Webinar on Employee Retention – Measures & Strategies29th March, 2012All materials are Copyrighted 2010 by Strategic Human Resources Management India, Pvt. Ltd. or Society for HumanResource Management unless otherwise expressly noted. All rights expressly reserved.
Structure 1. Mathew Kuruvilla -- Understanding Employee Turnover in India -- Retention : A “Systemic” Solution 2. Mervyn Raphael -- Real time challenges in Employee Retention -- Some best and next practices in Employee Retention -- How to evaluate retention program effectiveness? 3. Question & AnswerSlide 2
What are organizations grapplingwith?“Double digit attrition rates hurting “56% of employees inIndian businesses….attrition costs India believe they must leave theirthree to four times of an individual’s organization to advance to a bettersalary.” job. Comparative figures: US 43%- Bruce M Stewart, Deloitte Global Services Line U K 41%China 38 %…” Leader - Towers Watson’s Global Workforce Study 2010 “Indian ITES firms tackle “India and China are regarded as the attrition >35% on an annual future…consequently, multinationals basis…” are scouring these countries for local - The Economic Times August 2011 talent.” - The Global Talent Index Report,: Outlook to 2015, The Economist & Heidrick & Struggles Slide 3
Indian labor dynamics Retention not Retention a key HR Focus shifts to Embedded in priority Economic Retention Rise of the HR Strategy New Economy Reforms Businesses No Labor Emerging Labor Market Shortage Shortage Under Pressure Workforce • No labor shortage • Increasing labor mobility • Shrinkage of labor pools Specifications • Low mobility • Increasing recruitment cost • Over dependence on colleges • Tenured • Shorter tenures as labor pipelines • Preference for public • No-poach agreements • Ability to negotiate opportunities service • Volatile talent - constantly on the lookout - devoid of career focus Retention • Recruitment key • Retention business case driven by • Line Managers willing to pitch in Drivers • Lower turnover preferred productivity & Opportunity costs • Extending tenure vs • Equity key driver for • Efforts to communicate value lifetime loyalty employee satisfaction • Beginnings of focus on top • Focus on employee engagement • Lifetime loyalty factor performer identification & retention • Reduce opportunity losses and replacement costs Staffing • Limited Talent Pool • Staffing an operational priority • Quality leadership & Managerial Challenge • Stagnating labor pools & • Turnover starts challenging stability talent shortage markets • Wage inflation begins • Depleting organizational • Tolerance for mediocrity • Workforce quality starts suffering knowledge • Low trust levels between • Near fit capabilities employer & employeeSlide 4
Getting the basics right – employeeengagement & organization performance Employee Engagement Desire to Stay Discretionary Effort Organization PerformanceSlide 5
Top turnover drivers in India* • • Job Characteristics • Leadership quality & poor people management • Total Compensation not competitive • Work environment & work-life balance Bottom-line: • Inadequate career advancement • Poor Alignment of employee with job opportunities • Dissatisfaction with the opportunities & • Inadequate personal development practices adopted by the organization opportunities • Relationships at the workplace • Individual characteristics * Source: research reports from Towers Watson, Corporate Executive Board, Heidrick & StrugglesSlide 6
Sharper Diagnosis Needed Employee Focus • Post Exit Surveys • Performance turnover – top 25% • Employee relations audit • Top talent attrition • Manager sensing data based on • Turnover of low performers defection risk Organization Focus • Benchmarking employee value proposition • Hard to hire positions • Key skills • Organization design & structure assessments • Employee surveys, pulse surveys, focus group etc. External Focus • Attrition to direct competition • External factor analysis • Benchmarking HR products & practices • Industry trends or regulatory changesSlide 7
Most appreciated elements of EVP* Type of Working for Training/ work/Job interest respectable development alignments organization/ opportunities organization Flexible schedule/ stability vacation/holiday/ Base Pay/ paid time off compensation Bonus or other Career incentive advancement/ opportunities Are Employers aligned to the employee view of the value proposition … does it remain compelling?*Based on three different Studies by Mercer, Towers Watson &Corporate Executive Board on Employee Value Proposition (2011). Slide 8
Employee Value Proposition – an Integrated Retention Strategy Embed retention into Sharp focus on future business strategy & Recruitment career opportunities, Manager outcomes compensation, Devpt Benchmarked opportunities, job Culture & Total Relationships Compensation alignment Practices Workforce Integrated Career Planning & Retention Advancement Role/Job & Personal Alignment Strategy Development Leadership/ High Quality Work-life People Balance Management Practices RobustAssess levers for inter - Performance, Talent & Focus on organization linkages & relative Succession Management culture & assimilation of impact HR practicesSlide 9
