employee innovation retention

I will be presenting more on this topic at the HR Innovators Virtual Conference – 2 Days, 6 Education-packed sessions from top-rated speakers covering topics critical to success today, including, millennials and culture, creating meaningful workplaces, using social media to attract talent, and how talent loss affects innovation. Register Today! Space is limited.

Years ago, I worked for an organization with a turnover problem. And this wasn’t just an isolated issue—it affected a significant amount of the 700-strong workforce and created an incredible burden on the HR staff to manage the issue. Despite small efforts here and there, little was done to change the direction of the firm and it ultimately went under, unable to keep afloat amidst the constant turmoil.

Everyone knows that employee turnover is a problem, but just how much of an issue is it, really? Today we’re going to explore the far-reaching nature of turnover and what it means for your organization. Anecdotally, I know that undesirable turnover can harm team morale, reduce revenue, and hamper innovation. But the data supports this as well. According to an article on ERE, the impact of turnover depends on the career level of the employee.

  • For entry-level employees, it costs between 30-50 percent of their annual salary to replace them.
  • For mid-level employees, it costs upwards of 150 percent of their annual salary to replace them.
  • For high-level or highly specialized employees, you’re looking at 400 percent of their annual salary.

We know that this is a challenge, but I believe there’s an even more costly aspect of turnover that most organizations don’t examine: the impact on innovation.

Innovation Impacts

In 2014 Carnegie Mellon had some of the world’s brightest robotics minds working on its campus. These people were focused on the bleeding edge of robotics technology and their research could have created new breakthroughs and advancements in the use of robotic technology for the betterment of mankind.

But then they left. 

In a surprise move, Uber lured the scientists away and brought them into the fold. This not only caused a blow to the university—it also affected each of us. The research that was performed at Carnegie Mellon would have certainly been published in academic journals and shared with the world, forming the basis for new breakthroughs in robotics and other fields. The research they complete at Uber? It’s going to be tucked away in a proprietary database for the benefit of the company’s pursuit of a robotic car fleet.

So, what does this have to do with you and your organization?

While you might not have a team of PhD-level robotics experts on staff, you do have a set of smart, intuitive professionals within your organization that are constantly creating, innovating, and experimenting. They don’t have to be on a formal team or even in the same hierarchy, but they are still pursuing new ideas and opportunities just the same. If an opportunity arises to serve customers in a new way or develop a new product/service, the people with that mindset are often the originators.  

In fact, I’ve met quite a few HR leaders that fit this description. This comes from the fact that we as HR staff have the opportunity to see across functional and organizational lines, often discovering new methods and options for performance improvement.

Wherever this talent resides, the question remains: what do we do if one of these people leaves?

We know that it’s painful to have people depart. The statistics linked above point to some of the challenges this creates, and yet the research looks mainly at the impact today, not for the future.

I’m arguing that we should see employees as appreciating assets, with a higher future value.

While it’s challenging to quantify the value of innovation and to be able to predict what people are going to create, it’s fairly easy to see that the future value of one of these individuals is clearly higher than the cost of their wages and benefits today. And that’s my position on this topic: the long-term impacts to innovation will harm the organization much more than the loss of the person performing the job function today.

Consider this example. In the past I served as the HR Director for a global government services firm. One of our employees, a software engineer, earned approximately $70,000 per year. If that person left, we would have lost that “position,” which would have required time, effort, and resources to backfill for the unique skill set. Let’s estimate that total cost to be $100,000. What’s interesting is the $100,000 figure is actually a relatively minor amount when compared to the overall value of the employee and her innovative ideas.  

One day on a whim that employee developed a new method for licensing hardware and software to the government. That bloomed into a multimillion dollar product line and became a steady source of organizational revenue. However, if we only looked at the “normal” cost of turnover, we would have seen only an impact of $100,000, not several million dollars.

Want to Know the Secrets to Employee Retention?

We have defined the problem, but what about the solution? In the upcoming session I’ll explore more than 20 ways to impact retention ranging from the simple steps to take today to the radical changes that separate good organizations from great ones. The ideas include:

  •         Gamifying retention
  •         Changing the ownership mentality
  •         Using an executive “save” strategy
  •         And more!

I hope you’ll join me for this session so we can make employee retention a positive differentiator for your business. Click this link to register and join me at the upcoming session: How Losing Your Best Employees is Killing Innovation.

