Retention in a downturn: What the research tells us Dispelling the Myths!Ron Eldridge

Overview

Introduction & mini-questionnaire completion Retention: some facts and figures Presentation of questionnaire results and

discussion

Intended approach is flexible

The aim is for a highly participative session

TalentDrain

“the people retention company”

Product based HR consultancy focused on the issue of people retention & employee engagement.

Provide a range of diagnostic questionnaires covering– Early employee engagement (recruitment process,

induction, etc)– Existing employee commitment & satisfaction – Leaver analysis through reforming the exit process.

Some of our Clients

Mini Quiz

A short quiz designed to “get you thinking” about retention & employee engagement.

15 questions – in pairs or groups of three Should take around 10 minutes. Results will be used as the focus for debate later.

The Employee Retention Survey

Examining the relationship between why HR believe people join & leave organisations and the reasons given by real employees.

Over 300 organisations participated with 9,500 leavers and 1000 new starters.

Free copies (no irritating sign-up pages!) at www.talentdrain.com

Some Economic Background.. Budget cuts?

Adjustment to HR Strategy

Priorities for HR Strategy

56%

24%

17%

16%

11%

3%

2%

2%

24%

32%

69%

48%

55%

43%

31%

26%

20%

44%

14%

36%

34%

54%

67%

72%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Recruitment

Learning & development

Merger & acquisitions

Compensation & benefits strategy

HR information systems

Employee engagement and retention

Organisational communications

Performance management

Lower priority

No change

Higher priority

New Starters...

How much time and money is spent on recruitment in your organisation?

Do you spend the same or more retaining the people you spent so much recruiting?

How effective is your brand, attraction, recruitment and induction process?

Feedback on your process?

Attraction Factors?

61%

53%

46%

44%

65%

49%

47%

21%

49%

37%

25%

10%

35%

32%

26%

30%

52%

44%

44%

21%

50%

43%

32%

23%

0% 10% 20% 30% 40% 50% 60% 70%

Image/profile of the organisation

What the organisation does

Reputation as an employer

The calibre of people

The nature of the work itself

Potential for progression through the organisation

Training and development opportunities

The physical working environment

The pay & benefits package

Work-life balance on offer

The degree of autonomy in the role

Mentoring from line-management / other

HR respondents (N=336)

New starters (N=957)

Attrition Factors?

29%

35%

16%

41%

13%

1%

8%

11%

2%

5%

6%

7%

10%

16%

10%

7%

32%

14%

43%

16%

4%

13%

16%

8%

15%

21%

26%

31%

40%

55%

0% 10% 20% 30% 40% 50% 60%

Wrong vocational choice

Mismatch between expectations and reality

Line manager relationship

The nature of the work itself

Relationships with colleagues

Harassment / bullying

The physical working environment

Relationship between employees and management

What the organisation does

The degree of autonomy in the role

Confidence in the organisation

Training and development opportunities

Work-life balance

The pay & benefits package

Potential for progression through the organisation

HR respondents (N=336)

New starters (N=957)

Aiding Self-Selection?

Taking Action: Organisations should ensure they have a robust understanding of what

attracts and engages new starters to their organisations, and revise their recruitment, induction and onboarding processes in light of this information

Even in the current climate, employees (especially top talent) self-select where they work. All too often, this happens within their first six months once organisations have invested considerable time and money for little return. Organisations need to enable potential employees to self-select far earlier in the recruitment process. This could include more realistic job previews, talking to current employees, job shadowing, the more realistic positioning of working at the organisation

Focus on addressing the question “At what point do we make a return on investment in a new employee?” to shift HR’s focus towards working with the business to either increase an employees’ speed to performance or adjust the levels of investment in them, so they can contribute to organisational performance more quickly.

More General View of Turnover

Employee turnover seems to have slowed considerably since October

Public sector and manufacturing organisations tend to have lower levels of turnover (80% report it to be less than 15%) than Private sector (circa 21%)

Turnover & Effect

19%

25%

17%

22%

9%

16%

7%

7%

19%

13%

27%

32%

4%

14%

7%

14%

5%

13%

5%

5%

21%

26%

49%

61%

0% 10% 20% 30% 40% 50% 60% 70%

Lack of teamwork / cooperation

Uninteresting work / boredom

Promises not kept by management

Lack of training / development opportunities

Uncomfortable working conditions

Lack of confidence in the future of the organisation

Lack of belief in the purpose of the organisation

Lack of independence in carrying out the job

Poor work-life balance

Poor relationship with supervisor / manager

Inadequate pay

Lack of promotion opportunities

% organisations

Figure 9.1a Reasons for Voluntary Turnover HR practitioners (N = 316)

Leavers (N = 5,061)

Interventions

The five most popular retention initiatives are:– improving the induction process– improving employee communication and

involvement– increasing learning and development opportunities– improved selection techniques– increased pay

Since 2005, there has been a notable increase in the implementation removal of age-related policies and practices

Taking Action: The survey highlights that most organisations have a huge opportunity

to get more value from their exit data. The first step is to understand how to interrogate their data more meaningfully, rather than looking for simple quick fixes (e.g. “what were the worst 3 items?)

Having done this, HR can develop a clearly defined Engagement and Retention strategy that is jointly owned by HR and the business.

The next step is to establish clear KPIs to support this strategy and that are informed by the different engagement measures within the organisation (i.e. new starter infomation, employee satisfaction surveys, and leaver data).

The senior HR team then need to invest time throughout the year to explore the best way to execute, communicate and involve the wider organisation in this strategy. They then need to regularly review the value of their interventions, and revise actions accordingly.

