1. Avoiding Six Dangerous Retention Mistakes Most Companies Make
Steve Puckett, SPHR
Director, Corporate Human Resources

2. Introduction Employers facing “Talent Paradox”
Relatively high unemployment (peaked in 2010)
Increasing shortages in areas where attracting and retaining employees is most critical
Loss of high-potential talent
Spike in voluntary turnover after a downturn
Employees advancing careers
Poor morale due to cost cutting measures
Gen Y’s comparing notes

3. The Cost of Turnover Can be significant and can result in…
Loss of productivity
Lost institutional knowledge and relationships
Added burdens on employees who must take on more work

4. The Cost of Turnover Direct Placement Costs Indirect Placement Costs
Accrued paid time off and replacement costs
50-60% of annual salary
Indirect Placement Costs
Disruptions to team-based work
Lost clients
Decreases in overall service or product quality
90-200% of annual salary
12-40% of Pre-tax Income
No longer a problem for just “large” employers

5. Voluntary Turnover
During turbulent times best employees are the ones who leave
A’s first
B’s second
Left with C’s
Poor performers hold on to paychecks until unemployment eligible

6. 4 Paths to Turnover Employee is dissatisfied with job
Employee has better alternatives
Employee is following a plan
Employee is leaving without a plan

7. Additional Factors Organizational commitment and job satisfaction
Quality of the employee-supervisor relationship
Role clarity
Job design
Workgroup cohesion

8. Focus Shifted from Talent Retention to Cost Reduction
2/08 Corporate leaders priority
Retention of top talent
2/09 Cost reduction/survival
Top talent retention fell to #8
Once again, retention on our radar screens
Retention of top talent is even more critical as economic conditions improve…

9. The Six Most Dangerous Retention Mistakes
Focusing on Retention Programs vs. Retention Processes
Supporting a Fear-Based Workplace
Confusing Employee Engagement with Employee Destruction
Not Supporting a Multi-Generational Friendly Workplace
Not Holding Supervisors Accountable for Retention
Not Narrowing the Front Door to Close the Back Door

10. Critical Retention Mistake #1
Focusing on Retention Programs vs. Retention Processes

11. Drive Retention from the Top, Because Executives Have Greatest Impact
Include turnover cost in annual report
Include in strategic plans and report monthly
Rewards for meeting goals
Consequences for missing goals
HR must encourage managers to lead with
influence rather than authority
Leave authority to senior management
- CFO’s must be on board

12. Think!
Sales
Service
Quality
Safety
Retention
= $ Profits $

13. 10 Strategies of Rethinking Retention - Richard Finnegan
People quit jobs because they can
Companies make it too easy to quit
No effort to hold on to our best
Employees stay for things they get uniquely from you
Build a retention brand different from others
Supervisors build unique relationships that drive retention/turnover
Employees stay for bosses
Employees leave because of bosses
Hold supervisors accountable for achieving retention goals
Add to other measurable objectives

14. 10 Strategies of Rethinking Retention (con’t.) - Richard Finnegan
5. Develop supervisors to build trust
Relationships Trust Information Success
6. Narrow the front door to close the back door
Focus as much on hiring process as retention
7. Script employees’ first 90 days
Predict how long employees will stay
The most critical time during employment
8. Challenge policies to drive retention (support/hinder)
9. Calculate turnover cost to galvanize retention
10. Drive retention from the top
Executive buy-in is a must

15. Design Job for Engagement
Capture the minds and hearts of employees
Avoid the Sunday blues
Challenging assignments
The absent Millennial
Goals with feedback
Provide for personal growth and development
Full partnership career development process
Career interest forms

16. Hidden Obstacles to Retention
Young workers with fewer bills
Growing number of entrepreneurs

17. Calculate Turnover Cost to Galvanize Retention
Develop formula to calculate turnover cost
Those who have CFO endorsement have greater opportunity for upper management support
Call center identified turnover cost at $12K per employee
Destroyed a $12,000 obsolete piece of computer equipment to drive point
Drove home actual cost
Delivery company put cost of driver turnover at $60K, same value as company truck
Showed video of totaled truck from accident to emphasize cost

18. Retention is an on-going process driven by upper management
Best practice
Retention is an on-going process driven by upper management
NOT
a Band-aid program

