STAFFING MANAGEMENT

STUDENTS’S MANUAL

Retention ,

ContentsChapter 1 RECRUITMENT.......................................................................................................................3

INTERNAL ENVIRONMENT.................................................................................................................3

Promotion From Within.................................................................................................................3

Nepotism.......................................................................................................................................4

EXTERNAL ENVIRONMENT.................................................................................................................4

Labour Market Conditions.............................................................................................................4

Legal Issues....................................................................................................................................4

INTERNAL RECRUITMENT..................................................................................................................5

JOB POSTING.................................................................................................................................5

Employee Referrals........................................................................................................................5

EXTERNAL RECRUITMENT..................................................................................................................6

INTERNET RECRUITING......................................................................................................................7

RECRUITMENT FOR DIVERSITY...........................................................................................................7

Chapter 2 SELECTION.............................................................................................................................8

THE APPLICATION..............................................................................................................................8

SCREENING INTERVIEW.....................................................................................................................9

SELECTION TESTS ..........................................................................................................................9

INTERVIEWING CANDIDATES.......................................................................................................11

TEAM OR INDIVIDUAL INTERVIEW...............................................................................................12

BACKGROUND VERIFICATION AND REFERENCE CHECK...............................................................12

MAKING THE JOB OFFER..................................................................................................................13

EVALUATING THE RECRUITMENT AND SELECTION PROCESS...........................................................14

Chapter 3 EMPLOYEE RETENTION.......................................................................................................15

REDUCING RECRUITMENT BY INCREASING RETENTION EMPLOYEE RETENTION.............................15

INTRODUCTION...............................................................................................................................15

PEOPLE ARE VALUABLE....................................................................................................................15

RECOGNIZING THE PROBLEM..........................................................................................................16

The High Cost of Employee Turnover..........................................................................................17

The Impact To Your Business.......................................................................................................17

What are you doing about the problem?....................................................................................18

SOLUTIONS......................................................................................................................................18

The Basic Elements of Retention Strategies................................................................................18

A :: Top Performer Profiles..........................................................................................................19

B :: Orientation and Onboarding..................................................................................................19

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C :: Performance Reviews............................................................................................................20

D :: Career Pathing and the Two-Way Value Proposition............................................................21

E :: Communication and Employee Engagement.........................................................................22

F :: Morale...................................................................................................................................23

G :: Competitive Compensation, Benefits and Incentive Program...............................................23

H :: Non-Monetary Reward Recognition......................................................................................24

I :: Employee Surveys...................................................................................................................24

J :: Exit Interviews........................................................................................................................25

K :: The Boomerang Effect...........................................................................................................25

5 :: CONCLUSION.........................................................................................................................26

6 :: RETENTION CHECKLIST..........................................................................................................26

Flexible Firm Model.........................................................................................................................27

Flexible Labour Markets..................................................................................................................28

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Chapter 1 RECRUITMENT

When HR planning indicates the need for additional labour, organizations have a number of choices to make. This may be the first step in a full-scale recruitment and selection process, but sometimes hiring additional employees is not the best method to obtain additional labour. It may be appropriate for an organization to consider alternatives to recruiting, such as outsourcing or contingent labour, instead of hiring regular employees. If this is a temporary fluctuation in work volume, the simplest solution may be part-time labour or overtime by existing employees. The costs of recruitment and selection can be staggering; hiring new employees should occur only after careful consideration and only when the organization anticipates a long-term need for additional labour. Estimates on the cost to replace supervisory, technical and management employees run from 50 percent to several hundred percent of employee salaries.

Careful HR planning must consider the overall growth prospects of the organization and accurate forecasting of future labour needs. Recruitment planning begins only when other alternatives have been considered and eliminated

INTERNAL ENVIRONMENTPromotion From Within Your organization’s promotion policy will have a significant effect on the recruitment process. If the open position is above entry level, it may be appropriate to promote someone already working for the organization. Many organizations use promotion from within as a motivation tool and a reward for good work or longevity with the organization. When employees see their co-workers being promoted, they become more aware of their own career opportunities. Promotion may be especially important in a stagnant economy where people have little chance of improving their lot by changing organizations. Their only opportunity for career growth and increased income is to move up within their current organization. The problem with promotion from within is that the promoted person leaves a staffing gap in his or her former position, so there is still a position to be filled. However, that gap is likely to be at a lower, less-skilled position, and therefore it may be an easier position to fill. The advantage of promotion from within is that your promoted employee is already comfortable with the corporate culture, knows organization policies and will likely get up to speed much faster than a person new to the organization.

The disadvantage of promotion from within is that the organization loses out on the chance for new ideas and the creativity that can come from a new person entering the organization for the first time. Clearly, there are pros and cons to both promotion from within and outside hiring. It’s not that one way is right and the other is wrong—it simply depends on organizational policy, the type of job being filled and its level within the organization. Higher-level jobs are more likely to be filled by promotion than are lower-level jobs.

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RECRUITMENT: The process of attracting individuals on a timely basis, in sufficient numbers and with appropriate qualifications, to apply for jobs with an organization

Nepotism Nepotism is the hiring of relatives. Be sure you know your organization’s policy on nepotism before one of your staff approaches you about hiring a member of his or her family. If you hire staff relatives (or if you don’t), be careful of civil rights violations because in many situations it is illegal to discriminate in hiring based on a person’s marital status. So when your administrative assistant asks you to hire her husband, refusing to hire him just because he’s married to her may be an inappropriate and an illegal employment decision. Many organizations have nepotism policies, so find out where your employer stands on the issue. When hiring relatives, most employers require family members to work in different areas of the organization to prevent issues of favoritism and possible morale problems among employees. It is never appropriate for family members to be in supervisory positions where they are required to manage their own relatives.

EXTERNAL ENVIRONMENT Labour Market Conditions The strength of the economy and labour market conditions will significantly affect your organization’s ability to attract and retain top-level employees. When the economy is strong, with little unemployment, your organization may have to compete with other employers for a limited number of skilled employees. This may require increased compensation or benefits incentives to attract quality applicants. The reverse may be true in a soft economy, with high levels of unemployment. The problem then is not a shortage of qualified applicants; instead, the problem is managing the huge number of applications that must be pared down to find a few good hires. Local labour market conditions strongly affect nonmanagerial and supervisory positions, and depending on your industry, global considerations may affect your labour market for professional and technical applicants.

Legal Issues There are a number of laws that will affect your hiring process, particularly in the area of discrimination. The Civil Rights Acts prohibit discrimination in employment practices when the discrimination is based on a person’s race, colour, sex, religion or national origin.

The Age Discrimination in Employment Act extends discrimination protection to persons aged 40 and older for organizations of 20 or more employees. Pay attention to your discrimination laws as well. Some situations require compliance with age discrimination law for employers of two or more workers, and some situations have lowered the age discrimination threshold far below 40 years old.

The Pregnancy Discrimination Act makes it unlawful to refuse employment to a woman based on pregnancy, childbirth or any related medical condition. The basic principle is that a woman affected by pregnancy or other related medical condition must be treated the same as any other applicant in the recruitment and selection process.

The Disabilities Act prohibits discrimination against qualified individuals with disabilities in organizations of 15 or more employees. The DA also requires that the employer offer reasonable accommodations to disabled individuals so they have equal opportunity to apply for job openings and, if hired, to be successful in their job functions. If you are unsure what accommodations may be reasonable, check with your department of labour. Employers are prohibited from using an

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employment test to disqualify a disabled candidate unless that test is valid for the skills necessary in the job to which they are applying and unless the same test is given to all applicants, not just to those with disabilities. Always contact your department of labour for information on appropriate laws in your area and remember that it is important that you remain current on employment law as regulations are frequently updated. Discrimination costs employers millions of dollars every year, not to mention the countless hours of lost work time, employee stress and the negative public image that goes along with a discrimination lawsuit. The best way to avoid the trauma and expense of a lawsuit is to simply not discriminate. Focus your recruitment and hiring decisions on job skills and qualifications, endeavouring to find the best person for the job. For additional information on discrimination law and compliance, see the Equal Employment Opportunity Commission

INTERNAL RECRUITMENT Job Posting The most common method used to find qualified applicants from inside the organization is job posting.

