Maximizing retention and minimizing attrition by Toronto Training and HR March 2011
Contents 3-4 Introduction to Toronto Training and HR 5-7 Definitions 8-10 Costs of attrition 11-17 Reasons for leaving 18-21 Improving morale and motivation 22-25 Drivers of employee commitment and retention 26-27 Handling a resignation 28-29 Interview mistakes 30-31 Job satisfaction 32-33 Retaining female employees after maternity 34-41 Exit interviews 42-47 Managing turnover 48-49 Drill A 50-86 Examples 87-88 Drill B 90-98 Case studies 99-100 Conclusion and questions Page 2
Page 4 Introduction to Toronto Training and HR Toronto Training and HRis a specialist training and human resources consultancy headed by Timothy Holden 10 years in banking 10 years in training and human resources Freelance practitioner since 2006 The core services provided by Toronto Training and HR are:
Page 9 Costs of attrition 1 of 2 Administration of the resignation Recruitment and selection costs, including administration Covering the post during the period in which there is a vacancy Onboarding training for the new employee
Page 10 Costs of attrition 2 of 2 Studies have shown it costs: Up to 18 months’ salary to lose and replace a manager or professional Up to six months’ salary to lose and replace an hourly worker
Page 12 Reasons for leaving 1 of 6 HUMAN FACTORS Quality supervision (support, feedback, communication) Frequent people contact Co-worker support Mentoring and coaching Fair treatment Teamwork Assistance when mistakes are made
Page 13 Reasons for leaving 2 of 6 HUMAN FACTORS Communication Support when personal problems arise Meaningful, positive feedback Co-workers who care about doing a good job A sense of belonging and friendship Inspiring leadership Properly managed critical feedback and discipline Doing work that makes a difference and helps others
Page 14 Reasons for leaving 3 of 6 ENVIRONMENTAL FACTORS Input into decisions that affect the employee Meaningful performance appraisals Scope of work and job variety Clarity of duties and expectations Fair / competitive wages and benefits Time away from work for family and personal lives Safety Recognition, rewards and acknowledgements Having the materials, equipment and technology needed
Page 15 Reasons for leaving 4 of 6 ENVIRONMENTAL FACTORS Job security Hours of work (schedule) Autonomy and independence Flexible hours Opportunity to learn new skills and be challenged Training and career development opportunities
Page 16 Reasons for leaving 5 of 6 EMPLOYEES 1. Lack of trust in senior leaders 2. Insufficient pay 3. Unhealthy/undesirable culture 4. Lack of honesty/integrity/ethics 5. Lack of opportunity for training and development
Page 17 Reasons for leaving 6 of 6 EMPLOYERS 1. Insufficient pay 2. Unexpected job/career opportunity 3. Decision to change careers 4. Lack of work-life balance 5. Lack of opportunity for training and development
Page 19 Improving morale and motivation 1 of 3 Ensure challenges and learning opportunities on the job provide training and development opportunities Ensure job expectations and performance standards are clear, reasonable and understood Advocate for adequate wages and benefits Maximize employee involvement in making decisions e.g. Ask employees for their ideas on how to improve retention Establish trust among colleagues and of the supervisor Walk your talk
Page 20 Improving morale and motivation 2 of 3 Work toward removing barriers that interfere with doing things well and efficiently (e.g., change policies, procedures and practices that are too rigid, out-dated, unclear or bureaucratic) Listen to and validate concerns-ask employees to propose solutions to the problems they present Be creative with the ways in which you reward good effort and performance-say “thank you” Provide honest, constructive critical feedback Deal with problem performance and “problem employees” with fairness, humanity, consistency and courage
Page 21 Improving morale and motivation 3 of 3 Deal with conflict as soon as you are aware it exists-name underground issues and support the group to resolve them Communicate directly and honestly-give people accurate information about plans and changes as soon as possible
Page 22 Drivers of employee commitment and retention
Page 23 Drivers of employee commitment and retention 1 of 3 I feel my career goals can be met at this employer I feel a sense of belonging at work My work gives me a sense of accomplishment I am paid fairly Senior leaders treat employees as valuable assets People are rewarded for their performance I can balance my work and life I receive recognition for my accomplishments My supervisor supports me
Page 24 Drivers of employee commitment and retention 2 of 3 Senior management interest in employee wellbeing Opportunities to learn and develop new skills Base salary My manager understands what motivates me Satisfaction with organization’s people decisions Retirement options Senior management acts to ensure the organization’s long-term success
Page 25 Drivers of employee commitment and retention 3 of 3 Fairly compensated compared to others doing similar work in my organization Appropriate amount of decision-making authority to do my job well Reputation of organization as a good employer
