Maximizing retention and minimizing attrition March 2011

Maximizing retention and minimizing attritionby 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 resignation28-29 Interview mistakes 30-31 Job satisfaction32-33 Retaining female employees after maternity34-41 Exit interviews42-47 Managing turnover48-49 Drill A50-86 Examples87-88 Drill B90-98 Case studies99-100 Conclusion and questionsPage 2

Introduction to Toronto Training and HRToronto Training and HRis a specialist training and human resources consultancy headed by Timothy Holden 10 years in banking10 years in training and human resourcesFreelance practitioner since 2006The core services provided by Toronto Training and HR are:Training course design

Training course delivery- Reducing costsSaving time

Improving employee engagement & morale

Services for job seekersPage 5Definitions

Definitions 1 of 2Employee turnoverRetention

Definitions 2 of 2Measuring employee turnoverMeasuring retention

Costs of attrition 1 of 2Administration of the resignationRecruitment and selection costs, including administration Covering the post during the period in which there is a vacancyOnboarding training for the new employee

Costs of attrition 2 of 2Studies have shown it costs:Up to 18 months’ salary to lose and replace a manager or professionalUp to six months’ salary to lose and replace an hourly worker

Reasons for leaving 1 of 6HUMAN FACTORSQuality supervision (support, feedback,communication)Frequent people contactCo-worker supportMentoring and coachingFair treatmentTeamworkAssistance when mistakes are made

Reasons for leaving 2 of 6HUMAN FACTORSCommunicationSupport when personal problems ariseMeaningful, positive feedbackCo-workers who care about doing a good job A sense of belonging and friendshipInspiring leadership Properly managed critical feedback and disciplineDoing work that makes a difference and helps others

Reasons for leaving 3 of 6ENVIRONMENTAL FACTORSInput into decisions that affect the employeeMeaningful performance appraisalsScope of work and job varietyClarity of duties and expectationsFair / competitive wages and benefitsTime away from work for family and personal livesSafetyRecognition, rewards and acknowledgementsHaving the materials, equipment and technology needed

Reasons for leaving 4 of 6ENVIRONMENTAL FACTORSJob securityHours of work (schedule)Autonomy and independenceFlexible hoursOpportunity to learn new skills and be challengedTraining and career development opportunities

Reasons for leaving 5 of 6EMPLOYEES1. Lack of trust in senior leaders2. Insufficient pay3. Unhealthy/undesirable culture4. Lack of honesty/integrity/ethics5. Lack of opportunity for training and development

Reasons for leaving 6 of 6EMPLOYERS1. Insufficient pay2. Unexpected job/career opportunity3. Decision to change careers4. Lack of work-life balance5. Lack of opportunity for training and development

Improving morale and motivation

Improving morale and motivation 1 of 3Ensure challenges and learning opportunities on the jobprovide training and development opportunitiesEnsure job expectations and performance standards areclear, reasonable and understoodAdvocate for adequate wages and benefitsMaximize employee involvement in making decisionse.g. Ask employees for their ideas on how to improveretentionEstablish trust among colleagues and of the supervisor Walk your talk

Improving morale and motivation 2 of 3Work 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 proposesolutions to the problems they presentBe creative with the ways in which you reward good effort and performance-say “thank you”Provide honest, constructive critical feedbackDeal with problem performance and “problem employees” with fairness, humanity, consistency and courage

Improving morale and motivation 3 of 3Deal with conflict as soon as you are aware it exists-name underground issues and support the group to resolve themCommunicate directly and honestly-give people accurate information about plans and changes as soon as possible

Drivers of employee commitment and retention

Drivers of employee commitment and retention 1 of 3I feel my career goals can be met at this employerI feel a sense of belonging at workMy work gives me a sense of accomplishmentI am paid fairly Senior leaders treat employees as valuable assetsPeople are rewarded for their performanceI can balance my work and lifeI receive recognition for my accomplishmentsMy supervisor supports me

Drivers of employee commitment and retention 2 of 3Senior management interest in employee wellbeingOpportunities to learn and develop new skillsBase salaryMy manager understands what motivates meSatisfaction with organization’s people decisionsRetirement optionsSenior management acts to ensure the organization’s long-term success

Drivers of employee commitment and retention 3 of 3Fairly compensated compared to others doing similar work in my organizationAppropriate amount of decision-making authority to do my job wellReputation of organization as a good employer

Handling a resignationNo surprisesNo dishonestyNo dependenceNo non-competesNo selfishnessNo defamation

