Employee Retention Plan

How To
Create Your
Retention Plan
Using simple strategies to
persuade employees to stay

Introduction
This guide is designed to help you create an employee retention plan that
will work in practice, rather than one that looks good on paper but fails to
persuade employees from leaving.

A retention plan is simply a list of those actions you intend to take to

increase your chances of retaining targeted employees; a proactive
approach to retention as opposed to the common, passive, and at times
negligent, assumption that employees will stay.

The most effective retention plans, are deceptively simple in their

construction. But they are based on sound principles, on an
understanding of what really makes a difference to employees, especially
those employees whose departure could be avoided.

In essence, you decide which employees you wish to retain, your targets,
or top priorities. Then you determine the most appropriate way to
persuade them to stay.

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Employee Retention Plan

Retention Plan Background

A sensible retention plan includes two elements. One that focuses on the
retention of established employees and another that tackles early turnover
departures in the first six months.

The problem with many retention efforts is that they are too general, not
targeted, and unfortunately, not relevant to many of the employees they
wish to influence.

The best approach to meeting the challenge of retaining employees is to

reduce the appeal of competitors by creating value; value that is
determined by the employee. And to do so you need to know what is
important to each individual employee you wish to retain.

Why People Leave

The key drivers of employee turnover can be divided into two categories:
push factors and pull factors. While some perfectly satisfied employees
may be tempted away by the pull of an offer so fantastic that they just
have to accept, the large majority of departures do involve an element of
push.

It is a mistake to assume that all departures occur for the same reasons.
One persons priorities may not match anothers. There may be
considerable differences in what different employees are prepared to
tolerate before they start looking elsewhere.

There are surveys and studies that detail the most common push factors
such as poor people management, and a lack of career development
opportunities but these are rarely the only push factors in play.

A retention plan must take into consideration the relevant push factors
and find a way to minimise their effect. A good starting point is discovering
what they are. A sensible approach to adopt is described below.

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Employee Retention Plan

1. Retaining Current Employees

When it comes to retaining current employees, the latest research shows
that two interrelated retention strategies outperform all others by a
considerable margin. Firms are strongly advised to adopt these measures.
The first relates to the assessment and reward of managers. The second
to the use of periodic retention focused interviews. Both are described in
detail below.

Managers are the linking factor between the two strategies and their role
is a vital one if the plan is to succeed. Without the support of managers
many a retention strategy that looked good on paper has failed to deliver
in practice.

Other measures may be applicable in certain circumstances. It is

important to take note of the destinations of departing employees. It may
be that employees are leaving to join indirect competitors for their services
rather than traditional rivals.

Understanding the appeal of the real competition is a vital element of any

retention effort. This can be done on a micro or macro basis though it is
wise to recognise that it is the individual that makes the decision to leave
and their criteria are what really matters.

Employee attitude surveys will sometimes provide valuable insight with

regards to turnover. However, it has to be said that there are serious
reliability issues with both surveys and exit interviews.

Where additional employee insight is needed, the nominative group

technique is to be recommended. This form of focus group is especially
appropriate for diagnosing the causes of turnover within different groups.

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Employee Retention Plan

a) Managers, Managing And Employee Retention

To increase the chances of your managers acting as retention magnets,
as opposed to being one of main drivers of employee turnover, you
should take the following proactive steps.

Give Managers The Responsibility For Tackling Turnover

Make clear to managers the costs involved each time someone leaves
and the benefits associated with low rates of turnover. Explain the loyalty
effect described by Frederic Reichheld and how it applies to your
situation. Agree the length of time you expect employees to stay with the
company. Then set appropriate targets.

Assess Managers On Turnover Figures

Include employee turnover amongst the figures on which managers are
assessed. Be careful to use benchmarks that are fair and targets that are
realistic. Use a definition of turnover that does not include retirements,
redundancies and dismissals.

Reward Managers On Their Retention Achievements

Create a link between managers bonuses and their retention
achievements.

Provide Appropriate Support To Managers

This will depend upon circumstances, something as simple as an hour of
coaching each month for a period of six months will often be sufficient.
Alternatively, you might provide an opportunity for managers to meet
periodically to discuss their successes and the challenges they are
currently facing.

Talentkeepers have produced a fairly comprehensive internet based

retention product for managers that may be appropriate for those that

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Employee Retention Plan

wish to devote considerable time and energy to developing their skills in

this area.

Consider Upward Feedback

The use of upward feedback can assist managers to improve their people
management skills.

Some work environments may not be suit the introduction of such an idea.
As with 360 degree feedback there are times and places where its impact
is minimal at best.

As an alternative to assessing managers on turnover figures, you can use

an indirect approach and assess them on their ability as a developer of
people.

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Employee Retention Plan

b) Retention Interviews
The second element recommended by the research for the retention of
current employees is the introduction of periodic retention focused
interviews.

If you want to retain someone, you can improve your chances by being
proactive, by making the first move before they start to look elsewhere, or
receive a tempting offer from one of your competitors.

Some departures are unavoidable, but not all. If you ask people why they
left you find that many of the reasons could have been avoided given
better communication, given a degree of flexibility, some imagination, and
a willingness to negotiate.

The purpose behind retention interviews is to encourage employees to

explain their aspirations, their needs, their preferences what needs to be
done for them to stay. Without this information it is easy for a firm to lose
talented employees for avoidable reasons.

In retention it is often the small change that makes the difference. But it
needs to be a change that is relevant to the individual, a change that is of
value to them.

So roles are customized, tailored to suit the individual, small adjustments

that might seem irrelevant to an outsider.

Retention interviews have been shown to reduce the number of avoidable

departures. Loyalty should not be taken for granted. The relative
attractiveness of competitors and other options can be reduced by a few
small changes.

