Grow employees to raise retention

The CEO of a Web site design firm recently sent a letter to his clients giving them an update on the business, which had enjoyed steady growth through the burst of the bubble and the economic slowdown. The letter said, “ One of the key reasons for our success has been our staff retention rate of more than 90 per cent.”

When asked how this was achieved in the intensely competitive high-tech arena, he responded, “We make a point of constantly talking to our people to determine what they want to learn next, what skills they want to develop and what sorts of positions and projects they aspire to.”

To this CEO and to most HR professionals, the case for retention is clear. For those who need to be convinced, three points should suffice. First, turnover is costly. Counting only the easily quantifiable costs of replacing an employee, such as hiring, relocation and training, the price tag is usually pegged at 1.5 to 3 times salary. Hidden costs, such as lost productivity, customer dissatisfaction, lost revenue and reduced morale, are seldom considered.

Second, despite recent layoffs and discouraging economic news, the need for motivated, capable employees remains high. The race for talent is still on, spurred by the greying of the workforce and the ever-widening skills gap.

Finally, research done by the Corporate Leadership Council in the United States offers a methodology for calculating the value of “internal churnover.” Their hypothesis is that the cost of turnover to a division losing an employee who moves internally will be more than offset by the effective savings in the receiving division. Therefore, encouraging employees to seek career growth and development by moving internally benefits the organization as a whole.

People who feel challenged and motivated and see realistic opportunities to progress along a career path that interests them are more likely to stay put. This makes effective career management a powerful retention tool for organizations.

This seems obvious and simple, but human resources practitioners know better. Continuous, effective career management for all employees is an elusive ideal. In the past two decades, organizations have increasingly given employees responsibility for managing their own careers. That was good because it removed outdated command-and-control models, but not everyone “gets” the concept of self-managed careers.

Effective career management must be a shared responsibility. It should be supported by the organization, facilitated by the manager and owned by the employee. Good career management practices roll down from broad organizational initiatives generated at the highest policy-making level and roll up from grassroots activities that are a part of every employee/manager relationship.

Strategies for effective career management practices that have been successfully implemented by many organizations include:

•Create different career paths. Allow specialists and professionals to advance in their functional area without necessarily moving them into management positions.

•Respond to the values of particular groups. Baby Boomers may want to ease into retirement while Generation X wants flexibility and mobility.

•Provide clear information about policies and internal processes. Ensure that employees understand the internal selection process and have access to learning opportunities.

•Make career development tools accessible. Use Intranet, workshops or videos.

•Make internal opportunities attractive. Work hard at “selling” opportunities to internal candidates.

•Use external career coaches. An outside, objective sounding board can be of great benefit to those struggling with career decisions.

•Use “intentional” mentoring and dedicated internal coaches. Too often mentoring is informal or “accidental.”

•Maximize experiential learning opportunities. Use job rotation, job shadowing, internships, task-force assignments and cross-functional teams.

These strategies are important steps in the right direction, but to create a culture of continuous career growth and development throughout an organization, managers must adopt a new type of on-going conversation with their staff. They must include career development in performance appraisals and be held accountable for setting career development objectives with their staff.

HR should coach line managers to conduct effective, informal, frequent career conversations with their staff.

The most effective career management practice is having line managers connect with their employees in an effort to understand and encourage their career development. This activity is a valuable strategy for retaining key talent part and must become part of an organization’s culture. It will take time and effort to instill this practice, but it will be worth it.

When individuals are valued and can see how their talents and skills contribute to the success of the organization, both in the present and into the future, their loyalty becomes stronger. Retention improves and the resulting benefit of having a stable workforce is the prize for those companies that make career management their most important retention tool.

Marge Watters is co-author of It’s Your Move: A Personal and Practical Guide to Career Transition and Job Search for Canadian Managers, Professionals and Executives, and a founding partner of Knebel Watters & Associates, a career transition firm. She can be reached at [email protected].

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