In today's competitive environment, the fight for talent must be waged on two fronts: recruitment and retention. It's not enough to find good employees; companies also must work to keep them.
Succeeding at this second task has been a growing challenge for many employers, according to recent surveys of human resource professionals, and the situation may be worsening.
A Monster.com survey of 600 human resource managers found that 70 percent believe worker retention is the primary concern and 40 percent have seen an increase in turnover in the past 12 months. What's more, 55 percent expect work-force retention to be a high or very high challenge for their company in the next five years.
The mounting concern about retention is fueled by two major factors: An aging work force has companies bracing for an exodus of retiring workers, and many businesses are refocusing on growth as they continue to rebound from the recession, said Lori Holsinger, a senior associate with Mercer Human Resource Consulting.
Despite these anxieties, relatively few companies are committing the necessary time and effort to deal with the problem of turnover, she said. Surveys conducted by Mercer have found that roughly one-third of companies feel they are doing a good job of retaining employees.
"Oftentimes companies will focus on the compensation side at the expense of other factors that influence retention," Holsinger said. "If you look at what compels people to stay or go, it is really a combination of things, it's not just one factor."
When it comes to keeping employees satis- fied enough to stay put, companies need to:
- Make sure workers are challenged by their jobs.
- Help them feel involved in the company.
- Communicate the company's values so employees can work toward common goals.
Some companies are turning to employee surveys to give them insight into where they stand on these and other workplace issues. Although anonymous questionnaires can be helpful, Holsinger cautions that companies should conduct surveys only when they're willing to take action on the outcome and that they be prepared to release the results -- good or bad.
Wayne McMillan, president and CEO of the Bobby Dodd Institute, has found that such surveys have beenan effective part of developing an employee retention strategy for his organization. Employee responses in past surveys have inspired a number of changes at the institute, which provides vocational training and employment opportunities for disabled and disadvantaged individuals.
Among these changes are having managers send employees notes of praise, mentoring new employees, modifying some job descriptions to suit employees' strengths and increased training about the organization's values.
Making employees more engaged in their jobs and the company can translate into more than just lower turnover. McMillan contends it can actually boost the bottom line.
Seventy-three percent of the institute's 150 employees have been there between two and seven years. Its operating budget has doubled in the past year to $6.6 million, and the level of services provided has quadrupled. What's more, McMillan said, the institute is on track to exceed last year's revenue.
Jim Hamilton, CEO of Southern Civil Engineers Inc. (SCE), said employee retention is extremely important in his industry, which often struggles with a talent shortage. Although his 20-year-old consulting and design firm has lost fewer than five employees in the past five years, he said the company can't afford to be complacent. SCE grew by 30 percent in revenue and staffing last year and is poised for similar growth this year, Hamilton said.
Developing a strategy for improving retention must begin at the time of hiring, according to Hamilton.
Holsinger said companies should describe everything from company culture to a typical workday or workweek when meeting with prospective employees.
Hamilton said the company has made a concerted effort to give employees a strong voice in its future plans.
The results of a recent survey of its 25 employees have been incorporated into the company's current strategic planning efforts. A major focus of this process has been setting goals both for employees and the company and working on ways to achieve them.
Doug Calahan also is hoping employee surveys will help chart a course for the impending growth of his company, Argo Systems Inc. The software company has had no turnover among its 14 employees for the past nine of its 10 years. Although his company has an enviable retention rate, Calahan is worried that turnover will become a bigger problem as the company expects to double in size over the next five years. Argo's revenue has grown 19 percent annually over the last three years, and its annual rate of growth is expected to be 25 percent in the next five years.
To prepare for the upcoming changes, Calahan said, his company recently began a process of defining its core values and outlining how each part of the company reflects them. In addition, the company has launched a process of gauging employees' impressions of the workplace.
Calahan said responses to these surveys already have led to changes. For instance, the company's future decisions about compensation and bonuses for managers will be based in part on how well they communicate and support their employees.
To this end, Argo Systems is focusing on ways to help employees maximize their talents and keep them challenged in their jobs.
"We could concentrate just on satisfaction, but that really could be pandering to employees by just trying to give them more benefits. Unfortunately, that doesn't do anything to improve the company," Calahan said. "By making sure people are engaged, we will be more productive and actually help grow the company."