Interview mistakesIgnoranceInattentionVerbosityInconsistencyAimlessnessMismanagementProcrastination

Job satisfaction1. Work that is challenging or meaningful2. Being valued and respected3. A good boss4. A chance to learn and grow5. Fair pay

Retaining female employees after maternity

Retaining female employees after maternityGreat policies are essentialInvest in both manager and employee trainingAgree a timescale with appropriate times of contact to keep women in the business loop on their own termsCoaching can boost managers’ skills and reveal unconscious biasesMake sure that the actions of line managers support family-friendly policies“Keeping in touch” days are good for re-engaging returning staff

Exit interviews 1 of 7WHY CONDUCT THEM?Organizational health checkReduce employee turnover PR tool to recruit applicants in the future

Exit interviews 2 of 7PREPARATIONSelect the person carefully who will be undertaking the exit interviewAsk the right questionDon’t ask employees to complete long forms written in a questionnaire styleThe interview should be about them Time the interviewDon’t blow upUse the information collected

Exit interviews 3 of 7TIPS FOR SUCCESSPrepare goals for the exit interview meeting in advance, including selected questions and topics for explorationHold the meeting early in the departingemployee’s notice period – don’t leave until the last few days when possibly de-mob happyCarry out knowledge transfer meeting(s)separately to the exit interview itself

Exit interviews 4 of 7TIPS FOR SUCCESSFollow documented and established exitinterview proceduresReceive training in interviewing and listening skills, and how to avoid the basic legal pitfallsConduct exit interview face to face –for better communicationsListen to the employee and let them do thetalking, from prompts and questions

Exit interviews 5 of 7TIPS FOR SUCCESSRemain calm, professional, supportive andobjectiveAsk questions that elicit views, feedback and answersAsk open ‘what/how/why’ questions ratherthan closed onesAvoid using ‘who’ questions or becomingtoo personal

Exit interviews 6 of 7TIPS FOR SUCCESSTake notes or use a prepared questionnaireBe consistent, so that everyone leaving thecompany is offered an exit interview, eventhose who are redundant, retiring etc.Take action on what is learned from theinformation and feedback, particularly astrends emerge

Exit interviews 7 of 7TIPS FOR SUCCESSInform the exiting employee of your desire to collect information that could help improve working conditionsAsk if the employee prefers talking with you (if you are the supervisor) or someone else, such as another human resources person or a line managerAsk the employee to discuss any issues that would be useful to you or the organizationTell them that the information will be kept confidential

Managing turnover 1 of 5Understand why employees leaveBenchmark your organization against current industry standards and geographical locationSet clear promotion and development guidelines that are transparent and fairDevelop effective workplace policies and nurture a positive cultureInvest in people management training for line managers

Managing turnover 2 of 5Decide who to retainRecognize your organization’s push factorsRecruit and onboardPerformance manage-measures

Managing turnover 3 of 5Take time to planBe objectiveInterview wellLook for fitOffer fair and competitive payCheck referencesAvoid hiring out of desperation

Managing turnover 4 of 5Job previewsMake line managers accountable for levels of attrition in their teamsCareer development and progression Consult employees Be flexible Avoid the development of a culture of 'presenteeism' Job security Treat people fairly Defend your organization

Managing turnover 5 of 5Identify why people are stayingIdentify who is at most risk to leaveDevelop strategic organization-wide goals and objectives to improve retentionHire the right peopleCreate a sense of belonging by using a pre-commencement orientation programEnsure a comprehensive job, program, department and organization orientationDevelop a mentoring program

Example One-food retail/wholesale industry

Example One-food retail/wholesale industry 1 of 3SURVEY FINDINGSBy 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%).

Example One-food retail/wholesale industry 2 of 3SURVEY FINDINGSFacilities 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.

Example One-food retail/wholesale industry 3 of 3BEST PRACTICESResist calling employees in to work during scheduled time offMaintain an employee training programOffer competitive pay ratesEngage with employees and reward good behaviour

Example Two-national hotel chain

Example Two-national hotel chain 1 of 10EMPOWERMENTThe 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

Example Two-national hotel chain 2 of 10EMPOWERMENTDuration 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.

Example Two-national hotel chain 3 of 10EMPOWERMENTPerceived 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.

Example Two-national hotel chain 4 of 10ORGANIZATIONAL COMMITMENTMeasuring 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.

Example Two-national hotel chain 5 of 10ORGANIZATIONAL COMMITMENTContinuance (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.

Example Two-national hotel chain 6 of 10ORGANIZATIONAL COMMITMENTNormative (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.

