Finders Keepers: How To Keep Hold Of Your Top Talents

now. Issue 11
Executive Insights
Finders Keepers: How To Keep Hold Of Your
Top Talents
It has always been an uphill task trying to discover your top talents, let alone
retain them. What steps can you take to ensure that your best hire does not
end up another turnover casualty?
CAN YOU AFFORD A TURNOVER TSUNAMI?
“Retaining talents isn’t simply a question of ‘headcount’ – it can make the difference between the
success or failure of a company and the winning and losing of market share, investors, new clients
and contracts.”
Broman (2010)
Behind every well-managed organisation, you can usually derive unequivocal evidence from a group
of dedicated employee talents driving its success. However, negative employee sentiments will also
directly result in failure – even with the same group of talents. When thousands of eager job hunters
first rushed to apply for limited vacancies at Marina Bay Sands, a first-of-its-kind Integrated Resort
(IR) gaming management based in Singapore, they did not know what they were in for. The once
coveted dream job soon faded into a nightmare within a short span of six months amidst reports of
mass employee discontent. A string of employee management spats soon followed, which included a
bizarre incident where 350 croupiers called in sick and refused to report for work on Valentine’s Day.1
The cracks were evident but this was ignored, and this subsequently accelerated into a full-blown
crisis which culminated in the resignation of President and CEO Tom Arasi, who had barely lasted 18
months into the job.2 Interviews revealed that this was due to hectic work schedules and the difficulty
employees encountered in getting their work leave approved. However, one major catalyst was the
organisation’s failure to award an employee bonus, despite recently having announced robust profits in
its first financial report.
There are many other factors which may lead to employee discontent, and consequences can be dire
if they are not quickly addressed. At the other end of the employment spectrum, the job requirement
No love for Marina Sands casino as croupiers stay away, Steve Hand, 20 Feb 2011
http://www.casinoexecutivenetwork.com/news/no-love-for-marina-bay-sands-casino-as-croupiers-stay-away/
2
Storm brewing at Marina Sands, Human Resources, 1 Feb 2011
http://www.humanresourcesonline.net/news/24420
1
All contents are Copyright © 1992 - 2011 Cisco Systems, Inc. All rights reserved. This document is Cisco Public Information.
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now. Issue 11
Executive Insights
goalposts have also shifted over time. Although everincreasing competition has led to a direct increase in job
demands, perks such as job security, fast promotions and
wage increases have diminished over the years. What was
once an unwritten condition to differentiate between your
closest competitors’ and your own company has now faded;
employee loyalty has disappeared along those fines lines
somewhere between the black-and-whites of the “new
job contract”. With the economy strengthening, this is an
especially critical period too, with resource-rich businesses
looking to beef up their human capital in order to rival fierce competition for that limited talent pool.
In this modern ubiquitous job world today, the million dollar question will be, how then, can we keep
our star performers? How can you ensure that you keep your top talents happy while working for you?
Which are the factors to consider and which steps can you take to avoid a turnover tsunami?
ATTRITION: IT’S ALL ABOUT THE MONEY. REALLY?
According to a recent retention survey based on 745 employees from
118 organisations4, the following trends were unveiled:
• One-third of all employees surveyed expect to leave job within the
next year;
• Turnover costs the average organisation more than $27 million per
year;
• Almost half of the organisations surveyed do not have any formal
strategies for addressing retention.
Although employment rates have been looking up in recent times, a
recent employee survey found their job satisfaction to be at its lowest
in two decades.5 A recent report presented in The Business Times,
Singapore 2010 listed the attrition rate in Asia for 2010 as follows:
• Australia – 7.7%
• Indonesia – 5.5%
• Malaysia – 12.2%
Did You Know?
The Widening
Employer-Employee Perspective
• 65 % employee respondents
said they were “somewhat”
satisfied, but less than 15 % said
they were “extremely” satisfied.
Meanwhile, employers believe
that 30 % of their workers are
“extremely” satisfied.
• 65% of employed survey
respondents said they are
looking around (up 17% from
previous year). 60% percent
said they plan to intensify their
job search over the next three
months. Nearly 80% of
responding managers do not
believe that their employees will
initiate a job search in the next
three months.
Source: Employment Survey 2010 (Salary.com)3
• South Korea – 7.3%
• Thailand – 6.4%
• Singapore – 9.1 %
WHAT CAUSES THEM TO JUMP SHIP?