19. Critical Retention Mistake #2
Supporting a Fear-Based Workplace

20. Managing Through Fear vs. Trust*
The boss is always right.
Who knows who’s right? Let’s brainstorm ideas.
The most important thing I do is make sure we hit our goals.
The most important this I do is remove barriers for my team (so they can hit goals).
If someone goofs up, I write them up.
If something goes wrong, we talk about it to get the learning.
* Managing Through Trust vs. Fear, a Human Workplace E-Workbook by Liz Ryan

21. Managing Through Fear vs. Trust*
I need to let people know who’s in charge.
I need to make sure people know I have their back.
Incentives & penalties make employees perform.
Carrots & sticks are for donkeys. Treat people like adults & watch them succeed!
We need lots of policies & controls because people can’t be trusted.
Why would I work among people I don’t trust? We solve problems in context.
* Managing Through Trust vs. Fear, a Human Workplace E-Workbook by Liz Ryan

22. During economic downturns most companies focus on keeping employees with good attendance even though their work is substandard.
This seems to be a better alternative to firing the employee and waiting days, weeks or months to replace.
Some bosses are encouraging young workers to buy a new car, boat or other expensive item knowing they would have to keep their job to make the payments.

23. Beware “Jerk Bosses”
Since 2003, 24 states have introduced legislation on “workplace bullying”, however no laws have been enacted*
9 states with 12 bills active as of 3/25/13*
37% of U.S. workers report they were a bully victim – 12% have witnessed workplace bullying*
Verbal attacks from supervisors are generating six figure settlements
Four times more complaints than all forms of harassment combined
*According to the Workplace Bullying Institute

24. Transitioning From a Fear-Based Workplace 10 Early Signs of a Fear-Based Workplace
Appearances are everything
Staying longer than boss
Worrying less about quality of work than how they’re perceived
Fear-based discussions rule over work discussions
Who’s stock is falling/rising
Preoccupied with who is invited to meeting vs. meeting agenda
Predicting employee failures

25. Transitioning From a Fear-Based Workplace (con’t
Transitioning From a Fear-Based Workplace (con’t.) 10 Early Signs of a Fear-Based Workplace
3. Distrust rules
Off the record conversations
Coded messages
Back alley meetings
Backstabbers thrive…”Would this be your knife in my back?”
Your failure is my success
4. Numbers rule
Total obsession w/ metrics
Employee is sum of numeric goals
Record profits and now cutting back on perks…coffee, etc.
Stock price vs. People price
5. Too many workplace policies
Overdependence of rules vs. common sense
Lengthy, tedious policies
Ordering supplies, scheduling a business trip or vacation day

26. Transitioning From a Fear-Based Workplace (con’t
Transitioning From a Fear-Based Workplace (con’t.) 10 Early Signs of a Fear-Based Workplace
6. Management discourages lateral conversations
Fear of employees comparing notes
No one has authority to authorize meetings
Loss of sharing ideas…No Brainstorming Allowed!
7. Information is restricted
Information leads to success
Lack of transparency
Knowledge = Power
Destroys trust

27. Transitioning From a Fear-Based Workplace (con’t
Transitioning From a Fear-Based Workplace (con’t.) 10 Early Signs of a Fear-Based Workplace
8. Brown-nosers rule
Kissing up at all levels
“Who said it” rules over “what was said”
Fear-based leaders surround themselves with “yes men” and “yes women”
Right answer vs. truth
9. The boss is so out of touch it’s almost comical…The Office
Focuses on keeping one’s head down, taking no risks and sucking up to anyone in management

28. Transitioning From a Fear-Based Workplace (con’t
Transitioning From a Fear-Based Workplace (con’t.) 10 Early Signs of a Fear-Based Workplace
10. Management leads by fear
Most decisions made in secret
Information is given in drips
Company culture “Be glad you have a job, stop whining and get back to work”
Leadership is based on keeping employees in the dark
Major gap between management and employees

29. Treating Employees Fairly Requires:
Distributing rewards
Respect through interpersonal relationships
Involving employees in difficult decision-making
Offering opportunities to question decisions

30. Critical Retention Mistake #3
Confusing Employee Engagement with Employee Destruction

31. Employee Engagement
Employees who are so committed to their jobs that they want to give…
Discretionary Effort

32. 3 Buckets of Employee Engagement. - N. Davis, Editor, HR Magazine. - G
3 Buckets of Employee Engagement N. Davis, Editor, HR Magazine G. Sherrill, VP HR, Wal-Mart
17% actively disengaged
Unhappy
Undermining co-workers
54% not engaged
Sleepwalking thru workday
Putting in time w/o passion
Fence sitters
29% work with passion
“Do you want the 17% hanging around your 29%?
Disengagement costs U.S. economy $300B in lost productivity annually.

