HR Managers As Employee-Retention Specialists

HR Managers as Employee-Retention Specialists

Roger E. Herman

orkforce stability is once again a front- employers are eager to hire more people, Wburner strategy in corporate America. workers are in the driver’s seat. They ask the In fact, employee retention is a key issue for questions in the job interviews; they pick top executives in employer organizations and choose where they work. Employers around the world. This refocus is a departure offer all sorts of incentives to attract and from the lack of concern about employment hold needed employees. that we have seen in the past four years. During the seller’s market of the late A weak global economy during the first 1990s, workers became accustomed to mov- part of this decade led employers to reduce ing freely from job to job. The economy was payrolls, hire relatively few people, and treat hot, and plenty of jobs were available. If you employees as a replaceable commodity. didn’t like your work, your boss, or your Bosses pushed for high productivity, generat- commute, you could move to another organi- ing stress in the workforce and creating hos- zation with little difficulty. Most employers tile workplace environments. Seeing few found it difficult to build teams—people just opportunities for meaningful work in their weren’t around long enough. Mission accom- current jobs or in positions at other compa- plishment was hampered by a lack of work- nies, employees felt trapped. With few oppor- ers to complete the tasks required. tunities for movement to new jobs, a buyer’s During the latter part of the 1990s, market in labor prevailed. employers invested considerable resources in In the employment world, a buyer’s mar- employee retention—until suddenly the need ket is very different from a seller’s market. was no longer there. Just as competition for Employers are in the driver’s seat, with good people was really heating up, the econ- workers forced to take whatever jobs are omy took a nosedive, and employers were available, under whatever conditions employ- relieved of the need to engage deeply in com- ers impose. Employers—the buyers—control petitive retention. compensation, working conditions, and job design. They ask the interview questions and HISTORY IS REPEATING ITSELF—BUT make the hiring decisions. WITH COMPLICATIONS A seller’s market in employment is dra- matically different. With an abundance of The economy is growing again. Since the jobs, employers must compete to attract and mid-1990s, world conditions have changed, hold the talent they need to fulfill their mis- fueling economic growth on a global scale—a sion—to serve their customers. When bit more cumbersome, but deeper and

stronger in the long term. Although we don’t Under these circumstances, recruiting becomes yet see the symptoms of a hot economy as more difficult—and more expensive. we did a decade ago, the consequences are To make matters worse, too many execu- present nonetheless. Here’s why. tives are virtually unprepared to take the nec- Current economic growth is creating more essary policy and leadership steps toward jobs—jobs that have to be filled by qualified, workforce stability. Consequently, their man- skilled workers. The availability of employ- agers will tax the available resources to get ment opportunities is already stimulating things done—if they can even meet corporate increased movement of workers in most objectives in the first place. By not address- fields as talent migrates to new positions. ing these issues strategically and deliberately, Throughout this decade, job changing will executives who can’t or won’t respond to accelerate, stimulated in part by more aggres- retention issues will put their companies at sive recruiters. With positions that must be risk. In effect, they’ll kill their companies by filled for employers to accomplish their mis- their lack of response (see www.Corporate- sions, employment specialists will be SuicideWatch.com). expected to do whatever it takes to find quali- Savvy leaders recognize that when they fied people and get them on board. The have trouble attracting qualified workers, employment marketplace is about to shift into employee retention is their most productive overdrive. policy. Complicating the challenge of attracting a sufficient supply of qualified workers—and EXPERTISE TO SUPPORT MANAGEMENT persuading them to stay—is a supply problem. In our consulting work and in our speeches, we emphasize that employee retention is not Current economic growth is creating more jobs, jobs that a human resources issue—it’s a management have to be filled by qualified, skilled workers. issue. Unfortunately, few managers—from front-line supervisors to CEOs—have been We are on the threshold of the most severe trained in the fine art of leadership applied to shortage of skilled labor in history. Estimates retain talent. These leaders, from the opera- suggest that we could face a shortfall of up to tional level to the strategic level, need ten million skilled workers by the end of the knowledgeable specialists to guide and decade. Combined with turbulence in the labor advise them in fulfilling their retention marketplace, this lack of viable applicants will responsibilities. Managers who are held confront many employers with the most dan- accountable for the stability, tenure, and pro- gerous crisis they’ve ever faced. Without ductivity of their employees will need assis- enough qualified employees, any organization tance and support in meeting this additional will be in trouble. Achieving work objectives performance expectation. will be difficult, as will any kind of serious recruiting. Candidates’ eyebrows will rise A NEW SPECIALTY EMERGES when they learn that few, if any, current employees have intellectual knowledge about The stage is set for a new specialty to emerge how the company is supposed to operate. from the human resources department. Meet

