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Best Practices of Retention

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GOOD MANAGEMENT ADOPTIONS

GOOD MANAGEMENT ADOPTIONS

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  • Ask for a response by a show of hands. Of those who know, how many will lose 20%? 30%? 40?
  • Pause and ask people to hazard a guess.
  • Check for understanding of A, B and C players.
  • What to do???
  • These are some of the different faces of frustration…
  • You may not necessarily want to keep every employee in the company. How do you choose who – and what – to focus on?
  • Here’s the “what”.
  • Survey conducted by Career Systems International and published in Training & Development magazine, April 2005. 7,600 respondents to the survey Interesting to note that the top 3 replies are the same today as they were at the peak of the tight labor market in 2000
  • 90% of respondent listed at least one of the first 3 items among the top 3 or 4 reasons they stayed.
  • Hewitt and other organizations have conducted numerous studies over the last ten years to assess this relationship between engagement and business results and have found the following: There is a significant link between employee engagement, customer loyalty, and profitability Engaged employees are twice as likely to be advocates of the company,its products, and services Engaged employees are more likely to stay with the company .
  • We hear a lot these days about engagement. There is a proven correlation between engagement and retention. One way of measuring engagement is through a survey developed and administered by Hewitt Associates for Report on Business magazine. At a high level here is how engagement is defined. Simply stated - if you are engaged you Speak positively… Have an intense desire to stay… Exert extra effort for our success…
  • If a high percentage of employees are positive on these six statements, this will feel like a great place to work.
  • What keeps employees happy – and keeps them with an organization – is influenced by all interactions they have within the organization. Retention, therefore, is part of the larger organizational system.
  • Now we’re going to move into the “who”. How do you know who to focus on? Who are the people who most influence organizational success? Who are the people who have the skills – or POTENTIAL TO DEVELOP THE SKILLS – that you’ll need next year, or 2 or 3 years from now? A succession planning or succession management process can help you to answer these questions.
  • Ask for a show of hands.
  • Succession planning helps to identify top talent within your organization. With this approach, forms were often completed, put in a binder and placed on a shelf.
  • Challenge is not the model – it’s what goes on in the organization during implementation. Bumps up against other elements – culture, performance, having conversations, and, change ORG. TALENT REVIEW – assess both current performance and leadership potential. Key here is ability to have meaningful conversations NOTE: some organizations start with replacement SP and move to SM (integration of LD) later…but there still needs to be assessment on current performance and future Leadership. Some try pilots in one department the first year, or key levels only. Need to determine
  • J&J example
  • Ensure replacements for these positions/people
  • So, how do you take the information gathered through succession management and translate it to retention?
  • You can file it away…
  • Talk to those people you’ve identified as having potential. Are they happy? What do they need? Think about the lists of employee retention items and ask questions about those items. Make sure they know how valued they are! Data from exit interviews consistently reveals that employees who leave organizations did not know how valued they were. Often, they had no idea they were viewed as being in succession for a more responsible role. This is where investing in developing leaders at all levels in the organization can really help. Managers need help having these types of conversations. They need to develop coaching and mentoring skills to ensure successful development of their team.
  • Research reported in the book, The Extraordinary Leader, by Zenger and Folkman (2002). Conclusive evidence that good leaders produce good results for their organizations. In fact, good leaders are more effective than bad leaders in almost every dimension, including improving productivity, employee retention, enhancing customer service, and creating high levels of employee commitment. These next few slides show the impact of the best and worst leaders on achieving bottom-line results. On the “X” axis we have leadership effectiveness shown in percentiles.
  • Specific measures can include: Decrease turnover of high potentials Increase movement of high potentials to other areas of company Decrease spending on ? Training Leadership development ROI Decrease recruitment costs Develop lower performers to higher level – or – terminate low performers by…. Measure productivity Change reward systems to attract and retain high performers - Broad scope measures By ? Year increase high potential leaders by __ Over ? Years, increase high potential retention by __ Leadership skills in management group will increase… Decrease turnover Known as best company – attract high potentials
  • No promises, honest, frequent

Best Practices of Retention Best Practices of Retention Presentation Transcript

  • Best Practices of Succession Management and Employee Retention
  • Questions To Consider...
    • What % of your employees will retire in the next 5 years?
  • Questions To Consider...
    • What % of your employees are looking for other employment?
  • So…what are you planning to do about it?
  • Session Objectives
    • Briefly explore current trends
    • Understand succession management versus succession planning – and the alignment to employee retention
    • Understand best practice processes and examine a few of the tools and methodologies being used
    • Discuss the roadblocks and benefits of implementation
    • Explore how to get started
  • Why the Interest in Succession Planning and Employee Retention?