According to Adam (2010), one of the main causes of an employee’s decision to leave their job begins
with a low sense of job satisfaction. “Job satisfaction represents a person’s emotional feelings about his
or her work. When work is consistent with employees’ values and needs, job satisfaction is likely to be
How do your employees really feel about the jobs, the company? Debbie Zmonrenski, 9 Sep 2010
http://blogs.reliableplant.com/1221/employees-jobs-company-satisfaction/
4
Development Dimensions International Inc Report, 9 Sep 2010
http://www.ddiworld.com/pdf/retainingtalentabenchmarkingstudy_es_ddi.pdf
5
How do your employees really feel about the jobs, the company? Debbie Zmonrenski, 9 Sep 2010
http://blogs.reliableplant.com/1221/employees-jobs-company-satisfaction/
3
All contents are Copyright © 1992 - 2011 Cisco Systems, Inc. All rights reserved. This document is Cisco Public Information.
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Executive Insights
high.”6 A recent survey on Retention Strategy and Execution revealed, the top reason why employees
jump ship – is because they are dissatisfied with compensation.7 Non work-related events and issues
such as health, spouse relocation came in second, with poor work-life balance ranking third among
departure drivers across all company sizes and industries.
DON’T MAKE THESE MISTAKES
However, for most employees (even the disgruntled ones), the default impression they would want to
portray on the outset is a “happy face”. They do not show their unhappiness – purely out fear of losing
their current jobs. In a research performed by leading experts in this field, the following key findings
were revealed8:
The Bad Manager Managers are the primary reasons for why people aren’t productive. Most
companies do not have a “bad management identification program” in place and most do not educate
their managers on their key roles in influencing employee motivation and commitment. Most managers
lament the loss of talented contributors and when asked to diagnose reasons, the average manager
will point to all external organisational factors – except themselves! An interesting finding by research
expert Dr John Sullivan states, “it’s hardly ever the money that causes people to leave. It’s more likely
because of ‘my bad manager’ and the money will be the contributory factor that propels them on the
job search journey”.
Attrition is Inevitable. Not. Attrition is unavoidable. However, it is not inevitable. You can increase your
organisation’s retention ratios with a sound strategic retention plan in place. It is a challenge that can
be overcome with the right strategies and tools.
Exit Interviews Are Overrated Many employees commonly report “better compensation” as one
of their main reasons for leaving. In many cases, these employees were not dissatisfied with their
compensation. Instead, other reasons such as the absence of professional development opportunities
represent the truth. Often, they do not report these negative reasons for fear of retribution, but instead,
report what is attractive in the new job. Because of this phenomenon, organisational data from typical
exit interviews fails to surface the real causes of an organisation’s attrition problems.
Dimensions of Job Satisfaction
Empowerment
•Involvement in decisions
•Information from management
Job Fulfilment
•Sense of personal accomplishment
•Good use of skills and abilities
Salary
•Pay relative to others
•Pay for type of job
Satisfaction with Colleagues
•Quality of work done by group
•Cooperation among co-workers
Retaining Talents. Maintaining an Effective Retention Indicator, Adam, M.H. (2010), proceedings of the conference Performance Measurements & KPI for HR, Asia Business Forum 2010, Kuala Lumpur, Malaysia, 30 November 2010, representing Aberdeen Learning Solutions, Singapore
http://www.ddiworld.com/pdf/retainingtalentabenchmarkingstudy_es_ddi.pdf
7
Are you wasting time and money on the wrong retention strategies? Carol Morrison, 6 Feb 2010
http://www.totalpicture.com/shows/trendwatcher/employee-retention-strategies.html
8
The challenge of retaining top talent: the workforce attrition crisis, Lynn Ware and Bruce Fern
http://www.itsinc.net/retention-research.htm
6
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Executive Insights
Job Security
•Strong job security
•Attractive total benefits program
Satisfaction with Work Facilitation
•Company efforts to make competitive changes
•Conducive working environment
Source: Adapted from Adam, 2010 (citing Schneider et al, 2003)
The table above illustrates the various dimensions of employee job satisfaction. With this identified,
employers now have the key metrics and a benchmark by which they can prescribe relevant talent
retention strategies and execute upon them accordingly.
OFFER “MORE THAN JUST A JOB”
What do companies like Google, Microsoft and Apple have in common? Apart from being household
brand names, they were ranked amongst the top 10 employers of choice by Universum Index of Top
50 most attractive employers globally.9 The Employee Retention Guide10 summarises what employment
practices employers of choice had in common:
• Giving employees the responsibility and authority to get things done
• Treating employees with respect and trust
• Providing feedback on performance and recognising achievement
• Dedicating thought and resources to promoting high morale
• Hiring the right people
The following tables illustrate the top 10 retention drivers, as well as the corresponding strategies you
can apply in order to attain them.