JOB POSTING: The procedure to inform employees that job openings exist.

The traditional method to announce a job opening was to post notice of the job on the HR bulletin board; no doubt this is the origin of the term job posting. Today, many organizations post jobs electronically through organization-wide intranets or send e-mails to all employees about the job vacancy. Other employers publish employment newsletters or distribute job announcement flyers. Whatever the method used, the job announcement should include information about the position, the required qualifications and instructions on how to apply. It is important that the job announcement is made available to all employees. Adequate job posting can ensure that minority workers and other disadvantaged groups are aware of opportunities within the organization. The downside to job positing is employee cynicism that occurs when jobs are posted as open, but in reality, the organization has already selected a strong internal candidate. Such practices create resentment and mistrust among employees when they believe the job posting is just a formality with little real opportunity for advancement.

Employee Referrals Some managers believe that the best method to find top performers is to hire individuals referred by existing employees. Current employees can play an important role in recruiting new employees, and some organizations pay a bonus to employees for successful referrals. Bonuses typically range anywhere from a $250 gift certificate to a $2000 cash reward, but employers have been known to pay several thousand dollars for the referral of a successful employee in a position particularly difficult to fill. It sounds like everyone wins—the organization gets a successful new hire, the new employee has a job, and the referring employee has a bonus in his or her pocket. There is a downside to extensive use of employee referrals, though. Relying on word-of-mouth recruiting may generate applicant pools that do not reflect the diversity of the labour market and may be discriminatory. Therefore, it would seem prudent to use employee referrals sparingly.

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EXTERNAL RECRUITMENT Applicant pools can be generated in a number of ways. Depending on your organization’s policies and the size of your hiring budget, you may want to use an employment agency. Private agencies and executive search firms are usually used for recruiting white-collar employees, but they can be used for virtually any type of position. Using job criteria provided by your organization, an agency will generate the applicant pool and do the preliminary interviews, thereby screening out unqualified candidates and sending you only those who are actually qualified. This can save a great deal of time; however, private agency fees can be costly because they are often a percentage of the position’s annual salary. This can be a significant expense, particularly when filling executive-level positions. If you register your job opening with your state employment office, it may send you similarly qualified referrals at no charge. Depending on the nature of the position, you may also get some unsolicited walk-in applicants, but these still may not generate a large enough applicant pool without further recruitment efforts. Large organizations often hire in-house recruiters whose sole focus is to generate qualified candidates for open positions. Recruiters are generally used in high-tech industries and focus their efforts on technical schools, community colleges and universities. Since in-house recruiters are employees of the organization, applicants generally base their perception of the organization on their interaction with the internal recruiter. Therefore, recruiters must be made aware of the image they present during the screening interview; it can significantly influence the applicant’s attitude toward the organization. You may choose to advertise the open position in local newspapers, trade journals, radio and television. Advertising can range from a simple help wanted ad in the classifieds to an extensive multimedia campaign. Help wanted ads often include a URL for online applications well as more traditional methods for reply. Some organizations have eliminated traditional methods altogether and accept only online applications. Historically, local newspaper advertising was the common recruitment method, particularly for entry-level positions, because it was low cost and could generate a good number of applicants. If the job you are hiring for requires technical skills not commonly found in your local labour force, you will have to broaden your search geographically by advertising in other areas or working with employment specialists outside of your local area. In general, the more technically specific the job, the wider the geographic recruitment area. Some positions lend themselves well to internships. An internship is an arrangement in which a student is placed temporarily in a position with no obligation by either the student or the organization to make the position permanent. The internship may be a summer or a part-time job while the student is in school, enabling the student to learn the organization and try out the job before settling into a career. It also enables the organization to try out a possible future employee before making a job offer.

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INTERNET RECRUITING The most significant change in recruiting practices has been the rise in the use of online recruiting. Many organizations post job openings on their web sites or on specialized sites like Career Builder and Monster.com, and some accept only online applications, completely eliminating the hard-copy application. There are advantages to online recruiting. First, it costs less than traditional advertising. It’s easy and quick to post an ad; responses arrive faster and in greater quantity; and a wider range of applicants can be generated. Online processes can also screen applications and administer some selection tests, thereby significantly reducing the HR time required to generate a pool of qualified candidates. The online format is immensely popular with job seekers as well because the ease of submission allows them to send out dozens of résumés with just a few mouse clicks. This can create a problem for HR, however. There must be processes in place to filter out those who do not meet minimum job qualifications. The ease of applying for a job online can generate a great number of applications, requiring HR staff to spend time sorting through applications to glean out the few that are actually qualified for the job. There are as many different methods of recruiting as there are organizations, and there is no one best method for recruiting job applicants. Most organizations use a variety of methods, depending on the nature of the job to be filled, the time needed to properly fill the position and the size of their recruiting budget. Your organization may already have a valid track record for recruiting that will determine what methods work best for your situation.

RECRUITMENT FOR DIVERSITY Equal employment opportunity legislation outlaws discrimination based on race, color, gender, national origin, religion, disability and age. Some organizations abide by discrimination law simply to keep out of court, but most employers recognize the inherent advantage of employee diversity, including greater creativity and an expanded customer base. Employers who wish to develop a diverse workforce must ensure the use of recruiting methods that generate applications from a variety of individuals. It is important that recruiters receive training in the use of objective standards because recruiters are in a unique position in terms of encouraging or discouraging diverse individuals to apply for positions. Recruitment flyers can include pictures of minority and disabled employees, advertisements can be bilingual, and interviews can be conducted using translators, if appropriate. It is important that the employer generate credibility to the image of equal employment opportunity and that these are not just words printed at the end of a recruitment announcement.

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Chapter 2 SELECTION

THE APPLICATION Asking the candidate to complete an application form is generally done early in the selection process. Despite the widespread use of application forms for employee selection, research demonstrates that illegal (or inappropriate) application items are still quite common. Questionable items are those that request information on gender, race, national origin, education dates and disabilities. The most commonly found inappropriate questions involve past salary levels, age, driver’s license information, citizenship information and Social Security numbers. Questions about past salary are considered inadvisable since they can perpetuate lower salaries for women and minorities as compared with white males. If an employer bases a starting salary on an applicant’s prior earnings, minorities and women will likely be offered less pay. Although the majority of applications do not explicitly ask about age, many include inquires about an applicant’s education dates (year of high school graduation), which can be used to infer an applicant’s age. Citizenship information is not appropriate on the application and can be discriminatory if used as a factor in the hiring decision. Certainly new employees must provide the employer with a Social Security number when hired, and it may be needed for applicant background checks, but it is not necessary on the application, and many people concerned with identity theft are reluctant to give Social Security numbers. Since driver’s license information can be used to obtain demographic (and possibly discriminatory) information, it is best not to ask for that information unless possession of a driver’s license is a valid requirement for the job. If your organization has an affirmative action (AA) plan, your applicant may be asked for demographic data for AA records. This information must be collected separately from the application form, and applicants must be advised that submission of demographic information is voluntary and that the affirmative action form will be separated from the application and stored. The information requested on an application form may vary from organization to organization and even by job type within an organization. Typically, though, the application form should include sections for the applicant’s name, address, telephone number, education, military background, work experience and reference information. There should be a place for the applicant to sign and a preprinted statement that the applicant’s signature indicates his or her attestation that everything on the form is true; if not, the candidate can be released. When it is not prohibited by state law,

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SELECTION: The process of choosing from a group of applicants the individual best suited for a particular position and for the organization.

many organizations include an employment-at-will statement reminding employees that either the employer or the employee can terminate the employment relationship at any time. And finally, the form should include a statement from the applicant giving permission to have references checked. Many applicants include résumés along with their applications, and HR can direct applicants to submit forms either online or in hard copy. Most large organizations now use automated tracking systems that require online submission. Automated systems can scan applications and résumés for keywords, thereby eliminating the time spent by HR in reviewing documents. Obviously, this saves time in the HR department, but employers using automated tracking systems must be cautious. Applicants are becoming more sophisticated in the process and stuffing their applications and résumés with keywords even when they are not truly qualified for the open position. Regardless of the methods used, you may get hundreds of applications for only a few open positions, particularly in a slow economy with high unemployment.

