How to retain proficient employees

Prepared for Mr. John Schuler Director Human Resources Fort Lauderdale, FL 33309

Prepared by David Payne Keiser University Fort Lauderdale, FL 33309

July 15, 2010

INTRODUCTION Many years a person would go through school, get a job, work at the same company for 40 years and retire to enjoy the golden years. Today that is no longer the norm (Lofton, 2006). The gold watch is no longer enough enticement to stay with the same company. Part of this might be because of the nationwide lay-offs that occurred across America during the recession of the 1970’s. At that time many people lost their positions, their benefits and their pensions. The national workforce realized that the loyalty they had been raised to believe in was not extended by their employers when the time came to cut losses and run. From that point forward employees began looking out for themselves and now it is not unusual to receive training in one environment, and then move on to another company for a little more pay, or perks and then later move again (Lofton, 2006). One of the largest problems facing the national workforce today is the retention of good employees. Recently this company has begun to lose a number of valuable employees to competing companies and industries. The importance of retaining employees who are proficient in their job skill sets cannot be ignored. “Retaining key employees is a number-one problem. A solution will mean more profitable and effective organizations, happier and more productive employees, and more satisfied client/customers. Losing employees also is expensive. Studies have found that the cost of replacing lost talent is 70 to 200 percent of each lost employee's annual salary. There are advertising and recruiting expenses, orientation and training of the new employee, decreased productivity until the new employee is up to speed, and loss of those customers, clients, or citizens who were loyal to the departing employee. Finding, recruiting, and training the best employees represent major investments. Once an organization has captured talented people, its best return on investment (ROI) requires closing the back door to prevent them from walking out(Jordan-Evans, 2001).” This company currently employees 150 people in various administrative and manufacturing positions. The company has been in operation for 15 years and until recently had enjoyed many long-term employees. Within the past year the company has suffered a 20 percent loss of employees. SOLUTION The first step that must be taken is a research study to determine the cause of exiting employees. This study will be conducted over a six-month period. It will be done in several ways. The first line of defense for the study will be that each employee giving notice of intent to leave will be asked to go through an exit interview with Human resources on their final day. Until now the company has never performed exit interviews, which leaves us with no way of knowing why the employees leave. Is it because the competition is providing higher pay rates, better benefits or other perks that we don’t provide? Is it not about what they can get out there but the problems internally? Are the employees being treated as valued members of the company team or are they feeling like they are not important? Are the managers trained in communication and management so that they know how to handle their teams? These are all elements that need to be studied within the research so that we have an idea of what may be at the bottom of our sudden increase in employee exits. An exit interview provides the employee the opportunity to let us know how we could improve our services for future employees. They will be encouraged to be open and honest in their assessment of how they were treated and what prompted them to look for another position and ultimately accept one. The second step to the solution will be to change the elements that are creating the desire to leave. A recent study found that most mangers and human resource employees believe the number one reason for giving notice for another position is about money. Perhaps they do not get paid enough or the new company has a higher starting rate, however this study concluded that money is rarely the driving force behind sending out resumes and leaving the company. In 1999 a Hay Group study examined over half a million employees that worked with 300 different companies and found that pay was the least important factor when it came to retention (Jordan-Evans, 2001). The study ranked the reasons for retention within successful companies and found the following listed in order of importance. ➢ “Career growth, learning, and development. ➢ Exciting work and challenge. ➢ Meaningful work, making a difference and a contribution. ➢ Great people. ➢ Being part of a team. ➢ Good boss. ➢ Recognition for work well done. ➢ Autonomy, a sense of control over one's work. ➢ Flexible work hours and dress code. ➢ Fair pay and benefits(Jordan-Evans, 2001).”

With these study results in mind we need to turn our attention to the top five elements of retention satisfaction and be sure we are targeting those areas for employee satisfaction. In addition we must add programs that will create the desire to stay. HOW TO One of the first steps this company needs to take in the attempt to retain the top talent is to provide opportunities for growth and career development. We have recruited several seminar management companies that will present a packet to us in the next three months that detail the services that they provide. The company will begin to offer career advancement seminars to those who are eligible and the company will pay for the selected employees to attend the seminars. In addition to the in-house provisions for seminars the company is going to begin a tuition reimbursement program. In this program employees will be encouraged to attend college courses. If they have been with the company one year and pass the course the company will reimburse their tuition and books at 50 percent. If they have been with the company three years to five years and pass the courses the company will reimburse the employee for 75 percent of tuition and books. If the employee has been with the company more than five years and passes the courses the company will reimburse tuition and books at 100 percent.

