RETENTION
IDS looks at the solutions to retention difficulties
Because turnover costs are so high and people are so important to the modern business, companies need to take serious measures to improve recruitment and retention. Incomes Data Services, the UK pay analysts, has just published a detailed guide to help you develop successful retention strategies.
And it looks like some managers are finally waking up to the heavy costs of staff walking out of the door -- judging from the fascinating detail on the range of measures adopted by the organisations interviewed by IDS in its 41-page report.
The role of pay
The clear consensus among the employers IDS contacted was that keeping pay in line with appropriate market rates is vital to retaining staff. Another recurring theme was that ultimately money is a "satisfier not a motivator".
As the author of the IDS research puts it: "As long as salaries or the overall pay package is perceived by employees to be competitive, money becomes an issue when there are other sources of dissatisfaction."
Here are the key findings of the IDS research
Rather than simply putting more money into pay packets, the companies IDS investigated have looked at a range of retention tools. So, how are businesses addressing the issue?
1. Recruit the people you want
The first vital task is to ensure that you take on the right people at the outset. And IDS adds that it's worth remembering another essential step in the recruitment and selection process -- establish realistic expectations.
"When advertising for staff, it is essential to a give an accurate portrayal of the job. If an organisation does not deliver what it has promised, an employee may feel let down and leave."
2. Pay attention to the induction process
According to the IDS research, employees are more likely to leave during the first few weeks of a new job than at any other time. The firms in the IDS panel that had improved their induction processes said they had reaped the benefits in terms of reduced labour turnover.
3. Provide career paths, more interesting work and opportunities for personal development
Most experts regard offering structured career paths as an essential cornerstone of effective retention. Another powerful selling point is providing staff with opportunities for more interesting work.
4. Offer more flexible working and family-friendly policies
To give them the edge in attracting and keeping valued employees, companies are increasingly introducing a host of new benefits and working patterns aimed at giving employees a better chance to balance the demands of work and family responsibilities.
5. Offer attractive benefit packages
As IDS points out, to realise the full potential of its benefits package as a retention tool, a company needs to actively promote it to staff. "In this vein, more companies are now introducing 'total reward' statements setting out the full value of their benefits package," says IDS.
6. Identify successful initiatives
Finally, firms could do a lot worse than remembering that managing turnover is likely to be an ongoing challenge. "Even as one problem is resolved, others may appear," says IDS.
| What will you find in this IDS report? |
| Managers are becoming ever more aware of the cost of their most prized employees jumping ship. The costs of high staff turnover can be substantial. Not only are there the direct financial costs of replacing staff but also other repercussions such as the potential 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 and line managers as they are constantly recruiting and training new staff. This 41-page report is divided into four main sections. |
| 1. Measuring staff turnover and costs 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 benchmarking against similar organisations and taking into account the real costs of turnover to the company. The report looks at:
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| 2. Devising a retention strategy Briefly considers how companies identify the reasons for turnover. |
| 3. Retention initiatives Examines the options open to employers to address retention difficulties. Some issues may be addressed at a local level by placing a greater emphasis on listening and responding to employees concerns and ideas. But general retention difficulties are likely to require a broader and longer-term plan. Many companies take a holistic view to reducing turnover, looking to improve the situation by promoting wider cultural change. Such an approach may involve introducing a variety of initiatives to improve internal career opportunities, to support work-life balance and to create an attractive and interesting working environment. The overall aim is often to create a "great place to work" or to become an "employer of choice". |
| 4. Company practice Presents a series of company case studies, offering an insight into the approaches taken by organisations from varying backgrounds with successful retention strategies. The report draws on the experience of six case-study organisations:
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Want to know more?
Title: "Improving staff retention", IDS Study 765, January 2004, Incomes Data Services.
Availability: Call IDS customer services in London, tel: 020 7250 3434. For a fuller flavour of this service, take a look at the list of recent IDS Studies together with abstracts which can be found on the IDS web site at www.incomesdata.co.uk/studies/subjectlist.htm
Incomes Data Services is an independent research organisation providing information and analysis on pay, conditions, pensions, employment law and personnel policy and practice in the UK and rest of Europe. For more information about IDS jump to www.incomesdata.co.uk
Posted 26 January 2004