    • Numbers of people retiring and numbers of people entering workforce
    • Loss of organizational memory
    • Skills shortages are acute
    • Retention of talent
    • Future of work – different needs for generations of employees
    • What else?
  • Trends and Forecasts*
    • By 2008, more people will be leaving the workforce than entering
    • 44% of workers aged 45-59 say they will retire before 65
    • 10% of workers aged 50-59 who leave full time jobs, move into part time within 2 years
    • 1/3 of workers aged 50-59 who leave full time jobs, move back into full time
    • * Statistics Canada research
  • Trends and Forecasts*
    • 72% of companies predict they’ll have an increasing number of leadership vacancies over the next 3-5 years
    • 76% of those same companies are “less than confident” in their abilities to adequately staff these positions
    • * Corporate Leadership Council research
    • (reported by The Gallup Organization)
  • Current Economic Issues
    • Workplaces will lose high performers as economy strengthens
    • Currently, workplaces that understand future skills needed are having difficulty recruiting
      • Recruitment strategies are strengthening
    • Retention of talent is increasingly becoming a “hot” issue
  • The Internal Challenge
    • Who is going to do the work?
    • What knowledge are we about to lose?
    • What skills will we lose?
    • What traditions will change? Is this good?
  • The External Challenge
    • The market place for good talent will be competitive
    • The good people will be able to pick and choose their working environment
    • How do we create an organization in where people want to stick around?
  • Who is responsible to ensure you have the people to get the job done?
  • Shift from Industrial Age to Information Age
    • The Old Way
    • HR is responsible for people management
    • We provide good pay and benefits
    • Recruiting is like purchasing
    • Development happens in training programs
    • We treat everyone the same
    • Source: “War for Talent”
  • Shift from Industrial Age to Information Age
    • The New Way
    • All managers are accountable for strengthening their talent pools
    • We shape our workplace, jobs, and strategy to appeal to talented people
    • Recruiting is like marketing
    • We fuel development through stretch jobs, mentoring and coaching
    • We affirm our people, but invest differently in A, B, and C players
    • Source: “War for Talent”
  • Questions To Reflect On
    • If the dam bursts today, what is the impact to your organization?
    • How would you replace the people, knowledge, lost productivity?
  • One Approach…
  •  
  • It’s not just about having the bodies. It’s about the right bodies doing the right things. Creating an organization of which people want to be a part.
  • Retention: What keeps employees happy?
  • Current Retention Trends
    • Towers Perrin (2002) Canadian study
    • 59% are open to changing jobs
      • 11% actively looking
      • 45% passively looking
      • “ To retain me, you’ve got to help me advance, keep the good people, and provide competitive pay….”
  • Top 15 Retention Drivers Source: Career Systems International, 2005 15. 14. 13. 12. 11. 10. 9. 8. 7. 6. 5. 4. 3. 2. 1. 7.7 Diverse, changing work assignments 10.3 Location 10.5 Job security & stability 12.6 Autonomy, creativity and a sense of control 13.6 Flexibility 16.0 Great work environment / culture 16.5 Pride in organization, its mission & product 17.0 Meaningful work, making a difference & contribution 22.0 Benefits 23.0 Being recognized, valued & respected 25.1 Supportive management/great boss 31.8 Fair pay 41.8 Working with great people & relationships 42.6 Career Growth, Learning & Development 48.4 Exciting work & challenge % Retention Items
  • Other Research Source: Love ‘Em or Lose ‘Em, 1999 15. 14. 13. 12. 11. 10. 9. 8. 7. 6. 5. 4. 3. 2. 1. Location Great work environment Pride in organization, its mission and quality of product Inspiring leadership Fair pay and benefits Flexibility – for example, in work hours and dress code Autonomy, sense of control over work Fun on the job Recognition for work well done Good boss Being part of a team Great people Meaningful work, making a difference and a contribution Exciting work and challenge Career growth, learning and development Retention Items
  • Understanding the Data
    • Employees are looking for job growth and learning opportunities, or they are looking for a new job
    • Are you offering the items on these lists to your employees?
    • As managers in your organization, how many of these items do you believe are within your control?