Example Two-national hotel chain 7 of 10ORGANIZATIONAL COMMITMENTThe 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.

Example Two-national hotel chain 8 of 10SURVEY CONCLUSIONSResults 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.

Example Two-national hotel chain 9 of 10SURVEY CONCLUSIONSKey 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.

Example Two-national hotel chain 10 of 10SURVEY CONCLUSIONSHowever, 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.

Example Three-librarians

Example Three-librarians 1 of 6FINDINGSDetermine 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 membersConduct exit interviews with those who leave the profession

Example Three-librarians 2 of 6RETENTION STRATEGIESSalaryWorking conditionsJob enrichmentEducation

Example Three-librarians 3 of 6RETENTION STRATEGIESEntry-level (first 5-7 years)Mid-career (8-14 years)Beyond mid-career (15 years and over)

Example Three-librarians 4 of 6FACTORS CONSIDEREDSalary and benefitsPosition responsibilitiesOpportunities for growth and developmentAbility to move laterally to learn new skills or to make a career changePotential for promotionQuality of work lifeRelationships with supervisor and colleaguesWork environment and image/reputation of the library and institution

Example Three-librarians 5 of 6POSSIBLE CHANGESWorking with institutions to systematically increase beginning salaries as well as salaries of current employees in order to remain competitiveAdvocating for improved benefit plans to meet the needs of employees and to provide choicesDeveloping position descriptions that meet the needs of the library andthe employee

Example Three-librarians 6 of 6POSSIBLE CHANGESProviding on-going training and development opportunities both within the library and outside the librarythat benefit individuals in their current position and their future positions;Creating new opportunities for employees to move within the organization, either laterally to learn newskills or upward into management;Fostering workplaces that have a high quality of life and are stimulating work environments; andCreating multiple opportunities for mentoring.

Example Four-armed forces

Example four-armed forces 1 of 10RECOMMENDATIONSa) Pay and allowances – compensation for work b) The housing portfolio – accommodations c) The injured, retired and veterans – care of injured personneld) The military family e) Transitions including recognition, work expectations and conditions of servicef) The future

Example four-armed forces 2 of 10MOST IMPORTANT INITIATIVESa) 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 forcemembers and their spouses due to the serious illness or death of an immediate family member of the forces member or spouse

Example four-armed forces 3 of 10OTHER INITIATIVES ASSESSEDa) Provision of emergency childcare services when short notice deployments are announcedb) 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 paidc) Use of the housing relocation serviced) Introduction of the Military Quarters Repair Program (housing)

Example four-armed forces 4 of 10OTHER INITIATIVES ASSESSEDe) Creation of operational trauma and stress support centresf) Providing employment assistance to spouses when families move to help them find jobs and maintain qualificationsg) Improving access of forces programs and services in peoples’ language of choice

Example four-armed forces 5 of 10OTHER INITIATIVES ASSESSEDh) 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

Example four-armed forces 6 of 10SOLUTIONS1) 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.

Example four-armed forces 7 of 10SOLUTIONS3) Improve participation in employment and career decisions while improving the match betweenpersonal aspirations and employment. This could involve advertising available positions and invitinginternal application based upon a merit system.4) Maintain policies to ensure a harassment free environment and continued emphasis on diversity of all forms.

Example four-armed forces 8 of 10SOLUTIONS5) 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.

Example four-armed forces 9 of 10SOLUTIONS7) 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.

Example four-armed forces 10 of 10SOLUTIONS9) Recognize the value of exceptional performance through a system of commendations, honours andawards, the significance of which must be clearly recognized and viewed with credibility.

Example Five-physicians

Example five-physicians 1 of 3MORE SATISFIEDRelationships with patientsRelationships with colleaguesFamily issuesPersonal growthFreedom to provide quality careAvailability of office and hospital resourcesPrestige for role as physician

Example five-physicians 2 of 3LESS SATISFIEDCost containment efforts by the hospitalAmount and quality of personal timeOpportunities for research and teachingApproaches to utilization review by the hospitalAutonomy over non-medical decisionsIncomeAdministrative responsibilitiesOrganizational climate/culture of the hospitalWorkloadAutonomy over medical decisions

Example five-physicians 3 of 3RECOMMENDATIONSPracticePhysician retention will be facilitated by “reasonable” work loads and shared practice philosophyCommunityIdentify physicians with an inclination for the life style provided by the communityFamilyEnsure evolving family needs are identified and addressed

Maximizing retention and minimizing attrition March 2011

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Maximizing retention and minimizing attrition March 2011