SCREENING INTERVIEW Before moving further into the selection process, many organizations prefer to do a screening interview of those applicants that appear qualified based on information submitted on their résumé and application. Screening interviews are usually conducted by telephone. The interviewer asks a few straightforward questions to determine the candidate’s job qualifications and appropriateness for the open position. If it is determined that the applicant is not appropriate for the position, the interviewer may refer the candidate to another open position within the organization if there is something available that matches the applicant’s skills. If there is nothing else available and the candidate is obviously unqualified for the position, the process ends there, saving both the candidate and the organization the time and expense of going further into the selection process.

SELECTION TESTS

There are a number methods organizations use to determine if an applicant has the potential to be successful on the job. Selection tests are used to identify applicant skills that cannot be determined in an interview process. Using a variety of testing methods, applicants are rated on aptitude, personality, abilities, honesty and motivation. Properly designed selection tests are standardized, reliable and valid in predicting an applicant’s success on the job.

Standardization: The uniformity of procedures and conditions related to administering tests (R. Wayne Mondy)

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SELECTION TEST: Any instrument used to make a decision about a potential employee.

To equitably compare the performance of several applicants, the processes used for testing those applicants must be as identical as possible. The content of the test, the instructions and the time allowed must be the same for all candidates. For example, when giving a timed keyboarding test, it would be unfair for one applicant to be tested on a manual typewriter while the other candidates were tested on contemporary computer keyboards.

Reliability: The extent to which a selection test provides consistent results (R. Wayne Mondy) A test’s reliability should be questioned if it does not generate consistent results each time it is used. For example, if a person scores 125 on an intelligence test one week and scores only 80 on the same test the following week, you should assume the testing instrument is not reliable.

Validity: The extent to which a test measures what it claims to measure (R. Wayne Mondy)

Do higher test scores relate to higher success on the job?

The skills tested in a selection instrument should be the same skills used on the job. Therefore, we can assume that higher test scores will correlate to higher success in job performance. If a specific test cannot assess the ability to perform the job, it has no usefulness in the selection process. For example, for an administrative assistant position that requires skilled keyboarding for job success, a keyboarding test would be valid in the selection process. We could assume that a higher score on the keyboarding test would indicate higher performance on the job. Requiring the same job applicant to complete a lifting test would not be valid for the position because the ability to lift specific weights is not a job requirement and therefore a higher score on lifting would not be a valid predictor of job success.

Tests are generally administered and evaluated before interviewing candidates. Testing helps trim the applicant field by further eliminating those with inadequate skill levels to be successful in the job. Applicant testing has two major advantages: test results are objective and free from personal bias and they are usually expressed numerically so they can be validated by statistical analysis. Employers usually use tests to determine the applicant’s knowledge or proficiency level in the required job skills. Some organizations also use aptitude tests as well as personality, honesty and physical ability testing. If your organization does testing for substance abuse, it must occur at the end of the selection process and be done in conjunction with a job offer.

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INTERVIEWING CANDIDATES Selection testing will trim your recruitment pool, but you’ll likely need to narrow your list of candidates even further to establish a reasonable number for interviewing. The nature of the job and how much time you can afford to allot to the interview process will determine how many applicants you choose to interview. Three or four may be plenty, but more may be important for you to get a good feel for the candidates’ qualifications.

The interview is really a verbal test for the candidate. However, unlike a paper and pencil test, there is no clear right or wrong answer in many cases. The results are subject to interpretation by the interviewer and thus can have a huge potential for error, depending on the questions asked, the answers given and the interviewer’s own personal bias. Think carefully about the kind of information you want to get from the candidate during the interview. Don’t waste time asking questions that give you the same information found on the application. Use the interview to find out how the person will conduct him or herself on the job. Successful interviewing results from a thorough understanding of the job requirements. Therefore, you must have a complete and accurate job description that identifies the critical job competencies. These competencies become the target list against which each candidate is measured, and they provide the basis for developing your interview questions.

The most widely used interview techniques are the structured or patterned interview, the nondirective interview and the situational/problem-solving interview. In a structured or patterned interview, the interviewer follows a pre-set list of questions asked of all candidates. This allows for consistency in the process, ensures that important questions are not left out and helps guarantee that all candidates will be assessed by the same standards. Though consistency is desirable, the interview should not be so rigid that interviewers are not allowed follow-up questions based on the candidate’s answers; you don’t want to miss important information that the candidate may provide from further questions.

Situational interviewing is characterized by questions like, “what would you do in this situation,” allowing the candidate to speculate on how he or she would handle a particular job problem. Behavioral interviewing asks the candidate to describe what he or she did in a particular situation. It requires the candidate to give real examples of past actions and results, and it is based on the theory that past behavior is a good predictor of future behavior. Generally, behavioral questions are more likely to give real-world information that may be relevant in making a good selection decision. The nondirective interview takes the opposite approach from a structured interview. It is conducted with a minimum of questions asked by the interviewer and questions are not always planned in advance. This technique involves open-ended questions such as “tell me about the work you do in your field,” allowing the candidate to

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express his or her thoughts and feelings that might be relevant to the job and allowing the interviewer to follow the direction set by the candidate. This technique can reveal information that may never arise in a structured interview, but it can lead to problems if the candidate reveals inappropriate or potentially discriminatory information. Sometimes interviews without structure can become nothing more than casual conversations, with the interviewer focusing solely on getting to know the candidate. This may be nice for social gatherings, but it has almost no predictive ability in the hiring process. You’ll have a more successful new hire if you stay away from the “casual conversation” trap and instead plan carefully for a structured interview that focuses on job-related information.

TEAM OR INDIVIDUAL INTERVIEW In the past, the supervisor may have been the only person interviewing the candidate, but the trend now is to use an interview team consisting of representatives from the various areas of the organization that will interact with the new person. The advantage of this approach is that multiple interviewers represent broader areas of interest, and when interviewing is completed, there is more than one person to make the selection decision. This may also help the new hire to be more quickly accepted by the team, since those who participated in choosing the new team member are generally supportive of that choice. The downside to team interviews is simply logistics. The larger the team, the more difficult it is to find a time and a place in everyone’s busy schedules to make the interview happen. In addition, candidates are likely to find a panel interview more stressful than an interview by a single person.

