A scientifically designed retention program predicts and prevents turnover, saving you millions. But unfortunately, most existing retention programs are a joke!
Across industries, most companies consistently fail to reach even their minimal retention goals. Of course, reducing turnover is currently much harder because we are all suffering from record employee turnover, an abundance of open jobs, and extreme employee frustration after 2 years of COVID. As a result, your employees view this year-end time frame as the perfect time to consider a job search. In fact, an astonishing “95% of workers said they were considering changing jobs” (Monster survey). Unfortunately, your company’s current retention toolkit that was designed for the 20th century simply won’t work in this more complex and competitive 21st century. So, your best strategic move is to hire a fully accountable data-driven retention expert immediately. And require them to follow to the letter these 10 irrefutable laws that guide scientific retention.
- Your retention program must be data-driven – it is an absolute requirement that all retention-related decision-making must be data-driven. The current intuitive approach used by managers and those in HR has proven to be extremely ineffective in improving critical employee retention. I estimate that up to 90% of all retention efforts fail to meet their goals. Primarily, they operate under weak or non-existent laws or principles. So if you must excel at retention, it must become a habit to make all-important retention decisions based on data and not speculation. In addition, you should also measure every important aspect of the retention/turnover program results and business impacts with performance metrics. With the use of data, your managers would realize that a retention action produces benefits in three ways. It obviously increases retention, but these actions also have a positive impact on both productivity and recruiting. Data would also tell you that measuring and rewarding managers for both productivity and key employee retention has an extremely high ROI.
- Prioritize employees based on their value and flight risk – the biggest retention mistake by far that company’s make is across the board equal treatment. That includes trying equally hard to keep every employee. Of course, treating everyone equally is a mistake because not all employees and jobs have the same business impact. Few organizations have the resources even to attempt to retain every employee who might want to quit. Finally, realize that all employees do not have the same risk of leaving (some are a zero-risk). So move beyond equal treatment by first identifying and then targeting your retention efforts only on your most impactful employees who, at the same time, also have among the highest risks of leaving (i.e., they are a flight risk). Remember, if you only lose one person on your team of eight, you only have a 10% turnover rate. However, if that person is named LeBron… your NBA team is in big $ trouble!
|A best practice in prioritizing – Ask yourself as a manager… “which of my people, if they told me they were leaving in two months for a similar job at a peer organization, would I fight hard to keep?” The process also includes a component where the employee prompts the keeper conversation with their manager, who usually waits too long. (This “keeper test” was developed by Netflix).
- With the right assessment tool, individual employee turnover is extremely predictable – because employees that are at a flight risk “give off signals.” Some companies like IBM and Google have developed predictive algorithms for retention. Including IBM’s AI-assisted “predictive attrition program,” which has a 95% accuracy rate for predicting who will quit within 6 months.
- Most turnover causes can be prevented or minimized – among employees that are most likely to leave. One study found that 77 % of turnover causes were preventable by the employer without major effort. A disgruntled employee reduces productivity significantly long before they quit. Target the flight risks, at the very least, to identify the factors that are currently lowering their productivity.
- You need a process for accurately identifying the causes of why an individual quit – The traditional “exit interview process,” which purpose is to identify why an individual is leaving, is almost universally recognized as inaccurate. Instead, what produces superior results is a delayed post-exit call or survey for the top performers you lost. After they no longer need a job reference, they will almost always reveal at least a 40% more accurate list of their real turnover causes.
- You also need a process for determining the “sticky factors” that keep them here – the most powerful retention tool is a “Stay Interview,” which can reveal “the sticky factors” that bind this employee to the company. This 60-minute yearly one-on-one interview with their manager begins by thanking them and showing deep appreciation for the employee’s contribution. It then explores the manager’s actions to strengthen the bond and add any new sticky factors.
- Realize that turnover will likely also require a “triggering event” – you need to know that “not having a great job” or “even having a crummy one” isn’t normally enough by itself to make most employees leave. Most disgruntled professionals also experience an additional “triggering event” (or career wound) to accelerate their departure. Like, they were suddenly contacted by a recruiter at a top firm or seeing a rapid increase in the number of open jobs. Or being turned down for a project idea, a raise, or having a great boss/colleague leave.
- Realize that turnover causes shift over time – because an employee’s needs change-over-time (i.e., a bigger family, new college tuition, financial ups and downs, health issues, and approaching retirement). Be aware that the retention actions effective in keeping an employee at your firm last year may be dramatically new and different needs at another time.
- Money may keep them for a while, but – the # 1 employee motivator is usually making a difference and working for a purpose. “Employees with highly meaningful jobs were 69% less likely to plan on quitting their jobs within the next 6 months” (Source: Harvard Business School). Also, a Gallup study found that only 22% cite money as the primary turnover driver. So giving your flight risk employees a “stay on bonus” may keep them as your employee for a short while. But unfortunately, they will still be disgruntled and a complaining employee that will be continually disrupting your team because this employee is still working in a job that’s not right for them. So fix their job first, before giving them any money. And don’t give them any money that’s not tied to on-the-job performance results. Finally, realize that at least 75% of the causes for costly voluntary turnover come down to things that managers can influence (Gallup research).
- A personalized retention action plan is essential – and last but certainly not least. Because what motivates and frustrates each employee is different (even among twins and those in the same generation). It’s a huge mistake to stereotype or generalize about retention causes and solutions to all in a group. Instead, you need a personalized retention plan for each targeted individual. That is sculpted to that employee’s current drivers of turnover. Also, using a plan created especially for them helps to make the employee feel more wanted. Also, try to avoid across-the-board reward or benefit actions (like offering childcare payments) that may add no value to over 50% of your employees.
Typical components of a personalized retention plan
- ID the reasons why they quit their last 2 jobs (and avoid them)
- ID the elements of their dream job (so that you can potentially add them in)
- List and target their top excitement, challenge, & frustration factors (to motivate them)
- ID and list desirable new projects and new work/skill areas (to give them opportunities)
- Create an individualized learning plan (with their own learning budget)
- ID where they would like to be in two years (so that you can help them get there)
- ID and list how they prefer to be managed (so that you can tweak your management style to fit their needs better)
- ID and list of who they might want to work with (so that relationships can be built)
- Set a yearly date for “stay interviews” (to reinforce the bonds that keep them here)
- Set bi-monthly no cancel two-way communications meeting dates
|If you can only do one thing © – read up on stay interviews (you can access my e-book on the topic here). And begin holding these interviews with your best at-risk employees. Who if they left, you would label it as “regrettable turnover.”
Unfortunately, only a few firms have discarded their decades-old retention program designs. And the rest have not yet shifted to a much more scientific and business-like approach (IBM and Google are examples to follow). However, when you finally realize (hopefully soon) that your traditional across-the-board equal treatment approach will never be fully effective, most will begin shifting to a micro-personalized approach that is better suited during our record-high turnover. All that you need to do is modernize your internal movement processes to maximize new opportunities. And then follow the above 10 rules to turn your retention results around in a little as two months!
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