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Improving Workplace Retention

Many organizations in today’s highly competitive business environment are struggling to answer the question: ‘How do we retain onto our best people?’Dr. Garry McDaniel Professor

Minimizing employee turnover now ranks with finding new employees as one of the toughest challenges in this difficult economy. New research by Best Practices LCC, confirms what we have suspected for a long time, retaining top employees is critical to ongoing productivity and effectiveness.

And a poll released by the American Institute of Certified Public Accountants indicates that finding, hiring and retaining quality staff has been the number one issue facing their industry for the past three years. While these two studies present gloomy findings, they also indicate that successful companies are those with strong, sustainable processes for creating a workplace that not only attracts the best employees, but also encourages them to stay.

The Changing Environment

Twenty years ago, organizations had very different expectations for employees. The old employee/employer contract asked employees to work hard, be loyal and work as hard as they could. In return, the organization would provide a job for life, regular salary increases and a chance for promotion. Today workplace demographics have shifted radically workers have become more educated and more women and minorities have come to comprise a greater percentage of the workforce. The impact of these changing demographics on organizations is illustrated by the fact that the average time an employee has worked with a company dropped from an average of 25 years in 1976 to less than 4 years in 2002. Today it is down to less than three years!

It is no surprise that in today’s aggressive business environment, the challenge of maintaining a workforce that can sustain competitive, high quality services is a major concern for organization leaders. The bottom line is that organizations today are more dependent than ever on having top performers who provide high quality, innovative services over the long term to ensure organizational survival.

Why Improve Workplace Retention?

Reducing turnover and retaining talented employees is a basic responsibility of leaders to develop an organization that is able to survive not just for the short term, but also for the future. A strong, committed and skilled workforce can have a number of significant benefits.

  1. Reduced Costs. Research by the Corporate Executive Board and Saratoga Institute both indicate that the cost to replace an employee runs anywhere from 65% of the annual salary for a skilled administrative staff member to one and a half times the annual salary for a key professional.
  2. Increased Productivity. Organizations are in the people business and your products and services have to be valued by customers. To get those products and services to your customers, you need great people to develop the products and deliver the services. If you have created a great place to work, you build a strong team of experienced, skilled employees who are able to make the organization stronger and more productive.
  3. Enhanced Morale. We are far more productive when we have a happy, committed and experienced group of employees. The motivated attitude of employees will be evident to your customers - it’s contagious!
  4. Confidence. When you have talented, motivated staff it creates greater confidence for you as the leader, to other employees and to your customers.

Taking the First Step

Fortunately, there are practical steps an organization can take to create a workplace that employees find hard to leave.

  • Take a look at yourself. If you want to create a great workplace, you have to begin by working on your attitude. Managers get what they model to employees. If employee morale is low, service is down, and turnover is up, you need to find out what you are doing or not doing to create that type of climate.
  • Provide clear purpose and direction. Any organization must have a vision that employees find is well articulated, easy to understand and makes it easy to carry out their jobs. People need focus or they will spend their time working in areas that occupy their time, but not serve the greater purpose of the organization.
  • Work on Your Culture. Today’s workforce enjoys a workplace that demonstrates respect and flexibility with employees. CEO’s need to establish and promote a climate where there is a high level of trust and employees feel both their personal and professionals needs are being met.
  • Ensure your compensation and benefits are competitive. Salary and benefits are not the most important aspect to a job, but they must be competitive if you are going to retain great people. Pay at or above the level of your competition.

Developing Productive Employees

Hiring the right people is a major achievement. Keeping them is something else. One very capable recruiter once said, “The businesses whom I represent want the best & brightest people. If your organization isn’t treating your top people right, I can find a business that will!” Once you have hired the right person, how do you help them become productive quickly?

