you that they're leaving because their compensation isn't satisfactory, it may not be realistic to expect that offering more training opportunities for workers will solve the problem.
4. When employees provide insights into the reasons they leave, use that information. Taking the time to find out what issues exist and then failing to take action to remedy problems is counterproductive. It wastes the time and money spent to survey or interview employees. Worse, it tells workers you don't care. Soon, they'll simply stop providing feedback altogether. Seize your opportunities to be proactive.
For more information about the study, visit www.i4cp.com