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The Bottom Line for Employee Retention

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Article from, written by: Susan M. Heathfield

Want the bottom line when it comes to employee retention? The quality of the supervision an employee receives is critical to employee retention. People leave managers and supervisors more often than they leave companies or jobs.

It is not enough that the manager is well-liked or a nice person. Sure, a nice, likeable manager earns you some points with your employees. A draconian, nasty, or controlling manager takes points away from your organization. So will below market benefits and compensation. But, a manager or supervisor, who is a pro at employee retention, knows that the quality of the supervision is the key factor in employee retention.

Effective Managers Create Employee Retention

Managers who retain staff start by communicating clear expectations to the employee. They share their picture of what constitutes success for the employee in both the expected deliverables from and the performance of their job.

These managers provide frequent feedback and make the employee feel valued. When an employee completes an exchange with a manager who retains staff, he or she feels empowered, enabled, and confident in their ability to get the job done.

Employee complaints about managers and supervisors center on these areas. Employees leave managers who fail to:

  • provide clarity about expectations,
  • provide clarity about career development and earning potential,
  • give regular feedback about performance,
  • hold scheduled meetings, and
  • provide a framework within which the employee perceives he can succeed.

How to Help Managers With Employee Retention

Almost every manager can increase her ability to retain employees by developing her management skills. Teaching a manager about how to value people can be more challenging. Particularly if the manager doesn't already value people and their contributions in her mind and heart, it will be a leap for her to change her values.

These ideas will help your organization develop managers who believe in and act in ways that support employee retention.

  • Integrate core values about people and a mission and vision that enable people to align themselves with the company direction. Communicate the importance of these, and clear expectations about the behaviors expected from managers to accomplish these, to every manager.


  • Negotiate a performance development plan with each manager that stresses the expected managerial areas of development,


  • Provide training in core management skills to every manager. Core management skills include how to:
    • integrate performance management including goal setting,
    • give and receive feedback,
    • recognize and value employees,
    • coach employee performance,
    • handle employee complaints and problems,
    • provide a motivating work environment, and
    • hold career development discussions with employees.

  • Hold regular meetings to provide management development coaching and feedback. You can assist managers to improve their management style and skills. A regular meeting helps you debrief events as they occur, while memories of the exchanges are fresh in the manager's mind.


  • Schedule and hold learning organization events such as book clubs, product training, project debriefs, and discussion and planning meetings.


  • Provide funding for conferences and educational development opportunities for managers to continue learning.


  • As part of a fully integrated performance management system, provide 360 degree feedback so managers know how their management style is perceived.

What if a Manager Fails at Employee Retention?

If a manager fails at employee retention, the chances are good that the manager has been unable or unwilling to develop their ability to manage and value people across the board. Managers who exhibit a pattern in which their key employees leave your organization cannot retain their management role.

If you have fairly and ethically provided the manager the learning opportunities suggested here, you can, in good conscience, remove the individual from the managerial role. My experience has been that most managers consider this such a loss of prestige and "face" that they voluntarily leave the organization.

If they choose to stay, however, they must commit to being effective, contributing employees. If the manager cannot make this leap, you will need to let the manager go before their negativity impacts the rest of your workplace.

Given the management development opportunities listed here, most managers will be able to become managers who retain their best employees. Your investment in your managers can fuel your organization's ongoing success. After all, it is the quality of the people you employ and retain that is the heart of your business success.


Fun and the Bottom Line: Using Humor to Retain Employees

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Posted by tsdadmin

Article from, written by: Susan M. Heathfield

I've featured David Granirer at the About HR site in the past because he combines wit with useful information in an approachable writing style. As I visit workplaces these days, I see a lot of up-tight people who are worried about their futures and their opportunities.

In these uncertain times, David is right, often the one thing we do control is our reaction to the work situation in which we find ourselves.

I'm a serious proponent of empowerment, as any of you who have read this site for any time know. Consequently, choose to be a cheerleader at work. Choose to have a say and make a difference. Choose to contribute your best talents and skills. Your workplace will be better for your contribution and that will be a good thing for both you and your organization. David Granirer tells you more.

