Success leaves clues

The characteristics of successful employee retention planning systems
By Tony Guerra
|hrreporter.com|Last Updated: 08/12/2003

S

etting up a formal employee retention plan is attractive for companies who have spent years grappling with turnover-related problems, and it can go a long way in improving morale and productivity in the workplace.

Actually implementing the plan, though, is where the fun really starts. The first question facing HR is how is it going to set up the employee retention plan? It’s a simple question, but it’s not the easiest one to answer.

There is a lot of confusing and contradictory talk about employee turnover and the best ways to deal with it, including:

• ‘It’s all about the money;”

• “It has nothing to do with money because all employees really want is respect and empowerment;”

• “You should try to encourage loyalty;” and

• “Don’t bother investing in training because employees aren’t going to stick around.”

Many HR professionals have heard these comments before, but should not be discouraged by them. Organizations can develop effective employee retention plans if they pay attention to the design and architecture. Companies that have established successful employee retention plans have been able to ratchet-down turnover rates and increase productivity while reducing operating expenses, making them more attractive as employers of choice.

The successful programs have a number of common characteristics, including:

Effective employee retention plans are developed through a formal process by a cross-section of managers and employees from across the company.

Process is as important as content when it comes to employee retention. The best plans are those developed through a team effort and by means of a formal process. The process is overt — companies announce their intentions to develop an employee retention plan, set out the process to be used, the timelines and identify the people involved. Given the vested interest employees and managers have in their jobs, the information will likely be widely circulated and progress will be followed closely.

When developing the ERP, focus on identifying the causes of the problems facing both the company and the industry.

Bringing people together and having them identify the problems facing the company and the industry is the first step. More importantly, though, they need to focus on identifying the causes of the problems, not just the effects. Once the causes were identified, they were able to develop measures that would deal directly with the challenges.

This characteristic is integral to an employee retention plan. Managers can fall into the pitfall of presuming they know what is ailing their organizations and can set out to develop solutions to unknown problems. That approach to developing an employee retention plan will usually fail miserably.

Successful employee retention plans operate at the strategic, operational and tactical levels.

Organizations that have reduced turnover and become employers of choice have had these goals in mind from the outset. Once the goals were identified, they developed a strategy for bringing the goals to fruition, developed the necessary infrastructure and went to work.

A successful ERP has the resources it needs.

Organizations need to allocate appropriate financial and human resources to the employee retention plan in addition to the time needed to properly plan them out.

As simple as this might seem, it is imperative the process not be given short shrift since it could be perceived as an insult by employees, and fuel additional turnover.

A successful employee retention plan requires feedback and measurement.

Organizations with successful plans seek information about the effectiveness of the plan and the particular tactics being used to deal with turnover. Not all of the tactics will be equally effective, and HR should ensure it is able to refine the plan in order to maximize its contribution.

The goal is to develop a plan that is effective and sustainable. An organization has a lot of flexibility in terms of the tactics it can use to deal with employee turnover. But if an organization’s employee retention plan has these characteristics, it dramatically increases the odds it will work.

Tony Guerra is president of LMG, The Labour Market Group Inc., a consulting company that develops and implements strategies to deal with labour market challenges. He can be reached at tonyg@thelmg.com or (877) 324-8222.

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