  • Establish an effective orientation process. Too often, we get a new employee on board and simply tell them to ‘get to work.’ Effective organizations have thoughtful, well planned programs for helping new employees at any level fully understand the organizations’ mission and strategy, customer base and relationships with other staff. It also includes understanding daily routines, how information is shared, where supplies are kept, work schedules and other pertinent data about how your organization operates on a day-to-day basis.
  • Ensure employees have the skills, knowledge and tools to do their job. One executive said, “Our employees are the foundation of the organization. We just completed a merger that increased our number of members from 500 to over 700 companies across eight states. I ensure that all our employees receive the training they need to provide the best care and customer service to each member.”
  • Let employees do their job. In exit interviews, most employees list ‘higher pay’ as the reason for leaving. In follow-up interviews six months later, the number one reason given by the same employees is ‘poor management.’ The message- lead, don’t micromanage. Managers must trust their employees to do the job they were hired to do. Make your expectations clear, give them the authority, responsibility and guidelines for doing the job, and then get out of the way. Your job is to direct the strengths and skills of the staff to achieve the organization’s goals and objectives, not to do their job for them.
  • Allow employees a stake in planning and decision-making. If you want employees to be bought into and committed to the job, you have to let them feel like part of the team. Minimize bureaucracy, get rid of processes or procedures that get in the way of work and stifle creativity.

Retaining Top Talent

Once you have hired the best employees and they are contributing to your organization, how do you ensure they stay? Here are a few suggestions that will help you keep your employees happy:

  • Ask employees how you are doing. Ask your employees how they are feeling, what they need and how they want you to deliver.
  • Build for the Future. Establish structured processes for driving continual employee personal, professional and career development. Today’s worker expects ongoing training and growth throughout their career. Educational assistance, succession planning, mentoring, learning plans and job rotations are just a few methods for providing on-going challenge and growth to your employees.
  • Communicate, communicate, communicate. Top managers need to keep their employees informed. If you don’t tell employees what they need to know, they will make it up. Responding to rumors all day is no way to run an organization.
  • Promote trust and exploration. It is one thing to talk about how good change is, but if you don’t establish an environment that allows for risk, mistakes and experimentation, then you will find yourself maintaining the status quo.

In conclusion, the longer an employee has been with your organization the better able you are to create vital, trust-based relationship.  Positive employee relationships are important for ensuring your organization and customers can withstand the storms of today’s vibrant business environment.

What do you value most in your job?

Distribute this short survey to your employees and ask that they
1. Rank each as V=very important M=moderately important N=not important
2. Identify the top 10 with 1 being most important, 2 next most important, etc.

Purpose: Provide you with an overall and individual view of what job factors are most important to your employee’s. Use the results to tailor group and individual rewards, recognition and follow-up. Discuss findings in groups and 1:1 to fully understand what employees indicated.

___ Respect from manager ___ Integrity of my manger

___ Work/life balance ___Positive work environment

___ Opportunity for advancement ___ Job security

___ Flexible scheduling ___ Retirement/savings plan

___ Health insurance ___ Dental insurance

___ Disability insurance ___ Empathy for personal problems

___ Adequate vacation, time off, etc. ___ Seminars/training

___ Feelings of accomplishment ___ Competitive compensation

___ Earnings potential ___ Integrity of organization

___ Understand what’s expected of me ___ Appreciation for contributions

___ Integrity of manager ___ Feeling I am “in” on things

___ Other


Different employees respond to different incentives and rewards for a job well done. This short survey will provide you with clear suggestions for how to reward and recognize individuals and groups. Ask employees to fill out the survey and then discuss their selections in a group or 1:1 meeting.

Please rank the following non-cash incentives from 1-5 in order of preference with 1 being the most important and 5 being the least important.

___ Restaurant gift certificates (Restaurant preference: _______________________)

___ Department store gift certificate (Store preference: _______________________)

___ Other gift certificate (Name: ____________________________________)

___ Cash Bonus

___ Time off from work

___ Recognition (award, plaque, etc.)

___ Staff lunches or dinners

___ Movie day

___ Item from company gift store: ___________________________________

___ Other: ______________________________________________________

Author Information:

Dr. Garry McDaniel, Professor
Professor of Human Resource Development

Franklin University in Columbus, Ohio, USA.

You can contact him at 614-657-8524 or This email address is being protected from spambots. You need JavaScript enabled to view it.