MBI Retention Toolkit Resources for Retaining Valued Employees
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Table of Contents Imagine 3 Key Retention Thoughts 5 Top Reasons Employees Leave 6 The Cost of Turnover 7 Value of Lower Turnover 9 Start Before Day 1 11 Assess Your Risk 13 Create a Plan 15 Focus on Growth & Leadership 16 Tools at a Glance 22 Sources 23
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Imagine‌ You have been working late to finish an important project when your project manager walks into your office and tells you she has been offered a better job. This is the same person you handpicked, trained and recently gave a pay raise. As she turns to depart, she says, "There are others thinking about leaving too." What went wrong? How are you going to finish this project? Who will be next to leave? The dread is starting to sink in.
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The Retention Challenge Leaders face enormous challenges when they consider the increasing difficulty of finding skilled people, a more demanding younger workforce, and a growing population of older workers heading toward retirement. The difficulty in finding and keeping talented people is having a catastrophic impact on many businesses and industries throughout the world, including Michael Baker. The good news is that there are things that organizations, and more importantly, leaders can do to help reduce voluntary turnover. This toolkit contains strategies and tools that leaders can use to help positively impact employee retention and contribute to creating a positive employee experience.
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Key Retention Thoughts What is Retention?
Who Owns Retention?
Retention is about compelling great people to stick around. It’s not about compelling everyone to stick around. Turnover of low performers is actually desirable.
A workforce is far more engaged and committed when it trusts its leadership, receives clear communications about corporate strategy, and believes its leaders can execute on that strategy. In other words,
employee retention is not simply an HR function, it should be driven by business leaders.
According to external research, more than six in ten employees (62%) who plan to stay with their current employers reported high levels of trust in their corporate leadership, while only 27% of employees who plan to leave express that same trust. In addition, 26% of those who plan to leave their jobs in the next year cited lack of trust in leadership.
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Top Reasons Employees Leave According to Gallup, an American researched-base consulting company, employees leave their jobs for a number of different reasons as people have different expectations, goals and personal circumstances. However, there are some trends that we see. Some of the top reasons employees leave include:
Lack of career progression
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Lack of compensation increases
Lack of flexibility in scheduling
Lack of fit to job
Dissatisfaction with manager
The Cost of Turnover Research suggests that the cost to replace an employee can reach as high as 50%-60% of an employee’s annual salary. Some examples that prompt turnover costs include:
Work that is not being done
Recruiting costs
Lost engagement from the team ramp-up time and training costs that can occur after the new hire does come on board
Time the position is vacant
Client impacts
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Other Negative Impacts of Turnover When employees leave the company, it may cause their peers to re-
evaluate and question their own decisions to stay with the company.
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Turnover can also negatively
affect our employer brand
if we are continuously losing and having to replace employees which further reduces our ability to replace talent.
These costs are
exacerbated when high-performing and/or employees with
unique and rare technical skills leave the organization.
Value of Lower Turnover Lower turnover rates have been found to be associated with better organizational outcomes includes sales growth and workforce morale. It is critically important for Michael Baker International and its leaders to manage voluntary turnover and adopt retention strategies for their employees.
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Benefits to a Small Amount of Turnover
Employee Upgrade
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Fresh Perspective
A problematic or lowperforming employee who leaves may be replaced by a better one.
Tenured employees in key roles may have consistency, but may lack awareness of new ways of looking at things.
Managers may recognize low performers and encourage them to resign or terminate them.
Turnover can help a company stay proactive in its evolution as opposed to reacting to desperate situations.
Removal of Negative Influence Turnover of managers or highly influential workers with negative attitudes is beneficial. Companies may have high turnover and not realize until exit interviews that one manager contributes to many of the issues.
Start Before Day 1 Hire the best and avoid the rest. Cisco CEO John Chambers said, "A world-class engineer with five peers can out produce 200 regular engineers." Instead of waiting for people to apply for jobs, top organizations spend time looking for high-caliber people whether they have a job opening or not. The best leaders also know it is better to leave a position open than hire the wrong person.
