According to Noah Webster, "Retention is the act or power of keeping or retaining. Corporately, retention is the power to keep employees actively engaged and committed to being an integral part of the organization."
Webster separates employee retention from standard retention. However, I have read about, seen and experienced a direct correlation of employee retention with stock price and EBITA. When a company does a great job of hiring the right people and then they do a great job of retaining them, they maximize their ability to secure and retain market-share. The businesses that have cracked the code on recruitment and talent management hold on to customers longer, are in a position to proactively solve their customers’ problems, and have the ability to be on the leading edge in offering new and innovative solutions to their customers because of a steady stream of new knowledge and solid relationships. The correlation between employee retention and profitability makes perfect sense.
Impacting your company’s ability to retain your key contributors, mission-critical players and next-level leaders begins with you understanding where people are at from a of view.
It is important to note that today’s workplace psychological state is at an all-time low—peopleare too discouraged to go the extra mile; they are waiting for the other shoe to drop. The workforce of 2010 is mistrustful and skeptical. The top issues affecting workplace psychology and employee engagement are “warm chair attrition,” when the body shows up but the mind and heart have been left at home, and “corporate cocooning,” when the mature, highly experienced worker is hoarding information, afraid to share with or train others for fear of being replaced. Yet another is young working parents choosing their families first. Many in this group opt for working at home or only going to the office part-time. A great many people in this demographic are looking for “life/work navigation,” as they have seen firsthand how putting the job first and family second is crippling, un-fulfilling and littered with false rewards. One thing for sure is that in most situations and for most of your workforce: Corporate Loyalty Is Dead.
Competitive, astute employees are adopting a free-agent mentality and building their own relationships outside the company with vendors, customers and ex-employees so they are always ahead of the networking curve. Additionally these mission critical players, key contributors, and highly sought after next-level leaders are constantly improving their skill set so when the ax falls, they have opportunities lined up and waiting.
Recently HR Executive magazine conducted an engagement survey with hundreds of high-performing high potentials from all over the nation, and what they published was somewhat surprising, to say the least. Their study reported that 45% of all internal “candidates” within anorganization’s promotion pipeline are currently looking to leave the organization.
In another survey, conducted by Harris Poll and CareerBuilder, the results were just as compelling:
- 41% of employees are not satisfied with their jobs
- 46% say their workload has increased
- 33% feel they’re at a dead end at their current job
- 78% believe they are coping with “burnout”
- 56% are not glad they chose to work for their current employer
- 63% believe their top management does not display integrity and morality.
Any company that values the power of their human capital, believes that their people are their competitive advantage, is aware of the cost of replacing a great employee, and does not have a progressive talent strategy in place should be nervous. If you are not, take a look at this chart. It makes a great visual. Think about if your company lost their best salesperson to the competition. These days even your ironclad non-compete would most likely only slow them down. They might not call on your customers, but they can take their brain and everything they learned while in your operation and use it against you.
The problem is a big one and a strategic, systemic one at that. Not having enough knowledge-workers leads to longer development times, lower sales coming into the organization, fragmented customer service, a reduction in innovation and, eventually, lost customers. Hiring the wrong people because you are in a “rush” leads to more unwanted turnover, and that turnover comes at a high cost. Not knowing what makes your people tick leads to an incubation of the “free agent mentality.” The bottom line: the demographic and psycho-graphic challenges facing our companies cannot be avoided or ignored. Furthermore, the cost of doing nothing far outweighs the cost of being proactive and creating high-impact solutions that affect your bottom-line profitability and stakeholder equity.
Your company must decide if people are your competitive advantage, and if they are, you must strategically cause a corporate transformation, adopt a talent mindset and lead the way. Once you adopt and engage the rest of the leadership and management team in the talent mindset,you need to develop a people, or better said, talent strategy that lives and breathes throughout the organization.