BACKGROUND VERIFICATION AND REFERENCE CHECK Once you have made your selection decision, you must verify the information provided by the candidate and check the candidate’s references. Millions of background and reference checks are done on applicants annually, and unfortunately, much of the information on application forms and résumés is inaccurate. According to ADP Screening and Selection Services, 40 percent of applicants lie about their work histories and educational backgrounds and about 20 percent present false credentials and licenses. Nationwide, an estimated 30 percent of job applicants make material misrepresentations on their résumés. 5 Another survey found that 95 percent of college students said they would lie to get a job and 41 percent said that they had already done so. One survey of top executives found that 15 percent admitted falsifying résumé information.6 Difficult as it may be to check references, you must get accurate information on your prospective new hire. Unfortunately, past employers are increasingly reluctant to give references mostly because they fear defamation lawsuits from disgruntled former

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employees. Consequently, many employers strictly limit the information they provide about former employees. It’s a no-win situation for employers, though, because they can be sued either way. Withholding negative information about former employees may offer protection for the employer from a defamation lawsuit, but it increases its exposure to a lawsuit based on negligence if the employer withholds information regarding the volatility of a former employee.

A past employer that fails to warn about an employee’s known propensity to violence may be guilty of negligent referral, and a potential employer that fails to do proper reference checks that may have uncovered the potential risk of a new employee may be guilty of negligent hiring, if the new employee causes injury to another in the workplace. It is a reminder to HR that we must diligently ferret out information on new hires and, at the same time, keep accurate employment records on current employees so that when asked, we can provide verifiable and reliable reference information. Because of the difficulty of obtaining information from past employers, many organizations conduct criminal background checks, credit checks and Internet searches to find information on job candidates. In 2006, according to research from SHRM, 96 percent of employers conducted background checks on applicants, up from 66 percent only a decade ago.9 Though controversial, these background searches are not illegal if the candidate has given proper permission. Before conducting any background check on a potential employee, be sure your candidate signs the proper release forms.

MAKING THE JOB OFFER A job offer may be extended by phone, letter or in person—whatever is customary in your organization. Most commonly, the job offer is handled by the HR department. At this time, salary and benefits are discussed and the prospective employee is told of any further conditions that must be met. If your organization requires a physical examination or a drug screen, arrangements should be made to complete the process. If the candidate needs time to think over the job offer, a time should be established for notification. At this point, you must ensure that your potential new hires receive a realistic job preview. Tell them everything they need to know about the job, the bad as well as the good. If this job requires travel, tell them. If this job is high stress with little advancement opportunity, tell them. Employers that treat the recruiting and hiring of employees as if the applicants must be sold on the job and exposed to only the organization’s positive characteristics set themselves up to have a workforce that is dissatisfied and prone to high turnover. Remember, you are hiring for long term; the job must be a good fit for both the new employee and the organization. People are most at risk of quitting within the first few months of hire, usually because the job turned

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DEFAMATION: The act of harming the reputation of another by making a false statement to a third person.

NEGLIGENCE: The failure to exercise the standard of care that a reasonably prudent person would have exercised in the same situation.

out to be something they did not expect. This is expensive for your organization and stressful for HR if you are continually repeating the hiring process for the same positions; and, of course, it is also stressful for the new hire.

When you make the job offer, avoid quoting an annual salary. Quote compensation by the hour or the month, whichever is appropriate. Annual salary quotes have sometimes been interpreted by the courts as a contract for employment for a minimum of one year. If the employee is let go before the completion of that first year, you may be looking at a potential lawsuit—breach of employment contract. This is easy enough to avoid— don’t quote an annual salary! See Eales v. Tanana Valley Medical-Surgical Group, Inc. for court opinion regarding enforceability of oral promises made during the hiring process. After your selection decision, you must verify the employment eligibility of your new employee. Under the Immigration Reform and Control Act, employers are required to hire only Namibian citizens and aliens legally authorized to work in the United Situations. Eligibility for employment must be verified for all new hires within three days after they start work. Both the employee and the employer must complete and sign the application form, with the employee presenting the necessary documents to verify identity and the legal right to work in the United Situations. The form indicates which documents have been presented and the employer’s signature verifies that the documents appear to be genuine. The application form must be retained by the employer for at least three years.

EVALUATING THE RECRUITMENT AND SELECTION PROCESS Most organizations keep at least minimum statistical information on their recruitment and hiring processes. You will want to evaluate the processes to ensure that it is cost-effective, timely and, most importantly, that you hired the right person! Information gathered may be invaluable for further recruiting as your organization grows. Some things to think about: Were your methods cost-effective? Did you stay within budget? Did your recruitment generate a large enough applicant pool to make a good selection decision? Were your applicants qualified for the job? How many applicants must you generate to get a good hire? How long did it take to fill the position? How long does it take for a new employee to “get up to speed?” What about turnover? Do your new employees stay with the organization? Answers to these questions can provide valuable information for the next time you recruit and hire a new employee. CONGRATULATIONS – You have a new employee!

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Chapter 3  EMPLOYEE RETENTION REDUCING RECRUITMENT BY INCREASING RETENTION EMPLOYEE RETENTION Retaining your best staff is essential to your company’s performance. For managers, nothing feels better than having a productive and happy workforce who are collectively focused on the organization’s success.

INTRODUCTION Have you ever phoned or revisited a client and discovered that the person you were dealing with is no longer working for the company? It’s an unfortunate and frustrating realization. All that time – and often money – spent developing a relationship and sharing business strategies with someone you trusted went out the window. Now recall how you felt about the organization your client represented. Their reputation became unreliable, you lost faith in their business practices and you probably lost interest in working with them. So if you have felt this way about other companies, then your clients likely feel the same about yours if you have trouble retaining your top talent.

For managers, nothing feels better than having a strong, successful, happy workforce in place who are mutually focused on the organization’s performance. Hiring top-quality individuals is an important task on its own, but essential to any manager’s ongoing process is a critical retention strategy. In fact, hiring does not end when the candidate has accepted the position. Advantageous initiatives and well-planned processes must be firmly in place and consistently nurtured so that employees will have reasons to remain with your company for growth to continue. Following a well developed strategy will let you reduce recruitment through retaining your top-performing talent.

Obviously, you cannot hold onto all your best people, but you can certainly minimize the loss. Reducing employee turnover is a strategic and vital issue, beneficial to your company’s bottom line. It has taken considerable time and resources to attain a staff whom you are proud of – to replace them starves your organization of many essential success factors (money, overall attitude, productivity, etc.) and the company’s ultimate triumph. The intent of this whitepaper is to help you discover the importance of retaining your valuable employees and provide you with a list of solutions.

PEOPLE ARE VALUABLE Like an art collector who has spent time and research attaining that Great Master’s work which embodies the talent, skills and training of the artist, getting excellent staff requires the same passion. The collector protects the painting with superior security and environmental methods. In your position as a manager of people you must do whatever you can to keep that priceless individual who works hard for your company and generates strong results.

As an experienced business person, you have undoubtedly used, or are in the process of using, effective hiring tools to assemble what you believe to be the best staff, with exceptional skills and who fit well into your company’s unique culture. In a competitive, professional world, top performers are often made a variety of offers before they settle on one career position. But once they are working for you, they need reason and motivation to remain.

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The old adage “Look after the small things and the big things look after themselves” can easily apply to your workforce. “Look after your people and the business will look after itself”. It could not be more relevant today as when it was first said. Your staff is more than employees. They are valuable individuals with unique competencies and characteristics who require appreciation as much as a paycheck. In fact, people are the single most valuable element within your organization. Without them, you simply cannot do business or generate revenue. It is not just human resource companies that are in the people business – every business needs excellent people to prosper. Can you think of a Fortune 500 company that reached success without top performing people who have grown and developed over time with the company?

Each individual who performs a function at your organization – no matter how junior or senior – are the puzzle pieces that fit together to create the larger picture of success. Missing one of those pieces puts a hole in the picture and stops your company being successful. To keep them, your company must develop a retention strategy with clearly defined goals.

RECOGNIZING THE PROBLEM Who is ultimately responsible for staff retention?

