Should You Be Worried About Retention?
A Contrarians View
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As we emerge from the pandemic, there is fear that turnover will soar as employees seek greener pastures. Whether the economy is strong or weak, and no matter how much employees are paid, many of the best will decide to leave.
Should you be worried?
For most of the past decade, many employers have given employees more time off and more benefits aimed at the family. During this pandemic, they have paid for computers and Zoom subscriptions to enable employees to work from home. Many have promised to make remote work the permanent future or have given employees that option.
They have enriched and enlarged jobs until some employees are now complaining that they are overworked and their jobs are too enriched. Almost all remote employees now have more autonomy over the hours they work and are free from constant monitoring of their behavior. It would seem that worries over turnover should be minimal.
Yet, one worry is that almost 3 million American women have left the workforce over the past year. Younger women to care for family and to help their children with homeschooling. Older women because of burnout, stress, or unequal pay. And many women have been forced out of work because they overwhelmingly staffed the entertainment and hospitality industries. As these industries recover, many women may return, but organizations will need to address their concerns more than they have. This means dealing with the three largest issues women have with the workplace: being treated equally to men, being paid the same, and being offered the promotional opportunities they have been excluded from.
There are many negatives of turnover. The obvious ones: greater costs to hire and train new employees, lost knowledge and experience (i.e., intellectual capital), decreases in productivity, and lower quality of work.
But on the plus side, some turnover may be beneficial to organizations as it forces them to ramp up recruitment or pause and do things differently. This is an opportunity for them to redesign processes, introduce robots or automation, or increase the use of the gig workforce.
I do not believe recruitment will ramp us significantly in the near term. Many firms will continue to downsize their workforce, decentralize, use far more remote services, and distribute work globally. This trend was already underway when the pandemic struck, and organizations paused to deal with its consequences. Now that we are returning to some semblance of normality, the redesign of work will continue.
We will need to be more concerned with finding and retaining those employees who have solid general intelligence - the ability to take on a wide range of goals in different environments. These are the employees who can take on a variety of responsibilities, the value-creators, and the customer relations employees. Those who do routine work or have specialized intelligence and narrow expertise will be replaced with artificial intelligence, automated tools, and consultants.
Retaining key, value-adding employees will remain a concern. These will primarily be the value-creators and customer relations people. Most all administrative and routine work will move to automated tools and processes more rapidly than previously thought. Some expert-level work will migrate to consultants and contracted staff or be augmented with artificial intelligence. This will mean that recruitment will be more focused than ever on hiring a very narrow slice of people, internal mobility, and hiring the gig workforce.
Our “traditional retention” tools fall short of stopping turnover because the usual tools in HR’s arsenal, such as stock options, autonomy, flexible hours, and remote work, impact only a few or are already in place and have become commonplace.
To keep key employees will require organizations to find better levers, and these are not human resources or recruitment responsibilities for the most part. They are top-level issues about how the organization is put together and what it values.
It will require firms to wake up and address the real issues workers have and focus on the major factors that research has shown affect whether key people stay or leave.
A clear and compelling strategy and a vision for the future that excites and motivates. Boring, mendacious, insipid mission statements won’t be sufficient. Ideally, there should be a compelling attractor. Even when more aspirational than real, mission statements or mottos such as Google’s “Do no evil” or Apple’s “Change the World” are useful. Firms that are not inherently exciting or produce routine products should focus on automating whatever they can and encouraging employees to innovate, reduce costs, or refine the products.
An innovative environment low in bureaucracy. Automation and process redesign can significantly reduce bureaucracy. HR can contribute by eliminating their policing role and focusing on encouraging innovation, teamwork, and networking. Barriers to movement internally should be removed.
Tough work assignments. Give employees work they are not trained to do or work that seems a stretch. Challenge them by having them solve problems or overcome obstacles the firm is facing. People who are inspired and challenged rarely move to other firms.
Teamwork and projects. One proven way to generate innovation and problem solving is to create teams and projects. People inspire, learn, and encourage each other in team environments. Teams are shown to improve retention.
Fair rewards that reflect achievement realistically. We should rethink compensation, and factors such as experience and degrees should not be the primary determinants. Contribution, teamwork, innovation, and achievement should be the prime factors. Bonuses can make up a large part of pay when they are based on accomplishments. Compensation needs to be flexible, personalized, and most of all perceived as fair.
Pragmatically, the goal of any organization is to find and keep those who produce value or revenue. Work that is not doing this should be automated. Focusing on the minor, fringe things that retain marginally useful people for a short while is a waste of resources. All effort and research should focus on finding and implementing the big, hairy things that make value-creators commit for the long term.
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Hi, Good post. In my reading, research, and relevant experience, the 'top-level' issue, the Number One Lever of retention, the Most Important Factor in keeping high-performers, is the possibility and opportunity for professional development - personal, administrative, technical, managerial, etc. Millennials are particularly interested in personal growth. It often/always exceeds the traditional planks of compensation, holidays, options, etc. This is the principle/theory of enlightened self-interest. Before this era, it could be challenging to enlist workers in their development. Employees often knew that mediocrity was the watchword. It could deliver a prosperous career of 30ys+. Development was seen as training - boring, tedious, bureaucratic, unfun. Why? Because it was! Today, the tables have turned. MSEE tenure in Silicon Valley is an average of 18-months. Time in the same job goes something like this remark poached from a discussion group... "2-years I would say is best. 1-year minimum and 3-years max. Past 5-years is way too long. I automatically ignore resumes with 10-years tenures." Top-notch workers have a bigger appetite for what's next than ever before. Retention leadership means continuously offering nutritious opportunities to hungry high-performers.