33. 6 Essentials for World Class Employee Engagement
People
Senior leaders who excel at
Listening
Knowing and cherishing relationship with employees
Outstanding communication
Work
Providing resources for employees to over-achieve
Full Service Recognition
Competitive pay
Recognition for each generation
One size does not fit all
Opportunities
Succession planning
Training
Career development

34. 6 Essentials for World Class Employee Engagement (con’t.)
5. Quality of Life Issues
Targeted benefits
Flex schedules
6. Company Culture
Live your practices
Diversity
Company reputation
Performance management
*Every employee must understand
How their job impacts organization’s success

35. Employees First and Customers Second - Vineet Nayar HCL Technologies
Key is holding management equally accountable to employees
Live in a world of democratic form of government
BUT
Autocratic nature of business

36. Customer Service Focus Must Include Internal Customers
Employee first, Customers second
Satisfied employees display better customer service

37. How Not To Engage Your Employees
Company President
Not listening to employees
Hires a $100K consultant
Consultant listens to employees
Makes same recommendations
Not embracing meetings
50% informing
50% listening

38. Employees Stay Because of Things They Get Uniquely From You
Write down 2-3 employees in your company who are critical to your success
Write answers to these questions for each employee
Could this employee leave you for a better job?
Has the employee ever considered looking elsewhere?
Now write down reasons you feel they have stayed
Tangible…shift, schedules
Intangible…new skills, good supervisor

39. Critical Retention Mistake #4
Not Supporting a Multi-Generational Friendly Workforce

40. Traditionalists (Veterans)
Born before 1945
Long term careers
Loyal
Tech-challenged
Like structure
Respect authority
Law & order
Hard work…max effort
Duty before pleasure
Honor

41. Baby Boomers Born 1945-1964 Motivated by position, perks and prestige
Competitive
Goal-oriented; equate work
& position with self-worth
Independent
Prefer to meet face-to-face
Believe you have to “pay your dues”
to get ahead in the workplace

42. Generation X Born 1965-1980 Technologically savvy Like informality
Learn quickly
Work/life balance
Embrace diversity
Like to work independently
Like casual work environment
Short attention spans

43. Generation Y (Millennials)
Born after 1980
Communicate through
texting, social networking,
Family-centric
Embrace diversity
Expect to advance quickly
Attention craving
Participation vs.
accomplishments
Good at multitasking

44. Major Increase in Employment Replacing Exiting Boomers1
Personal Financial Advisors 2
Dental Hygienists 3
Civil Engineers 4
Market Research Analysts 5
Computer Systems Analysts 6
Physicians and Surgeons 7
Computer Appl. Software Engrs. 8
Management Analysts 9
Accountants and Auditors 10
Registered Nurses
Top Job Opportunities for Next 10 Years*
The best paying, fastest growing jobs will grow up around one of the richest and fastest growing segments of the population: the retiring Baby Boomers.
*24/7 Wall St.

45. Generational Expectations of Succession Planning
Traditionalists
My dedication and service have been rewarded.
Baby Boomer
It’s about time! I’ve paid my dues.
Gen X
What do you mean I can’t be promoted yet? I have delivered the results for which you asked.
Gen Y
What’s my next career move? I’ve been here for 12 months and haven’t been promoted yet.