Article by David Granirer*


Humor for Retaining Employees

Picture this: a team of welfare workers on the front-lines of a poor neighborhood, serving difficult, high-needs clients. And if that’s not tough enough, each has a caseload of about 300 and works for an organization undergoing massive funding cuts, downsizing, and policy changes.

But every day after coffee, it's the same. The supervisor and two workers appear in the reception area. "What song do you wanna hear? Do you wanna hear Jazz? Rock? Folk?" Then, "playing" accordion folders and staple removers as finger cymbals, they launch into the world’s worst rendition of "Across The Universe" by John Lennon, to the hysterical laughter of their colleagues.

"It's our way of keeping up morale," says a team member. "We're so overwhelmed, so stressed, so burned out. This is how we keep our sanity."

As more and more organizations reengineer, merge, restructure, downsize, rightsize, and even capsize, employees confront uncertainty on an almost daily basis. The rules keep changing in terms of what they're supposed to do, how they’re supposed to do it, who they do it for, and whether they get to do it at all.

And since most have little or no control over the making of these rules, the result is often a sense of powerlessness that translates into increased stress, decreased wellness, demoralization, absenteeism, and lower productivity, all of which affect rates of retaining employees. And we all know that people are an organization’s number one asset, and losing them costs money.

So the big question for both individuals and organizations is: how do you keep up spirits, continue to work effectively, and maintain health and sanity in a crazy-making situation? The team of welfare workers described chooses to laugh.

They could also choose despair, cynicism, bitterness, or negativity, but instead team members choose laughter. As one worker states, "We could either cry, or we could laugh, but you can only cry for so long. We’d had enough of crying, and it was time to do something else."

So, how do you help employees, who have little or no control over external events, survive a crazy-making situation? Organizations need to encourage employees to take control over the one aspect of the situation they do control - how they choose to respond to it.

And on those days where workers feel overwhelmed, overworked, and have no idea what's going to happen next, the only rational, life-affirming response is to go find some colleagues, and break out the clown noses, kazoos, and Groucho glasses.


Why Laughter?

Why is laughter such a positive choice? We all know that it makes us feel good, but in today’s bottom-line oriented workplace, the term "feel good" is too nebulous to have much impact on how people go about structuring their job interactions and professional relationships.

And most organizations are not going to promote humor as part of their culture because some "touchy feely" wellness devotee thinks that having the boss come to work dressed as a chicken will create a happy afterglow.

So any discussion of the benefits of laughter needs to be more tangible and focused on addressing positive morale, a major factor contributing to retaining valued employees. Remember though, humor is a coping mechanism to aid in retaining employees, not a cure-all for other systemic problems affecting organizations.


Boosting Morale

It's a common theme. An organization keeps cutting staff until the people left feel like they can't cope anymore. Unfortunately, the organization I’m thinking of didn't take into account what this would do to the morale of the "survivors."

Management was unwilling to listen to their concerns, and when anyone did voice them, they were labeled as disloyal. Teamwork plummeted, with employees adopting a "me first" attitude. The office atmosphere was poisonous, rife with gossip, rumors, and backstabbing.

"This feels like hell. I’d never recommend this company to anyone, and I just hope I can survive until I take early retirement," said one long-term employee.

Like the team of welfare workers, this group found themselves in a bad situation over which they had no control. Sadly though, members were not encouraged to make use of humor, the one coping mechanism they had left.

Instead, management saw it as a frivolous waste of time, a sentiment which came to be echoed by the employees. "We're living in hell. We're too busy to laugh, and besides, it won't change anything, was a common refrain among employees with whom I talked. However, they were wrong.

According to Steve Lipman, who researched the use of humor during the Holocaust, "Wit produced on the precipice of hell was not frivolity but psychological necessity. Humor is one of the greatest gifts God gave mankind to pull itself out of despair."

In today's uncertain work environment, humor isn't an option, it's a necessary way to boost morale. When employees clown around, they’re not wasting valuable time, they're making use of one of the few tools available to increase and maintain their esprit de corps. Laughter may not change the external reality, but it can certainly help people survive it.

