One of the most challenging issues facing today's employers
is how to retain good employees. Because turnover can cut deeply into
a company's profits, it is far more cost-effective to keep valued
employees on the payroll than to constantly be seeking, interviewing,
hiring, and training new employees. In order to avoid costly turnover
problems, the following steps are suggested.
Presenting the good, the bad, and the ugly. Probably the best way to improve retention and reduce turnover
is to make good hiring decisions. This entails describing the job
accurately to applicants and hiring the candidate who can and will
meet these requirements.
Before interviewing the first applicant, even before
placing an employment ad or hiring a search firm, employers should:
• Identify the critical characteristics of the job.
• Put these elements in writing.
• Draft an accurate job description.
• Define the employer's expectations so that they may be
clearly conveyed to job applicants.
The other side of this equation is to train managers
and others involved in the hiring process to conduct interviews that
lead to well-informed, appropriate judgments about each applicant.
Please see the
Most employees want to find their job rigorous enough
to be interesting, but not so difficult that it can't be mastered.
To a great extent this depends upon realism in describing the job
to an applicant in the first place (and of course the employee's honesty
in characterizing his or her own skills). Applicants or employees
seeking a promotion need honest information, both favorable and unfavorable,
about an open position so that they have clear expectations about
the job in store for them. At the same time, the employer must have
a very accurate sense of the employee's ability to do the job described
(e.g., whether the employee is skilled enough to accomplish the tasks
expected or has too much ability to find the job at all challenging).
Training. Keep employees motivated
and stimulated through good training and development programs. Stress
the importance of personal development. Ensure the availability and
importance of solid, ongoing training for employees.
Early intervention. Starting with
an effective orientation program, employees should be helped to adjust
and get up to speed in the new environment. During the orientation
process, employees should be provided with a contact person or mentor
who can answer their questions and help them find the tools and resources
they need to work effectively.
Enrichment. Allow employees more
autonomy and decision making in their everyday work, add responsibilities
to the employee's job, and increase the variety of their tasks. Many
employers offer employees the opportunity to cross-train in another
position. This broadens an employee's skills and makes it easier for
employers to find temporary replacements for employees who are on
leave or vacation.
Mentoring. Develop a mentor program
teaming veteran and new employees, and stress its importance. Reward
mentoring employees for doing that particular task well.
To help prevent turnover caused by employees feeling
unappreciated or undervalued, many employers have set up employee
recognition programs as a way of recognizing exceptional employee
performance. One way of accomplishing this might be an employee reward
or bonus program, accompanied by a special note of thanks from the
supervisor. Expressing appreciation is appropriate any time an employee
accomplishes a task well or expends extra effort. Choose an employee
of the month and present a small award at an all-employee meeting.
Send employees to represent the company at social functions, trade
shows, or other meetings, conveying the worth of the employee to the
Room to grow is probably the most important issue for
talented and ambitious employees—the kind an employer doesn't want
to lose. Good employees need to know that an organization has room
for them to improve their careers; indeed, a leading reason for high
turnover in an organization is that there is no career path, or it
isn't made clear to employees.
Promote from within. Is there
an internal posting system for openings, and does it work? Employees
are quick to understand a sham posting system, and it can be a major
reason for cynicism and resentment in the workplace. Retention depends
on an employee's ability to grow and advance in the job, and internal
posting is a critical element of providing an opportunity for advancement.
Employers must be sure that their supervisors know what
they are doing because incompetent, harassing, or unfair supervisors
are a major cause of employee flight. Supervisors need training too,
in job skills, leadership, feedback, attention, and fairness. Also,
supervisors need the same challenges, job satisfaction, and promotional
opportunities as their subordinates.
Open communication. Employer and
employee must communicate. Some methods are to open forums in which
employees can talk with, and listen to, decision-makers, and provide
employee newsletters or e-mail in order to share important information.
Also, if at all possible, employers should know their employees and
spend time just chatting with them, taking an interest in them personally
as well as talking informally about their work. This is a valuable
way for employers to know more realistically what's going on in the
While employees may expect the more traditional benefits—health
insurance, employer-contribution savings plans, insurance, paid vacation—it
is often the more innovative benefits that make the difference in
retaining employees. Some examples include flexible hours, telecommuting,
casual dress codes, education subsidies, day care in the workplace,
stress reduction programs, and many more. The benefits an employer
chooses to offer depend on the nature and culture of the workplace,
and on the kind of employees an employer is seeking to attract and
Pay is far from the least important factor but it isn't
necessarily first, either. Employees, of course, want good pay and
good raises for doing their jobs well. They want bonuses for exceptional
performance on important projects. But if employees are paid competitively,
it's typically the other factors, such as workload, recognition, or
the working relationship between subordinates and supervisors, that
have the most impact on whether they stay or go. Employees will often
continue to build a career with an employer in whom they have confidence
and trust, despite being offered an opportunity to earn additional
pay with another employer.
Training supervisors and managers about the causes of
turnover, how to reduce turnover rates, and how to increase retention
of good employees, may help employers avoid turnover costs. Training
materials that include video and audio presentations, handouts, a
trainer's guide, and quizzes are available on HR.BLR.com