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Retention Strategies for Managers

Page history last edited by Brandi Jackson 8 years, 9 months ago


Retention Strategies for Managers


Timothy Yorkey

October 8, 2014

1:30pm - 5:30pm

University Center

Rose Room

4 Course Hours



This course began with Tim asking the class our thoughts on retention.  With about half of the class being Industrial-Organizational Psychologists, we were privy into the knowledge of how much it costs to train employees and how detrimental it can be when an organization experiences high turnover volume, especially with managers.  Replacing employees costs businesses a lot of money.  In fact, the most valuable resource of a business is the people who are employed.  How much does it cost a company to train a new employee?  Roughly, twenty-three to twenty-five percent of training costs go towards benefits plus the taxes paid by the company for training, and annual pay for the employee.  How do companies avoid turnover and increase retention?


What is Retention?

Retention is the ability for a company to keep the employees on staff.  Roughly fifty-five percent of employees desire to leave their current place of employment.  Statistics show that generation may be a factor as to the increase in voluntary turnover.  The current generation entering the workforce are not finding their jobs fulfilling and require more job stimulation.  These individuals leave their jobs in search of more fulfilling and motivating work.  The exception is the "911" generation.  This generation shares a lot of traits with the older Baby-Boomer generation.  The "911" generation are more traditional and seek jobs that they can make into a career.  These individuals want to keep their jobs and eventually retire.  Job stability is important to the "911" generation.  This is comforting to organizations as it costs the company between fifty and two-hundred percent of the employee's annual compensation when employees quit.  When turnover happens, it costs the organization roughly two years worth of salary to replace that employee.  Where do the costs come from when replacing an employee?

  • Human Resources
  • Marketing
  • Interviewing
  • Training
  • Hiring a certified trainer

Unfortunately, new hires do not come pre-programmed with the knowledge required to immediately take over for the replaced employee.  It takes about one year to get new employees "up to speed."  As managers are the first line to employee retention, how do managers increase intentions to stay?  About eighty-nine percent of managers believe that all employees are extrinsically motivated through money when, in fact, money is a hygiene factor not a retention factor.  The biggest turnover factor is a mismatch between employees and organizations.  For organizations to retain employees, the employees have to be the right fir for the right job.  The organizational culture and the employees values must be in alignment in order to experience goodness of fit.  Bosses are mostly to blame for mismatches between organizations and employees.


Why So Much Turnover? 

  1. Higher expectations
    1. As stated before, the current generational workforce is no longer in the traditional stage.  Jobs are no longer something to be kept but as a means for personal development and growth.  They have higher expectations of what jobs have to offer but sometimes jobs do not meet or fulfill the needs of the employee.
  2. Longer hours and more demanding work
    1. With jobs becoming more globalized and more technologically advanced, employees are feeling the pressure to always be connected with the organization (i.e. responding to business emails on the weekend, etc.).  Employees will search for jobs that will allow them to have a work-life separation.  
  3. Family demands
    1. The sandwich generation is now responsible for not only caring for their children but their aging parents, as well.  If the organization does not allow time off when these demands become more important than work, employees will look for employment elsewhere.  To combat this, the government passed the Family and Medical Leave Act to help decrease turnover.


The Truths About Turnover

When discussing the truths about turnover, the class was assigned to rate the level of importance for both managers and employees on motivating factors.  The chart illustrates my guesses versus what the actual ratings are (the numbers in parentheses).

There is a significant difference in what I thought managers and employees would value over what they actually valued.  I was under the impression that managers would rate employee job security the highest out of the ten factors but managers actually perceived good wages as being the highly rated factor for employees.  When attempting to guess what employees would perceive as the highest motivator for retention, I thought promotion and opportunity for growth would be highly valued.  Employees actually value managers fully appreciating work completed as the highest motivator for retention.  The above factors shown in the chart are gathered from Herzberg's motivation-hygeine theory.  We see money and wages fall in the middle of what motivates employees and having voice in the organization is highly rated.  With this information, we can posit that the authority figure is most responsible for voluntary employee turnover.


Unfortunately, turnover happens.  In order to change turnover rates, the organization must avoid stagnation and incorporate new perceptions and change.  When turnover happens, you want your best, most well-trained employees to be the ones who leave because they are a reflection of the company.  The more well-trained and prepared for the world an employee is, the better chance for gaining new employees that want to work for your organization because of the training.  However detrimental turnover can be, there is such a thing as desirable turnover.  New employees bring new ideas to the organization.  Diversity is important for organizations to avoid stagnation which will ultimately decrease turnover.