 

As HR is increasing its presence as a strategic part of the business, key performance indicators, or KPIs, are becoming a key part of the language for discussing how it is actually performing. Recruiting, in some ways, is actually easier to measure because it is very similar to sales: you either have results or you don’t. Today I want to talk about first year retention, a measure that I believe is going to continue to grow as a recruiting metric, even though many companies wouldn’t consider it even remotely linked to recruiting as of today.

recruiting kpiWhen I realized the link from retention to recruiting

Several years ago I ran into the wall. Figuratively, that is. I was spending about 50% of my time processing termination paperwork and 49% processing new hires. The other 1% was spent wondering just how we were going to sustain this churn. We were turning over about 50% of employees in positions that made up 90% of our workforce. In a company with more than 600 employees, you start to get the picture for just how bad things were. Like I said, my entire job was dedicated to moving the people into and out of the organization.

So I decided to try something. I gathered information. I pulled five years of archived files and noted termination reasons along with tenure and manager information. I looked into our Stone Age HRIS and pulled the same items for more recent terms. Once I had amassed the data, I started analyzing. I quickly identified a few key trends and highlighted them in the report I developed.

A few days later I presented my findings to the VP of HR, demonstrating through the data that approximately half of those terms not only happened within the first year, but within the first 90 days on the job. We were spending hours recruiting, training (each employee received over a dozen hours of training before starting work), and coaching these people, only to have all of that effort wasted. The data showed that if an employee made it past the 90-day mark, they were significantly likely to stay for a year or longer.

This is when I realized that recruiting has a very strong link to retention, especially first year retention.

[Check out: What it’s like to be a recruiter]

First year retention, examined

When we think about retaining employees, a more senior staff member might come to mind. We automatically assume that if someone took the job just a few weeks ago that they are going to be excited and engaged for months to come (hint: the honeymoon period). Well, that depends on several things, including the recruiting process. Here are the ways the two are linked:

  • Realistic job preview-during the recruiting process, an accurate picture of the job must be depicted at every stage (job ad, phone screen, interview, etc.) If not, the candidate might get a more rosy picture of the position than is actually accurate, which leads to frustrations on day one. People are quick to skim over areas that might be bothersome for them in the leap to a new company–it’s critical to show the good, the bad, AND the ugly to provide a full understanding of the job and what it entails.
  • Manager engagement in the hiring process-having managers who not only join in the selection process, but actually lead it, is key. Managers who develop questions to probe candidate abilities and fit ultimately pick better people than those who use a stock list of “what is your greatest strength” type questions.
  • Team engagement in the hiring process-a great way to help people feel like they have friends on day one? Let their team interview them. When I have done this I request that they ask some technical questions, but that they also focus heavily on fit: does the candidate gel with the existing workers? Are they similar in terms of values and passion? How have they felt about coworkers in the past? If a person feels like they have friends at work, they’re more engaged and less likely to bolt a few weeks later.

[Check out: How one of the best managers I’ve ever seen engages new hires from day one]

The future of recruiting metrics

In the past and still today, recruiting has been focused on some very surface level items: mainly time to fill and quality of hire. If we’re solely looking at those numbers, I could have phenomenal time to fill and quality numbers, only to have them dropping out of the workforce a few weeks or months later. Using a metric like first year retention as a recruiting metric provides a more well-rounded picture of just how well it is actually being performed. And it also brings a long-term, holistic view to recruiting.

What recruiting KPI’s does your company use? Are they working? What do you think of first year retention as a metric?

According to a recent CareerBuilder survey, more than half of workers over age 60 plan to continue working in some capacity after retiring from their current career. I’ve read about the “graying of the workforce” and the impending “brain drain” for years, and it’s easy to be overwhelmed by the topic’s sheer magnitude. And while it might be your first instinct to think that the shift is toward part-time work, the population of individuals over 65 who are pursuing full-time work has been on the rise for years. Today I’d like to share a short anecdote to help illustrate how this can play out in the real world and to teach a lesson in retaining older workers.

The Risk of Employee Retirement

When I was working as an HR Director several years back, an employee called me and told me he planned to quit. When pressed, he admitted that he liked the job and his coworkers, but he wanted to spend time with his grandchildren and pursue some hobbies.

At the time, several things were running through my head simultaneously: Continue reading

Hello, friends!

This coming week I will be talking with some companies in my area on behalf of my local SHRM chapter (North Alabama SHRM). This topic will be focused on retention, and I wanted to see if you had any insights, tips, or other considerations. I will pull any suggestions together and put them into the presentation for the attendees to benefit from your point of view.