Watch out for Line Manager response to your proposals !!Slide 11
Structure 1. Mathew Kuruvilla -- Understanding Employee Turnover in India -- Retention : A “Systemic” Solution 2. Mervyn Raphael -- Real time challenges in Employee Retention -- Some best and next practices in Employee Retention -- How to evaluate retention program effectiveness? 3. Question & AnswerSlide 12
Retention Is Not For Everyone The challenges that confront managers are not only how to minimize the possibility of losing good employees, but also how to identify the employees an organization needs and wants to keep. Source: Dibble, Suzanne. (1999). Keeping your valuable employees—Retention strategies for your organization’s most important resource. New York: John Wiley and Sons. Inc.Slide 13
Current Challenges Individual Imperatives • Career growth increasingly about variety of exposure: cross-function, cross-industry, cross-geography • Increased connectivity leads to employer consideration set becoming more global • Generational shifts leading to shorter time horizons for “staying” in an organization – organizational “loyalty” getting redefined • Peer comparisons becoming more of an influencer due to increased connectivity on various social platforms, employees constantly looking for “greener pastures” • Emphasis on work-life balance, in contrast to organizational requirements – mismatch of career anchor with organization/role Organizational and Industry Imperatives • Accelerated growth of people managers to senior management, due to exponential growth of some sectors • Organizations in the same domain are scrambling for the same talent, with no perceptible differentiation • Dilution of ethical hiring practices, due to the need to “make the numbers” • Acknowledging and actioning on the critical role of the manager in retentionSlide 14
Retention Practices Rewards (Monetary) Individual Level Non – reward programs Culture Organizational Level Policies & Procedures Long term interventionsSlide 15
Retention Practices at Individual Level Rewards Non – Reward Programs Bonus Employee of the Month Sabbaticals Performance based Spot Recognition Paid vacations with families incentives and Recognition Leaves Individual career growth increments Lunches/dinners with the Variety of career options Long term rewards like leadership across functions and ESOPs Stretch assignments for geography Continuing Education high potentials "WOW Hours" (time off program Employee Engagement awarded to employees who Deferred Compensation initiatives go above and beyond) Retention Bonus Building managerial Profit sharing capability for handling peopleSlide 16
Retention Practices at Organizational Level Culture Policies & Procedures Long Term Interventions Empowered Teams Implementing a unique Involving people in planning Culture of ownership – Employer Value and taking decisions Feeling of “My own Proposition Flatter structures – leading to company” Clear Brand signature faster communication and Building a culture of trust, practices quicker decision making transparency, and Telecommuting Career Lattices for improved openness Building practices employee development Continuous feedback to around employee needs Customized career path and from employees Employees-only online based on employee life Autonomy and freedom networks stages Being socially Fun @ Work: Recognize responsible - engaging birthdays/anniversaries/ in community efforts retirements/promotionsSlide 17
Some Examples Unlimited tuition Pay Exception: Allowing reimbursements for job manager to give pay increases related educational expense beyond normal policies Introduced new global "Rotating Officer Program,“ women’s theme - Defining where every bank sits on board success. Your way meetings Social Security systems for all CEO has lunch with his its employees employees on most days Customized career options for Rigorous leadership employees based on their career development program for stages senior managers Now follows a continuous process Deferred Compensation of appraisal rather than a yearly program for young leaders process Active contribution to Every employee to be moved to community – social a different role/function/ responsibility is one of their geography every 2-3 years core valuesSlide 18
References High attrition rate hurting India: Deloitte; Rediff.com, May 3, 2011. Attracting & Retaining Critical Talent Segments: Identifying Drivers of Attraction and Commitment in the Global Labor Market; Corporate Executive Board, 2006. Inside Employee’s Mind : Navigating the New Rules of Engagement, Mercer, 2011. Towards a Sustainable Rewards and Talent Management Model, Key Insights from Towers Watson’s Global Talent Management and rewards Survey, Towers Watson, 2010. The Global Talent Index Report ;The Outlook to 2015; Heidrick & Struggles & The Economist Intelligence Unit, 2011. Redefining Careers in India; Richa Gulati & Shatrunjay Krishna Towers Watson, December 2011. Retaining Talent; A Guide to Analyzing and Managing Employee Turnover; David G. Allen, SHRM.Slide 20
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