Top Ten Reasons Good Performers Leave 

Top performer turnover really puts an organization at a disadvantage.  Good performers leave because no link exists between pay and performance.  As the performance level improves, if organizations do not provide the appropriate promotion, the employee will find other employment that will pay for his level of performance.  Also, good performers who do not perceive advancement opportunities and are not recognized for their contributions will leave the company in search of employment that will recognize employees.  As companies grow, employee and policy manuals are revised constantly.  The more these policies and regulations change, the more unclear expectations are perceived by employees causing turnover.  Another factor affecting good performer turnover is office environment.  If the organizational climate is abrasive, employees will leave based on treatment.  Instability of management also pressures good performers to leave.  As management changes, so do expectations and unclear expectations lead to confused and unhappy employees.  Every employee travels through the Employee Life Cycle: 

This cycle shows the progression of an employee evolving from happily challenged to overwhelmed and likely to participate in voluntary turnover.  Discussing the employee life cycle, we discussed the difference between the "old contract" and the "new contract."  For the current generation, the old contract of keeping a job until retirement is outdated.  Today's contract offers employees a work/life balance, meeting employees needs, and being flexible for employees.  


Manager's Role

A manager has four roles in employee retention:

  1. Retention - keeping employees
  2. Attrition - the loss of employees
  3. Career Planning - bottom-up processing
  4. Succession Planning - top-down view

Managers are responsible for employee retention and alluding employee attrition.  Succession planning seems to be easier to reach for private industries.  Succession planning can be likened to mentoring because it involves senior employees imparting valuable knowledge and skills that the new employees will need in order to be successful.  Managers are key facets for increasing and maintaining employee retention. 


Hiring The Right Person

On order to have quality, high performing employees increasing productivity for your organization, you have to have certain steps in place to ensure that you hire the right person.  The recruiting and hiring process influences retention rates.  Being the choice organization influences the volume of job applicants.  Organizations need to have a significant recruiting value in order to attract quality employees.  In order to be successful at recruiting, the organization has to develop an effective recruiting program.  So what does an effective recruiting program look like?

  • An effective recruiting program is well-planned and is adaptable to different situations.
  • An effective recruiting program clearly communicates job descriptions to applicants in a concise manner.
  • An effective recruiting program shows respect to all potential job applicants, regardless of their qualifications, making everyone feel welcome.
  • An effective recruiting program is well-versed on the organization's cost-benefit analysis.

The above steps can help an organization implement a successful and effective recruiting program to ensure equality among applicants and that the organization is attracting the right applicants for the job.  


After the recruiting process, the organization will review resumes, conduct interviews, and maybe implement an orientation program.  These steps are crucial in retaining new and potential hires.  When reviewing resumes, we should implement a numeric system to categorize the resumes.  This numeric system will be customizable, depending on the organization's needs.  Look for mistakes in writing or discrepancies in information.  These can be potential red flags, rendering the applicant an ill-fit for the organization.  Once you identify who you will interview, make sure that your interview criteria is standardized.  This will ensure that all applicants have an equal opportunity for the position and will allow for an easier comparison between applicants.  Another valuable tool is the use of references.  Applicants who can supply a list of references present you with the opportunity to see if the previous employer would hire that applicant again.  However, make sure you obtain a release from the applicant to contact those references.  Once hired, new employees must participate in some type of on boarding process.  This process will determine if the employee is more likely to participate in voluntary turnover because new employees are looking to be welcomed as a part of the team.  Having a well-developed orientation program will decrease turnover intentions of new hires.


In review, an organization must be careful when recruiting and hiring new employees.  Ensuring a good fit between the organization and its employees is crucial to organizational, as well as individual, success.  Organizations should focus on hiring for talent over experience because experience is something that can be taught and polished.  Ensure your recruiting and hiring staff are well-prepared and know for whom the are looking to recruit.  When organizations hire someone to fill a position that is not qualified or whose values do not align with the organization, the performance of the employee and organization is at risk of decreasing.  Also, ensure job descriptions are not outdated.  Present job applicants with up-to-date descriptions of job responsibilities, tools needed for the job, and skills required to ensure success.  Always be prepared to back up hiring decisions with an analysis.  Sometimes organizations have to provide evidence for hiring one person over another.  When this happens, documentation of the entire process is crucial to avoid litigation.  Another key tool to use in the interview process is open-ended questions.  These questions allow the applicant to freely respond, according to his personality, and can provide a more accurate insight to the applicants alignment with the organization.


Final Thoughts

I thoroughly enjoyed this course.  We reviewed a large amount of information in a relatively short amount of time but I feel as though I left this course with more knowledge on employee retention.  It is extremely important for organizations to attend to new hires' needs and wants.  Without properly on boarding new employees, organizations will quickly be perceived as not being the "choice" employer.  This course offers pertinent information for managers to keep employees motivated and decrease voluntary turnover. 


Notes, Handouts, and Certificates

Retention Strategies PowerPoint.pdf        Retention Strategies 10:08:14.pdf

Retention Strategies Handout.pdf            Retention Strategies Certificate.pdf



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