Retention starts at the top. Sourcing, hiring and retaining motivated employees is the responsibility of the company’s governing board and Leadership Team. Getting and keeping good staff demands focused, formal and informal policies and procedures that make retention a prime management outcome. Managers need to appreciate staff every day and constantly work to keep them on board.

The HR department alone cannot reduce turnover. For significant, positive change, company leaders must establish distinct retention processes and programs within all levels of an organization. After finding the right people, it is management’s primary role to take responsibility for the success of their employees including leading people towards performance goals and targets.

Why are people leaving?

If you are baffled as to why people are leaving your company, then take a look at a typical workplace scenario:

Kevin had grown frustrated with his current employer. He felt he was very talented in his job and had won several key accounts as proof. Yet he hadn’t had a raise in two years, and his boss seemed incapable of saying anything nice about his work. Kevin was putting in a lot of overtime and was stressed from the huge amount of work he was expected to complete with decreasing resources. Past downsizings and employee reductions had left his department short- handed, and yet workloads were rising rapidly. He wasn’t sleeping well, and his home life was suffering because he never had energy or time for life outside of work. Kevin had had enough and began interviewing with other companies. But when he was made an offer from a major competitor, he wasn’t sure what to do. In some ways he liked his existing job. He recalled having faith and being happy with the company before the downturn and he liked his fellow workers — although he knew that several of them were looking as well. He couldn’t help but think, maybe things would improve soon?

This scenario has become increasingly familiar in companies. The nature of work environments at all levels has become such that employees are faced with increased workloads, ever-stressed bosses, lack of incentives and fear of reductions. This has caused many talented employees to leave their current organizations. In most cases they are not blind to the fact that things might not be

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better elsewhere but they are hoping for some recognition and perhaps a bit of relief, even if temporary, from their current situation.

There are a number of factors that will contribute to a forthcoming wave of turnover. New job opportunities are steadily rising in fields that were once under performing. Fast online job search resources let employees search and apply to new jobs easily. Globalization and off-shoring have created a sense of discomfort and lack of loyalty to companies. Increased corporate recruitment efforts are aiming to snatch top performers and the natural shift of age dynamics means retirement levels will soon come in waves, leaving once unattainable roles open.

Never has it been more critical to organize your company’s retention programs before high turnover takes hold and strongly impacts your business goals

 The High Cost of Employee Turnover The costs of high staff turnover can be incredible. Some of the substantial costs that occur when a person leaves your organization include the following:

Recruitment costs ● from advertising to the time spent interviewing and sourcing.

Training costs ● orientation materials and trainers’ time (ex. call center agents require on average 4 - 6 weeks or more of classroom training).

Lost Productivity Costs ● a new employee operates between 25%- 50% of productivity levels for the first three months, not including the time spent by existing employees to assist.

Lost sales costs ● the loss of business when the role is vacant.

According to William G. Bliss, advisor to entrepreneurial companies, figures can easily reach 150% of an employee’s annual salary. The cost will be significantly higher (200% to 250% of salary) for managerial and sales positions. For example, if the average salary of employees in a given company is $50,000 per year, the cost of turnover at 150% of salary, is $75,000 per employee who leaves the company. For the company of 1,000 employees who has a 10% annual rate of turnover, the annual cost of turnover is $7.5 million.

What company can afford this? Not only are there the direct financial costs of replacing staff but other repercussions include the loss of key skills, knowledge and experience, disruption to operations and the negative effect on workforce morale. In addition, high turnover represents a considerable burden both on HR representatives and managers who are constantly recruiting and training new staff.

The Impact To Your Business Replacing staff is obviously expensive. But in addition a company’s reputation is also at stake. No one feels confident dealing with an organization which cannot hold onto their employees. It suggests instability, poor management and a lack of good planning. Regardless whether an individual is let go or leaves on their own accord, more often than not the employee leaves with a bitter taste in their mouth. That feeling is taken with them – along with the skills they learned while working for you – and their sentiments are often repeated to future employers and their personal network. Reactively losing talented individuals can damage your company’s reputation for years to come.

Lastly, constant high turnover creates unrest in present employees. Positions which are made vacant create increased workloads for other staff members – often outside their position profiles. The sense of instability and frustration can cause work backlogs and slow

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productivity. Yet, perhaps more fundamentally, the employee’s lack of faith in the organization when they see their co-workers departing will effect productivity work levels in unbelievably negative ways.

 What are you doing about the problem? Dr. Sullivan says that most firms have by now long forgotten any of the lessons they learned about retention during the 1990s. Many managers have grown arrogant because the last few years of high unemployment guaranteed that most employees would have to take whatever they dished out. Over 75% of firms have no distinct retention strategies and those with plans have let them fall into neglect.

Even if you don’t have high employee turnover today, your company should look at implementing retention strategies. Employees see retention efforts as more sincere when managers are not being forced to act due to high turnover.

  “The first step to solving the employee turnover problem is to recognize that we indeed have a turnover     problem,” said Bill Pollock, CEO of Drake International, a global provider of business consulting and implementation solutions, in his article “People are Everything”.

When seeking to resolve the problems associated with high turnover, companies must first investigate the underlying causes. They need to have in mind an appropriate level of attrition by setting benchmarks against similar organizations and taking into account the entire cost of turnover to the company.

Some issues may be addressed at a local level by placing a greater emphasis on listening and responding to employees concerns and ideas. Yet, in general, retention difficulties are likely to require a company leader with the ability to engage the employees - using strategies such as job satisfaction surveys - who can also create a broader, long-term plan.

If your company does not have effective retention strategies set firmly in place, then the time to act is now

SOLUTIONS The Basic Elements of Retention Strategies As the economy improves and firms look to build their talent strength, it is only logical that senior leaders, managers and HR professionals will increasingly look at retention as a major business imperative.

Dr. Sullivan states in his article “Expanding the Scope of Your Retention Efforts” that most newly enacted retention efforts will not only fail — they do so miserably. As someone who has been designing retention solutions for corporations for well over a decade, Dr. Sullivan says the reason for this is that many firms define the goals of the retention program too narrowly. For example, if the goal is defined as merely to “keep good people,” you are automatically dooming the effort by failing to identify specifics that can be measured.

Rather, a broad set of carefully planned criteria is essential when building a strong retention program. The solutions addressed in the following section were recognized and created by industry professionals whose experience prove invaluable to any company, of any size. They have helped organizations realize their productivity goals through the retention of top performers and the reduction of recruiting. Drake consults companies on the philosophy that giving careful consideration to the retention of top performers reduces the need for recruitment

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and saves time and money. As a result, they have helped organizations realize their productivity goals through the following topics:

A :: Top Performer Profiling

B :: Orientation and OnBoarding

C :: Performance Reviews

D :: Career Pathing and The Two-Way Value Proposition

E :: Communication and Employee Engagement

F :: Morale Boosting

G :: Competitive Compensation

H :: Non-monetary Reward and Recognition

I :: Employee Surveys

J :: Exit Interviews

K :: The Boomerang Effect

A :: Top Performer Profiles

“Knowing how to select the right people, and  in   fact,    actually   selecting   them   is   essential  to successful performance.” - Bill Pollock, “People Are Everything”

It is important that both the organization and the employee know what they want to get out of the job. Yet, unknown to most managers, retaining good staff ideally begins during the recruitment phase. A key challenge during recruitment is differentiating candidates who do well in interviews and candidates who will do well in the actual position. Often they can be mutually exclusive. The goal for any recruitment strategy should be to attract a top performer who will stay with the company for as long as possible. In order to hire those “near perfect” individuals, an ideal role profile should be created. If a company spends quality time, energy and focus to create such a profile it becomes much easier to source qualified candidates who will successfuly fill the position.

