Get Smart to Retain Needed Employees

Get Smart to Retain Needed Employees

September 2011

Must you and your management raise salaries before year’s end to keep your workforce humming productively and your best people from leaving for better employment?

And what prompts this question now while the U.S. and world economy frantically wallows and zigzags in the economic doldrums?

On July 27, human resource consulting firm Mercer released its 2011/2012 Compensation Planning Survey, showing 97 percent of surveyed organizations plan to give out base pay increases in 2012. More than half of them reported planning higher 2012 pay increases than granted in 2011, citing greater competition for workforce and anticipated labor shortages as the main reasons.

On Aug. 1, The Wall Street Journal headlined Kyle Stock’s column with “Some Companies Return to Offering Pay Raises.” Stock wrote: “While U.S. companies have slowed down hiring this year, some even announcing layoffs, some are raising salaries.”

On Aug. 3, global talent management firm Lumesse released its Inspiring Talent 2011 survey report. Of employees surveyed, 9 percent plan to leave their jobs in less than one year while a total of 29 percent of all employees surveyed plan to leave their jobs in less than five years.

On Aug. 4, the Dow Jones Industrial Average plunged 512.76 points, or 4.31 percent. The next day, Aug. 5, the Dow traded in a wide range of 400 points, closing up 60.93.

Last week, (Aug. 8-12) investors panicked on Monday and the Dow tumbled down 634.78 points. Stocks were dizzy, up and down, all week. Friday the Dow finished up 125.71 points.

Despite the fears employees may have about the uncertain future – or for some employees, perhaps because of the uncertainty – Bloomberg.com on Aug. 2 reported: “Frustrated employees are voluntarily quitting their jobs at the highest level in almost three years as confidence they will find another stabilizes, even with unemployment at about 9 percent for more than two years.” Authors Anna-Louise Jackson and Anthony Feld wrote: “Almost 2 million Americans quit their jobs in May, a 35 percent rise from the lowest level in January 2010, according to the Department of Labor.”

At such a schizophrenic time, with economic and job market signals swinging now-up and now-down, it’s a good time to examine the fundamentals of employee retention. And in most organizations, the fundamentals for retention don’t start with salary and pay increases. There are other moves to make and actions to take that don’t cost any money before you think of salary and pay increases.

Jeff Kortes, president of Human Asset Management in Franklin, Wisc., believes that in today’s uncertain economy, the risk of your top performers jumping ship “is actually quite high because top performers are quite valuable no matter what.” In a time like now, he says, employers “can’t afford to hire a lot of people, so they are seeking the high performers.”

Kortes, who is author of No Nonsense Retention: Painless Strategies To Retain Your Best People,” offers these actions to take to retain your best and productive employees before you consider wholesale salary and pay increases:

1. Communicate with employees. Kortes explains poor communication with employees is the first bad management practice that drives employees to seek new jobs. “When employers don’t communicate with employees, the employees fill in the blanks themselves, often incorrectly, and create a lot of anxiety among themselves.”

2. Terminate the bad employees. Kortes labels the underperforming employees “slugs.” He stresses that “they take away resources from the good employees and frustrate good employees because the good employees see the employer holding on to the slugs.”

Kortes defines a “slug” in the workplace as “someone who is a poor performer, or someone whose value system is inconsistent with the organization.” He says, “We’ve just gone through one of the worst economies in years and slugs are still in the organizations. Employers just refuse to deal with those people.”

Kortes, who spent 25 years in HR and now runs an executive search firm and consults with organizations on retention, says “firing slugs is one of the most important things you can do [to retain the best people].” He explains: “Slugs really irritate the top performers. Seeing those people day-in and day-out really sucks off resources from the organization. By not firing the slugs, it undermines the credibility of your management team. The good employees are looking at management and saying, ‘How can they tolerate these people?’”

Management that tolerates and refuses to weed out the poor performers sends the message to the good performers that there must be better places to work.

3. Be visible. Says Kortes, “Management that doesn’t get out of the office, management that’s not visible to employees, is not accessible. Being accessible drives communication, communication drives trust, and trust drives loyalty. And people don’t quit someone they’re loyal to.”

4. Start at the top. To retain the best employees, focus on management first. Says Kortes, “Most people do not quit companies, they quit their boss. As an example, just this morning I met with an HR manager at one of my clients. He’s telling me a year ago he absolutely loved his job. Then a year ago he got a new boss and now he absolutely hates his job.”

5. Care about your people. “As the workplace has gotten more and more depersonalized,” Kortes says, “those supervisors who show they care for their employees are respected more than they used to be. It’s about getting to know your people. You understand why they come to work. And as a result you can be a better supervisor.”

6. Actively focus on employee assistance. Kortes explains that “focusing on an employee assistance program is huge because 20 percent of your people at any one time will be going through tough issues outside of work that affect their performance at work. Your rule is to notice change in performance and to channel people to the appropriate resources so they can get back to being the most vital performers for your organization.”

7. Tell your people what you want them to know. “One of the things most maddening for people is supervisors who fail to set expectations for people or who are constantly changing expectations,” says Kortes. “That is probably the second most frustrating thing that occurs for individuals, other than seeing slugs tolerated in the organization.”

Here are five more no-cost employee-retention strategies:

1. Re-hire your employees. Think of this as a re-hire interview. But instead of an interview, have a two-way conversation. Sit down one-on-one with each employee and talk with the employee about (1) the organization’s goals for the future, near-term and long-term, (2) the employee’s needs and goals for the future, near-term and long-term, (3) how the employee’s strengths and talents can best fit both the organization’s goals and the employee’s goals.

2. Be a jerk-free workplace. If you are a jerk, change. And don’t hire jerks. (A dictionary definition of jerk is “A person with unlikable or obnoxious qualities and behavior, typically mean, self-centered, or disagreeable.”) If you inadvertently hire a jerk or two, coach them to turn around, and if they don’t, free them from your employment so your competitors can hire them.

3. Stop doing time-wasting things. Jane Boucher, consultant at janeboucher.com and author of How To Love the Job You Hate, says, “Throw away irrelevant tasks. Neither the boss nor the employee should waste time on inconsequential things.”

4. Offer flexible work schedules. Given the opportunity, many employees will choose a flexible work schedule over a higher paying position. Have one-on-one discussions with employees about how they might complete their assignments and reach their goals while performing their work on flexible schedules. Examples: Some employees can perform well while doing some or all of their work at home. Some employees’ duties can be completed in a seven work-hour day, rather than eight. Offer these employees the reward of leaving work each day when their assigned duties are completed.

5. Do job-match evaluations. Job positions change. Employees’ skills, talents, and interests change. The needs and opportunities in your organization change. Lessen employee dissatisfaction by doing job-match evaluations. Conduct new, current evaluations of each employee’s strengths and weaknesses. Also analyze each work position to confirm the current skills and strengths needed to perform the position well. The result may be that you find some employees who will be happier and perform better in newly-designed positions.