Today’s labor market can be defined as an “employee market” where individuals are voluntarily leaving existing positions for other job opportunities. As companies face higher turnover rates, there is an opportunity to take a more holistic evaluation of why employees depart. Organizations taking this approach recognize the need for a comprehensive retention and talent development strategy.
Who is responsible for developing a retention strategy? Often it is assumed that Human Resources is accountable for everything involving employees. While HR departments can take the lead in defining the challenge and outlining alternatives, leadership sponsorship and commitment to implementing an effective retention strategy, leaders who make retention a priority, acknowledge that innovative talent management practices and a unified culture are critical marketplace differentiators.
If you are a business leader, use the following questions to guide your thinking about purposeful retention.
Look at the Data and Your Current State
Being armed with accurate information regarding when and why turnover occurs can inform the strategies needed.
- Do you know if your turnover rate is higher or lower than industry averages?
- Are there differences in turnover by gender or age range?
- What are the primary factors contributing to voluntary turnover (e.g., manager-employee relations, compensation, better career opportunities)?
- Are there reward equity issues that potentially indicate a lack of gender parity between men and women in similar roles? Are there efforts underway to close pay inequity?
Evaluate your Organizational Culture
Many employees leave an organization voluntarily because they do not believe there is a good fit. Inquire about the following:
- Are the organizational values concerning people and talent development clearly articulated?
- Does your culture demonstrate that “people are our most important asset?”
- Do individuals feel a disconnect between what is said and what is done?
- Are employees engaged and feel their individual work is meaningful?
- Does your culture support ongoing coaching and learning as a way to develop people and make work more satisfying?
Assess Organizational HR Practices
Consider assessing practices for attracting, selecting, managing, developing, and retaining employees (e.g., assessment, performance management, training, leadership development, career planning, and succession planning).
- Are the proper processes and resources in place to ensure these practices yield the desired results?
- Are performance management practices viewed as fair and meaningful?
- Are employees receiving appropriate levels of coaching and support?
- Are the criteria for career advancement clearly defined?
- Is there sufficient opportunity to advance at a satisfactory rate?
- Do high performing female talent and diverse candidates believe that career advancement opportunities are awarded fairly?
Support Your Managers and Build their Capabilities
One of the primary reasons employees leave an organization is the manager-employee relationship. Organizations need to proactively support managers’ ability to create a positive work environment and coach their employees with effective, timely feedback.
- Are there managers who have a higher rate of turnover?
- What are you doing to enhance management skills related to delivering effective feedback based on two-way communication and mutual trust?
- Are you helping your managers assess potential retention risks?
- Are managers equipped to seek support when conducting a candid conversation to “re-recruit their talent” and/or “make a save” when an employee is at risk for leaving?
- Are managers receiving training related to unconscious gender bias that could inhibit their ability to think fairly about team member performance or promotion readiness?
Remember Individual Factors
There will always be personal circumstances that lead to employees voluntarily leaving an organization. These include employees who find issues related to balancing job demands with personal needs. Also, people who perceive there are not opportunities for advancement look for greener pastures.
As long as there is a strong economy, there is higher voluntary turnover. Companies taking proactive measures to retain high performing talent benefit by reducing direct costs associated with recruiting and replacement. These hidden costs include impact on work productivity, added demands placed on other employees, lower employee engagement, and marketplace perception. Leaders and HR professionals must partner to make retaining talent a priority.