Employee retention: Some tricks of the trade
September 20, 2012
Article courtesy of SBAM Approved Partner ASE
By Anthony Kaylin
Salary increases are not likely to top three percent for most employers this year.
In times of low inflation such as the present, three percent actually represents real growth. Consider that in August the annual inflation rate was calculated at 1.69 percent, which would make a three percent raise equal to 1.31 percent real growth in pay. However, many companies froze their salaries for two years or more during the Great Recession, so employees in those companies are still experiencing negative salary growth despite raises this year. The simple though brutal reality during the recession was that forgoing salary growth in order to keep one’s job was a fair tradeoff.
And a new Deloitte study may give employers a sense of complacency about employee retention in 2012. Deloitte’s new global talent survey, Talent 2020, has found that 80 percent of employees plan to stay with their organizations over the next year, a significant increase from 2011 when nearly 65 percent were planning to leave. Forty-six percent of the survey respondents indicate they are less inclined to move because, in the last 12 months, they have changed jobs (nine percent), were promoted (22 percent), or have taken new positions (15 percent) with their current employers.
However, the situation has arguably begun to change post-recession, and employee attitudes may be changing as well.
Consider that gas and food prices have increased more than the rate of inflation, leaving some employees thinking they are paying to keep their jobs. Also, nearly one-third (31 percent) of respondents in the Deloitte survey say they are not satisfied with their jobs. Further, employees unhappy with their salaries know, because it has been widely reported in the press, that employers may be sitting on hoards of cash rather than spending it, never mind their reasons for doing so. Not a good mentality for developing retention strategies. And the truth is that there are still skill shortages in certain areas that will tempt key employees in those areas to move.
The reality is that employers still need to worry about retaining their key employees.
The Deloitte survey identifies three major challenges for retention. First, employers need to engage employees in meaningful work or watch them walk out the door. Employees value meaningful work over other retention initiatives; 42 percent of surveyed respondents who have been seeking new employment believe their job does not make good use of their skills and abilities.
Second, employers need to focus on “turnover red zones.” Employee segments at high risk of departure, or “turnover red zones,” are employees with less than two years on the job and Millennial employees (those aged 31 and younger).
Third, when it comes to retention, leadership matters; sixty-two percent of surveyed employees who plan to stay with their current organizations report high levels of trust in corporate leadership. Yet, considering the corporate cash situation and the controversial issue of CEO pay, trust is not easy to come by.
So what can HR do now to create meaningful retention strategies? Here are some things to consider:
According to a University of Iowa study, career growth in a company needs to be transparent to employees. If they cannot see career paths ahead, then training does not really help. “Most of the training research suggests that investing in employee training and development should help retain employees,” Maria Kraimer, associate professor and co-author of the study said. “But we found that providing developmental support, such as training opportunities and career mentoring, to employees who do not believe there are attractive career opportunities for them within the company, led to such employees leaving the organization. ”It is critical for businesses to have regular career planning discussions with their employees,” Kraimer said.
Another study shows that cascading responsibility and allowing employees to determine how best to do their jobs create greater satisfaction and higher retention. “People are more likely to be happy at work if motivation comes from within,” said Maynard Brusman, a psychologist and an executive coach at San Francisco-based Working Resource, who conducted the research. “They will perform better, engage more, and be more committed if what they do comes from the core of who they are.” But employers must have the tools and policies in place to support this approach.
Finally, a study by TeamViewer in February 2012 shows that “flexiplace,” in particular the ability for the professional workforce to work from home, coupled with worktime flexibility creates greater potential for retention. “. . . [T]hese findings show that telecommuting will be a force to be reckoned with in the future,” said Holger Felgner, general manager at TeamViewer, which conducted the research. Especially for working parents and those in the sandwich generation, giving employees time to work around personal responsibilities creates greater reluctance to leave the job.