So, what do you say? Care to share some of your thoughts on employee retention? If you’re not sure where to start, here are a few possible discussion questions. Feel free to pick one to answer if you don’t already have specific suggestions…

  • Should organizations do regular “stay” interviews? Why or why not?
  • What can exit interviews tell us about retention/turnover?
  • What should our target be as far as retention goes? Is 100% reasonable? If yes, why? If no, why not?
  • How does recruiting play into retention efforts? What about training? Benefits? Other focus areas of HR?
  • What does the average employee tenure say about your company’s retention efforts?
  • What is the best way we can approach retention strategically? By focusing heavily on the relationship between manager and employee, by focusing on a culture that makes people want to stay, or something else?

Thanks! Looking forward to seeing what you guys have to share. I know the attendees of the event will really appreciate your insights. As always, if you have ideas or requests for other topics, feel free to reach out!

I’m at the SHRM Talent Management Conference in Nashville this week. This morning I attended a session on improving employee retention by Linda Ginac at TalentGuard. Here are some thoughts on that topic…

Turnover is real

With average employee turnover by generation standing at 2 years (Millenials), 5 years (Gen X), and 7 years (Boomers), turnover is a real issue for organizations everywhere. According to a recent study, the average turnover in the US is 15% with just over 10% of that being voluntary/preventable.

So, what are you going to do about it?

[Related: Check out this employee retention video]

Each employee is more than their job title

Continue reading

Recently I was talking with someone about employee retention techniques and how to get people to stay at your organization. At first I gave a rote answer based on my gut, but after thinking on the topic for a while I realized there were some pretty significant pieces to the puzzle. I would hazard to guess that the multitude of options explains why there isn’t a magic bullet for fixing retention problems overnight.

In the video below I talk through some of the key employee retention techniques and give a reminder that not all turnover is bad. In fact, we measure two separate items there: turnover (any staff leaving over time for any reason) and retention (voluntary turnover). Check it out:

Employee retention techniques video

Employee retention video notes

Here’s the short list of important items:

  • Respect-for the people and their work
  • Fit-culture fit, baby!
  • Basics-pay/benefits are a basic must
  • Challenge-offer a challenging, growth-oriented environment
  • Professional development, or mentoring for higher level-give people something more than a job
  • Connect with mission-have a mission worth buying into
  • When in doubt, ASK  your people what they want from you
  • Not all turnover is bad!
  • Retention vs. Turnover

Also, please don’t forget that I put together a free guide to employee retention that you can download, print, or share. Lots of great content in there from some excellent professionals in the industry.

What are your employee retention techniques? What has worked for you in the past?

One of the topics that sometimes keeps me awake at night is knowledge. The sheer amount of knowledge in the minds of our staff members is staggering. In the past few years we’ve had a few highly competent people attempt to retire, and we’ve had a great strategy in place to reduce the impact.

reducing brain drain

How can you reduce “brain drain?”

Here’s a great piece of information that was passed on to me by John Dooney, a ninja research guru over at SHRM:

From the recent Sloan Award Survey conducted by Families and Work Institute: When the organizations were asked the number of employees at their work site that were allowed to phase into retirement by working reducing their hours over a period of time prior to retirement, the answers were as follows:

All: 42%
Most: 30%
Some: 16%
Just a few: 6%
None: 6%

How we do it

I have a great recent example. We have a staff member who has been working for our customer in some capacity for 20 years. He planned to resign outright, and we asked if he would be interested in working a 20 hour flexible schedule to continue the customer relationship. He was pleasantly surprised at the availability of the option and instantly accepted. He’s still working happily for us, we’re trying to staff up in the event he would like to leave permanently, and our customer is appreciative of the opportunity to transition to a new familiar face.

So why don’t more employers do some version of this?

I think it’s pretty simple.

I think more companies could start by offering the “stay” opportunity to those leaving for voluntary reasons. We do this as a regular practice. It’s not rocket science–you just ask. The worst they can say is “no” and walk out the door. The best option is for them to continue working for some period of time on a reduced schedule. They are invaluable and it makes for an easier transition for them and for the company.

The biggest benefit for us as the person transitions to a part time schedule is us finding out where knowledge gaps are and using them while they are on staff to help close those gaps.

What type of flexibility, if any, does your organization provide?