2 Roger E. Herman Summer 2005 the employee-retention specialist, educated, We will also see employee-retention spe- trained, certified, and dedicated to helping cialist positions created in critical depart- management: ments where it is important to have jobs filled with minimal turnover. Nursing • Prevent and reduce unwanted loss of departments in some hospitals are examples human and intellectual capital; of this new departmental focus. At Centra • Increase bottom-line profit and improve Health System in Lynchburg, Virginia, the financial performance by reducing costs work of Nurse Retention Specialist Linda related to employee turnover; and Youngblood has resulted in a remarkably • Improve workforce performance (quality, low vacancy rate of 2 percent and a surpris- stability, engagement, and productivity). ing turnover rate of only 4 percent. Centra’s time to fill nurse positions was also reduced In some organizations, employee-retention by two-thirds. specialists will play a functional or even a man- agerial role in the human resources depart- THE COMPETENCIES ment. In many cases, they will report to the chief human resources officer. In recognition As the role and responsibilities of employee- of the strategic importance of this work, some retention specialists become more refined employers may elevate the retention-specialist over time, and as more people take on this position to a vice-presidential level. These prac- titioners will be valuable sources of informa- Our research in the field of employee retention has pro- tion about the external employment environ- duced a body of knowledge that is beneficial to everyone ment, internal conditions within the engaged in this important work. organization, appropriate policies and techniques, and access to best practices in the field. role in their organizations, expectations and Dena Glass is excited about her work as opportunities will become clearer. A commu- an employee-retention specialist at Marion nity of these professionals is already in the General Hospital in Marion, Ohio. She development stage. Our research in the field reports to the director of HR, who reports to of employee retention, dating back to 1988, the chief executive officer. In the recent past, has produced a body of knowledge that is Dena has been quite busy revamping the ori- beneficial to everyone engaged in this impor- entation program, managing the outsourcing tant work. This knowledge has now become of exit interviews, and engaging in 90-day fol- the foundation for formal certification. The low-ups with new hires. Those new hires are competencies for this position are: probably pretty happy, because they’ve already participated in lunch check-ins after • Facilitate and sustain organizational and one week and again after two weeks. During business change; these conversations over a meal, new • Facilitate learning and performance employees are asked if their employer is improvement; meeting their needs, if their expectations are • Assess, analyze, and measure results; being met. Dena will start “stay” interviews • Research and benchmark best practices; by mid-2005. • Develop, align, and integrate strategy;

HR Managers as Employee-Retention Specialists 3 Employment Relations Today

• Build a winning organizational culture; and Corporations understand that retention is a • Develop effective retention strategies. bottom-line issue. Specialists have a responsi- bility to communicate the body of research An initial look at these competencies sug- linking effective people-management prac- gests that employee-retention specialists will tices with key outcome measures of turnover, work at a fairly high level in organizations. productivity, and financial performance. However, in other situations, they may be positioned lower on the organizational chart Facilitate Learning and Performance but still will significantly influence the work Improvement of higher-level decision makers. They will Since research has confirmed that learning Employee-retention specialists will apply organizational and continuous improvement motivate people development practices rather than concentrate on transac- to stay with an employer, employee-retention tional activities. specialists concentrate on training and coach- ing to improve retention skills of leaders, man- usually be found in the human resources agers, supervisors, and employees at all levels department, though some may be attached to of an organization. With the clear recognition operational leadership teams. Employee- that retention is everybody’s business, not just retention specialists will apply organizational an issue for human resources to “fix,” special- development practices rather than concen- ists involve everyone in a systematic and inte- trate on transactional activities. grated effort to build a culture where talent Let’s dig a little deeper into each of the retention is a visible, strategic objective. broad competencies listed, the better to The employee specialists who have partici- understand what tasks may actually be part pated in the certification training provided by of the responsibilities of employee-retention The Herman Group can describe demo- specialists. graphic trends, forecasts, and statistics to illustrate the transition of our economy and Facilitate and Sustain Organizational and employment marketplace to a sellers’ labor Business Change market. They can advise management by defining the retention crisis facing employers, This competency recognizes that most organi- and they can identify key vulnerabilities that zations wrestle with uncontrolled employee will affect the organization’s effectiveness turnover because of the way they do busi- and performance as the crisis grows. Special- ness. Companies may need to make changes ists use various retention models to show in their corporate culture and other aspects managers the big picture, so they can under- of business philosophy. Employee-retention stand the strategic and economic value of specialists collaborate with key leaders and finding and keeping good people. managers accountable for retention performance to prevent and reduce turnover. Spe- Assess, Analyze, and Measure Results cialists emphasize improving and sustaining workforce quality, stability, engagement, and Many of the people responsible for workforce productivity. stability and bottom-line performance depend

