Using HR to Increase Retention - Part 1
Organizations that experience high turnover will generally also experience lower productivity, as well as an increase in administrative tasks associated with on boarding, training and off boarding.
As negativity aligns and combines to undermine corporate objectives, it is every manager’s role, and most importantly, HR’s role to minimize the possibility of workforce negativity and nip it in the bud where and when it happens.
Many organizations now realize that they can achieve positive financial and productivity gains by retaining quality employees.
Positivity is contagious. The hard and soft costs associated with high staff turnover are significant and not always fully visible or acknowledged. Increasing employee retention not only helps drive these costs down, it increases productivity while also boosting employee morale and loyalty; and so, the momentum goes on further boosting morale, loyalty and ultimately profitability, which all in turn attract quality staff anon.
HR’s Crucial Role in Retention
It is imperative that HR managers take steps to implement and integrate retention strategies into their people management programs. Over the last few years, retention has become the focus of researchers who are keen on workforce and company relations, as well as changes within the global labor market. Bancroft, & Okum, 2003; Deloitte, 2005; Buenger 2006 and Rothberg, 2007 have all conducted research which has underlined the importance of HR and its role in retention.
Effective and efficient HR managers are those with a clear idea of not only what retention entails but also, knowledge of the strategies to better plan and implement programs to negate or minimize turnover.
Access to current and historical employee data empowers managers to make better informed decisions, curtailing negativity, accelerating or multiplying positive outcomes.
Retention in the workplace is regarded as the ability to maintain a stable workforce. Many companies are now more vigilant about maintaining a stabilized workforce. Retention is now given higher priority in many organizations due to the effect on employee morale and productivity. The aim should always be to retain quality employees as their productivity tends to also raise the bar and pull up fellow workers productivity. HR should not wait until quality employees start showing signs of disengagement. Rule of thumb is that if an employee is actively looking or has found a role then they already have one foot out the door. Any enticement for them to remain may be in vain as often their departure is only delayed by the incentive presented.
Retention crosses the entire employee experience … from hire to retire. Retention is not a one-off intervention. You do not offer incentives to appease disengaged workers then go back to business as usual. Retention is an ongoing program that takes effect once a worker is on-boarded, and last throughout their work life (or career) with the company.
It should be noted that retention also does not mean giving in and giving everything to employees. This is also counterproductive.
Turnover, whether on a small or large scale, whether natural or enforced ... negative or positive is a cost to business. The loss of people from the workforce involves training, re-training a loss of IP and generally a slowing of productivity.
Just as negativity is contagious… so is positivity!
From a high level, determining your organization’s turnover rate can be simply calculated by dividing the number of terminations that took place in a specified period of time by the total number of individuals on the workforce, then multiply by 100.
Number of terminations with X time x 100
Total number of the workforce
This calculation does not help determine productivity loss which would vary depending on industry.
As we all know, just like executives in finance and other business functions, HR (and payroll) need a consistent analytical point of reference to make human capital decisions that impact business results.
The ability to be able to retain quality staff while maintaining (and increasing productivity and ultimately profitability) relies on the analysis, measurement and transformation of data into insights in order to enable managers to improve engagement strategies aligned with the organization’s long term business strategies.
In Part 2 of this blog I will discuss retention strategies and how combining strategies with technology, HR can make a positive measurable impact on an organizations bottom line.