Page 31 Job satisfaction 1. Work that is challenging or meaningful 2. Being valued and respected 3. A good boss 4. A chance to learn and grow 5. Fair pay
Page 32 Retaining female employees after maternity
Page 33 Retaining female employees after maternity Great policies are essential Invest in both manager and employee training Agree a timescale with appropriate times of contact to keep women in the business loop on their own terms Coaching can boost managers’ skills and reveal unconscious biases Make sure that the actions of line managers support family-friendly policies “Keeping in touch” days are good for re-engaging returning staff
Page 35 Exit interviews 1 of 7 WHY CONDUCT THEM? Organizational health check Reduce employee turnover PR tool to recruit applicants in the future
Page 36 Exit interviews 2 of 7 PREPARATION Select the person carefully who will be undertaking the exit interview Ask the right question Don’t ask employees to complete long forms written in a questionnaire style The interview should be about them Time the interview Don’t blow up Use the information collected
Page 37 Exit interviews 3 of 7 TIPS FOR SUCCESS Prepare goals for the exit interview meeting in advance, including selected questions and topics for exploration Hold the meeting early in the departing employee’s notice period – don’t leave until the last few days when possibly de-mob happy Carry out knowledge transfer meeting(s) separately to the exit interview itself
Page 38 Exit interviews 4 of 7 TIPS FOR SUCCESS Follow documented and established exit interview procedures Receive training in interviewing and listening skills, and how to avoid the basic legal pitfalls Conduct exit interview face to face –for better communications Listen to the employee and let them do the talking, from prompts and questions
Page 39 Exit interviews 5 of 7 TIPS FOR SUCCESS Remain calm, professional, supportive and objective Ask questions that elicit views, feedback and answers Ask open ‘what/how/why’ questions rather than closed ones Avoid using ‘who’ questions or becoming too personal
Page 40 Exit interviews 6 of 7 TIPS FOR SUCCESS Take notes or use a prepared questionnaire Be consistent, so that everyone leaving the company is offered an exit interview, even those who are redundant, retiring etc. Take action on what is learned from the information and feedback, particularly as trends emerge
Page 41 Exit interviews 7 of 7 TIPS FOR SUCCESS Inform the exiting employee of your desire to collect information that could help improve working conditions Ask if the employee prefers talking with you (if you are the supervisor) or someone else, such as another human resources person or a line manager Ask the employee to discuss any issues that would be useful to you or the organization Tell them that the information will be kept confidential
Page 43 Managing turnover 1 of 5 Understand why employees leave Benchmark your organization against current industry standards and geographical location Set clear promotion and development guidelines that are transparent and fair Develop effective workplace policies and nurture a positive culture Invest in people management training for line managers
Page 44 Managing turnover 2 of 5 Decide who to retain Recognize your organization’s push factors Recruit and onboard Performance manage-measures
Page 45 Managing turnover 3 of 5 Take time to plan Be objective Interview well Look for fit Offer fair and competitive pay Check references Avoid hiring out of desperation
Page 46 Managing turnover 4 of 5 Job previews Make line managers accountable for levels of attrition in their teams Career development and progression Consult employees Be flexible Avoid the development of a culture of 'presenteeism' Job security Treat people fairly Defend your organization
Page 47 Managing turnover 5 of 5 Identify why people are staying Identify who is at most risk to leave Develop strategic organization-wide goals and objectives to improve retention Hire the right people Create a sense of belonging by using a pre-commencement orientation program Ensure a comprehensive job, program, department and organization orientation Develop a mentoring program
Page 50 Example One-food retail/wholesale industry
Page 51 Example One-food retail/wholesale industry 1 of 3 SURVEY FINDINGS By far the majority of all employee departures were voluntary (83%), as opposed to dismissals. It is clear, then, that turnover is primarily an issue of losing productive workers whom the employer would prefer to retain. Participants reported an overall employee turnover rate of 38.7% (in Ontario this was 20.2%, with an average voluntary turnover rate of 31.7%. The reported turnover rate was highest for part-time non-management staff (64.9%).
Page 52 Example One-food retail/wholesale industry 2 of 3 SURVEY FINDINGS Facilities located in urban areas experienced a higher rate of overall turnover (40.2%) than those in rural locations (28.1%). Turnover varied with the type of ownership structure: the rate was highest for chain facilities (40.9%), followed by independent facilities (31.8%) and franchises (27.2%). The size of operation did not appear to influence the rate of turnover.
