Retention in a downturn: What the research tells us Dispelling the Myths Ron Eldridge

2. Overview Introduction & mini-questionnaire completion Retention: some facts and figures Presentation of questionnaire results and discussion Intended approach is flexible The aim is for a highly participative session

3. TalentDrain �the people retention company� Product based HR consultancy focused on the issue of people retention & employee engagement. Provide a range of diagnostic questionnaires covering Early employee engagement (recruitment process, induction, etc) Existing employee commitment & satisfaction Leaver analysis through reforming the exit process.

4. Some of our Clients

5. Mini Quiz A short quiz designed to �get you thinking� about retention & employee engagement. 15 questions � in pairs or groups of three Should take around 10 minutes. Results will be used as the focus for debate later.

6. The Employee Retention Survey Examining the relationship between why HR believe people join & leave organisations and the reasons given by real employees. Over 300 organisations participated with 9,500 leavers and 1000 new starters. Free copies (no irritating sign-up pages!) at www.talentdrain.com

7. Some Economic Background.. Budget cuts?

8. Adjustment to HR Strategy

9. Priorities for HR Strategy

10. New Starters... How much time and money is spent on recruitment in your organisation? Do you spend the same or more retaining the people you spent so much recruiting? How effective is your brand, attraction, recruitment and induction process?

11. Feedback on your process?

12. Attraction Factors?

13. Attrition Factors?

14. Aiding Self-Selection?

15. Taking Action *An Employee Value Proposition - EVP - articulates what value employees will get from working for your organisation and how you are different to competitor organisations. It should encapsulate what current and potential employees perceive as the value of being part of, and contributing to the success of, your organisation. E.G. IBM has used �all your careers in one organisation� Given the rapidly changing environment, organisations should review and revise, or create, their EVP to ensure it aligns with changes in the organisation�s vision and business strategy. HR should assess their priorities & budget allocations against this redefined EVP to ensure they are not making false economies � e.g. reducing investment in top talent development may well lead to increased turnover in this group, leading to considerably more cost to the organisation (i.e. loss of performance and the recruitment costs to replace them). HR should review the return on investment for each organisational initiative they are delivering, and reinvest where they adding the most value. As part of this, HR should work with their different suppliers to demonstrate value more explicitly to the business.

16. Taking Action: Organisations should ensure they have a robust understanding of what attracts and engages new starters to their organisations, and revise their recruitment, induction and onboarding processes in light of this information Even in the current climate, employees (especially top talent) self-select where they work. All too often, this happens within their first six months once organisations have invested considerable time and money for little return. Organisations need to enable potential employees to self-select far earlier in the recruitment process. This could include more realistic job previews, talking to current employees, job shadowing, the more realistic positioning of working at the organisation Focus on addressing the question �At what point do we make a return on investment in a new employee?� to shift HR�s focus towards working with the business to either increase an employees� speed to performance or adjust the levels of investment in them, so they can contribute to organisational performance more quickly.

17. More General View of Turnover Employee turnover seems to have slowed considerably since October Public sector and manufacturing organisations tend to have lower levels of turnover (80% report it to be less than 15%) than Private sector (circa 21%)

18. Turnover & Effect

21. Interventions The five most popular retention initiatives are: improving the induction process improving employee communication and involvement increasing learning and development opportunities improved selection techniques increased pay Since 2005, there has been a notable increase in the implementation removal of age-related policies and practices

22. Interventions to reduce turnover

23. Taking Action: The survey highlights that most organisations have a huge opportunity to get more value from their exit data. The first step is to understand how to interrogate their data more meaningfully, rather than looking for simple quick fixes (e.g. �what were the worst 3 items?) Having done this, HR can develop a clearly defined Engagement and Retention strategy that is jointly owned by HR and the business. The next step is to establish clear KPIs to support this strategy and that are informed by the different engagement measures within the organisation (i.e. new starter infomation, employee satisfaction surveys, and leaver data). The senior HR team then need to invest time throughout the year to explore the best way to execute, communicate and involve the wider organisation in this strategy. They then need to regularly review the value of their interventions, and revise actions accordingly.

24. Mini survey

25. 1. The majority of people leave their manager, not the organisation �True / False ? � False. Only 13% of leavers give dissatisfaction with their manager as a reason for leaving, while 33% of leavers give �dissatisfaction with the organisation� as a reason for leaving.

26. 2. What percentage of leavers goes due to dissatisfaction with the job and/or the organisation? 57% 67% 77% 87% 97% � 57%. 43% of turnover is to all intents and purposes unavoidable. Geographical relocation, career switch and just �time for a change� are some of the reasons for leaving that organisations are much less able to tackle.

27. 3. 66% of organisations collect feedback from new starters, how many ask specifically about the factors that attracted people to join?  � 24% 36% 43% 53% 24% with only 19% asking what factors effect engagement

28. 4. Upon resigning, for how long has the average leaver been thinking of going? Less than 1 month Less than 3 months 3-6 months 7-12 months 1-2 years More than 2 years � 3-6 months. 35 % of leavers report considering their leaving decision for 3-6 months prior to resigning. Only 6% have been thinking of leaving for less than 1 month.

29. 5. Which occupational group is most likely to leave for a more competitive salary elsewhere? Managerial Professional Sales Customer Service Administrative � Sales. 36% of leavers from a sales occupation are attracted by a more competitive package elsewhere. 35% of professionals also give this as a reason for leaving. This drops to 26% for managers.

