The latest findings by The Wall Street Journal indicate that five years is actually too long to expect any employee to stay with your organization today, which is a real kick-in-the-bottom for H.R. managers responsible for staff retention. The findings hold true across all occupations, according to TWSJ’s stats, but managers will stay the longest, waiting a median of 6.9 years before departure. The highest turnover rate is in sales, where the median term of employment is 3.4 years. Business and financial people turnover about every five years, and the composite median for all occupations is 4.6 years.
What can we do to keep our most talented workers employed by our firms? Here are some suggestions:
Establish cash incentives for tenure.
Even in past decades, a gold pocket-watch wasn’t really the inducement to stay 25 years — not when loyalty to firm, a desire for security, and lack of opportunity were the prime employment motivators. Today, advancement is a key motivator and so it pays to float resumes, particular in the shadow of a recession. To tether employees, many companies have returned to annual bonuses. Set bonus opportunities to longevity goals: for example, give $750 for the first two years and $1,500 for the third, fourth and fifth years. Award $2,000 for six through nine years of service, and a whopper $5,000 bonus at ten years. (If you are on a profit sharing model, increase percentages of gain for every year worked alongside your other formulas).
People become more valuable to a firm over time, as they build relationships, experience and skill. An incremental rewards system may be the honey that keeps the bee closer to the hive longer — and it also encourages managers to prune sub-performance workers who aren’t “worth” a bigger bump at three years. Let the more capable employees know that staying with your firm pays.
Establish a key employee career ladder inside the firm.
Rather than a one-sized-fits-all approach to career development opportunities, assign key employees to an internal mentor or assign an external career coach to guide them through their career with the company. A job description lists the goals that must be achieved to competently do a job; once the supervisor is satisfied that the worker has mastered those skills, the employee would be afforded opportunities to begin training for the next phase – to expand their current role in ways which would benefit both company and employee, or to cross-train into another position. The mentor, while serving as the employees’ advocate, must stay in lock-step with management goals and company needs, and be a creative individual with sufficient company knowledge to help find opportunities.
Establish a strong and positive workplace culture.
The companies with the most positive and visible workplace identities have little trouble recruiting new employees and less trouble holding onto them as individuals age through the workforce. Usually these firms (1) have managers who value employees as people as well as employees; (2) employ supervisors who understand how to build and support teams; (3) pay a bit higher than scale when possible; (4) value innovation and employee feed-back as well as buy-in; (5) are good at telling their story and sharing company legends and goals across all lines.
A company’s recruitment success really does start at the management level; the number one reason people stay after exhausting their own advancement opportunities is linked to a positive relationship with their supervisor.
What retention practices work for your company? We love reader input, so let’s hear your ideas!