Page 53 Example One-food retail/wholesale industry 3 of 3 BEST PRACTICES Resist calling employees in to work during scheduled time off Maintain an employee training program Offer competitive pay rates Engage with employees and reward good behaviour
Page 55 Example Two-national hotel chain 1 of 10 EMPOWERMENT The construct of empowerment has two directions: the transference of power and authority through structural manipulation or the perception of power and authority at the psychological level. Structural empowerment implies the ability of one unit to modify the conditions of other unit through external influences. Four dimensions have been identified that contribute to the construct: Meaning, Competence, Self-determination and Impact
Page 56 Example Two-national hotel chain 2 of 10 EMPOWERMENT Duration of job tenure within an organization will be positively associated with overall empowerment level. Job levels within an organization will be positively associated to perceived empowerment. An employee’s formal educational attainment will be positively related to perceived empowerment.
Page 57 Example Two-national hotel chain 3 of 10 EMPOWERMENT Perceived employee empowerment may exist at different levels within the same organization. Studies in 1992 identified that empowerment consisted of sharing four key ingredients with employees: information about organizational performance, rewards contingent on organizational performance, knowledge on how to contribute to organizational performance and the power to make decisions that can influence corporate direction and performance.
Page 58 Example Two-national hotel chain 4 of 10 ORGANIZATIONAL COMMITMENT Measuring commitment at the individual psychological level was developed in 1990 with three dimensions: Affective (desire-based) commitment measures an employee’s emotional attachment to their organization. It reflects the acceptance and integration of organizational values, showing an increased willingness to remain with an organization; it is the ‘want to’ aspect of commitment.
Page 59 Example Two-national hotel chain 5 of 10 ORGANIZATIONAL COMMITMENT Continuance (cost-based) commitment results from an employee’s measure of potential loss in invested time and effort if they leave the organization. Employees who have invested larger amounts of time and effort into their organization should be less willing to leave. They feel like they ‘have to’ stay with their current organization; there are fewer employment options outside of their current situation and leaving would provide a less desirable outcome.
Page 60 Example Two-national hotel chain 6 of 10 ORGANIZATIONAL COMMITMENT Normative (obligation-based) commitment stems from a perceived duty towards the organization developed through internal socialization processes. Both pre-entry (familial, early childhood, cultural) and post-entry (organizational) socialization processes shape the level of normative commitment.
Page 61 Example Two-national hotel chain 7 of 10 ORGANIZATIONAL COMMITMENT The length of job tenure within an organization is likely to be positively associated with continuance organizational commitment. Job levels within an organization will be positively associated with both affective and normative organizational commitment. Education level of employees will be negatively associated with continuance organizational commitment.
Page 62 Example Two-national hotel chain 8 of 10 SURVEY CONCLUSIONS Results indicate that tenure and all four dimensions of empowerment are closely related. Each dimension of empowerment increased as job tenure increased; perceived personal meaning, ability to perform their work tasks, feeling of personal control in outcomes and direct impact all increased with time investment with their current organization. Part of this may be explained through the economic concept of the “learning effect”, where additional competency is gained through the simple repetition of tasks as they are performed over a period of time.
Page 63 Example Two-national hotel chain 9 of 10 SURVEY CONCLUSIONS Key transition periods appeared at the one-year period, with a significant increase in perceived empowerment for workers who remain beyond one year. Management should take note of this as they monitor their employees for skill development; perceived empowerment should rise within the first year of employment.
Page 64 Example Two-national hotel chain 10 of 10 SURVEY CONCLUSIONS However, tenure seems to only be related to an increased level of continuance commitment. The longer a person works for an organization, the greater their “need‟ to stay, perhaps due to perceived lack of attractive alternatives externally. While the survey did not establish directionality of influence, it would appear that highly empowered employees are also longer tenure employees. From a HR perspective, seeking methods that extend tenure should positively influence empowerment levels while increased an employees’ perceived need to stay.
Page 66 Example Three-librarians 1 of 6 FINDINGS Determine how many librarians leave the profession for reasons other than retirement and determine when and why they leave. Survey graduates of university programs Conduct regular quality of work life or job satisfaction surveys of members Conduct exit interviews with those who leave the profession
Page 67 Example Three-librarians 2 of 6 RETENTION STRATEGIES Salary Working conditions Job enrichment Education
Page 68 Example Three-librarians 3 of 6 RETENTION STRATEGIES Entry-level (first 5-7 years) Mid-career (8-14 years) Beyond mid-career (15 years and over)
Page 69 Example Three-librarians 4 of 6 FACTORS CONSIDERED Salary and benefits Position responsibilities Opportunities for growth and development Ability to move laterally to learn new skills or to make a career change Potential for promotion Quality of work life Relationships with supervisor and colleagues Work environment and image/reputation of the library and institution
Page 70 Example Three-librarians 5 of 6 POSSIBLE CHANGES Working with institutions to systematically increase beginning salaries as well as salaries of current employees in order to remain competitive Advocating for improved benefit plans to meet the needs of employees and to provide choices Developing position descriptions that meet the needs of the library andthe employee
Page 71 Example Three-librarians 6 of 6 POSSIBLE CHANGES Providing on-going training and development opportunities both within the library and outside the library that benefit individuals in their current position and their future positions; Creating new opportunities for employees to move within the organization, either laterally to learn new skills or upward into management; Fostering workplaces that have a high quality of life and are stimulating work environments; and Creating multiple opportunities for mentoring.