This tiered system for percentage of reimbursement will target those employees that have stayed with us and provided assistance by their longevity and in return we will help them better themselves and their career opportunities. The importance of having meaningful work and feeling one is making a difference is important according to the studies. To this end the manufacturing lines are problematic as a recent company survey indicates the employees are not feeling fulfilled. We cannot change the manufacturing needs that we have but we can provide the feeling of fulfillment in other ways. We are going to begin donating percentages of the profits to worthy charities. The charities will be chosen monthly by the line team that met the highest quota the month before. They will choose a charity of their choice and the next month all of the profits that the line makes will be compiled and 10 percent of the bottom line will be donated to whatever charity they chose. While this is not quite the same as providing exciting work it will provide the employees who are not excited about working on the line a reason to work hard and be proud of their personal contribution to bettering the world and their community. For those who wish to do so they will be allowed to contribute up to two percent of their weekly paycheck to that charity and the company will match their contributions. The third reason the research noted as a reason that employees’ stay at their jobs is the people they work with. We need to make sure we are providing time and events that will encourage our employees to become socially acquainted. The company will begin to have monthly potlucks. The company will provide the meat and drinks and the employees will be asked to bring a salad or side dish. The company will also provide a birthday cake to honor any worker with a birthday in that month. These opportunities will provide the employees with a chance to get to know each other outside of simply working side by side. They will be able to form friendships and perhaps begin friendships that will create an atmosphere of family when they come to work each day. The research indicated that such an effort will provide employees with a desire to maintain employment so they do not leave their friends.

The next reason given in this 500,000-employee study for staying with their current company was the feeling of being part of a team. For many months we have tried moving people around thinking that the diversity of duties and groups would help create a desire to stay because the monotony would be removed, however, it appears that this may be one of the things we are doing that causes our workers to seek other employment (DeSena, 1991). Beginning next month we will assign lines, tasks and workstations based on employee preference and company need and those will remain in place for 18 months. This will allow members of the team to get to know each other and provide the feeling of working as part of a team. The 18 month limit however, will provide the security for the workers who do not like their workstations or their team members of knowing they will be able to move again in 18 months. THE LONG TERM While these strategies may work to help reduce the percentage of employees leaving for this company there needs to be a long term solution as well. The company will seek out, recruit and hire a retention manager. The retention manager will be hired for the sole purpose of monitoring our retention rates, implementing the programs we have listed and working to add more programs aimed at retaining our talent. The retention manager will be expected to seek out and understand all current research and data with regards to national retention trends and use a proactive approach in the attempt to retain the employees. This manager will have the power to implement changes, programs and other benefits as long as they are discussed ahead of time with management in the hopes of improving retention.

CONCLUSION The problem of employee retention has been a growing one for several decades. Today, employees do not feel the loyalty that they did in years past when it comes to leaving companies that have employed them. Whether it is because of the ability to move around, the removed stigma of days gone by when it comes to job hopping or different needs and interests from what previous generations had with regards to their careers the fact remains that it is a growing issue throughout America. The loss of employees that we have taken time to recruit, hire and train is financially important as we have to slow production as new employees come online, we have to renew various occupational licenses for new hires and we are in the position of hiring temporary administrative people any time one of our administrative employees leave. The time has come to begin a proactive approach to employee retention. The strategies discussed in this report will begin immediately and we will reconvene in six months with data to determine the effectiveness of our efforts and to analyze any needed changes.
REFERENCES

DeSena, Jim (1991) 25 steps to success. (motivating & retaining valuable employees)
Security Management

Griffiths, Kimberly (2006) How to Find 'em and how to Hold 'em.(retaining and recruiting of employees) Industrial Distribution

Jordan-Evans, Sharon (2001) Retaining Key Employees.(cities and towns.)
Journal of Public Management

Lofton, Lynn (2006) Benefits becoming more important in hiring, retaining...
Mississippi Business Journal

SLOME, JESSE R (2000) Overlooked Plans Can Benefit Key Employees On a Selective... Los Angeles Business Journal