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Employee Retention Plan

Depending on the precise circumstances, some of the things you might

like to discuss are:

Career development plans

Recognition of their contribution

Work assignments

Job sculpting

Coaching

Work-life balance

Ask people to stay

Of course, there are parameters, boundaries you cannot cross. Some

changes just arent possible. But you could always ask if there is anything
else that is important to them.

Format
The best format to adopt is the deceptively simple ask, listen, negotiate.

So the manager might ask about the employees career aspirations, then
discuss practical changes they could make that would assist the
employee in gaining some of the skills and experiences they need to
reach their ultimate destination.

These changes might involve additional training, some coaching, new

responsibilities or particular work assignments.

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Employee Retention Plan

Questions

What are your career aspirations?

What can we do to assist?
What do you want to do next?
What will keep you here?
What is the best thing about your role?
What is the worst?
What can we do to make your job more rewarding?
We want to retain you, what will it take?
What is most important to you?
What single change would you make to your role?

Careers And Aspirations

Once you know an employees career aspirations, you are in a much
stronger position to retain them. An employee will often be happy to stay if
they feel their employer or manager has their best interests at heart.

You can create value for employees by supporting growth, by helping

them improve their current skills and develop new ones; preparing them
for the future.

Careers Development Plan

If the future doesnt get discussed, it can be easy for employees assume,
rightly or wrongly, that their future must lie beyond the firm. That the firm
isnt really bothered whether they stay or go. So they look to move on.

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Employee Retention Plan

During the retention interview, or perhaps at a later date, you might want
to spend a few minutes co-creating a career development plan. Be a
catalyst. Help them to think about their unique talents, their interests, their
skills.

Discuss trends, business needs, challenges and the future. Where will the
opportunities arise? What skills will be needed?

Flexibility
A flexible manager is far more likely to be able to retain employees than a
manager with a more rigid approach.

A manager that is assessed, and rewarded, on their ability to retain

employees, will often be more willing to negotiate a mutually agreeable
solution.

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Employee Retention Plan

2. Eliminate Unnecessary Early Turnover

Departures that occur within the first six months of joining the company
will tend to be a result of failings in either the recruitment or orientation
processes. Fortunately, these are easy to remedy.

Realistic Job Previews

Make every effort to provide a realistic job preview in order to reduce the
element of surprise. All too often new employees leave after a few weeks
when they discover the job was not as they expected.

Adverts designed to show the company in its best light may attract
superior candidates, but giving a misleading impression of the daily reality
of the role is likely to be a costly mistake.

Expectations
A major flaw in many recruitment processes is the failing to address the
issue of expectations. It is very easy for an individual to assume that
things will be similar to their previous place of work. But not all these
assumptions turn out to be correct.

Spending as little as 10 minutes discussing expectations, both those of

the candidate, and those of the firm, can reduce early turnover by as
much as 20%, sometimes more.

Clarify promotion prospects, especially time frames, salary and bonus

arrangements, working hours and location flexibility, managerial style and
approach to assessment.

Attempt, wherever possible, to get a sense of the candidates medium to

long-term career goals and aspirations. Be careful not to appoint
someone who will outgrow the position in a very short space of time
unless you intend to promote them almost immediately.

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Extreme Caution
Be careful about recruiting employees who will have to relocate. There is
a high risk that factors beyond the workplace will result in an early
departure.

Think twice before appointing candidates with high potential. A fairly

common error in recent years has been for firms to select graduate calibre
candidates into roles with limited room for growth. Is this person likely to
be content to perform the role in question for the length of time the
company desires?

Promote From Within

Internal promotions have a far greater success rate than external hiring
when judged on retention rates; there are fewer surprises, the risk is
lower. Of course, there are many other factors that need to be taken into
consideration when determining who to appoint.

Orientation
In recent years firms have been paying more attention to the orientation
process. And some have been able to reduce early turnover as a direct
consequence.

On their first few days new recruits are bound to feel slightly lost,
confused, out of place. Not sure what the rules are, who to talk to. They
may decide they prefer their old job with its comfortable routine, their
friends, emotional attachments.

From a retention perspective orientation, or on-boarding, has to achieve

one thing: to get the new employee to feel at home as quickly as possible.

Does your current process meet this requirement?

If you arent sure, try asking current employees how long it took them to
feel settled, and what might have been done better during their first month
or so.

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Employee Retention Plan

Common mistakes during this period:

Not having the new employee's equipment in place

Ignoring them or leaving them to read manuals

Long lectures, too much information, endless form filling

Not involving the new recruit's manager and department

Monologue rather than dialogue

Instead try to:

Make sure equipment is in position

Show them how they can achieve

Explain what is expected of them

Explain how to add value

Explain how to be a team player

Help them to feel at home

The current fashion seems to be to adopt a buddy scheme, pairing each

newcomer with someone who will look after them for the first few months,
showing them how things work, explaining the unwritten rules and
providing answers to the many questions they are likely to have during
this period.

Inevitably the manager or supervisor of the new recruit will play a major
role in their orientation. From a retention perspective there are two
priorities: firstly, explaining the importance of their role in the success of
the business, and secondly, to ask the employee to promise that they will
come and talk to the manager before deciding to leave the company.

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Employee Retention Plan

Apart from the usual tasks such as introducing the new recruit to other
team members, briefing them on the company strategy, objectives and
values, discovering how they prefer to be managed and motivated, the
main focus should be on getting them in position so they can contribute as
quickly as possible.

Get them started so they can make a real contribution

Schedule any training they might need

Give them an appropriate assignment not too difficult,

not too simple

Establish medium term goals including both personal

and career development goals

Arrange short meetings to check how they are doing

Get colleagues to meet them to explain how best to

communicate

Invite them to the next social event

Colin Brown 2006

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