I recently had a conversation with an HR professional about employee retention. I was making the case for the need to educate the HR community about the implications for organizations and HR functions of the switch from a buyers’ to a sellers’ job market.
She had a different view of HR’s needs. Her opinion was that HR professionals know about retention and the need to engage key employees with the organization in order to keep them. What HR needs, she maintained, is to be shown how to do that.
I thought long and hard about this, because I didn’t want to just reject it out of hand. I’ve concluded that she was describing an approach to retention and engagement that I’ll call a “problem elimination” orientation.
This orientation assumes that employee retention is a problem to be solved. If we can find the right solution, we can make the problem go away. I have some sympathy for people who rely on the hope that the need to retain talented employees is a temporary phenomenon. They have so many problem situations to deal with, and so little time to deal with them, that they just trust that employee retention is another problem for them to solve.
I hate to break this to the HR community, but employee retention is not a problem to be solved, it’s a reality to be managed. And it’s not going away.
The shift to a sellers’ job market will bring with it some fundamental changes in the employer/employee relationship. HR will need to abandon some practices that it’s been pursuing for years. These are practices that work when there is an abundance of talent and replacing departed employees is relatively easy. And this has been the case for as long as anybody can remember.
But it’s over. The world is changing. Here’s what this means:
1. Organizations need to pursue a retention strategy.
As long as it’s easy to find replacements for employees who leave, it’s enough to have a replacement strategy. This is like playing offence. For years and years there’s been no real need to try to keep key employees from leaving, i.e. play defense, because there’s been very little to defend against. Employers and employees were loyal to each other. HR hasn’t yet adapted its recruiting function and other practices to reflect the fact that this reciprocal loyalty hasn’t really existed for fifteen to twenty years now. Most of what recruiting departments do, after all, is replace people who leave.
2. Some practices need to be abandoned.
Lots of organizations post job vacancies internally. A common policy around this is to bar employees from applying for them unless they’ve been in their current positions for a certain period of time. The rationale is that it takes time for an employee to become fully productive, and the supervisor should be able to take advantage of that before the individual goes to a different position.
This may be fine in a buyers’ job market, when replacing departed workers is relatively easy, but the seller’s market that we’re entering simply won’t prop this practice up the way the buyer’s market did. It invites talented employees who are looking for new challenges to look outside, because none are available inside until the arbitrary time period has expired.
Instead organizations need to identify their key employees, the ones they want to keep, and then provide them with whatever opportunities make sense to the employee and the employer, free from arbitrary strictures.
(I encourage you to revisit your HR practices and see which of them are supported by the fifty year old buyers’ market. There’s a strong possibility that the sellers’ market will obsolesce them.)
3. Differentiate the Workforce
By this I mean divide employees into two groups: “retention-eligible” and “other”. You can’t keep everybody, but you need to know which employees you want to try to keep, because you don’t want to face the future without them.
As for the “other” group, it’s not like you want them to leave (you might be kind of sad if they did), but you’re prepared to face the future without them, and therefore you’re not going to make heroic efforts to keep them. After all, there’s only so much retention capital to go around, so it needs to be reserved for key talent only.
This will represent a significant cultural change for most HR functions. We’ve been accustomed to treat everyone the same because it’s important to be fair to everybody. (In public, anyway. The fact is that HR has always treated different employees differently; it’s just that it’s been a secret. Some forms of compensation are available only to certain employees; there are different salary grids in use for different employee groups. The need to differentiate the workforce as part of a retention strategy will require more transparency.)
4. Poor managers must be managed out.
Here’s a mindset that’s been possible in the buyers’ job market, but that the sellers’ market will kill; the assumption that management/supervisory skills are “nice to haves”. As long as employees can be replaced easily, managers who “make the numbers” but lack people skills are not only tolerated but rewarded. That day is gone. Talented employees will not stand for unskilled managers, and they’ll leave. Leaving is easy for them, because the head hunters are calling them all the time. They’re not calling the “other” group nearly as much.
It follows from this that part of differentiating the workforce is assigning bang-on accurate ratings to employee performances. Most organizations, to be honest, don’t do this with much discipline. HR will need to breathe life into what is often just a box-ticking exercise that drives compensation decisions. Another culture change for many.
5. Recruit the right people; stop filling job vacancies
The practice that I call “passive recruiting” has to stop. That’s the bureaucratic approach whereby the recruiter does nothing without a signed requisition. This practice is meant to control costs, which is a fine thing to do. But in a sellers’ market it’s not good enough to wait for a vacancy to arise before looking for talent. Other organizations are looking for your talent all the time. The time to bring talent into your organization is any time, whether you have a position for the individual or not. Here’s another culture shift.
It’s not uncommon to read or hear about a professional athlete who asks to be traded to another team because “management isn’t committed to winning”. This is code meaning that the athlete’s teammates aren’t top performers. If you want to retain the really good ones, you need to surround them with other good ones.