Don't discount alumni. No matter how good you think our company is, employees always think they can find a better job elsewhere. "The grass is greener" mentality is alive and well in organizations across the country. So keep the doors open for the good ones to come back. Keep in contact with previous employees, send them updates about our work, keep recruiting and talking to them until they return. Even if they don't return, they may refer other good employees to you.
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Start Before Day 1 Consider how you onboard new employees. The old saying, "You don't get a second chance to make a good first impression" is true in this case. Many organizations experience the highest level of turnover during the first 90 days on the job and employees continue to be at high-risk for turnover during their first 2 years of employment with a company. The purpose of onboarding is to quickly assimilate the new person into the organization, so make the first critical days stand out as a positive experience. This is a great opportunity to make new hires feel proud to have chosen Michael Baker International. Our New Employee Resource Connection site includes manager tools and checklists to help you create a consistent, engaging experience for all new hires.
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Assess Your Risk Understand your employees' unique motivations.
Focus your efforts
Everyone has a different set of needs and expectations about their jobs. By asking employees to complete the Individual Motivation and Rewards Assessment, managers can quickly identify the employee's unique motivations, level of job satisfaction, recognition preferences and other expectations. If you're going to use the assessment, be sure to have a conversation about it with the employee and commit to creating an action plan to address any issues that come up.
Retention must be managed one employee at a time. Focus on the key roles that have the most impact on profitability and productivity. Use the Retention Risk Matrix to plot your team in terms of their likelihood of leaving and the impact that would have on the organization. Then focus your retention efforts on those employees whose risk is highest. 13
A New Generation A study by Deloitte found that millennial employees reported the highest turnover intentions compared to Generation X or Baby Boomer employees. This suggests that millennials pose the biggest retention risk for organizations today. This same study reported that key retention drivers for millennials were: Career development & advancement
Leadership development opportunities
Financial incentives
While it is not always possible continuously provide financial incentives to employees, it is possible to provide millennials with career development and leadership development opportunities by following some of the tips in this toolkit.
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Want more information on how you as a leader might be impacting your employees’ decision to leave? Read Forbes’ article on: The Top 8 Reasons Your Best People Are About to Quit – And How You Can Keep Them.
Create a Plan Tell top performers you want them to stay. Have you told your top performers that you want them to stay? It may sound simple, but many leaders neglect to let their employees know that they are valued. Consider having an informal Stay Conversation to make your key talent feel appreciated, respected and supported. Conducting regular Check-Ins is also important to help promote regular feedback exchanges and discuss performance and professional development. As a leader, encourage your leader to engage in Skip-Level Conversations with your top talent to reinforce the value they bring and give the employee an opportunity to have the ear and interest of senior management.
Complete an Individual Retention Plan for your best employees. Once you've identified your high-risk highperformers, create an Individual Retention Plan for them to document how you are going to address each individual's unique situation. Work with your Human Resources Business Partner to develop creative solutions that maximize focus on the individual's motivators and interests.