4 Roger E. Herman Summer 2005 on key metrics. Employee-retention specialists Develop, Align, and Integrate Strategy utilize appropriate assessment instruments and surveys to measure employee satisfaction The work of employee-retention specialists is and engagement as well as their vulnerability strategic as well as tactical. Directly or indi- to leaving employment. They use the col- rectly, they help align retention strategies, pro- lected data to assess and document the busi- grams, and expectations with people manage- ness case for change, investment in employee ment, people development, organization retention, and movement toward “Employer development, and the business-development of Choice®” employment branding (see plans of their employers. Looking toward the www.employerofchoice.com). future, they also align retention strategies, pro- Employee-retention specialists conduct grams, and expectations with strategic work- “exit” and “stay” interviews, analyzing results force plans and hiring forecasts. This focus to determine why employees leave or remain ensures that recruitment will also be consis- with the organization. Ongoing analysis of tent with long-term workforce stability plans. turnover statistics and trends within the orga- Bringing new employees into the organiza- nization helps discover the root causes of tion through a well-planned, yearlong employee turnover, so they can be addressed. onboarding process is one of the tactics spe- This analysis includes study of the current cialists employ to support strategic alignment. and projected costs of turnover and replace- All employees understand their roles—in the ment, including direct and indirect costs. The work of employee-retention specialists is strategic as Research and Benchmark Best Practices well as tactical. Employee-retention specialists look outward as well as inward in their organizations. They company and for each other—from their first research and evaluate the latest studies con- day. Specialists ensure integration of reten- ducted on talent retention, workforce stabil- tion strategies, programs, and expectations ity, and organizational culture. In this pro- with performance management and appraisal cess, they gather evidence of best practices processes and outcomes. employed by other organizations, applying Employee-retention specialists work appropriate practices for their employers. closely with the organization’s financial, They pay careful attention to techniques and operational, and HR divisions, including key indicators from organizations that have senior executives within these divisions. The earned Employer of Choice® recognition. coalition of these leaders facilitates an inter- Specialists assess, evaluate, and continu- nal marketing and brand strategy that differ- ously improve policies and procedures that entiates the organization in the employment support development and maintenance of a marketplace. high-performance, retention-focused culture. They communicate turnover, retention, and Build a Winning Organizational Culture other applicable performance statistics to key decision makers, leaders, and employees Corporate culture will surely exert a major within the organization. influence on workforce stability in the years

HR Managers as Employee-Retention Specialists 5 Employment Relations Today ahead. Employee-retention specialists will 3. I don’t get the support I need to get my job guide and support development of the kind of done. Contrary to opinions heard all too culture that attracts, develops, and retains top often from management, people really do performers. In many cases, they will utilize want to do a good job. When they’re frus- the Employer of Choice® model to coalesce trated by too many rules, red tape, or efforts to attract and hold top talent. They incompetent supervisors or coworkers, will ensure that employment branding—inter- people look for other opportunities. nally and externally—is a key component of 4. There’s no opportunity for advancement. No, employee retention. Where appropriate, we’re not talking about promotions. The employers will be encouraged to work issue here is learning. People want to toward—and apply to be recognized for— improve their capacity to perform a wide becoming an Employer of Choice®. variety of jobs. If workers can’t find the growth opportunities with one company, Develop Effective Retention Strategies they’ll seek another employer where they can learn. A vital task of employee-retention specialists 5. Compensation is the last reason most people is the design, development, and implementa- leave. Workers want fair compensation, but tion of effective retention strategies that pro- the first four aspects must be strong. duce measurable results. These professionals will ensure that all transactional activities To verify the value of key employees, flow from a deliberate strategic perspective. employee-retention specialists will help busi- They will recognize and communicate the top ness leaders, managers, and supervisors define characteristics of “top talent” and A vital task of employee-retention specialists is the design, “good people” whom they must retain to development, and implementation of effective retention accomplish organizational objectives. The strategies that produce measurable results. specialists will design, develop, and imple- ment retention strategies focused on main- warning signs that talent is considering leav- taining the skills and intellectual capital of ing, as well as the top five principal reasons the experienced workforce. people leave jobs, which may be stated as: A ROLE WHOSE TIME HAS COME 1. It doesn’t feel good around here. This is a corporate-culture issue in most cases. As they meet future challenges to find, opti- Workers are also concerned with the com- mize, and retain qualified workers, employee- pany’s reputation; the physical conditions retention specialists will play an increasingly of comfort, convenience, and safety; and important role in organizations of all types. the clarity of mission. In their strategic position, these specialists 2. They wouldn’t miss me if I were gone. Even will have significant influence at the senior though leaders do value employees, they levels of organizations, showcasing their don’t tell them often enough. If people expertise, dedication, and effectiveness. This don’t feel important, they’re not moti- important work could be a career spring- vated to stay. board into higher levels of employment.

6 Roger E. Herman Summer 2005

Roger E. Herman is recognized as the pioneer in the field of employee retention. He’s a Certified Management Consultant, a Fellow of the Institute of Management Consultants, and a Certified Speaking Professional. A founding member of the Association of Profes- sional Futurists, Roger serves as contributing editor for workforce and workplace trends for The Futurist magazine. Author of 11 business books, he opened the field of employee retention in 1990 with the first edition of his classic book, Keeping Good People. His consulting firm, The Herman Group, trains and certifies employee-retention specialists. For more information, visit http://www.EmployeeRetentionSpecialist.com. Based on his book, How to Become an Employer of Choice, Roger created a recognition program for highly attractive companies that are designated “Employer of Choice®.” Information is available at www.employerofchoice.com. Employer of Choice® is a registered trademark of The Herman Group. Readers are invited to contact Roger Herman directly at [email protected].

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