A candidate profile should be built around existing top performer’s skills, knowledge and behaviour. Using predictive performance profiling such as Drake’s P3 proves invaluable in this process. It will match candidates to this criteria and distinguish them as future key contributors in your organization. Other interviewing techniques and assessments can clarify candidates who perform the job well, but P3 identifies and distinguishes the key behavioural tendencies necessary for them to be successful in their jobs and in the unique organization which they are entering. Once behavioural traits are determined, candidates can be separated into further categories based on their training requirements.

It is important that both the organization and the employee know what they want to get out of the job.

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B :: Orientation and Onboarding To retain the most desirable workers, employers must first recruit them. As mentioned above, the actual hiring technique is an important step in the process of building relationships that encourage long-term employment relationships.

Once ideal candidates are hired, their orientation to the company and the role is paramount. As mathematician Henry Block put it, “We are forced to rely on our people, which is why we put so much emphasis on training them.” Orientation is the critical “fitting in” phase of the training process. New hires are oriented to the workplace culture, trained in the role and learn the company’s expected outcomes. The orientation process must provide a clear understanding of the role and the performance targets necessary to attain to complete the role successfully. By establishing these targets from the outset, the employee will not be faced with surprise expectations, instilling both confidence and reliability.

Therefore, it is the responsibility of the company’s key stakeholders to develop these expectations prior to any sourcing for a new position and communicating it to the new employee. If the position profile incorporates these targets and is realistic in scope, new employees will enter the position with realistic expectations of what they must achieve. Of course, time is of the essence and a great way to personally communicate these messages is to utilize technologies such as Drake Interactive, a web-based messaging service designed to bring to sight and sound to information often delivered in flat, hard copy documents.

Many employers have experienced the frustration of hiring seemingly ideal candidates for specific positions only to have them leave immediately after the orientation session. In most cases, this introduction to the company was neither positive or reassuring enough for the new employee and they left due to overwhelming bewilderment or fear. So, to gain the highest productivity and the greatest longevity, wise employers should engage their new hires with an extensive, in-depth onboarding process.

Onboarding continues far past the point where orientation programs typically end. Some orientation experiences conclude after a couple of days of the employee’s first day. Yet, a number of more enlightened companies have extended their orientations for a number of months, conducting follow-up sessions on a periodic basis. This longer approach often serves to deepen the bonds with the employee by providing more attention, human interaction and information.

Additional rich media such as interactive web collaboration tools offer the opportunity for new employees to ask questions and resolve troubling issues. Managers who employ technologies such as Drake Interactive and PictureTalk, which pro- vides real-time collaboration while conducting small or large meetings, find this type of approach delivers the results necessary to communicate strongly to all candidates. Issues may be addressed in person and the human interaction is ideal for reinforcing success within the company. It lets the new employee know that communication is strong within the organization, thereby reducing turnover or loss of interest by employees who stay yet remain unhappy.

 C :: Performance Reviews Positive feedback on a regular basis does more to propel success in an individual than any other performance related tactic. Performance reviews are a chance to formally communicate an employee’s contribution to the company. A properly conducted performance review provides the employee and their manager an opportunity to step back, look at the bigger picture

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of the employees performance and to discuss in broad strokes whether the performance is below, at or above company expectations.

Performance Reviews increase the chance of an underperforming employee improving their performance. A partnership with a company such as Drake, who consults on reviewing techniques and project development, can result in effective performance reviews. Putting these into action within the workplace can be immediately instituted to improve performance.

Quite simply, negativity does not work. We no longer live in those dark Victorian times when unrealistic and iron-fisted tactics work to get an optimal performance from an employee. Today’s workplace requires that criticism must come with support and a sense that the company is there to assist the employee in achieving and attaining success. Proved time and again, even the most average of employees are likely to raise their quality standards if they are encouraged through constructive, open reviews. Always recognize successes and never berate an employee who works hard but whose work lacks company standards. In fact, these individuals are often the most open to suggestions of improvement and are ready to be molded into the most ideal of employees.

D :: Career Pathing and the Two-Way Value Proposition As the American poet Oliver Wendell Holmes said, “I find the great thing in this world is not where we stand, as in the direction we are moving.” Such motivation is vital for long term retention. Employers must balance company goals with employee’s personal goals. It stands to reason that a happy, content employee has an equal mix of successful professional and personal lives. Countless studies have determined that people who are experiencing problems - whether illness or lack of focus on goals, etc. - generally underperform in their jobs. After all, they are people first and employees second.

So, in order to make sure that your employees realize that the two aspects of life are valued in the workplace, it is imperative that your organization develops a value proposition that embodies these concerns. Essentially, this two- way value proposition is the marrying of company goals with personal goals. To achieve this, involving a third party organization, like Drake, can help to facilitate candid conversations, identify core issues and encourage the expression of their goals while jointly mapping future plans. Drake can provide customized certification programs to help identify the employee’s suitability for other positions and career development. As mentioned earlier, Drake’s P3 and Drakewize, a skills evaluation tool, can be modified to identify the skill sets and strengths the individual possesses and what positions they are most suited towards.

A strong career plan will provide a sense of hope in the future and comfort in the fact that their company is concerned in them as an individual. The key to this plan is to marry the company’s goals with personal goals, in essense, the real nuts and bolts of employee engagement. It is like envisioning a journey, the two are taking together. The result is an employee with aspirations who will see that their current role should be performed to the best of their abilities in order that they may continue to the next position. The credibility this establishes with the employee will do more to solidify the intention to stay more than any gift or bonus.

All top performers aim to accelerate their careers. Assisting individual staff members in finding new positions within the company may be the best and most direct way to influence them to stay. Organizations often subconsciously erect numerous bureaucratic hurdles that make

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moving around tough, or they simply do not offer ways for an employee to learn about possible openings. If employees stay challenged and in continual development, they will generally remain with the organization.

Some form of information platform, such as a website or job board, or easily distributed digital announcements, is a great way to let employees know there are vacancies in other departments within the company. One such effective tool to communicate vacancies is Drake Interactive’s messaging which can easily create a “speaking memorandum” distributed in an email to internal staff letting them know of current and future vacancies. Deconstructing barriers makes it easier for people to move between positions within the organization as it is outside the company. This could mean that certain current practices may need to change.

Organizations with low turnover generally follow several rules that guide the internal application and transfer process:

1. Individuals should be able to interview for new positions without permission from their present managers.

2. Individuals should not have to complete application forms and if resumes are used they should be kept very simple.

3. Individuals should be able to leave their current position with the fewest amount of obstacles as possible – it should not be their responsibility if their previous position has not been filled.

4. Salaries offered should be similar to those an external hire would receive.

Outsourcing internal applications and transferring to a solutions company such as Drake can streamline this process from the application stage and help to fill the vacancies created from relocation or transfer. From a salary point of view, Drake has the expertise in place in the form of labour market knowledge to help clients create a balance between external and internal compensation equity.

E :: Communication and Employee Engagement Nurturing staff should be ongoing, a day-to-day activity. Clear and open communication is the best foundation for nurturing staff. Nothing says respect or models empowerment more than managers who actively listen to their employees. The active listener appreciates the employee’s feelings, input and concerns which can be the most cost-effective way to acknowledge people. Being heard builds self-esteem and employees with high self-esteem feel trusted and valued and are less likely to feel marginalized.

People work for people, not companies, and people need to communicate effectively to ensure that their voices are being heard and their concerns addressed. More companies are devising communication plans to keep employees apprised of company performance and business objectives. Keeping employees “in the loop” increases their feelings of inclusion and helps them realize their importance to the company and it’s strategies and fosters the open communication environment successful companies have well ingrained within their culture.