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Focus on Growth & Leadership
Soft skills are the hard skills. Interpersonal skills are a critical element of the high-retention culture we are building. People want to feel that leaders care and are concerned for them as individuals. Yet, poor “soft skills” are one of the biggest factors driving people away. Strong leadership can be a key differentiator for an employee’s decision to stay with or leave a company. Factors that influence an employee’s decision include whether they trust their leaders, ability to execute on a vision, and the quality of communication they receive from the leader and the organization. Consider how you can develop your own skills as a leader to help improve your interactions with your team. 16
Help them grow or watch them go. For many employees, learning new skills and advancing their career is just as important as the money they make. Use the Check-in Process to understand your employees’ career aspirations and partner with them to create a meaningful development plan to help them get there. Remember that development isn’t just about sending an employee to formal training. Research suggests that 70% of development comes from on-the-job learning, 20% from coaching and mentoring, and 10% from formal training. Our 70-20-10 Development Guide provides practical suggestions to create comprehensive development opportunities. 17
Create a Positive Environment Have fun at work. The notion that if you are working, you're not having fun is an outdated idea that devalues the contribution that fun and play make to create an office environment that motivates employees to come to work every day. An increasing body of research demonstrates that when leaders lighten up and create a fun workplace, there is a significant increase in the level of employee trust, creativity and communication -- leading to lower turnover, higher morale and a stronger bottom line. Not sure how to get started? Our Play @ Work Guide provides some simple ideas, some of which have already proven to be effective at Michael Baker International offices across the country. But remember, there is no one-size-fits-all approach to introducing fun, so be sure to include your team in the planning and coordination. 18
Create a Positive Environment Get rid of the slackers and whiners. Employee retention doesn't mean that you keep everyone. Employees say one of the main reasons they stay is because they like the people they work with. No one wants to work with people who don't pull their weight or cause unnecessary tension with the team. Leaders who tolerate poor performance will drive off the good employees and be stuck with the bad ones.
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Recognize Employees for a Job Well Done The impact of voluntary turnover is exacerbated when the high-performing employees or employees with rare and specialized skills leave a company. It is important to recognize employees for a job well-done to help them understand their value to the organization and team. Employees who feel valued and recognized for their contributions are less likely to look elsewhere for employment. You can recognize employees in simple ways by: Taking the time to
nominate them
for office, region, or organizational awards
Letting employees have ‘early dismissals’ on Fridays and before major holidays
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Sending
personalized thank-you notes
Recognizing and celebrating
and emails or reaching out by phone
professional and personal milestones (e.g., years of service, promotions, and birthdays)
Publicly
Celebrating with team
acknowledging good work in front of organizational leaders
lunches, holiday parties, or happy hours
Know Your Employees You can work directly with your employees to better understand their key motivators to help drive the right recognition activities by having them complete and share with you the result of the Individual Motivation and Rewards Assessment.
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Tools at a Glance Here’s a high-level summary of each of the tools mentioned in this guide.
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New Employee Resource Connection site provides helpful onboarding information to new employees and their managers
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Retention Risk Matrix allows you to plot your team and determine where to focus your retention efforts
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Individual Motivation and Rewards Assessment helps you to better understand what excites your individual team members
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Stay Conversations are informal but thoughtful dialogues indented to let key talent know that they are appreciated and valued
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Check-Ins should occur regularly to promote regular feedback exchanges and discuss performance and professional development
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Skip-Level Conversations help leaders connect with key talent deeper in their organization
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Individual Retention Plan allows you to document your plan to retain key talent
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70-20-10 Development Guide offers ideas on how to encourage development through experiential learning, relationships and formal training
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Play @ Work Guide provides suggestions on how to incorporate fun into your day to create a better work environment
Sources •
https://pridestaff.com/sites/default/files/resources/PS-RetainEmployees_EBk-072013-FINAL.pdf
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Cascio, W.F. 2006. Managing Human Resources: Productivity, Quality of Work Life, Profits (7th ed.). Burr Ridge, IL: Irwin/McGraw-Hill. Mitchell, T.R. Holtom, B/C., & Lee, T.W. 2001. How to keep your best employees: Developing an effective retention policy. Academy of Management Executive, 15, 96-108.
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Batt, R. 2002. Managing Customer Services: Human Resource Practices, Quit Rates, and Sales Growth. Academy of Management Journal, 45, 587-597. Huselid, M. 1995. The impact of human resource management on practices, on turnover, productivity, and corporate financial performance. Academy of Management Journal, 38, 291-313.
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Talent 2020: Surveying the talent paradox from the employee perspective (September 2012): Deloitte Consulting, LLP Survey
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https://yourbusiness.azcentral.com/positive-effects-turnover-21217.html
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MBI Retention Toolkit Michael Baker International University