MINI SURVEY

1. The majority of people leave their manager, not the organisation

 True / False ?  False. Only 13% of leavers give dissatisfaction

with their manager as a reason for leaving, while 33% of leavers give ‘dissatisfaction with the organisation’ as a reason for leaving.

2. What percentage of leavers goes due to dissatisfaction with the job and/or the organisation?

57% 67% 77% 87% 97%

  57%. 43% of turnover is to all intents and

purposes unavoidable. Geographical relocation, career switch and just ‘time for a change’ are some of the reasons for leaving that organisations are much less able to tackle.

3. 66% of organisations collect feedback from new starters, how many ask specifically about the factors that attracted people to join?  

24% 36% 43% 53%

24% with only 19% asking what factors effect engagement

4. Upon resigning, for how long has the average leaver been thinking of going?

Less than 1 month Less than 3 months 3-6 months 7-12 months 1-2 years More than 2 years

  3-6 months. 35 % of leavers report considering

their leaving decision for 3-6 months prior to resigning. Only 6% have been thinking of leaving for less than 1 month.

5. Which occupational group is most likely to leave for a more competitive salary elsewhere? Managerial Professional Sales Customer Service Administrative

  Sales. 36% of leavers from a sales occupation are

attracted by a more competitive package elsewhere. 35% of professionals also give this as a reason for leaving. This drops to 26% for managers.

6. What is the most common reason for leaving across occupations and industry sectors? Poor work-life balance More competitive salary available elsewhere Lack of training / development opportunities Lack of promotion opportunities Poor communication by senior management

  ‘Lack of promotion opportunities’ and ‘More

competitive salary available elsewhere’. 32% of leavers give these as reasons for leaving. 19% of leavers cite ‘poor work-life balance’ as a key resignation driver.

7. When asked, what do most employees think is the most important factor for maintaining their commitment to an organisation? Well-Being Salary & Reward Personal Growth Career Progression Organisational Confidence

  Personal Growth. This area (defined as challenging

work and opportunities for training and development) is ranked as the most important. Well-Being (work-life balance) is ranked lowest out of this list, but preliminary European data suggests that this is a UK-specific finding.

8. The image/ profile / brand of the organisation is seen as a key attraction factor by HR. When asked what % of new starters agreed? 35% 48% 64% 75%

35% applicants are far more attracted by the nature of the work, what you do, pay, training, reputation as an employer

9. Which of these is the least common reason for leaving across occupations and industry sectors? Lack of independence in carrying out the job Unfair treatment because of your age, gender or ethnic origin Unethical business practices by the organisation Uncomfortable working environment Job not as advertised or described during recruitment

Unfair treatment because of your age, gender or ethnic origin. 3.8% of leavers endorsed this statement as a key reason for leaving.

8% leave because they feel the job was not as advertised or described.

10. When answering exit surveys that are not anonymous, leavers are on average more lenient in their responses. Which of the following reasons are leavers actually MORE likely to select when the survey is NOT anonymous? Incompetence of supervisor / manager Lack of training / development opportunities Uninteresting work / boredom More competitive salary available elsewhere Inflexible working arrangements

  More competitive salary available elsewhere. 32% of

anonymous leavers give this reason, compared to 38% of leavers who do not complete the survey anonymously. For all the other reasons in the list the difference is reversed. This suggests that ‘salary’ is perhaps the easier option or scapegoat when anonymity does not apply.

11. The following reasons are all more likely to be given by leavers who have stayed with their organisations for less than 6 months. For which reason is the difference between this early turnover group and those who stay longer the biggest?

My skills did not match the job Uninteresting work / boredom Job was 'oversold' to me Lack of support from supervisor / manager

  Job was 'oversold' to me. 15% of early leavers give

this as a key reason for leaving, compared to 8% of leavers who stay for longer than 6 months. Uninteresting work / boredom are the most common reasons for leaving among the early turnover group (29%).

12. When asked to prioritise what is important to them for maintaining their commitment to an organisation, on average men place more emphasis than women on 4 out of the following 5. Which area is more important to women? Job Satisfaction Salary & Reward Cooperation Career Progression Independence

  Cooperation. Women rank this area 1st out of a

list of 12 work-related areas known to influence organisational commitment and intention to leave. For men Cooperation comes 4th behind Personal Growth, Job Satisfaction and Salary & Reward

13 . Factors that influence new starters to leave vary considerably, but what is the biggest factor that influences their decision to leave?

Wrong vocational choice Line Manager Relationship Potential for progression Work life balance

Potential for progression. Although only 10% of HR feel this is an issue compared to 55% of new starters.

14. Leavers from which job group express the highest level of dissatisfaction with their work-life balance? Accountants Estate Agents IT professionals Lawyers Marine Coastguards

  Lawyers. 3 in 4 leavers from law firms feel their home-life

had been adversely affected by the demands of the job, compared to 35% of estate agents. Traditionally work-life balance has been viewed as a necessary sacrifice to achieve a successful legal career, although recent action by the Law Society suggests this assumption is being challenged.

15. Those organisations who collect feedback from new starters on the their early experiences typically do so at: 3-4 weeks 1-2 months 2-3 months 4-6 months

2-3 months. 31% of organisations collect feedback at this point.

Final Thoughts

‘Employee Retention’ is a young but increasingly important function of human capital management.

It is still in its infancy compared to the recruitment function with its relatively massive infrastructure and budget.

This imbalance needs to be redressed. There is no reason why the exit process should not receive an equivalent level of standardisation, objectivity and analysis.

CIPD Recruitment, Retention and Turnover survey, John Philpott (chief economist of the CIPD) concluded that the present climate presents:

“... considerable scope for HR professionals ... to raise their game”

www.talentdrain.com