Technology plays a critical role in communicating corporate messages to the ranks. For instance, through the internet, employees can learn about employment benefits, job openings and the latest product initiatives. They can also get a first look at annual stockholder presentations via online video presentations given by COOs and CEOs. Attaching rich media interactive

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messages - using a tool like Drake Interactive - creates a personal touch to these communications and goes further to instill key stakeholder involvement in all aspects of the company. If new ideas or procedures are to be rolled out, rather than a static email or direct mail handouts, many companies are enjoying the benefits of web- conferencing tools to facilitate company wide meetings. PictureTalk will let the audience and meeting hosts intermix in real time regardless of location. Issues and questions can be resolved immediately rather than elapsed time filled with confusion and frustration which can often result in departing employees.

F :: Morale Whether employees are heading for the exits at an alarming rate or because employee relations issues are becoming increasingly problematic, the issue of morale is critical to operational success and should be the cornerstone for any retention strategy. Morale directly affects the bottom line through its impact on productivity, customer service (and therefore customer loyalty), turnover, absenteeism and litigation.

Companies must be committed to investing in morale boosting initiatives to reflect both their sincerity towards the issue and their serious approach to retaining staff. Goodies, gimmicks, and gala events on their own, don’t lead to high morale. Nor do any other quick-fix solutions. In fact, when such events and programs contradict workers’ daily experience of not being respected,valued or appreciated, these approaches often lead to an increase in cynicism, distrust and eventual turnover.

What does lead to high morale is an intrinsically rewarding work experience where:

● ●● ●● employees feel respected, valued, and appreciated

● ●● ●● employees get to be players and not just hired hands

● ●● ●● employees get to make a difference

With such a work experience, employees don’t need to be ‘bribed’. They don’t have to be plied with treats to make them want to come to work and do their best. Morale problems are experiential problems; they’re a result of a negative or dissatisfying work experience due to the actual job itself, one’s relationship with their boss, not having adequate training or a myriad of other factors that affect morale. Since morale problems are due to an unsatisfying work experience, the answer is in changing the work experience. More specifically, the answer is in creating a work experience that itself is rewarding (not always fun, but rewarding). Material solutions or events don’ t satisfy experiential needs. In the workplace, the need to feel that you make a difference, the need to be proud of your work and your employer, and the need for autonomy are just a few of the experiential needs that impact morale and productivity. If these needs are not met, no material “solution” or event will make a difference. A combination of some of the solutions described here all play a part in engaging employees in elevating and driving a culture with a strong and positive morale.

G :: Competitive Compensation, Benefits and Incentive Program Competitive compensation and benefit packages including salary, bonuses, stock options, and the traditional health insurance and retirement packages are tools that some companies use to help keep employees onboard.

Salary increases should be structured to stay competitive within your market sector, geography and the position. Employers should distinguish between top and bottom performers by ensuring that that those individuals performing in the top quartile are paid over and above those in the

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bottom quartile. You may consider using 3 rd party salary surveys, such as Drake’s Annual North American Salary Survey, to benchmark your workforce’s salaries in your market sector and geography. Due to the difference in cost of living in various geographic sectors, you will want to understand how to apply salary inflators and deflators in your company to ensure salary equities amongst your employee base.

Carefully developed bonus or profit sharing programs provide encouraging, goal-oriented initiatives for employees to aim towards. The goals for success set out by the manager for the employee are more attainable if realistic and practical incentives are firmly in place. Benefit programs are important to employees.

Benefits can extend beyond the traditional health insurance and retirement programs and can include:

● ●● ●● employees feel respected, valued, and appreciated

● ●● ●● employees get to be players and not just hired hands

● ●● ●● employees get to make a difference

H :: Non-Monetary Reward Recognition Creative non-monetary reward and recognition programs can be powerful tools. Increasingly, companies are using informal methods for rewarding staff while financial compensation is becoming less the norm for recognizing employee accomplishments. Reward systems that are person-based are proving to be effective especially when recognition is linked to personal desires or needs such as:

● ●● ●● Time Off

● ●● ●● Flexible work hours

● ●● ●● Job-sharing

● ●● ●● Office Space

● ●● ●● Home Office

● ●● ●● Special Projects, Committee Involvement

● ●● ●● Public Acknowledgment

● ●● ●● Career development and training

● ●● ●● Company organized discounts such as fitness memberships, discounts on company products / services, discounts on client’s products / services

● ●● ●● Community and Charity Involvement

One of Fortune’s 2001 “100 Best Companies to Work for in America” companies has established the “Headstart for the Holidays” program which matches up company employees with hundreds of needy children over the holidays. The most important part of any informal reward and recognition system is that it is linked to organizational values and that it is given personally from management!

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 I :: Employee Surveys If you were a doctor, you would never prescribe a treatment or medication without first diagnosing the problem, would you? Well, reducing high turnover should be approached in the same way. Implementing regular employee surveys allow employers to take the temperature of employees and gauge a company’s culture and mood. The results will allow organizational leaders to anticipate issues in advance of turnover.

Collecting survey data and understanding concerns is only the first step. Managers need to craft and implement policies that meet employee concerns head-on. Organize company-wide communication sessions that feed back survey responses and associated actions, this lets employees know they are being heard and that their issues are being addressed. Employee surveys are best delivered by a third party consultative company such as Drake which can deliver an objective evaluation and encourage candid responses.

 J :: Exit Interviews “Facts  do  not  cease  to  exist  because  they  are  ignored.” Aldous Huxley It is unrealistic to think that good people can be trapped. So, when people do leave it is important to know why and adjust hiring profiles, policies and practices within the company to address the concerns. A structured exit interview program can play an integral role in employee retention. Remember it is important to learn from the information gleaned in these interviews. By not paying attention to the results turnover will continue for the same reasons

Consider using a 3 rd party organization to create and conduct your exit interviews. HR consulting experts such as Drake are an objective resource which encourage employees to act more openly and honestly with their answers. Drake has an innovative web based service that helps you conduct staff exit interviews from anywhere in the world. It also assists in the collation, reporting and analysis of interview results more efficiently than manual efforts. The information collated from these interviews is excellent for developing and adjusting job profiles and refining the position for the next candidate further improving the chances of retention. As you create your company’s exit interview questionnaire it is important to strike the right balance between the need for information and survey length. There are five key guidelines that should be kept in mind to help ensure that the end result is a useful and effective survey:

1. Do not focus solely on the employee’s reasons for leaving but also on the employee’s attitudes and experiences that identify the issues and concerns which may not surface when asking about reasons for leaving.

2. Ensure that there is more than one way for employees to express their reasons for leaving – including several open-ended questions for them to include their own comments – to get a full perspective on their decision to leave.

3. Incorporate key behavioural measures such as the employee’s satisfaction with the job itself, how well the employee’s job responsibilities were defined, perceived opportunities for advancement and the employee’s perspective on the amount of training, feedback and recognition received.

4. Recognize that exit interview practices need to be implemented consistently and in such a way as to encourage employees to share their opinions honestly.

5. Incorporate the ability to examine results not only on the basis of individual results but for the organization as a whole.

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K :: The Boomerang Effect The word ‘boomerang’ has recently been used to describe employees who return to an organization. Boomerang employees are usually very committed to their position and the company and are therefore can become the some of your best recruiters for new talent and mentors for existing employees. The time they have spent away from the organization has given them the additional knowledge of the market, and they have personally experienced that perhaps the grass isn’t greener on the other side

5 :: CONCLUSION As identified in this “whitepaper”, many issues are at stake when retention is not consciously prioritized. From a damaged company reputation to low employee productivity, high turnover is negative and costly. Keeping employees who outperform beyond expectation reduces the need to recruit and cuts related hiring and training costs. Put simply - you’ll have a successful company if you treat your employees well so they want to stay with you.

