A Big Issue
Big Issues are those that cost your organisation money – lots of money. On that criterion, staff retention is, for many companies, right up there with the biggest of their big issues. And, given the current vacancy and staff turnover levels in many organisations, it has the potential to become an ever bigger issue. Unless you do something positive about it now.
Let's look at some numbers;
Our 'typical' business services firm employs around 1,000 people and has a staff turnover of 15% per annum. We have developed a Financial Impact Model which enables us to assess the impact of losing and replacing staff. This is clearly most accurate when using specific company figures, but still gives useful input at a more generalised level.
Applying the model, we estimate that the total costs (direct and indirect) of 15% staff turnover to this company are around £1,300,000. Or somewhere between 20% to 50% of its annual profits!
Of course this is an oversimplification. Indeed, some level of staff turnover is both expected and required. But what level? What cost is acceptable? And, assuming that it is lower than the current level, what can be done to improve staff retention so that the desired level is achieved?
Mitigating the challenge of staff attrition.
We suggest that managers;
1. Recognise that staff retention is a Big Issue. This can be achieved by ensuring it is measured. And in sufficient detail across the various functions, roles and levels within your organisation. Put the business management spotlight on retention. Don't sideline it as an 'HR issue'. It isn't. It is an issue for general management as well as HR.
2. Calculate the financial implications. They are likely to vary significantly between organisations and indeed between departments and teams e.g. the organisational and costs structure and profit drivers of an outsourcing function will result in different loss and replace costs to those of a management consulting unit. Consider using a specialist to help you work through this.
3. Understand why people leave. Survey after survey show similar results. People don't generally leave because of pay; in fact salary is generally considered less important than career progression, seeking new challenges and achieving greater recognition. Again you may wish to explore the specific reasons that affect your organisation. If so, how about exit surveys and structured interviews?
4. Establish a programme to improve staff engagement and enthusiasm. These same surveys also point out the solution to improving retention rates. Provide your key staff with the means to continually improve the impact and contribution they make to your business and to their own personal development. Help them to understand how they can have frequent 'Career Bests' in their daily work. Help them to understand how they can improve their performance over time, taking on greater challenges, building their capabilities and matching their skills and passions with the organisations needs. Help them recognise that career development doesn't just mean a promotion into a more senior role. Rather it means moving through different stages of contribution, each one adding more value to themselves and to the business.
Build the coaching competencies of all your supervisory and managerial staff. Our research has shown just how important it is that supervisors and managers know how to enable high performance and commitment.
5. Set clear expectations. Employers and employees have shared responsibilities for personal development. Be clear as to what they are and how they are agreed. Build this into your development management system and link it to your performance management process.
6. Measure it. Once you've built a programme, make sure that its impact and value is measured against costs and results. Above all measure all your supervisory staff on their ability to reduce staff turnover and to build teams of committed, effective, engaged and enthusiastic staff.
And if you would like to discuss any of these issues with a specialist, talk to me on +44 (0)1252 727980 or email info@new-frontiers.co.uk
John Schonegevel is a Director of New Frontiers.
New Frontiers helps employers retain and develop great people. We specialise in developing and sustaining high performing people at work. High performance comes from skilled and motivated staff, working smoothly towards achieving clear goals.
We work to change peoples' behaviours enabling them to increase their impact and value at work and significantly grow the contribution they make to their employer's business results.
Our role is to support people in taking responsibility for meeting both their employers goals and their own, increasing their capabilities and so leading to sustained high performance, full engagement and ongoing enthusiasm at work.
New Frontiers is a Novations Consulting Partner
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