Employee Retention

As the economy heats up and there is demand for candidates with requisite skills and knowledge, a number of employees have started to look outside their company for growth. As the CEO’s feel the pressure from managers who use this excuse at every management meeting for their poor performance, the cry goes out “Stop the turnover.”

So what can any one company, or even worse, their poor beleaguered H R Manager do to reduce the turnover? Starting at the basics, “turnover is not the disease; it is the symptom of the disease”. It is like a fever, the underlying cause may be an infection of the stomach, the eye or a wound in the leg. The treatment would differ for each of these reasons and the doctor first finds out the cause before she starts recommending a cure Or starting with a different imagery, “Turnover is like the tip of the iceberg, you only see one-tenth of it, nine-tenths of it is below the water and hidden from the view.”

So here we go on a 6 Step Program to reducing turnover. Note this, for it is important” reduce” not “eliminate”. For neither is it possible to eliminate turnover, nor desirable to do so.

Step I: Measure the turnover: Foolish as it may sound, very often the cry for high level of turnover may be exaggerated, it may be due to a favorite of some powerful manager leaving the organization on being denied a much wanted (though often undeserved) promotion. So have an ongoing program to measure the attrition rate, use simple tools to start with and refine as you go along. This will be very easy if you have a decent HRIS system, if not use payroll data. Do not start with a state-of-the art solution; the problem with modern art is that it is about “15 minutes of fame”.

Step II: Analyze the turnover: Slice and dice the data, compare turnover across departments, across performance levels, across number of years with the company etc. Compare it to last year, to industry trends, to the best of breed if you can. Call up your batch mate who is the Head of HR for “Enemy No. 1” Company. Check with him, most probably he will be happy to share the data with you if you share your findings with him. Bill the lunch expense to your company, if possible invite another friend, after all the more the merrier. If you cannot entertain for only marketing has an entertainment budget, you have found the root cause of the turnover. Any company which does not value its People function definitely deserves to have turnover problems. In fact you should polish up your resume and look for a job yourself.

Step III: Still feel you have a turnover problem? Try to find out the cause of this turnover? The methodology can vary? From the old fashioned one of talking with a wide cross-section of your employees on a regular basis, one-to-one (I found this gave me the most insight when I worked as an HR Manager), to fancy employee surveys (my recommended strategy when I am being paid on an hourly basis as a consultant). The latter has the benefit of the boss believing the highly paid consultant more than some HR jerk who gets a lowly salary and who has scored poorly in interpersonal skills in the peer review. (Told you, do not try to point out the unhappiness in the finance function employees, or that the sales department employees seem to watch all new films first day, first show etc.) On a serious note, it is easier to accept negative news from an outside third party which is perceived to have no political axe to grind.
One point here on surveys, for God’s sake do not attempt one on your own if you do not have the knowledge base for it, at the least read two books and learn about survey design before you attempt it. The best bet is to give this to someone who has done it before and knows about not only the technical requirements but also the process issues. I will not go into the point about “lies, damn lies and statistics”.

Step IV: For each cause draw out a solution:
Once you have started a survey, whether formal or informal you have to do something about the problems you uncover. This is the price of knowledge, if you know the problem you will have to solve it. If you do nothing you after this you will increase the unhappiness and the feeling that no one cares or is bothered.

The causes may vary, bad leadership, lousy salary, lack of training, insufficient skills, bad working conditions, a poor benefits package, employees lack skills and motivation, lack of promotion, long working hours etc. Pick up the top three and throw some managerial time and attention at it. Remember this; managers will be interested only if their performance bonus is tied to solving the problem. Make sure that you have some frontline employees involved, not only the gung-ho, lets get ahead types by sucking up to the boss, but also those who are informal leaders and would normally not touch anything that has the smell of management on it. Making sure that you have a good mix of people here, not only is the quality of the solution important, more critically they should have the political savvy (Okay-okay, a high emotional quotient, hope the word is not copyrighted.) to create a buy-in for their solution.

Step V: Implement the solutions: This part is tricky for some people will definitely be upset with the recommended changes. Change as we all know is tricky, it threatens vested interests, and their pushback has been known to trip the best of leaders. You cannot give up here; remember that if you have ensured proper participation and have been open about the reason why the company needs to change, you can create buy-in for the change process. For after all what is the option, not change, continue in the same merry old way and see all the employees walk away to jobs with your competitors. (I understand I am exaggerating here, but a bit of drama was necessary to catch your attention.)

Step VI: Communication, communication, communication:
Forgive me Conrad Hilton for the paraphrasing, but as any good HR professional knows this is important. While you are trying to solve the turnover problem remember you have to keep the others engaged. You cannot involve everyone, nor hope they will sit quietly and wait patiently for you to come up with a solution. Remember the 5 W’s Who, What, When, Where, Why. Let the employees know what you are trying to do, why you are doing it, who all are doing it, where are the problems and when will they solve them. Use a variety of communication channels, one-to-one meetings, many-one meetings, Notice Boards, Town Hall meetings, the intranet, etc. And remember communication is a two way street, so use mediums that allow for feedback. Go out and search for feedback, if you do not have the pulse of your employees there is no way you will get to know what is happening.

This is the trickiest part, where the rubber meets the road. Boy does it get hot here. First of all, if you have communicated enough, everyone is watching what is going to happen next. God help you if you have not communicated enough, for the locker rooms, I mean the chat rooms are abuzz. The grape-wine is now an Ethernet cable and is on the world-wide web. Or someone may be blogging about the problems in your company. So pray and get the information out on the formal channels, before the informal channels start buzzing and inevitably distort the truth.

So now that you have the answer, stop reading, take a printout and get to it. You can send me the thank you note after you have solved the problem. Remember the crisp 1000 Rupee notes say thank you the loudest.