Hiring top-performing and enthusiastic employees requires a certain knack. But keeping those employees is an art. Increasing retention requires careful planning and implementation resulting in a solid program which incorporates many or all of the solutions mentioned in this whitepaper. Incorporating these techniques into your internal company planning does not necessarily require expenditure. In fact, many of the retention strategies mentioned above cost little or no money to implement and require nothing more than carefully planned time dedicated to longterm goals. Companies must realize that by keeping their turnover levels low, they are in fact improving their bottom line. The cost of replacing employees is an excessive one which most companies cannot afford. Compared to the cost of retaining existing top performing employees, the cost difference and time constraints is staggering. It is essential that every recruiter and manager should be concerned with retention from the start of any recruiting program. The process should be conscious of the end goal: to keep the individuals who outperform in your company. Making the new employee aware that the intention is to keep them as long as possible encourages the employee in committing to longterm goals and planning within the organization. No retention strategy is static but should be constantly evolving to suit the changing needs of the workforce. This complimentary whitepaper is designed to help you evaluate your employee retention program to ensure that your organization has the best possible practices in place to reduce costly turnover. If you want to partner with a forward thinking organization who will deliver quantifiable results to your retention problem and, ultimately, your bottom line, contact a Drake office in your community. Our innovative line of proprietary technologies and Best Practices Consulting Services will make your retention strategies operate efficiently and effectively.

6 :: RETENTION CHECKLIST 1. Recognize that people are valuable . Think of them as a great art collection that has taken time and money to develop. Take of them, nurture them, and you’ll keep them.

2. Recognize you have a problem . Once understood and the responsibility is identified, the costs of high turnover will motivate you into creating a strong retention program.

3. Find out why people are leaving . The answer to this question is the first step to realizing you have a problem and can be the basis for your retention strategy.

4. Set goals for your retention strategy.

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A Top Performer Profiling – Begin at the recruitment stage by comparing candidates to your best employees.

B Orientation and OnBoarding – Well planned, post hiring “fitting-in” plans instill longterm employee confidence in the organization.

C Performance Reviews – Performance feedback on a regular basis propels success.

D Career Pathing and The Two-Way Value Proposition – Paralleling company goals with personal goals and planning for success in the future creates motivation to outperform in current positions.

E Communication – Listening commands respect and representation.

F Morale Boosting - Respect, value and appreciate employees does more than financial compensation to increase retention

G Competitive Compensation – 3 rd party salary surveys allow you to stay current and your employees to stay with the company.

H Non-monetary Reward and Recognition – A variety of rewards will increase employee gratification and happiness.

I Employee Surveys – Let your employees be heard and listen to their concerns.

J Exit Interviews – Learn from the recently departed and change the existing profiles and perhaps company structure.

K The Boomerang Effect – Tap the resource of returning employees whose experience and connections are invaluable.

5. Utilize the unique and innovative solutions to solve your retention problems

Flexible Firm Model:

Atkinson and Meager’s model of ‘flexible firm’ identifies four types of flexibility that companies seek:

1. Functional: This refers to a firm’s ability to adjust and deploy the skills of its employees to match the tasks required by its changing workload, production methods. This is done by multi-skilling / dual skilling / dismantling of traditional rigidities between occupational groups (horizontal and vertical flexibility). This is designed to improve efficiency and reduce costs.

This is a core area of traditional conflict within the division of labour between distinct skilled groups and between the skilled and the non-skilled (Penn, 1985).

2. Numerical: This refers to a firm’s ability to adjust the level of labour inputs to meet fluctuations in outputs. There is increased use of part-timers, temporary, short-term contract staff, job sharers and agency workers.

There is a contrast between ‘core’ permanent workforce and ‘peripheral’ non-permanent. The general idea is that an increasing mixture of non-standard employment forms will be more efficient and cheaper.

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3. Distancing Strategies: This refers to the increased use of other firms that undertake non-core activities such as catering, cleaning and transport. Such a strategy will be cheaper.

4. Financial: This refers to achievement of flexibility through the pay and reward structure.

5. Temporal flexibility: It is concerned with the pattern of hours worked and linked to the demands of the business. Seasonal or demand work is provided leading to Flexi-time systems. In addition, annual hours contracts allotted with increase in evening working.

These flexibilities are achieved through a division of employees into:

• Core workforce: The core group is composed of high-skill and high-pay workers recruited from the primary labour market. These workers are expected to deliver functional flexibility. Core group workers have brighter career and promotion prospects and they usually are provided with comprehensive training and development.

• Peripheral workforce: The peripheral group consists of two-types of group. The first group consists of generic-skill (e.g.: word processing) workers recruited from external labour market. The second group consists of workers recruited as required on variety of contracts (e.g.: Government trainees, job sharers, sub-contract labour, temps etc.). This group workers have low job security.

Flexible Labour Markets. - Benefits and Disadvantages

Flexible labour markets involve a minimum of government intervention, they are labour markets which work efficiently and are competitive. Many supply side economists argue flexible labour markets are of great importance in reducing unemployment and improving the competitiveness of the economy.

Advantages:

1. Opportunity to exploit 24-hour economy

2. Contributes to an improvement in the inflation-unemployment trade off

3. Flexible wages and flexible employment helps to ensure that markets clear rapidly eliminating any excess supply or demand, so economies automatically move into long run equilibrium at potential output.

4. Higher productivity growth in the long run (which then helps to improve competitiveness)

5. Flexible employment suits more flexible life-styles

6. Stronger employment creation during an economic upturn

7. Flexibility makes the economy more attractive to inward investment

8. The economy can respond more flexibly to an external economic shock – because wages and employment are more flexible

9. Increases Labour Participation Rates: Flexible labour markets can be beneficial for workers. This is because it gives them more options of, when and where to work. This is particularly helpful

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for women with young children, for example, they can work part time and still look after their children. However, although flexible labour markets have created work in the part-time, service sector, there has been less success in creating permanent, full time jobs.

10. Flexible labour markets help to reduce costs for firms; for example, workers can be employed when they are needed. It is not necessary to pay for workers who are not productive. This will help attract inward investment. It is argued one reason, for higher unemployment in France is that there are costs in hiring and firing workers, this reduces the incentive for firms to expand.

However, although they have some benefits, these advantages of flexible labour markets are not equally shared. In particular, there are concerns over the negative impact on job insecurity. Criticisms are made based on its disadvantages:

Reduce Classical (Real Wage) Unemployment Real wage unemployment occurs when wages are set above the equilibrium, for example, through trades unions or minimum wages. Flexible labour markets help to keep wages close to the equilibrium and therefore avoid creating unemployment.

However, it is worth noting that minimum wages and trades unions don't always cause unemployment. For example, if firms have monopolistic power, wages can be kept below the equilibrium. A true flexible labour market would require both workers and firms to lose their market power.

However if labour markets are very flexible workers may have greater job insecurity, and this can lead to lower productivity

Reduces Wage Price Spirals If workers have too much market power they can bargain for higher wages, this can lead to inflation.

Rising inequalities There are concerns about a lack of training for workers on short term contracts which has a long term effect on their ability to regain employment if they lose their jobs.

Shorter term contracts might lead to job insecurity – for some people, the concept of “job security” is being gradually replaced by the concept of “employability”. Frequent job changes for workers can be unsettling for them and for their families.

Shorter term employment contacts and eligibility for occupational pensions may lead to increased pensioner poverty in the long run, many people on short term contracts do not enter into any occupational pension.

Longer term social implications of labour market flexibility – the “24 hours per day” work culture and the possible effects on family life.

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Income uncertainties - as the balance of risk in the workplace shifts from the employer to the employee

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