Winning the Talent Wars by Redefining Retention

Jul 16, 2001

We still hear a lot of talk these days about retention. And the question business leaders and managers always seem to ask is, “How do you retain people as long-term, exclusive, full-time, on-site employees with uninterrupted service?” But that’s the wrong question to be asking. The right question is, “How do you maintain good working relationships with the best people throughout their working lives?” In other words, you don’t have to retain most people in the old-fashioned way anymore. The best staffing strategy in today’s unpredictable business world is one that balances two competing priorities: continuity and flexibility. Yes, you need a stable core group, but the best way to retain a large share of your valuable employees may be on-again, off-again; sometimes full-time, sometimes flextime, sometimes part-time; sometimes on-site, sometimes off-site; sometimes on an exclusive basis and sometimes as a shared resource. Often it doesn’t matter where, when, or how people contribute, as long as they get a lot of work done very well and very fast. The key, then, to improving retention ? not merely increasing it ? is to redefine retention as “access to the talent you need when you need it.” Stay lean and thrive on recurring, short-term flexible employment relationships with the best free-agent employees. The free agents who serve you well on a consistent basis will become some of your most valuable, lifelong employees. Retain the best people one at a time, one day at a time, on the basis of an ongoing negotiation with each individual on his/her own unique terms. Some will follow the traditional path. Most, however, will not. But if you are willing to negotiate in order to retain, then you can transform the reasons why the best people leave into reasons why the best people stay. According to our research, there are five non-financial reasons why people typically leave their jobs voluntarily:

  1. Relationships. The number one non-financial reason why people leave their jobs is unhappiness with a boss or manager. The best way to prevent this factor from affecting turnover in your company is to create a corporate culture where supervisory managers play the role of performance coaches. But interpersonal difficulties just cannot be avoided sometimes. The challenge at that point is to move the employee into the supervisory orbit of another manager without losing the employee altogether. It is important to note, however, that this is not the only relationship that may cause an employee to leave (or stay). Other relationships with a powerful impact include relationships with coworkers, subordinates, vendors, and clients or customers. By working to improve problem relationships or moving contributors out of such relationships and into new ones, many unnecessary turnovers can be prevented.
  2. Schedule. This is almost as big a factor as relationships. Sometimes people want to work more, sometimes they want to work less, often they simply want to work the same hours but on flex-time or compressed-time. In many, many cases, even a slight adjustment in a person’s schedule will be enough to cause someone leave a job (or stay, for that matter).
  3. Work. Often people leave because they want to tackle new challenges ? new tasks, responsibilities, or projects. If they can find those new challenges in the same job or, at least, the same organization, often they will stay. Some of the best retention success stories involve people who reinvent themselves over and over again in the same organization.
  4. Skills. In today’s world, where it is critical to keep building one’s skills faster than they become obsolete, individuals ? especially the best, most skilled individuals ? feel a strong compulsion to be learning all the time. That is why, when people feel they have exhausted the learning opportunities where they are, they often leave in search of new ones. As long as such employees are learning voraciously on the job, they are unlikely to leave. The challenge for employers is to maintain an environment of constant learning by creating an infrastructure of learning resources and a culture of knowledge work.
  5. Location. Sometimes, due to a change in life circumstances (sometimes not), people want or need to work in a different place. That may mean a different geographical location. While not every employer may have the ability to accommodate this need, for organizations that are geographically widespread, all it takes is a transfer. Of course, employee transfers present many issues, not the least of which being that the transferring manager loses a valued employee. However, if the complicating factors can be worked out, at least the organization as a whole will retain an employee who would otherwise be lost altogether. It should be noted that, sometimes, the desire to work in a new location simply means a desire to work at home, some or all of the time. Whenever practical, retaining an employee as a telecommuter is preferable to losing the employee altogether.