This has been proven in some pretty dire situations. Lipman cites an example of how a group of Auschwitz inmates put on vaudeville shows to provide laughter for the camp population. According to one, "We had to make jokes to save ourselves from deep depression."

Somehow these people, on the brink of death, realized that their morale and survival depended on keeping their ability to laugh alive. As a group, they took the time and energy to make it happen.

Even though nothing could be as horrible as Auschwitz, people in almost all workplaces can learn from this example. Take the time and energy to share humor. Those brave concentration camp inmates proved that humor is a choice, and no matter how much adversity people face, whether at work or in their personal lives, they can still choose laughter. In fact, the worse a situation gets, the more important it becomes to make that choice.


Making Humor Happen In Your Organization

So what can organizations do to encourage the use of humor as a coping mechanism? On a recent trip, I flew on WestJet Airlines, and found that the crew had turned the usually boring safety announcement into a stand-up comedy routine. My favorite line was, "The floor lighting will come on in the event of an emergency landing or a disco revival."

Upon inquiring, I learned that the CEO of WestJet believes that work should be fun. He sets precedents through his own behavior, and by encouraging employees to enjoy their jobs. He makes it safe for the people he employs to use humor by leading the way.

And the payoff? All WestJet employees I spoke to said how much they loved working for the company because it was so much fun. And their enjoyment was reflected in great service to the passengers. They expressed their appreciation of the humor and their intention to continue flying WestJet.

In order to help employees use humor, organizations need to provide them with the tools and to set an example. When I worked at the Vancouver Crisis Center, we started every training group with an exercise called "the rubber chicken toss." We also provided crisis counselors with baskets of toys to use as stress-busters, and made it clear that humor was encouraged as part of our organizational culture.

These relatively inexpensive interventions did nothing to change the adversity we faced, but they did create an atmosphere in which going to work was fun.

I often had crisis line workers tell me that one of the reasons they kept coming back was because of how much fun they had. And if a crisis line, where workers regularly deal with suicide can be made fun, so can any workplace.


Top Ten Ways to Retain Your Great Employees

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Posted by tsdadmin

Article from, written by Susan M. Heathfield 

Key employee retention is critical to the long term health and success of your business. Managers readily agree that retaining your best employees ensures customer satisfaction, product sales, satisfied coworkers and reporting staff, effective succession planning and deeply imbedded organizational knowledge and learning. If managers can cite these facts so well, why do they behave in ways that so frequently encourage great employees to quit their jobs?

Employee retention matters. Organizational issues such as training time and investment; lost knowledge; mourning, insecure coworkers and a costly candidate search aside, failing to retain a key employee is costly. Various estimates suggest that losing a middle manager costs an organization up to 100 percent of his salary. The loss of a senior executive is even more costly. I have seen estimates of double the annual salary and more.

Employee retention is critically important for a second societal reason, too. Over the next few years while Baby Boomers (age 40 to 58) retire, the upcoming Generation X population numbers 44 million people (ages 25-34), compared to 76 million Baby Boomers available for work. Simply stated: there are a lot fewer people available to work.

Employee retention is one of the primary measures of the health of your organization. If you are losing critical staff members, you can safely bet that other people in their departments are looking as well. Exit interviews with departing employees provide valuable information you can use to retain remaining staff. Heed their results. You’ll never have a more significant source of data about the health of your organization.

I’ve provided retention tips in earlier articles, but will add ten more retention tips to your arsenal with these top ten ways to retain a great employee.

  • Management thinkers from Ferdinand Fournies (Why Employees Don't Do What They're Supposed to Do and What to Do About It) to Marcus Buckingham and Curt Coffman (First Break All the Rules agree that a satisfied employee knows clearly what is expected from him every day at work. Changing expectations keep people on edge and create unhealthy stress. They rob the employee of internal security and make the employee feel unsuccessful. I’m not advocating unchanging jobs just the need for a specific framework within which people clearly know what is expected from them.

