Retaining top talent: what can you do to keep your best and brightest employees from looking for better opportunities?

In every organization, some employees rise to the top in terms of dependability, creativity, and other desired traits. Whether they serve in management or perform key support functions, these outstanding performers are vital to your company's overall success. To maintain a competitive edge, it's crucial to keep them from leaving for other opportunities.

[ILLUSTRATION OMITTED]

"Retaining talent is essential to the health of every enterprise," says John Baldoni, a communications consultant based in Ann Arbor, Mich., and author of Great Communication Secrets of Great Leaders (McGraw-Hill Trade). "It's often taken for granted until it's too late, and the person walks out the door."

Lots of things can happen when you lose valued employees, and most of them are bad. For starters, hiring replacements is both time consuming and expensive. Les McKeown, author of Retaining Top Employees (McGraw-Hill Osborne Media), estimates it costs between 1.75 and 2.5 times their annual salary, depending on the industry sector, to replace an employee who leaves. "This figure takes into account lost productivity, retraining, and the direct cost of hiring the replacement employee," he says. For an employee who is paid $50,000 per year, this translates to a replacement cost of $87,500 to $125,000.

Perhaps even more important, the loss of key staff may be damaging over the long term. "If companies do not retain employees, they lose continuity, efficiency, and corporate knowledge" says Roger E. Herman, CEO of the Herman Group in Greensboro, N.C., and author of several books on workforce issues. "Relationships with customers and suppliers are built by people who are around for a while. When people leave, those relationships become fragile. Customers are fickle and will easily go to the competition, taking their wallets with them."

EMPLOYEE NEEDS

What really matters in employee retention? Certainly, paying salaries and wages that are too low can spur employees to jump to better-paying jobs, and common sense dictates good pay will support employee retention. There are, however, less tangible factors.

"Competitive compensation is a given," Baldoni says. "I like to focus on quality of work issues." He says good people will keep working if you provide them with challenges, the opportunity to grow, and the opportunity to be recognized and rewarded for their contributions. "You need to offer staff new job assignments and allow them to design jobs that add value to the enterprise," he says. "You also need to provide opportunities for development. This might mean sending them back to school, or at minimum, attending industry conferences."

Invariably, the best employees want to improve their own performance and perhaps enhance their prospects for advancement. "Valued employees want career growth and personal development opportunities," says Dr. Tom Massey, president of Pacesetters Consulting Group in Norman, Okla., and author of The ABC's of Effective Leadership: Managing from the Heart (Robert D. Reed Publishers). Staff at every level desires positive feedback.

"Feedback should be regular and timely," says Susan Eckert, principal of Advance Career and Professional Development in Brightwaters, N.Y. "Employees want to know where they stand, be recognized for what they do well, and supported in their development."

Such measures take time and attention, but need not be costly, according to Massey. "Most of the actions employers can take to boost retention levels cost little in terms of money," he says. "People want challenging and meaningful work in an environment where they receive recognition for work well done, have a boss who is flexible and fair, work on a team of people they connect with, and have a sense of control over their work. It certainly doesn't hurt to have a little fun, too."

A POSITIVE ENVIRONMENT

Perhaps most important is developing the right kind of working environment. "Employees stay where they feel recognized, valued, and accepted," says McKeown. "Build the right environment, and people will stay."

In many cases, this boils down to one-on-one relationships. "The single most important factor in retaining valued employees is the relationship between the employee and the employee's immediate supervisor," says Herman. "This factor applies at all levels of the organization."

To strengthen relationships between supervisors and their subordinates, Herman advocates effective management training. "Employers fail to train their supervisors, managers, and executives in leadership and employee retention," he says. "The blame for employee turnover is too often dumped on human resources. Retention is not a human resources issue; it's a management issue. Leaders at all levels must be trained, equipped, and supported to optimize and retain their top talent."

A key ingredient in positive relationships is trust, according to Dr. Dennis S. Reina, a partner in Vermont-based Chagnon & Reina Associates. "Trust is a reciprocal process," he says. "If you want to receive trust from your employees, you first have to trust them." He says trust is created incrementally over time, but once achieved, it can help encourage employees to want to stay with your organization. Actions such as seeking employees' input, involving them in planning and decision making related to the scope of their job, and dealing with minor issues before they become major ones can help head off employee dissatisfaction.

BUILDING THE FUTURE

It may be a cliche, but people really are a company's most important resource. Moreover, when looking to the future, any efforts to retain the best employees will undoubtedly be worthwhile. "Recent surveys suggest 30 to 40 percent of today's workers have already checked out," says Herman. "That is, they're more focused on where their next job will be rather than on their current performance."

He says as the economy picks up, dissatisfied employees will have abundant opportunities to leave, making many employers considerably more vulnerable than they realize. To ensure workforce stability, employers would be well advised to assess employee retention patterns and address them accordingly.

RELATED ARTICLE: HOW TO ENSURE JOB SATISFACTION

Marcia Reynolds, president of Covisioning, an international leadership development firm, offers the following tips for helping employees feel good about their jobs.

1 Provide clear expectations of outcomes. It's amazing how many employees don't know what you want them to do.

2 Provide employees with materials and equipment to do their jobs right. It's frustrating not to have the right tools to do the job.

3 Recognize and praise good work at least once a week.

4 Show sincere interest in employees as people.

5 Acknowledge the importance of their opinions, whether you agree with them or not. Then help them see alternatives.

6 Encourage employees to develop and grow at work and beyond. Don't worry about losing them. If you encourage their development, they will have more loyalty to you while they are there.

7 Hold progress review meetings at least every six months. They need to know how they are doing, and this includes sharing what they do well and areas they can improve.

8 Provide frequent opportunities to learn and grow at work. This can be hard in a small company, but people need challenges to stay alert.

9 Treat them as partners, not hired hands.

Mark Rowh (markrowh@verizon.net), based in Dublin, Va., is an OfficeSOLUTIONS contributing editor.

COPYRIGHT 2004 Quality Publishing
COPYRIGHT 2004 Gale Group