Keeping Your Employees: Four Ways to Improve Retention

I was speaking recently with an engineer who was in the midst of thinking through whether to accept an offer from a another local firm or stay with his current employer, a well-respected large company. He was generally very happy with his employer but was increasingly worried over the organization’s performance. There were rumors of layoffs and fear was running high. He knew that by going to this other firm he was, in a way, just jumping out of the frying pan into the fire. But, he reasoned, as a new hire he was less likely to be the target of any imminent layoffs, and he didn’t feel as confident at his current employer. As I listened to him, I filtered out four things his company could do to keep him ó if only they understood! None of these ideas costs much, and none are really very hard to do. But to put them into practice does require a change of mindset and a willingness to break (or at least stretch) the rules. Good HR and good recruiting is all about treating people fairly ó but not necessarily the same. Here are the four things I think could be done to keep this engineer, and probably most other employees. 1. Have a performance management system that works. Let employees know where they stand and how they are performing. Offer employees the opportunity to move within the company to jobs that may better fit their skills and interests. And keep the bureaucracy to a minimum and remove time constrictions. His major reason for even listening to the other recruiter was his insecurity over how his performance was being evaluated by his boss and his boss’s boss. Although he had been working in one area for two years, he wasn’t really sure of his status. Granted, he could have been more proactive and asked. That still doesn’t change the need for a better system. He was also required to notify his boss if he wanted a change positions. Of course, if he didn’t get the job, his boss would know that he wasn’t happy. Not a situation he wanted to be in. He had looked at other job opportunities within the organization via the company’s Intranet, but there weren’t many to choose from, and the ones that seemed exciting required skills or experience he did not have. The other recruiter promised him the chance to work on an exciting project with a guru who would act as a mentor and coach. The real plus was that he didn’t have to tell his boss he was interviewing. Why can’t organizations put in place a simple process that requires no notification until the offer is made and that allows the internal candidate to compete equally with external candidates? Even better: guarantee internal candidates a new job every two years if they want one. The idea is to keep up the excitement and the freshness that comes with a start-up, combined with the stability of the larger organization. 2. Keep employees informed. Silence is the greatest enemy of retention. When management does not update the employees on the financial state of the company and when rumors can be counted by the minute, turnover goes up as well. While some people (usually the “B” and “C” players) hunker down and hide, the best ones start looking. I can’t tell you how many excellent employees who are highly valued have left their employers because of uncertainty. I am not sure if this engineer is a “highly-valued employee,” but I suspect that he is. No one expects assurances or guarantees. What they hope for is some sense of direction ó are things better, the same, or worse? Are customers leaving? How is sales volume? I know that much of this information is guarded to protect the stock price. While I think that employees ultimately have the most significant effect, I understand the need to be careful. There are still many ways that an internal employee communications function can inform. 3. Educate employees all the time. In bad times, employees have time to soak up new information. If courses are available online through e-learning, administrative costs, delivery costs, and overhead costs are all reduced. No matter how much educating your employees costs your company, it is less than you will pay in agency fees, sign-on bonuses, severance pay, and lost time and productivity. Will you loose a few people to the competition? Probably. But once again, think about the net cost versus the fees usually paid to recruit someone. Education and development are the cheapest retention tools in your arsenal. We are in a talent war (even though right now it’s hard to see), and everything has to be tried. Locking people into degree or certificate programs is almost a guarantee that they will remain with your firm until they complete the program. Most will be loyal and thankful. And all of them will be better-educated, and hopefully more productive, employees. This is a BIG plus for the large organizations and you should be capitalizing on this right now. 4. Help every employee build a social network. The employee I talked about above was clearly devoted to his fellow employees and felt a strong attachment to them. This was one thing that was keeping him from instantly accepting the other offer. We all know how powerful networks are, and companies that actively promote employee interaction and teamwork have less discontent and less turnover than those that keep employees apart or at odds. I recommend starting clubs and social groups within the company where employees can work and play together. Some companies form college clubs for new college grads that help them become oriented to the firm and meet other new hires. This tends to raise the level of commitment they have to the organization and reduces turnover. Internal networks are powerful binding devices. Extending the network to include employees in many different local firms can alleviate fears and demonstrate to people that the water is not necessarily cleaner at another company. Knowledge is a powerful retention tool and naivety and ignorance can best be combated by sharing of ideas and experiences between people from many different firms. Nothing new here ó it’s 90% common sense.