30. 6. What is the most common reason for leaving across occupations and industry sectors? Poor work-life balance More competitive salary available elsewhere Lack of training / development opportunities Lack of promotion opportunities Poor communication by senior management � �Lack of promotion opportunities� and �More competitive salary available elsewhere�. 32% of leavers give these as reasons for leaving. 19% of leavers cite �poor work-life balance� as a key resignation driver.

31. 7. When asked, what do most employees think is the most important factor for maintaining their commitment to an organisation? Well-Being Salary & Reward Personal Growth Career Progression Organisational Confidence � Personal Growth. This area (defined as challenging work and opportunities for training and development) is ranked as the most important. Well-Being (work-life balance) is ranked lowest out of this list, but preliminary European data suggests that this is a UK-specific finding.

32. 8. The image/ profile / brand of the organisation is seen as a key attraction factor by HR. When asked what % of new starters agreed?  35% 48% 64% 75% 35% applicants are far more attracted by the nature of the work, what you do, pay, training, reputation as an employer

33. 9. Which of these is the least common reason for leaving across occupations and industry sectors? Lack of independence in carrying out the job Unfair treatment because of your age, gender or ethnic origin Unethical business practices by the organisation Uncomfortable working environment Job not as advertised or described during recruitment Unfair treatment because of your age, gender or ethnic origin. 3.8% of leavers endorsed this statement as a key reason for leaving. 8% leave because they feel the job was not as advertised or described.

34. 10. When answering exit surveys that are not anonymous, leavers are on average more lenient in their responses. Which of the following reasons are leavers actually MORE likely to select when the survey is NOT anonymous? Incompetence of supervisor / manager Lack of training / development opportunities Uninteresting work / boredom More competitive salary available elsewhere Inflexible working arrangements � More competitive salary available elsewhere. 32% of anonymous leavers give this reason, compared to 38% of leavers who do not complete the survey anonymously. For all the other reasons in the list the difference is reversed. This suggests that �salary� is perhaps the easier option or scapegoat when anonymity does not apply.

35. 11. The following reasons are all more likely to be given by leavers who have stayed with their organisations for less than 6 months. For which reason is the difference between this early turnover group and those who stay longer the biggest? My skills did not match the job Uninteresting work / boredom Job was 'oversold' to me Lack of support from supervisor / manager � Job was 'oversold' to me. 15% of early leavers give this as a key reason for leaving, compared to 8% of leavers who stay for longer than 6 months. Uninteresting work / boredom are the most common reasons for leaving among the early turnover group (29%).

36. 12. When asked to prioritise what is important to them for maintaining their commitment to an organisation, on average men place more emphasis than women on 4 out of the following 5. Which area is more important to women? Job Satisfaction Salary & Reward Cooperation Career Progression Independence � Cooperation. Women rank this area 1st out of a list of 12 work-related areas known to influence organisational commitment and intention to leave. For men Cooperation comes 4th behind Personal Growth, Job Satisfaction and Salary & Reward

37. 13 . Factors that influence new starters to leave vary considerably, but what is the biggest factor that influences their decision to leave? Wrong vocational choice Line Manager Relationship Potential for progression Work life balance Potential for progression. Although only 10% of HR feel this is an issue compared to 55% of new starters.

38. 14. Leavers from which job group express the highest level of dissatisfaction with their work-life balance? Accountants Estate Agents IT professionals Lawyers Marine Coastguards � Lawyers. 3 in 4 leavers from law firms feel their home-life had been adversely affected by the demands of the job, compared to 35% of estate agents. Traditionally work-life balance has been viewed as a necessary sacrifice to achieve a successful legal career, although recent action by the Law Society suggests this assumption is being challenged.

39. 15. Those organisations who collect feedback from new starters on the their early experiences typically do so at: 3-4 weeks 1-2 months 2-3 months 4-6 months 2-3 months. 31% of organisations collect feedback at this point.

40. Summary Employee Retention is growing in importance as an HR function. general consensus that certain types of turnover can have a large detrimental impact on organisational effectiveness growing awareness that it is possible to reduce unwanted turnover and improve organisational performance. �Retention� as a defined HR function (in terms of responsibility and budget) does not seem to exist in many organisations. Three-quarters of organisations do not have an explicit strategy for tackling employee turnover, it is difficult to see how many organisations will achieve this goal.

41. Summary Diagnosis of factors driving turnover is often less than valid the belief that poor line management is a major contributor to employee turnover is not reflected in the reasons real leavers provide. Whilst important (and is likely to cause turnover if it goes wrong), only 13% of leavers implicate this relationship in their resignation. a lack of cooperation or teamwork is given by 1 in 5 leavers as a reason for leaving, whereas the HR profession feel this hardly ever factors in voluntary turnover.

42. Summary Employees identify �Personal Growth� as most important to them for maintaining their commitment to an organisation. as the number one priority of most employees. This finding has been replicated many times since the 1960s. E.g. Herzberg, F. (2003; original paper 1968). One more time: How do you motivate employees? Harvard Business Review, January 2003. However, HR practitioners still rank pay and hierarchical progression as more important. Whilst these things often factor in the resignation decision, satisfying �Personal Growth� needs is a key way of retaining employees.

43. Final Thoughts �Employee Retention� is a young but increasingly important function of human capital management. It is still in its infancy compared to the recruitment function with its relatively massive infrastructure and budget. This imbalance needs to be redressed. There is no reason why the exit process should not receive an equivalent level of standardisation, objectivity and analysis. CIPD Recruitment, Retention and Turnover survey, John Philpott (chief economist of the CIPD) concluded that the present climate presents: �... considerable scope for HR professionals ... to raise their game