Finding and Retaining Talent By Ryan Scholz At Isnare.com Ezine Articles

A recently published study by the Achilles Group highlights a key issue faced by many businesses. When top level executives at small to medium sized businesses were asked to identify the biggest business challenge they face, 40 percent said that finding and retaining the talent necessary to sustain and grow the business was the number one issue.

Another survey by Authoria, a human capital and performance management firm, found that 76 percent of executives in companies with 100 to 2500 workers were concerned about retaining and developing talent. In 2003, the percentage concerned about talent was 24 percent. This is a direct reflection of the dwindling labor pool of qualified workers that is only going to get worse in the coming years.

In a benchmarking study by Development Dimensions International (DDI), the following statistics were quoted:

• The turnover rate for non-management workers was almost twice as high as for management workers (19.3% vs.10.3%). It is more difficult to retain frontline and professional staff.

• Turnover rates are increasing.

• There is a moderate correlation between job satisfaction and intent to leave a job. Employees who feel neutral or dissatisfied with their jobs are twice as likely to leave.

In the DDI report, these were the top five reasons employees stated for leaving their most recent positions:

1. Quality of relationship with immediate supervisor
2. Ability to balance work and home life
3. The feeling of making a difference
4. Level of teamwork and cooperation with coworkers.
5. Level of trust in the workplace.

When HR professionals were asked the same question, they thought that advancement opportunities and compensation were the top two issues. They ranked items 3 through 5 on the employees’ list 19th through 21st. This points out the need to make sure that the correct issues are being addressed in dealing with turnover.

Organizations that are serious about improving retention need to develop a formalized retention strategy. The key to having an effective strategy is to fully understand the real reasons that people leave.
Turnover can have a significant impact on a company’s bottom line. While the cost of turnover varies from company to company, experts estimate that the loss of an employee can range from 30 to up to 150 percent of that person’s salary.

Unfortunately, most organizations do not have a formal retention strategy to address this key business issue. Instead, they approach retention on an as-needs basis, rather than develop a comprehensive, coordinated and preventative strategy.

Before the problem of retention can be addressed, you need know where the problem exists. The first step toward developing a retention strategy is to quantify and measure turnover rates for the entire organization, including specifics for each department and supervisor.

The second step is to analyze the competition. What companies are competing with you for employees? Do your organization’s compensation package, working conditions and reputation match or exceed those of your competitors?

Since the relationship between supervisor and employee is a vital factor in retention, the strategy should also include a plan for selecting and developing leadership talent. Most people who become supervisors never receive training on managing employees until they are in the job for a significant amount of time or in some cases, not at all. One of the key measures of supervisor performance should be employee satisfaction and turnover.

Additionally, companies should examine management policies and practices and determine their impact on turnover. Sometimes policies and practices developed in prior years are no longer applicable in today’s work environment. Workers today are more concerned about work-life balance, and corporate policies should help employees achieve this goal.

The more positive the work environment, the higher the retention rate. Most organizations spend more time criticizing and reprimanding than they do praising and recognizing.

Workers who are emotionally engaged in their work are less likely to want to change jobs. A good retention strategy addresses each employees need to understand his or her importance to the company and its mission.

Finally, the strategy should establish open communications based on trust and integrity throughout the company.

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