Remember that the factors that cause valuable contributors to leave can often be transformed into factors that cause valuable contributors to stay, if an employer is willing to negotiate. Indeed it is often an employer’s willingness to negotiate and, ultimately, accommodate on such matters that can make an otherwise ordinary employment relationship uniquely valuable to an employee. The strong likelihood is that long-term employment relationships in the workplace of the future will be based on how well the work situation fits with each individual contributor’s unique life plan (not the reverse). Redefining the Meaning of Retention The problem with many retention programs is that they are based on the assumption that the goal of retention is to keep all the best employees as long-term, exclusive, full-time, and on-site. These traditional efforts have been limited in their effectiveness because they are usually focused on two things: (a) creating financial incentives for people to stay, and (b) becoming an “employer of choice,” that is, a place that is such a pleasure to work that nobody wants to leave. The problem is that these kinds of retention strategies thrust employers into bidding wars with other employers. Who can offer more money? Who can offer more perks? And who can offer money and perks in ways that are tied to or encourage (at least some) longevity of employment? Business leaders who try this strategy will win some battles, but they are destined to lose the war because their long-term employment model makes them sluggish. Routinely, they will find themselves bloated when they need to be lean; and too lean when they need more people. They will find themselves financially overcommitted, unable to respond to fluctuations in the market value of employees’ skills and contributions. Instead of figuring out how to operate successfully in an increasingly fluid labor market, they are trying to hold back the tide. So what are some ways to approach retention in sync with the fluid, information-rich, efficient free market for talent?

  1. Develop personal retention plans from day one. Don’t wait until an employee is considering leaving to ask, “Is there anything we can do to keep you?” Ask on the first day of employment and keep asking every single day. What changing role might your organization play in the career of each new hire as he/she moves from one stage of life to the next? What changing roles might each new hire play in the future of the organization? What might you have to offer each other as the employer-employee relationship grows and evolves over time? If you begin this dialogue on day one, it is much more likely that the dialogue will be continuing at all the key turning points down the road when the employee might decide to stay or go. This requires a high level of engagement on the part of supervisors-and a high level of discretion.
  2. Provide internal “escape hatches” that allow employees to reinvent themselves, their roles, their careers, and their circumstances without leaving the organization. Provide opportunities to move into new geographical areas, new skill areas, work with new people, take on new tasks and responsibilities, and work new schedules. This requires aggressive tracking of available talent, career paths, and corresponding workflow.
  3. Encourage people to leave without leaving. Once the organization has invested in recruiting and training an employee, management has a stake in retaining that person ? even if not as a full-time, on-site employee. If you can’t keep the whole employee, why not keep as much as you can? Instead of losing them, offer valued employees the chance to work part-time or flex-time, or as telecommuters, temps, or consultants. And offer unpaid sabbaticals. If you are going to stop managing place and time, however, then you’ll have to get really good at managing results.
  4. Build your own reserve army. When valued people do leave, put them in a proprietary talent database and consider them part of your reserve army. Stay in touch with them. Call them up for active duty when there is a project that fits. Try re-recruiting them after they’ve had a chance to see that the grass isn’t so much greener on the other side. Your reserve army will be the backbone of a robust fluid talent pool-and a way of organizing a whole new category of long-term employees.

Conclusion You can have long-term employment relationships with the very best people, but you’ll have to learn to employ people in many, many different ways. In order to have access to the best work of the best people on a consistent basis, you don’t need the majority to follow a traditional career path. Rather, you just need to know where to find those people when you need them, and have good enough working relationships that you can bring them in when you need them. And accept that they will work for you only when they are available. As long as you can maintain a deal that makes sense for you and for your best people, the best people will keep serving you well when you need them and when they are available. Lifetime employment is only on its deathbed for employers irrevocably attached to the old-fashioned, one-size-fits-all employment relationship: full-time, on-site, uninterrupted, exclusive, and made to fit the organizational chart. But for those employers ready and willing to reinvent their companies as fluid and flexible organizations, long live lifetime employment.

Get articles like this
in your inbox
The longest running and most trusted source of information serving talent acquisition professionals.