RETENTION
Staff retention moving up business agenda
With the UK labour market continuing to tighten and skills shortages becoming ever more widespread, perhaps it should come as no surprise that employers are looking for more effective ways to hold on to their own employees. Incomes Data Services, the UK pay analysts, has just published a detailed guide to help you develop successful retention strategies.
According to IDS, on average, an organisation can expect to lose one in five employees a year. Research cited by IDS suggests that the cost of replacing leavers may be as much as 150% of the annual salary for key staff.
But it looks like some managers are 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 29-page report.
The role of pay
The clear consensus among the employers IDS contacted was that paying competitive 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:
If pay is already set at a competitive level, throwing money at retention problem is unlikely to prove an effective solution in the long term. As long as employees perceive their salaries to be fair, money only tends to become an issue when there are other sources of dissatisfaction.
Retention measures
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? As IDS puts it: Successfully managing turnover rather than just reacting to events involves fully understanding the situation and implementing the right solutions.
Here are the key findings of the IDS research:
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:
When advertising for staff, it is important to a give an accurate and realistic picture 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
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
The case-study organisations are surely not alone in regarding structured career paths as a 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
While it is now commonplace for the standard benefits package of senior staff to include private medical insurance and a company car, some companies, albeit confined to a minority of high-profile businesses, are looking at more imaginative US-style perks — replete with dry-cleaning services, help with grocery shopping and the like.
But IDS has yet to be convinced about the efficacy of these so-called convenience benefits:
While these may be initially attractive, there is some debate over their long-term effectiveness in retaining staff.
6. Good line management
Finally, firms could do a lot worse than remembering that all too many employees leave because they are managed badly. Organisations therefore need to ensure that supervisors and managers have the skills to manage their staff effectively, says IDS.
What else is in the IDS report?
The report also looks at the most commonly-used turnover yardsticks and identifies the main sources of statistics.
It draws on the experience of five case-study organisations:
Makita Manufacturing Europe
Glaxo Wellcome Research & Development
Asda
PricewaterhouseCoopers Management Consultancy Services
Plan-Net Services.
Want to know more?
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 the rest of Europe.
Title: Improving staff retention , IDS Study 692, July 2000.
Availability: contact the IDS customer services manager, tel: 020 7324 2599
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A list of recent IDS Studies together with abstracts can be found on the IDS web site . . . www.incomesdata.co.uk