Top 10 Retention Drivers
1
Exciting work and challenge
2
Career growth, learning and development
3
Working with great people and relationships
4
Fair pay
5
Supportive management/ great boss
6
Being recognised, valued and respected
7
Job benefits
8
Meaningful work, making a difference and contribution
9
Pride in organisation, mission and product
10
Great work environment, culture
Source: adapted from Adam, 2010 (citing Career System International report, 2005)
The world’s most attractive employers 2010, Universum
http://www.universumglobal.com/IDEAL-Employer-Rankings/Global-Top-50
10
Employee Retention Guide: how to keep your top people on board, AICPA Study
http://www.aicpa.org/Career/WomenintheProfession/DownloadableDocuments/2945-378_EmployeeRetentionGuide.pdf
9
All contents are Copyright © 1992 - 2011 Cisco Systems, Inc. All rights reserved. This document is Cisco Public Information.
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Executive Insights
Employee Retention Strategies
Staffing
•Use realistic job previews
•Provide growth and promotion opportunities
•Select employees who fit into your organisation
Training and development
•Offer educational programs such as MBA
•Provide sabbaticals and other learning opportunities
Career Planning
•Specify career paths clearly
Compensation
•Maintain competitive pay
•Develop fair pay practices
•Pay for learning new skills
Labour relations
•Establish quick and fair grievances procedures
•Facilitate conflict resolution among employees
Source: Adapted from Adam, 2010 (citing Lee & Maurer, 1997)
DON’T WAIT TILL IT’S TOO LATE
With the blossoming economic outlook looking
up ahead, it is imperative for businesses to
keep hold of their best talents in order to
position themselves favourably in anticipation
of the impending recovery. With employee
talent retention cited as one of the top business
challenges in 201111, today’s businesses are
more reliant than ever before on their top
performers to innovate and provide services
that can help differentiate their business from its
closest competitors. The costs of discovering,
recruiting and developing such talents can be far-reaching, and especially more so for niche
professions such as high-tech or other industry specialists. Moreover, the damage inflicted on your
business can be even more significant if you actually lose them to your rivals, as American accounting
giants PricewaterhouseCoopers discovered when 200 of its employees defected to rival companies
after its alleged involvement in a fraud incident.12
The average boss only thinks about retention when an employee resigns. Most predictably attempt
to talk departing employees out of leaving by trying to convince them it’s a mistake. Most of the time,
these employees will resist attempts to persuade them to stay. The solution lies in tying retention to
critical business activities so that managers do not think about retention after the fact – when it is
already too late. Treating retention as an ongoing priority enables the manager to focus on proactive
measures to sustain long term employee commitment, instead of relying on reactive attempts to
reverse surprise resignations. The loss of key employees can be devastating to a company. Remember
– prevention is always the best cure.
11 business challenges in 2011:Keeping Talent, Bill Conerly, 3 Jan 2011
http://businomics.typepad.com/businomics_blog/2011/01/11-business-challenges-in-2011-keeping-talent.html
12
Satyam crisis triggers mass exodus at PwC, CFO Innovation Staff, 4 Feb 2010
http://www.cfoinnovation.com/content/pwc-calls-early-end-us-staff-pay-freeze
11
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now. Issue 11
Executive Insights
KEY SUMMARY
Talent retention is critical towards determining the success or failure of an organisation.
Employee perks such as job security, promotions and wages have diminished over time.
There is increased competition for limited employee talents between businesses seeking to
strengthen their resources.
There is a widening gap between employers’ and employees’ perspectives with regards to job
satisfaction.
Employee turnovers cost average businesses more than $27 million annually.
Almost 50% of businesses do not have any formal strategies for addressing retention. A low sense of job satisfaction and dissatisfaction with compensation are main reasons for
employee departures.
It is imperative for businesses to keep hold of their best talents in order to position themselves
favourably in anticipation of the impending recovery.
The costs of discovering, recruiting and developing top employee talents can be far-reaching, and
these costs get higher if they are niche professionals and industry specialists, or defect to your
business competitors.
Most employers only think about retention during times when faced with an employee resignation.
Retention policies are more effective when practiced as an ongoing priority, by focusing on
proactive measures to sustain long term employee commitment, rather than reactive attempts to
reverse surprise resignations.
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Disclaimer:
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accuracy of the information within, neither the publisher, editor or writers may be held liable for errors and/or omissions however caused.
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