Retention is a big challenge for HR managers in today’s work environment. Talent benchmarking and retention strategies are most important functions for the modern day HR department.
Talent benchmarking for selection, hiring, employee engagement and retention has become crucial in today’s high growth business world. While any of the functions mentioned above are not new to organizations but practice has certainly changed. According to a survey by one of the leading jobsite, close to 80% organizations believe that benchmarking improves workplace and workforce quality while 90% recognize it as an effective tool in recruiting right resources and retaining them.
A comprehensive people strategy is not comprehensive if it doesn't include a proven retention strategy for holding on to the employees you've worked hard to recruit into the company. Most business owners and managers think retention is based on compensation issues—wage and salary levels, incentives, and golden handcuffs—when in reality, the drivers go much deeper into the human psyche to the actions and attitudes that make employees feel successful, secure and appreciated.
Almost all discussions on attrition end up being debates about compensation or benefits or other perks. Any tangible parameter like compensation etc can never be “retention strategies”. Beyond a certain threshold level, they are never the drivers of attrition. Head hunters often point out firms where they find it impossible to lure employees to leave despite new prospective employer offering staggering jumps in compensation and benefits. What stops the employees of these companies when they could easily make more money elsewhere? It’s all about making the employee feel valued. That is always done by making the employee feel special and unique.
HR policies are usually applied as “one size fits all”. But for retention, the strategies need to be customized to fit the psychological and the life stage needs of the individual, whose needs vary because of multiple reasons. What motivates one person may be the exact reason that demotivates someone else. Some employers actively seek to hire spouse as retention strategy, while there are others who discourage hiring close relatives for fear of breeding a culture of nepotism.
While compensation is usually driven by the market factors, benefits offer employers an opportunity to customize the package according to the needs of an individual.
A sound retention strategy should focus on and tactically address four key elements—performance, communication, loyalty and competitive advantage.
1. Performance. The benefit of having measurable objectives for employees is fairly obvious to most business owners and managers, but this perception usually stops short of relating performance metrics to employee retention. Study after study confirms that people have a deep desire to feel they're succeeding and that their talents and capabilities are being used in a way that makes a difference to the business. When people sense their actions are fulfilling this desire, they begin to develop a sense of belonging and a feeling that your company is their company. Human beings are often the happiest when they're in the process of achieving a goal. Clear, achievable objectives that gauge personal, team and company performance provide the feedback employees need to confirm they're making valuable contributions and accomplishing desirable goals.
2. Communication. The second essential element in a retention strategy is communication, specifically a communications process that's structured to inform, emphasize and reaffirm to employees that their workplace contributions are having an impact. Since we're dealing very directly with how employees feel about their performance, the company and their work environment, the question becomes, "How do you know how they feel about these matters?"
Properly done, communication with your staff will provide you with the insights you need in order to know how your employees feel about working for your business. Do you communicate on a frequent basis with your employees? Do you have regular meetings with your people? Is it two-way communication, and do you have a nonthreatening channel for them to offer comments and suggestions? Do you conduct employee surveys to gather opinions on company issues and activities? Are your managers and supervisors good listeners? An effective and sensitive communications plan can provide you with insight on exactly what's driving employee morale and how your staff members feel about your company.
3. Loyalty. The third element in a successful employee retention strategy is employee loyalty. True loyalty is not an enforced requirement but an earned response to the trust, respect and commitment shown to the individuals in your company. When you demonstrate loyalty to your employees, they'll reciprocate with commitment and loyalty to your business. Remember that people don't begin their employment with you as loyal employees, but will develop loyalty over time as they're trusted, respected and appreciated by you. So how are you going to demonstrate your commitment to them? How loyal are you to your employees? Are you more concerned about their success or their contributions to your company's success? In actuality, these two considerations are not mutually exclusive but are both essential and should work together.
4. Competitive advantage. The fourth and final element in your strategy to retain employees has to do with your competitive advantage. While that may seem odd at first, think about it: People want to work for a winner. What sets your company apart from your competition? How are you--and as a result, your employees--making a difference in your industry, in your community, and for your customers? Take the time to identify and inform your clients and your employees about your unique competitive advantage. If your product is similar to others in the marketplace, your service can be what distinguishes you (and probably should in any case). People want to be with a winner...and that includes employees.
Together, these four elements can provide you with a retention strategy capable of producing amazing results. You may even have some of them already in place, such as performance metrics and a communications process. The key is to make sure you've integrated all four elements into a strategy for retaining employees that's grounded in a genuine commitment to serving your customers and employees well over the long haul.
Eventually it is the culture of the company that becomes the best retention strategy of that company. It is extremely hard to replicate because a culture is a by-product of the policies, the informal norms and is reflected in day to day interactions of the vast majority of employees.
Disclaimer: This is a contributed post. The statements, opinions and data contained are solely those of the individual authors and contributors and not of People Matters and the editor(s).