Executives say employee retention is one of the top issues keeping them up at night. There are several reasons why. On one end of the workforce, the Baby Boomer generation is retiring leaving fewer skilled people to choose from. On the other end, a smaller group of younger workers is entering the workforce whose loyalties and priorities lie within themselves first and foremost. The average tenure of a 20-something is only 18 months, creating a swinging door and a cycle of misery for
employers.
Few businesses consider the impact of turnover on their bottom line. It takes $7,000 - $14,000 to replace a typical employee; to replace a key manager costs the same as buying a Lexus. To replace a critical care nurse can run up to $185,000; and when a top talented individual in a key role departs, it can run into the millions. Businesses can make their organization the best place to work by following the five-step PRIDE model:
P - Provide a positive working environment
R - Recognize, reinforce, and reward each individual's efforts
I - Involve everyone
D - Develop the potential of your workforce
E - Evaluate and measure continuously
Provide a Positive Working Environment
Creating and managing a good organization takes an entirely different approach. Indeed, one-third of the executives surveyed by Robert Half International Inc. now say the work environment is the most critical factor in keeping an employee satisfied in today's business world.
A key aspect is workplace flexibility. First Tennessee National Corporation started taking family issues seriously, and made them top priority. They reshaped the rules they had forced employees to live under, added many family-friendly new benefits, and sent managers through three and one-half days of training. Result: Employees stayed twice as long-and the bank kept seven percent more of its customers.
Recognize, Reinforce, and Reward Each Individual's Efforts
Money may attract people to the front door, but something else has to keep them from going out the back. People have a basic human need to feel appreciated, and recognition programs help meet that need.
A successful reward and recognition program does not have to be complicated to be effective. Disney World views reward and recognition as a key part of the compensation package. An extensive program helps create a supportive environment contributes to employee retention, and encourages employee enthusiasm. They have over 20 different recognition programs such as "Applause-o-Gram" cards and "Thumbs Up" gift certificates provided to individuals working in the landscaping department. Additionally, each department has custom designed reward programs that provide instant recognition. New employees are asked to participate in their own reward strategy by listing in their file the things they would like to be rewarded with, such as time off, movie tickets, or public recognition. One of the highest forms of public recognition is when top performing employees have their names stenciled on the storefronts along "Main Street," stating they are the store proprietors.
Involve Everyone
Exceptional organizations involve the ideas and suggestions of everyone. The Sony Corporation is well known for its ability to create and manufacture new and innovative products. In order to foster the exchange of ideas within departments, Sony's Corporate Research sponsors an annual Idea Exposition. During the exposition, scientists and engineers display projects and ideas they are working on. Open only to Sony's employees, the exposition lets individuals share ideas otherwise protected by departmental walls. This process creates a healthy climate of innovation and creativity at all levels of the organization.
Develop the Potential of Your Workforce
For many people, learning new skills is just as important as the money they make. In a study by Linkage, Inc. more than 40 percent of the respondents said they would consider leaving their present employer for another job with the same benefits if that job provided better career development and greater challenges. The National Center on the Educational Quality of the Workforce (EQW) found on an average, a 10 percent increase in workforce education level led to an 8.6 percent gain in total productivity. On the other hand a 10 percent increase in the value of equipment only increased productivity 3.4 percent.
Evaluate and Measure Continuously
Someone said, "If you don't know where you are going, any road will lead you there." Evaluation and measurement must include important indicators such as turnover, employee attitudes, and how well managers are taking care of employees.
La Rosa's Pizza Company completes a cultural audit once a year, which measures employees' feelings about pay and benefits, care and recognition, etc. Additionally, all employees evaluate their bosses twice a year using an Internal Customer Satisfaction Index. (ICSI) The ICSI has only four questions, and asks the employees to give their managers a letter grade from A to D in four different categories. Any grade lower than a B requires additional comments.