  • Understanding the Data – Link to Recruitment
    • Attraction is part of retention, so this information also informs recruitment practices
    • Employees will be attracted to organizations that have well-developed mentoring programs, career development initiatives, and job enrichment opportunities
  • Link to Employee Engagement
    • Research shows positive correlation of engagement scores with:
      • Employee attraction and retention
    • Engagement scores also have a positive correlation with:
      • Customer satisfaction
      • Revenue growth and shareholder returns
      • Employee productivity
      • Employee attendance
  • What is Engagement? Say Stay Strive Speak positively about the organization to co-workers, potential employees and customers. Have an intense desire to be a member of the organization. Exert extra effort & are dedicated to doing the very best job possible to contribute to the organization’s business success. Engagement
  • Calculating Employee Engagement
      • Scores from the following six questions are used to calculate the engagement score:
        • I would, without hesitation, highly recommend this organization to a friend seeking employment.
        • Given the opportunity, I tell others great things about working here.
        • It would take a lot to get me to leave this organization.
        • I hardly ever think about leaving this organization to work somewhere else.
        • This organization inspires me to do my best work every day.
        • This organization motivates me to do more than is normally required to complete my work.
    Say Stay Strive
  •  
  • Succession Planning: Helping you understand who to focus on
  • Quick Poll…
    • Who has:
    • No succession planning in place?
    • Succession planning in place, but not sure it is, or will be, successful?
    • A successful succession planning initiative?
  • The Traditional Approach to Succession Planning
    • Often highly political
    • Little thought given to what kind of leaders required in the future
    • Done secretly
    • Focus on putting names in boxes (“replacement”)
    • Few conversations held
  • Results of This Approach to Succession Planning
    • Strategies become academic and administrative exercises. Change happens and rigid plans are not applicable – a waste of time and money
    • Little focus spent on the development of individuals
  • A Different Way to Think About Succession Planning
    • Succession management is a process of ensuring there are leaders and talent that can implement the organizational vision
    • It requires the systematic identification of those individuals who have the potential to turn the vision of the organization into reality
  • Elements of an Effective Succession Management Process* * The Gallup Organization 1. Individual Career Planning and Development 2. Succession Planning Analyses 3. Group Discussion and Review
  • Succession Management
    • Focus on individual development strategically aligned to future vision
    • Leadership development can ensure that the potential identified through succession process is realized
    • Result is long-term leadership sustainability through a ttraction, retention and development of talent
  • Succession Management
    • A key strategic initiative
    • Cannot be done in isolation to other cultural and people oriented initiatives in the organization
    • More than just “putting names in boxes”
  • Succession Management
    • Focus on integrating many elements of organization development
    • High level steps need to be customized for each organization
    • “ Leadership Pool” approach is gaining in popularity (identifying all potential employees vs. positional replacements)
  • “ There are no recipes or formulae, no checklists or advice that describe “reality”. There is only what we create through our engagement with others and with events.” (Margaret Wheatley, “Leadership and the New Science”)
  •  
  • Vision and Competencies
    • Alignment to vision and strategy
      • Business plan for succession initiatives
    • Succession and leadership aligned to the vision, critical business issues/skill gaps
    • Executive commitment
    • Develop leadership competencies
    • Develop a succession management roadmap
  • Need for a Roadmap
    • Implementing succession initiatives impacts culture
    • A roadmap shows how to get there
    • “ Without a roadmap, the likelihood is that you will focus too much attention on details and miss the ‘big picture’.”
    • (William Rothwell)
  • Talent Review Process
    • An interactive dialogue and discussion to support the performance and potential of talent in the organization
    • A process to look at key talent, open positions, promotions and leadership development
    • Discussion to support shared ownership of the talent pool and development opportunities
  • Talent Review Process
    • Robust Talent Review (“War for Talent”):
    • Full day on-site for each division
    • Discuss quality of incumbents
    • Review individuals and the talent strength of each unit, and discuss other issues such as retention or recruiting
    • Rigorous, candid and open debate
  • Talent Review Process
    • Robust Talent Review, continued:
    • Drive to a distribution of ratings
    • Specific action plans written and followed up for each unit
    • As important and intense as the budget process, with real accountability and a performance focus
  • Talent Review Roadmap Questions
    • How far down in the organization? What groups?
    • High potentials or everyone?
    • Replacement or pool – or both?
    • Assess on performance and potential
    • Other assessments required?
    • Who will assess? Do they have the skills to assess?