46. How Generations View Change
Traditionalists
Boomers
Gen Xers
Gen Ys
Something’s Wrong
Caution
Potential Opportunity
Improvement

47. Using Social Media to Engage Workers
Gen Y will make up 36% of U.S. workforce by 2014; 46% by 2020
Opportunities for career progression
Opportunities for personal development
Collaborative work environment
Flatter them; motivate them
Employers must embrace social media to enhance learning opportunities

48. Washington Post Survey 3400 Surveyed Employee Retention Desires1
Telecommuting
548
16% 2
Educational Assistance
396
11.6% 3
Flextime
379
11.1% 4
Benefits
375
11% 5
Bonuses
370
10.8% 6
Fitness
357
10.5% 7
Money
334
9.8% 8
Other Perks
302
8.9% 9
Time Off
227
6.7%

49. Critical Retention Mistake #5
Not Holding Supervisors Accountable for Retention

50. Hold Supervisors Accountable for Achieving Retention Goals
All levels of supervisors should have retention goals
Should be weighted same as productivity, safety, other goals
Talent Keepers recent survey
Only 14% supervisors have retention goals

51. Holding Supervisors Accountable for Achieving Retention Goals
Top methods for setting retention goals
Transitioning from consoling counseling to accountability counseling
Consoling conversation
Sad we lost Susan
Really going to miss her
It may take weeks to replace her
I am sure you will do a great job
Accountability conversation
How did we lose Susan?
She earned highest rating
What could/should we have done to save her?
What changes will you make to prevent from this happening again?

52. In reality, many supervisors would say
“Susan was not as good as we thought”

53. In Order to “Own Your Team”
Supervisors must be part of the hiring process
You hire it
You coach it
You are responsible for outcome and results
Adjust retention goals for economic downturns
Compare to the best, not the rest

54. Supervisors Build Unique Relationships That Drive Retention
#1 factor in retaining employees is “immediate supervision”
Best working conditions, world class benefits, employer of choice branding
Will be over-shadowed by ineffective supervisor
Average benefits and pay may be overlooked for great supervisor relationships
Employees join companies for “things” but stay for people

55. Supervisors Build Unique Relationships That Drive Retention (con’t.)
Yahoo Hot Jobs Survey
70+% of employees surveyed were interested in getting a new job due to dislike of boss
Florida State University study on supervisors
Failed to keep promises (39%)
Failed to give credit when due (37%)
Gave “silent treatment” to employees (31%)
Made negative comments about employees to other employees (27%)

56. What Employees Seek from Leaders
Trustworthiness – 79%
Cares about others’ well being – 67%
Encourages development of talent in the organization – 56%
Highly visible to employees – 42%
Manages financial performance successfully – 42%

57. Treating Employees Fairly Requires
Fair distribution of rewards
Heightened awareness of interpersonal relationships
Involving employees in decision making
Offering opportunities to question decisions

58. Develop Supervisors to Build Trust with Teams
According to 80% of employee surveys, TRUST is the most important factor employees seek from supervision…
Relationships lead to
Trust leads to
Information leads to
Success

59. Behaviors of a Non-Trusted Supervisor
Kiss up vs. kiss down
Rumor central
Caught up in employee rumors
Employees clam up
Employees polite but not engaging
Conversations very short
Complaints bubble up
Most complaints hidden
Playing favorites
Bullying
Retaliatory behavior

60. Behaviors of a Non-Trusted Supervisor (con’t.)
Fewer individual meetings
Group and one-on-one
Meetings cut short
Tight agenda
Meetings postponed/cancelled
Employee survey scores nose dive
Production suffers
Productivity declines
Blame game
No accountability
Increase in turnover

61. Turnover Retention Traditional Thinking Progressive Thinking
Most important supervisory skills for retention: communication, feedback, coaching
Supervisors who cannot build trust have little credibility regardless of other skills
To reach their positions, supervisors/managers have already learned their trust skills
Some supervisors are trustworthy and some are not
Trust begins with relationships
Only one chance for making a good first impression

62. Employee Retention is a Significant Factor to be Considered for Managerial Promotions
Wegman Food Stores, Rochester, NY (#10 Fortune’s 100 Best Employers)
Requires front line management accountability for retention
Traditional Thinking
Progressive Thinking
Supervisors cannot control all reasons employees leave
Like sales – supervisors strongly influence results
Pay & other policies are outside supervisor’s control
Supervisor can impact pay decisions
Supervisor won’t fire poor performers to pad retention numbers
Manage supervisors towards right decisions
Supervisors are a small part of a big problem
Supervisor takes ownership of team

