Seven Steps To Increase Employee Retention

By Mike Poskey, ZERORISK HR, Inc.

Many organizations are now realizing the bottom-line effect on retaining quality employees. Retaining quality performers quite simply adds to increased productivity and morale, while reducing the associated costs of turnover. As a business executive, doesn’t it make sense to have business processes that add efficiencies to how you conduct business to reach your corporate objectives and provide a positive perception in the marketplace and to your customers?

Why is Employee Retention Critical to Business Success?

• Projections from the Bureau of Labor Statistics forecast a shortage of 10,033,000 workers by 2010.
• Turnover analysis reports continue to show that the cost of unwanted turnover can be 1.5 times the employee’s annual salary.
• Employee turnover’s greatest cost is lost business and productivity.

When I consult with companies, the subject of identifying and retaining top talent is always one of the critical items executives tell me they’d like to improve upon. However, when I ask what their strategy is in that regard they either mention that they’ve found this great recruiting firm that is going to do nothing but send them top-level talent, or they look at me and tell me the people that have left were no good to begin with, basically rationalizing the cause of the turnover.

There are a couple of flaws with this line of reasoning. First, just because a recruiter has sent you top-level talent doesn’t mean that employee is going to stay and prosper with your organization. I can’t tell you how many talented employees I’ve seen leave organizations because they were either miscast for the job, management style, or corporate culture. Secondly, never assume a turnover problem exists just because the employee was no good to begin with. Job fit and performance go well beyond just having a talented employee. As with any business goal, you have to implement a proven process and strategy to attain that goal. The following will outline a seven step strategy to increase employee retention, one that helped one Fortune 500 Company realize a 67 percent increase in retention in the first year of implementing all seven steps.

1. Conduct job analysis audits to provide realistic job previews. Conduct job analysis audits with behavioral assessments, cognitive reasoning assessments, job simulations, and hard skills assessments (e.g., computer skills, etc.) to objectively define the core competencies required for success in each role (competency modeling). This helps in providing a realistic job preview for candidates and managers. Oftentimes what managers think they need for a certain role is different from that they actually need.
2. Implement a well-designed assessment and selection process. Include behavioral assessments and structured behavioral interviewing techniques to increase the likelihood of hiring people that can, and will, do the job at a high level in your environment and for your managers (job fit assessment).
3. Provide good employee orientation. The people you hire today are potentially your greatest resource for corporate success in the years ahead. As a senior leader, your participation in new employee orientation sends a vital cultural and leadership message: "We’re all involved here in the drive toward what we want to be in the future." Everyone—even the newest employee—has value.
4. Implement programs for employee training and development. Provide ongoing professional development to show your willingness as an organization to develop your greatest asset—your people.
5. Improve manager and employee relationships. Concentrate on the people that stay with you to learn what makes them happy … then give them more of it! "People leave managers, not companies. If you have a turnover problem, look first at your managers," Marcus Buckingham and Curt Coffman write in First, Break All the Rules.
6. Provide an equitable or fair pay system. Be competitive!
7. Encourage succession planning. Identify roles for which employees may be suited in the future and work with them on designing their succession plan within the organization. Invest in cross-training, job shadowing, coaching, mentoring, and cross-experience.

In summary, many organizations are already using several of the aforementioned steps, but may be lacking or deficient in the other steps. Each step is critical to the overall success of a comprehensive employee retention plan.

Mike Poskey is vice president of ZERORISK HR, Inc., a Dallas-based human resources risk management firm and exclusive provider of ZERORISK Hiring System. For more information, visit www.ZERORISKHR.com.