  • The quality of the supervision an employee receives is critical to employee retention. People leave managers and supervisors more often than they leave companies or jobs. It is not enough that the supervisor is well-liked or a nice person, starting with clear expectations of the employee, the supervisor has a critical role to play in retention. Anything the supervisor does to make an employee feel unvalued will contribute to turnover. Frequent employee complaints center on these areas.

    --lack of clarity about expectations,
    --lack of clarity about earning potential,
    --lack of feedback about performance,
    --failure to hold scheduled meetings, and
    --failure to provide a framework within which the employee perceives he can succeed.

  • The ability of the employee to speak his or her mind freely within the organization is another key factor in employee retention. Does your organization solicit ideas and provide an environment in which people are comfortable providing feedback? If so, employees offer ideas, feel free to criticize and commit to continuous improvement. If not, they bite their tongues or find themselves constantly "in trouble" - until they leave.

  • Talent and skill utilization is another environmental factor your key employees seek in your workplace. A motivated employee wants to contribute to work areas outside of his specific job description. How many people could contribute far more than they currently do? You just need to know their skills, talent and experience, and take the time to tap into it. As an example, in a small company, a manager pursued a new marketing plan and logo with the help of external consultants. An internal sales rep, with seven years of ad agency and logo development experience, repeatedly offered to help. His offer was ignored and he cited this as one reason why he quit his job. In fact, the recognition that the company didn't want to take advantage of his knowledge and capabilities helped precipitate his job search.
  • The perception of fairness and equitable treatment is important in employee retention. In one company, a new sales rep was given the most potentially successful, commission-producing accounts. Current staff viewed these decisions as taking food off their tables. You can bet a number of them are looking for their next opportunity.

    In another instance, a staff person, just a year or two out of college, was given $20,000 in raises over a six month time period. Information of this type never stays secret in companies so you know, beyond any shadow of a doubt, the morale of several other employees will be affected. For example, you have a staff person who views her role as important and she brings ten years of experience, an M.B.A. and a great contribution record to the table. When she finds she is making less money than this employee, she is likely to look for a new job. Minimally, her morale and motivation will take a big hit. Did the staff person deserve the raises? Yes. But, recognize that there will be impact on others.

  • When an employee is failing at work, I ask the W. Edwards Deming question, “What about the work system is causing the person to fail?” Most frequently, if the employee knows what they are supposed to do, I find the answer is time, tools, training, temperament or talent. The easiest to solve, and the ones most affecting employee retention, are tools, time and training. The employee must have the tools, time and training necessary to do their job well – or they will move to an employer who provides them.

  • Your best employees, those employees you want to retain, seek frequent opportunities to learn and grow in their careers, knowledge and skill. Without the opportunity to try new opportunities, sit on challenging committees, attend seminars and read and discuss books, they feel they will stagnate. A career-oriented, valued employee must experience growth opportunities within your organization.

  • A common place complaint or lament I hear during an exit interview is that the employee never felt senior managers knew he existed. By senior managers I refer to the president of a small company or a department or division head in a larger company. Take time to meet with new employees to learn about their talents, abilities and skills. Meet with each employee periodically. You'll have more useful information and keep your fingers on the pulse of your organization. It's a critical tool to help employees feel welcomed, acknowledged and loyal.

  • No matter the circumstances, never, never, ever threaten an employee's job or income. Even if you know layoffs loom if you fail to meet production or sales goals, it is a mistake to foreshadow this information with employees. It makes them nervous; no matter how you phrase the information; no matter how you explain the information, even if you're absolutely correct, your best staff members will update their resumes. I'm not advocating keeping solid information away from people, however, think before you say anything that makes people feel they need to search for another job.

  • I place this final tip on every retention list I develop because it is so key and critical to retention success. Your staff members must feel rewarded, recognized and appreciated. Frequently saying thank you goes a long way. Monetary rewards, bonuses and gifts make the thank you even more appreciated. Understandable raises, tied to accomplishments and achievement, help retain staff. Commissions and bonuses that are easily calculated on a daily basis, and easily understood, raise motivation and help retain staff. Annually, I receive emails from staff members that provide information about raises nationally. You can bet that work is about the money and almost every individual wants more.