63. A Great Retention Story
Who was your best boss?
Why?
Vice President of HR
Good communicator
Held me accountable
Not afraid to offer praise and/or criticism
Became a good listener
Relationship builder
Trustworthy…did what he said he would do
Good sense of humor
Supervisors build relationships based on trust…

64. Critical Retention Mistake #6
Not Narrowing the Front Door to Close the Back Door

65. Narrow the Front Door to Close the Back Door
Hiring the wrong employees puts you on a direct path to turnover
Tips for hiring employees who stay
Don’t forget the basics
Blocking
Tackling
Compare to the best

66. Most Turnover Occurs Within 90 Days
Set retention goals
90 days
Annual
Adding a few months to Average Length of Service can increase ROI tremendously
Doubling length of service cuts turnover in half
Do not classify the employee who quit as a slacker

67. Increasing Retention Involves Improving Employer Branding
Texas Instruments
“Think Big, Think Bold, Think Texas Instruments”
General Mills
“A Great Place to Start; A Great Place to Stay”
eBay
“You can find a lot of cool things on eBay but nothing cooler than our jobs”
Children’s Healthcare of Atlanta
Video of how jobs impact children's health

68. Increasing Retention Involves Improving Employer Branding (con’t.)
Delta
“Delta employees don’t just travel the world, they work to improve it”
Publix Supermarkets
“Where shopping is a pleasure”
“If you think shopping at Publix is a pleasure, try working here”
Barnes & Noble
“If you love books why not work at a place surrounded by books”
Hard Rock
“For those about to Rock, we recruit you”
“Kick a– service, served fresh daily”
“Rock stars wanted, come perform for a packed house”

69. Script the First 90 Days
At one time Wal-Mart had lost 65% of its employees in the first 90 days
University of Florida study states most employees form opinions in first 30 days which impact their decision to leave within 90 days
#1 on their list is disrespect from supervisors

70. Stay Interviews Employers of choice are focusing on stay interviews
Equal importance as exit interviews
Educating supervisors why employees stay, as well as why they leave
“Someone cares that I stay”
Concerns are addressed
Supervisors must be trained how to conduct stay interviews
Not complaint sessions
Clear focus on purpose of meeting
Avoid “implied contract”

71. Stay Interviews (cont.)
Broaden employee’s awareness
What do you look forward to as you come to work each day?
Which parts of your job are most enjoyable?
Which parts of your job are the most challenging?
What are you learning here and what else do you want to learn?
How do you like the people you work with?

72. Narrow the Front Door to Close the Back Door
According to Bureau of Labor Statistics
The length of time an employee stays with a job increases with their age when they began the job

73. Employee Referral Programs
Texas Instruments
Fidelity Investments
McDonnell Douglas
Reduced hiring cost 75-90%

74. Implement Employee Referral Program
Include taxes and gross up awards
$ = $73.87
Match rewards to employee needs
Cash
Trips
Present awards publicly
One big prize annually

75. Build Programs to Attract Older Workers
2012 – 20% of workforce age 55+
60%-75% plan on working past retirement age due to recession
Beat back misconceptions
National Council on Aging Reports
97% older workers reliable
AARP National Employer Team

76. Build a Realistic Job Preview Program
More than just a tour
Working conditions
Pay
Benefits
Succession planning
Co-workers
Use subject matter experts to build job description
Schedule applicant to meet with high performance employees

77. Probe for past resignation reasons
What drove you to look
Go for detail
Google professional candidates
35% of executive candidates have been turned down due to internet information
Look for high level accomplishments/memberships in professional organizations

78. Narrow the Front Door to Close the Back Door
Traditional Thinking
Progressive Thinking
We source all employees who meet our qualifications
We take extra effort to source older applicants because they stay longer
We pay good money for employee referrals
We market our employee referral program to meet employees needs
We give applicants a tour
We have a formal job preview program

79. Encourage Employee Embeddedness (Is that a word?)
Provide mentors
Design work in teams
Foster team cohesiveness
Encourage employee referrals
Provide clear socialization and communication about the company’s values and culture
Provide financial incentives based on tenure
Provide unique incentives that may not be common elsewhere

80. Express Employment Professionals Wishes You Great Retention Success