I’m talking about culture changes a lot here to underscore the point I made earlier: employee retention and engagement is not a problem to be solved. Problems get solved within established stable cultures. The cultures have certain tried and true ways to approach problem-solving (sometimes called algorithms or paradigms) that are peculiar to the culture. When major change occurs (and the coming shortage of talent is nothing if not major change) the tried and true won’t work any more.
So I guess I’m hanging on to my position. HR needs to come to grips with the implications of the changing job market. They are fundamental, and they call for fundamental changes in how organizations manage their people processes.
I know of one organization that was concerned about the amount of turnover it was experiencing. (It’s probably occurred to you that retaining key talent and reducing turnover are not the same thing. The former differentiates the workforce, the latter doesn’t.) Their solution? Implement a software program that bars internet access to employment-related (head hunter) web sites.
Besides being mind-numbingly futile and sending terribly negative messages to employees, actions like this betray the problem elimination orientation. So I’ll say it again: the need to retain key employees is a reality to be managed. It’s not going to go away.
It’s my belief that, once these far-reaching implications are understood, accepted, and internalized, the “what-to-do” about retention and the “how-to-do-it” are (mostly) easy by comparison.
What to do about Retention
1. Identify criteria for retention-eligible employees
This sounds easier than it is. The people in your organization who need to be in agreement on these criteria need to identify and accept what they are. This takes them beyond succession planning, which attempts to fill existing positions in the short term, to identifying the individuals who will be successful years from now in jobs that may not exist yet.
It also takes them beyond their biases (“If they went to Queens, they must be retention-eligible.”) and their urge to clone (“He reminds me of me 20 years ago.”) My experience suggests that these can be significant hurdles, if only because the individuals don’t always realize they’re doing it.
How? – bring in external help to facilitate the process of hammering out the criteria.
2. Accept that employees who aren’t retention-eligible may leave
You’ve already said you’re prepared to face the future without them, remember?
How? – persevere in investing in retention-eligible employees.
3. Build protective walls around retention-eligible employees
Communicate the big picture
Lose no opportunity to connect their work with organizational mission and vision.
How? – reference mission and vision in staff meetings, and in one on ones. If your organization doesn’t have a mission or a vision, pitch the need to your boss.
Implement flexible working conditions
Take steps to help them balance their work and non-work lives.
How? – trade magazines and the internet overflow with ideas on this. Promote the idea that what matters is employee productivity, not visibility. Are your managers victims of the Bud Light steamin’ cup of coffee hoax?
Beware of baubles like dragon boat racing teams. This can maybe help to retain at most eight people. Are they key employees, or just eight people who like to row?
Promote individual learning
Help them stay marketable by providing formal and informal learning opportunities.
How? – work with employees to link their thirst for continuous learning to the interests of the organization so that both can benefit. If your organization doesn’t have an educational support program, pitch this to your boss.
Rate superior and inferior performances as such.
How? – we already know how. HR needs to question the large number of “satisfactory” ratings as a way to promote the retention of talent.
Banish “Command and Control”
The example above of barring web sites is Command and Control management in spades. It speaks to a trust level that’s somewhere below zero. It treats employees as inferiors, indeed, as naughty children. It is an engagement killer; talent will flee it in droves.
How? – manage Command and Control types out. You simply can’t afford to have these people snuffing the life out of every attempt to engage key employees with the organization.
Free managers to manage
A recent survey by the Pace Group shows that managers would like to spend 75% of their time with staff, and 5% on administration. The reality, according to the same survey, is 28% with staff and 18% on administration. Managers themselves seem to know that they’re not managing as much as they need to.
Fifteen or twenty years ago, personal computer manufacturers offered a spoonful of sugar to help the huge cost of their hardware go down: managers wouldn’t need secretaries any more. They could do all that work themselves with their desktop computers. So senior management eliminated secretaries (except their own, whom they renamed “administrative assistants”).
Managers, as a result, are tied to their computers when they would rather be developing people. But they don’t have time, because senior management assigns more value to what the computer puts out than they do to employee development. This has to stop.
How?—this is a major culture change. It’s taken 20 years to get to this point; it will take a long time to get managers to managing as they’d like to.
More than money, retention-eligible employees crave and respond positively to any and all forms of recognition for jobs well done. Supervisors sometimes make the mistake of trying to get a salary increase for a good performer when a “thank you” is really what the performer craves.
How? – coach managers/supervisors on the wealth of forms of recognition that are available at no cost except a minute or two of time.
With managers spending only around one-quarter of their time with their employees, it’s no wonder that those same employees feel they’re not being listened to. That’s not the whole story, but the feeling of being listened to is an engager.
How? – listening skills are just that – skills. They can be trained.
Every retention-eligible employee deserves a coach. Whether it’s their manager, another employee, or someone external, providing coaching help is good way to communicate that you want the employee to stay.
How? – see Listen above.
How to implement retention solutions
It’s not a problem, so no solutions.
It’s only human to want to deal with retention by applying a solution that will make it go away, and everybody can get back to normal. It’s won’t go away. It’s the new normal.
Copyright Mattanie Press 2006