Take a look at your organization Are you doing your best to retain your top talent? Employ these ten factors in your organization to retain your desired employees and attract the best talent, too.


Employee Retention: What Employee Turnover Really Costs Your Company

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Posted by tsdadmin

Article from, written by: Ross Blake

It’s one of the largest costs in all different types of organizations, yet it’s also one of the most unknown costs. It’s employee turnover.

Companies routinely record and report costs such as wages and benefits, Workman’s Compensation Insurance, utilities, materials, and space, yet most companies have no and report the cost of employee turnover. It can be much higher than you think.

How Much is it Costing You?

Several well-regarded studies have recently estimated the cost of losing an employee:

  • SHRM, the Society for Human Resource Management, estimated that it costs $3,500.00 to replace one $8.00 per hour employee when all costs — recruiting, interviewing, hiring, training, reduced productivity, et cetera, were considered. SHRM’s estimate was the lowest of 17 nationally respected companies who calculate this cost!
  • Other sources provide these estimates: It costs you 30-50% of the annual salary of entry-level employees, 150% of middle level employees, and up to 400% for specialized, high level employees!
  • Do a quick calculation: Think of a job in your organization where there has been some turnover, perhaps supervisors. Estimate their annual average pay and the number of supervisors you lose annually. For example, if their average annual pay is $40,000, multiply this by .125% (or 125% of their annual pay, a reasonable cost estimate for supervisors). This means it costs $50,000 to replace just one supervisor. If this company loses ten supervisors a year, then 10 times $50,000 equals $500,000 in replacement costs for just supervisors. This is the bottom line cost. The top line cost? If the company’s profit margin is 10%, then it costs $5,000,000 in revenues to replace these ten supervisors.

Do These Numbers Seem Unbelievable?

Here’s an actual calculation from a well-regarded organization in my community. The HR Manager of this human services organization (housing for disabled persons, sheltered workshops, etc.), estimated that 30 entry level people leave his organization on average every quarter.

This averages out to ten people per month. Let’s be extra conservative and shave SHRM’s estimate (see above) down to $3,000.00 to replace each employee.

This amounts to $30,000 per month, or $1,000.00 in employee turnover costs every day of the month! Annually, this totals $360,000.00.

Actual turnover costs are usually much higher than we think they are — until we estimate them.

You may be thinking, “Some employee turnover is unavoidable, even desirable.” You’re right. Some turnover is necessary, to replace marginal or poor employees with more productive ones and to bring in people with new ideas and expertise. However, high turnover costs are both avoidable and unnecessary.

This is where companies need to focus their efforts. The goal is to retain valued performers while replacing poor ones.

Most companies group both types of performers together when looking at turnover. By doing so, they’re missing the cost and significance of replacing the good performers.

Why Don’t More Companies See This as a Costly Problem?

There are a variety of reasons this is not seen as a problem, all of which cost companies in expertise and dollars. How many of these occur in your organization?

1. No process is in place to tabulate costs. One survey found that only 44% of its respondents had a process in place to estimate turnover costs; 43% of companies relied on intuition, and 13% had no process at all. (1)

2. Costs are not reported to top management. It’s a business axiom that one of the best ways to get top management’s attention is to show them what something costs. However, most top management never gets to see turnover cost estimates because most companies don’t measure them — or if they do, they don’t report them to top management.

3. It’s an inescapable cost of doing business. Except, it’s not! While some turnover is unavoidable and desirable, most turnover, especially among your better and top performers, is largely avoidable. Thinking that turnover is just a normal cost of doing business is the same quality of thinking which says that accidents are just an inescapable part of being in the construction business.

4. It’s an HR problem. While HR needs to be a key partner in reducing turnover cost, this is a strategic issue requiring top management’s attention and actions, in addition to HR’s efforts, to resolve it.

5. Costs are underestimated, and so they register less concern. If costs are underestimated because the organization doesn’t agree on or know what to measure, the statistics generated either register less concern than they should, or are disputed and held in disregard.