Page 73 Example four-armed forces 1 of 10 RECOMMENDATIONS a) Pay and allowances – compensation for work b) The housing portfolio – accommodations c) The injured, retired and veterans – care of injured personnel d) The military family e) Transitions including recognition, work expectations and conditions of service f) The future
Page 74 Example four-armed forces 2 of 10 MOST IMPORTANT INITIATIVES a) Post Living Differential Program – stabilizes the cost of living of forces members and families with respect to regional differences to ensure that they enjoy a relative and predictable standard of living no matter where they serve) b) Compassionate Travel Assistance – to provide transportation at public expense for regular force members and their spouses due to the serious illness or death of an immediate family member of the forces member or spouse
Page 75 Example four-armed forces 3 of 10 OTHER INITIATIVES ASSESSED a) Provision of emergency childcare services when short notice deployments are announced b) Provision of the Family Care Assistance Program. This gives financial assistance to help offset family care costs that the member pays that are in excess of those normally paid c) Use of the housing relocation service d) Introduction of the Military Quarters Repair Program (housing)
Page 76 Example four-armed forces 4 of 10 OTHER INITIATIVES ASSESSED e) Creation of operational trauma and stress support centres f) Providing employment assistance to spouses when families move to help them find jobs and maintain qualifications g) Improving access of forces programs and services in peoples’ language of choice
Page 77 Example four-armed forces 5 of 10 OTHER INITIATIVES ASSESSED h) Numerous initiatives aimed at improving pay and benefits (e.g., acting pay, pension reform, special service allowances, overtime) i) Second language-training program for spouses
Page 78 Example four-armed forces 6 of 10 SOLUTIONS 1) Develop flexible terms of service and employ contemporary work practices to meet a broader range of organizational and personal needs and to attract and retain “skilled” workers based upon Canadian demographic trends. 2) Create career fields that enhance career flexibility through transition assistance and choice, and enable the rotation of personnel, providing respite from operational tempo and access to developmental opportunities.
Page 79 Example four-armed forces 7 of 10 SOLUTIONS 3) Improve participation in employment and career decisions while improving the match between personal aspirations and employment. This could involve advertising available positions and inviting internal application based upon a merit system. 4) Maintain policies to ensure a harassment free environment and continued emphasis on diversity of all forms.
Page 80 Example four-armed forces 8 of 10 SOLUTIONS 5) Develop fair and effective performance evaluation procedures that motivate, provide performance feedback and developmental opportunities, that apply at the individual and team level. 6) Maintain effective mechanisms of voice and conflict resolution processes that resolve issues at the lowest level and offer efficient recourse to those who believe they have been treated unfairly.
Page 81 Example four-armed forces 9 of 10 SOLUTIONS 7) Provide members with adequate spiritual, medical, dental, social and other support in times of both war and peace. 8) Develop policies that support military families as an essential contribution to operational effectiveness and the maintenance of morale. Special effort will be taken to ensure the support and care of military families during operational deployments and the re-integration of personnel after deployments.
Page 82 Example four-armed forces 10 of 10 SOLUTIONS 9) Recognize the value of exceptional performance through a system of commendations, honours and awards, the significance of which must be clearly recognized and viewed with credibility.
Page 84 Example five-physicians 1 of 3 MORE SATISFIED Relationships with patients Relationships with colleagues Family issues Personal growth Freedom to provide quality care Availability of office and hospital resources Prestige for role as physician
Page 85 Example five-physicians 2 of 3 LESS SATISFIED Cost containment efforts by the hospital Amount and quality of personal time Opportunities for research and teaching Approaches to utilization review by the hospital Autonomy over non-medical decisions Income Administrative responsibilities Organizational climate/culture of the hospital Workload Autonomy over medical decisions
Page 86 Example five-physicians 3 of 3 RECOMMENDATIONS Practice Physician retention will be facilitated by “reasonable” work loads and shared practice philosophy Community Identify physicians with an inclination for the life style provided by the community Family Ensure evolving family needs are identified and addressed