EMPLOYEE RETENTION

EMPLOYEE RETENTION

To design an effective retention plan, you need to first identify the reasons impacting retention in your organization. The most common reasons for attrition in organizations are: Compensation - Lack of external & internal equityBad bossesLack of growth opportunityLack of recognitionPoor fitmentLack of work-life balance These are reasons which can be addressed by the organization in the near team. Other reasons for attrition which may not be within the organization´s immediate control are overseas opportunity, location constraints, brand value of the organization, etc. Having identified the main reasons why your employees are leaving the organization, you now have a better perspective of what your retention plan should address. Let´s take compensation. Your organization´s compensation structure should not be too far divorced from the competitive labour market reference point. Appropriate source for competitive market rates are compensation survey reports. There are consultants who provide such reports. You could also commission a targeted survey. Another source is Jobsites. Many organizations while posting their jobs also communicate the salary details. Exit interviews are also a suitable source. Your job gets more difficult, if your organization´s compensation budget does not support external equity. In such a case, you may have to ensure that at least your key employees are adequately compensated. Besides external equity, lack of internal equity also causes immense dissatisfaction. For similar role, experience, and effort, employees expect certain parity. Identifying similar role and experience is the easy part, but most organizations fail miserably in communicating expectations and measuring individual effort. If your organization also falls in this category, it is advisable to avoid vast differences based on pay for performance programs. Do remember, Status & Fairness matter a lot to employees. Having said that, do not solve all your people problems with financial incentives. Pay may be the reason why employees leave the organization. But it´s not the reason why they stay. Bad bosses. Gallup in their survey report on attrition has identified bad bosses as the number one reason for the employee to leave the organization. There is an acute shortage of competent leaders. One of the unfortunate consequences of the rapid growth of Indian industry in the last couple of years is the fact that organizations have assigned employees with inadequate experience and competency to leadership roles. These leaders are poor role models for their direct reports and cause more harm than good. Training and coaching are suitable intervention to arrest this situation. Unfortunately, leadership skills cannot be learnt in classrooms. It has to be practiced. It´s important to have systems in place to identify future leaders in the organization and assign appropriate leadership responsibility. Besides classroom training, which provide useful tips, they should also be assigned mentors who can coach and provide timely feedback. Lack of growth opportunity is a major factor for employees to look for other employment options. Promotion is only one option to address this issue. You can´t promote everyone, but you can provide challenging tasks, greater responsibility and more learning opportunities. A suitable mix of OTJ and class room training should be provided. Employees view growth not only in terms of promotion but also in terms of increased knowledge and skill levels. Providing formal and informal feedback in a timely manner provides the employees necessary inputs to grow and succeed in their current roles. It´s a strong indicator to the employees that the organization cares about their growth. Lack of recognition. Recognition can be provided in many ways: Appreciating individual/team achievements. A word of appreciation from the immediate boss or peer has the most impact. Appreciation/recognition should be for a specific behaviour or achievement. Appreciation can be verbal or written. It can also take the form of a certificate or reward in cash/kind. Celebrating successes. Team get-together on successful project/milestone completion.Rewarding longevity. Prize and certificate to employees who complete 3/5/10... years in the organization.Birthday celebrations. Choices are: Card/Bouquet/Movie ticket/Cake cutting with team members in the cafeteria.Annual day celebrations. A word of caution. The organization´s Reward & Recognition (R&R) plan can be a double edged sword. It provides an immediate high to employees who are recognized and demoralizes those who don´t know why they were not considered. So, it´s important that the R&R plan is based on explicit criteria, well communicated and understood by the employees. Avoid programs such as "Employee of the month", based on round robin format. Poor fitment. Employees are more prone to leave the organization in their first year of employment. The main reason is their inability to adapt to the culture of the organization and expectation mismatch. During recruitment process, the recruitment team should evaluate the candidate for cultural fit. Some organizations have loose structures and require employees to have a high level of initiative to operate in an ambiguous environment. Employees who prefer a more structured environment and clear expectations may find it difficult to adjust. The recruitment team should also clearly communicate what the candidate can expect from the organization. It´s not uncommon for a candidate to be promised something which is not met when the candidate joins the organization. The candidate may have joined the organization based on the expectation that he may work on a specific project or technology, and when that expectation is not met, he may get disillusioned andleave the organization. The recruitment team should be sufficiently trained to identify appropriate candidates. Lack of work-life balance. In the race to stay ahead of the competition and satisfy unreasonable customer expectations, organizations are prone to bite more than they can chew. Management may bid for projects at extremely tight timelines. Employees are then expected to stretch themselves to meet these unrealistic timelines. Working late nights and on weekends becomes the norm rather than exception. This may lead to frustration, bickering, and in extreme cases - employee burn out. Providing training and introducing processes for better project estimation and assigning additional resources in projects may be some of the steps to address this issue. Providing stock option, concierge service, canteen facility, transportation for pickup and drop, group medical insurance (for employees and family members, including dependent parents), accident & disability insurance cover, flexi timing, free annual medical check up, subsidized loan, and option for young mothers to work from home are some of the benefits to ensure an engaged workforce. You could build on these ideas to create your retention strategy. It is important to understand that your plans only have a chance of success, if your CEO is convinced of your suggestions. This means that the CEO sets the example by practicing the process. If a culture of fairness is what the organization is professing, then the CEO should not only be fair in all his decisions, but also be perceived to be fair by all the employees. If you are suggesting a process for systematic recognition, then the CEO has to set the ball rolling by being the first practitioner of this process and the practice will automatically cascade down. HR function can only be a facilitator and trustee of the process. Retention is everyone´s responsibility.