What Costs Need to be Fully Estimated?

A comprehensive program measures the following costs:

  • Exit costs
  • Recruiting
  • Interviewing
  • Hiring
  • Orientation
  • Training
  • Compensation & benefits while training
  • Lost productivity
  • Customer dissatisfaction
  • Reduced or lost business
  • Administrative costs
  • Lost expertise
  • Temporary workers

There needs to be advance agreement among Human Resources, Finance, and Operations as to which cost measures will be considered valid. Then, it has to be measured and reported.

6. Waiting until there’s a crisis. I was amazed when the executive director of one organization told me she knew that one of her capable managers was unhappy, but decided it wasn’t necessary to take action because she hadn’t received a letter of resignation yet.

Prevention is what works best. Begin to measure your turnover costs and, very importantly, look at who is leaving so you’ll know if you’re retaining your best people.

The time to do this is now. Waiting until there’s a crisis to take action limits your options and success rate. It also often triggers the common response of offering more money to get someone to stay, instead of fixing the original problem.

Why Do So Many Retention Efforts Fail?

These are among the most common reasons company retention efforts fail, even when they’re implemented by capable people.

1. No assessment, so ineffective solutions are chosen. In their hurry to correct a costly problem, companies often forgo conducting a relatively brief and cost-efficient assessment in order to correct the situation faster. However, implementing a solution without diagnosing who is leaving, and why they’re leaving often results in solutions that are incapable of solving the root causes behind turnover.

Diagnosing the reasons behind turnover always pays for itself. Don’t start without an assessment.

2. Implementing too many solutions instead of the most effective solutions. Managers often brainstorm a number of plausible solutions, then implement many of them — especially those favored by top management. However, what is most needed is to select and implement a limited number of solutions which will be most effective at solving the problem. Implementing too many solutions, even good ones, will diffuse your resources and weaken your efforts and success.

3. No way of measuring success to know what works. How do you know which retention solutions you’ve implemented are working effectively and which aren’t, where you need to make refinements, and what strategies you need to drop if you don’t have a way of measuring your results?

How Do We Do a Better Job of Retaining Employees — Especially Our Most Valuable Ones?

First, rank your employees in three categories: best performers, middle performers, and lowest performers. Your objective is to retain your top performers; develop and retain your middle performers, turning them into near-top or top performers if possible; and potentially replace your lowest performers.

Second, agree internally on the measures you’ll use to calculate turnover costs. Be certain you’re taking all costs into consideration. Most organizations greatly underestimate them.

Third, report turnover costs to top management on a monthly, quarterly, and annual basis.

When turnover costs are unacceptably high, or higher than your industry’s average, do an assessment. Find out who is leaving and why they’re leaving. Exit interviews can help you find out why.

You need to know if it is your top, middle, or lowest performers who are leaving so you can gauge the expertise level leaving your organization. You’re obviously going to employ (and pay for) different strategies if your top performers are voluntarily leaving, compared to middle or lowest level performers.

Develop solutions capable of solving the problems you uncover, and only implement a limited number of them.

Measure the success of your retention efforts, and refine them.

Two Very Key Strategies to Save a Large Amount of Time and Money.

Very key strategy # 1: Don’t wait until turnover costs become unacceptably high before you implement an ongoing retention program. Put a retention program in place before you have crisis situation. You not only must find out why employees leave your organization, you must also find out why others stay.

Very key strategy # 2: Survey your top performers now in order to find out what keeps them there, why they might leave, what type of competitive offers they may find attractive, and what they need to be happier and more productive in their jobs. You’ll do a better job of keeping them (along with their expertise and value). You’ll also find out highly beneficial information about improvements your organization needs.

This means driving improvements in your organization by what your best people tell you, instead of focusing on taking care of the ever-present complainers in every organization.

Just How Valuable are Retention Efforts? One source estimated that a 10% reduction in employee turnover was worth more money than a 10% increase in productivity, or a 10% increase in sales!

Retain and gain.