Managers believe that more than 70% of employees leave for more money while 88% of employees say they leave for reasons other than money.  So says Leigh Branham in his new book, The 7 Hidden Reasons Employees Leave.  Obviously, employee retention is as important (and as misunderstood) as ever.

In Part I of this article, Seven Strategies for Retaining Top Talent, printed in the last newsletter, I described three strategies for keeping your top talent.  They were:

1.      Hire for attitude, train for skill.

2.      Set realistic expectations with your applicants.

3.      Use a Great Employee Profile to drive retention.

This newsletter presents Part 2 of the article.  Read on for more things you and your company can do to ensure that your top employees stay.
 

4. Create an employee value proposition (EVP) that delivers what it promises.

Creating an employee value proposition that delivers what it promises is imperative. The EVP is the compelling reason why a talented person would want to work for your company. McKinsey & Company identified four key elements in an EVP. They are:

• Great company. The company cares about its people, and the people care about the company. Trust and open communication form the foundation for all business interactions. Employees feel a tremendous sense of pride in being associated with the company's success and each person's role in it.

·         Great job. People have to like what they do and the people they do it with. A great job is challenging, growing, and filled with content that the person finds interesting and important. A big part of feeling good about job is the result of being valued for one's unique talents and contributions.

• Great leaders. Great leaders treat people with trust and respect. They find the balance between giving people the freedom to accomplish great things and providing the guidance to help them do it. Great leaders know their people, understand their dreams, and use that information to help the company and employees achieve great things.

• Attractive compensation. Money is important - for what it can buy and for the lifestyle that it provides people. It is also important because of what it represents: recognition and fairness. Talented people expect their contributions to be recognized, and they expect their compensation to reflect how the company values what they do.

5. Count what counts.

What gets measured gets done. What counts is what gets counted. To improve your company's employee retention, you must understand where you are now compared to where you want to be related to employee retention.

Most company turnover statistics are useless. Why? Generally, company turnover statistics include a single number that lumps all good turnover (under-performing employees leaving) with bad turnover (great employees leaving). Breaking turnover statistics down by department, by job, or by geographic region won't help unless a distinction is made between good turnover and bad turnover.

To improve employee retention, you need to take a different approach to the metrics your organization uses to track employee turnover and retention. Some new (and more effective) ways of measuring employee retention include:

• Great Employee Retention rates (voluntary/involuntary)
• Great Employee Retention rates (overall, department, and job)
• Great Employee Retention rates (hourly, salaried)
• Great Employee Boomerang rates (percent of great employee who leave you and come back)

Notice two things about these metrics. First, they focus on your great employees. A company's overall turnover rate may be quite low. Most of the people leaving, however, could be the company's top employees. Tracking great employee turnover and/or retention is the only way that companies can really get a handle on how they are faring in the war for talent.

Second, breaking out great employee retention rates by department, by job, and by other organizational categories gives you great insight into things going on within the organization. For example, if a particular job that has as slightly lower great employee retention rate, there is likely to be something about that job that needs to be changed. These results could suggest the need for more training, better equipment, or a change in the content/structure of the job.

6. Drive employee ownership of employee retention.

In their seminal book, First Break All the Rules, Marcus Buckingham and Curt Coffman provide data to support what most of us have known for years. The number one reason people leave a company is the supervisor. That's right - talent most often quits the boss, not the company.

Retention-savvy companies recruit, hire, and retain managers whose attitudes, values, and behaviors are consistent with the company's core culture. These managers, in turn, find it easier to recruit, hire, and retain other employees whose attitudes, values, and behaviors are consistent with the company's culture. These managers and the employees that they hire and promote serve to sustain the company's culture.

A second proven method for retaining top talent is to recognize and reward managers for behaviors related to employee retention. Kentucky-based manufacturer Griffen Industries exemplifies this strategy. In the past, Griffen had traditionally focused on two key measures for management bonuses: quality and safety. With a much higher turnover rate than acceptable, the company decided that the fastest way to reach their retention goals was to give turnover equal weighting in management's bonus calculation. When managers were measured equally on quality, safety, <I>and<I> retention, all three areas showed significant improvement.

7. Avoid a "one size fits all" approach to employee retention.

In his breakthrough book, Future Perfect, author, futurist, and business strategist Stan Davis introduced the concept of "'Any Time - Any Place - Mass Customization". Davis correctly predicted that to be successful into the future, all businesses must provide their services at:

• Any Time the customer wants the service (not just when the company prefers to give the service);
• Any Place the customer prefers to receive the service (not just where the company prefers to provide the service) with
• Mass Customization that designs and delivers all services to the unique needs and specifications of the individual customer (not a "one sizes fits all" approach).

Davis' concepts apply to retaining talent. Every employee possesses a unique set of skills, motivations, and needs. Although some employees share similar characteristics, each individual must be viewed as that - an individual - and not just a job title.

It is imperative to build a culture of mass customization if you wish to retain top talent. From a generic statement of the tangible and intangible benefits your company offers, you must move toward an Any Time - Any Place - Mass Customization of all employee-centered activities.

Well known for its ability to retain great employees, State Farm Insurance uses a simple approach to the mass customization of employee recognition. Managers ask their employees to complete a one-page "Favorites List" of their favorite things such as their favorite ice cream, color, flower, movie star, candy bar, restaurant, food, vacation getaway spot, hobby, recreational activity - you get the point. When the manager wants to reward an employee for outstanding performance, they review that employee's "Favorites List" and quickly customize the recognition to include the individual employee's favorite things.

People are costly, and justifiably so. People are the most important drivers of a company's competitive advantage. By retaining great employees, you also retain such intangibles as the capacity for innovation, the source of productivity improvements, and the basis for customer satisfaction.

Successful retention strategies can also translate into dollars and cents on the balance sheet. It can cost as much as two times the annual salary to replace an employee. A small decrease in employee turnover often results in a dramatic increase to the company's bottom line. Retention-savvy companies use these seven strategies to retain their top talent and, therefore, to improve their company's financial and non-financial standing in the marketplace.