  •  
  • Pool versus Replacement
    • Identifying “bench weakness” (e.g. managers, technicians)
    • Assess individuals
    • Develop as pool – stretch assignments, leadership development
    • Track progress
  • Folio Map Potential Performance 3.6 3.6 High Performance/ High Professional New in Position/High Potential High Performance and Potential 5.0 5.0 Outplacement Needs Improvement Competent/ Capable 2.6 0
  • Identifying High Potentials High Low High Potential Performance J J J J J J J J J J J J J J J J J J J J J J J J J J J J J J J J J J J J J J J J J J J J J J J J J J Our leadership “Talent Pool” The “bar” is a rating of 3.6 or above on potential Must be at least competent in each of the Standards of Leadership 3.6 1.0 5.0 3.6 1.0
  • Folio Map
    • Permits participants to identify specific developmental actions for employees
    • Assists conversations regarding next steps
    • Shows progress from year to year
  • Critical Positions/People*
    • Critical Position – A critical position in the organization that is imperative to running the business. Key strategic importance to have back fill.
    • Critical Person – A critical person in the organization which would result in a significant adverse impact on the business if the person left.
    • * Johnson & Johnson definitions
  • Example Multi-level ownership CEO Reviews plan to monitor corporate future President/Sr. VP Review functional plans & Develops Company level plan Functional Area/Company Managers Identifies high potentials across area Drafts succession plan Manager Discussion with employee & functional manager re. development/succession Employee Create Development Plans & Performs Leadership Assessment
  • Succession Management Retention ??
  • File it away…
  • Start having conversations!
  • Great Leaders Make A Great Difference
  • Leadership Effectiveness and Turnover
  • Leadership Effectiveness and Retention
  • Leadership Effectiveness and Customer Satisfaction
  • Making Leadership Development Work
    • Identify, inform and invest heavily in talent
    • Use 360s to build on strengths
    • Set extremely high expectations for your leaders – and measure their results
    • Make leadership development a long term process and not an event
    • Use the succession process as an opportunity to develop and measure the leadership potential
  • Senior Management Role
    • Responsible for succession process
    • Approve high potentials, individual development, leadership development
    • Determine success measures, next steps and time frames
    • Determine management accountability
    • Follow-up on actions
  • Measures
    • Define up front what you want to achieve in the broader scope
    • Then…once succession data gathered, define specific measures, timing and accountability. Measure regularly.
    • Track development of talent, and their progress, regularly over the long term. Assign accountability to managers for progress, assign mentors, reward
  • Possible Succession Measures
    • By ___ 90% of development actions complete
    • Increase movement of high potentials to other areas of workplace
    • Increase employee engagement/satisfaction
    • By year 20xx, increase high potential leaders by x%
    • Over x years, increase high potential retention by x%
    • External measures - attract high potentials
  • Employee Conversations
    • What needs to happen in these conversations?
  • Individual Development Planning
    • Actions
    • Goals and measures
    • Follow-up, follow-up, follow-up
  • More Best Practices (Hewitt)
    • Senior management lead the charge
    • Maniacal focus on the best talent
      • High potentials are carefully identified
      • Compensation is highly differentiated
      • Assignments drive high potentials’ growth
      • Tracking progress is critical
  • Challenges
    • Time
    • Buy-in
    • Lose sight of big picture – administrative nightmare
    • Employee/manager conversations
    • Cultural biases
    • Resource issues that arise
  • Results of Implementing Succession Management
    • A high-performance culture that continuously attracts and retains the right people
    • Strong leaders who can develop others
    • Mentors that can provide a legacy
    • A culture of openness and focus
  • Results of Implementing Succession Management
    • No “unspoken agenda” concerning individuals’ aspirations and potential
    • Investor confidence – Hay (1988) and McKinsey (1999) studies link effective SM to increased ROI and annual return to shareholders
  • Keys to Success
    • Top management must buy-in and be active participants
    • Link succession efforts to needs and strategic objectives of the business
    • Minimize paperwork and bureaucracy
    • Make succession and leadership development a constant preoccupation
  • Keys to Success
    • Identify high potential talent early – devise strategies to retain that talent
    • Recognize that effective succession management is not fast
    • Spend time to evaluate results and provide feedback to stakeholders
  • Keys to Success
    • Ensure leaders have an opportunity to apply the skills they are learning
    • Ensure everyone is, and can be, responsible for their own development
    • Ensure effective role modeling of leadership excellence
    • Measure behaviour change
  • Discussion
    • Where should we start?
    • What will be easy?
    • What will we stumble over?
  • Resources
    • “ War for Talent” – McKinsey & Co.
    • “ Leadership Pipeline” – Ram Charan
    • “ Grow Your Own Leaders” – W. Byham
    • “ Effective Succession Planning” – W. Rothwell
    • “ Love ‘Em or Lose ‘Em” – Kaye & Jordan-Evans
    • Centre for Creative Leadership – www.ccl.org
    • Statistics Canada – www.statcan.ca/
    • “ The Extraordinary Leader” – Zenger & Folkman