Why it is important to have a formal strategy for retaining talented people

first_img10. ImplicationsOrganisations that understand employee retention and itscauses will ultimately have a competitive edge. However, HR professionals mightnot be using the best approach to introducing changes that will improveretention. In fact, the consensus is that turnover in organisations willincrease. To avoid the damage and costs of increased staff turnover,organisations need to act now to improve their retention efforts. 2. Cost of replacementThe cost of replacing an employee ranges from 29 to 46 percent of the person’s salary. In the US, staff turnover costs the average firmmore than $27m (£17m) each year. This figure includes the cost of advertising,travel, interviewing time (spent by managers), lost productivity and otherassociated expenses. On average, the cost of replacing a manager is three timesthat of replacing a non-manager. Related posts:No related photos. Comments are closed. www.ddiworld.com 6. Failing to understand the causes of retentionAlthough HR professionals recognise some of the mostimportant retention drives, they miss these factors more often than theyunderstand. They are especially likely to ignore the importance of aco-operative and trusting work environment. They also fail to see how muchemployees value the meaning of the work they do. HR professionals need to makesure they understand the retention drivers in their company before they takeaction. 5. Primary drivers of retentionWhile pay and benefits do matter, employees are moreconcerned with the level of fulfilment they get from their jobs. They also feelthat working with an understanding supervisor or manager in a co-operativeenvironment is important.  Organisationsshould focus on making sure that the people they hire are a good match for thejob and the work culture. 1. Staff turnover is a major issue and set to increaseOn average, organisations expect staff turnover to increase.Turnover is much more common for frontline and non-managerial workers. It ispredicted that an increasingly competitive labour market will make findingqualified candidates more difficult in the future. Organisations thatunderstand retention and its causes will experience a competitive edge. Everytime a position becomes vacant, an organisation becomes less capable of meetingits goals. Previous Article Next Article Top tips by international consultancy DDIcenter_img 9. The bottom lineVoluntary turnover rates are almost twice as high fornon-management positions (19.3 per cent) as for management positions (10.3 percent). This is crucial, since, when retention is above average, customersatisfaction, productivity and profitability also tend to be above average. 8. Successful interventionsMost HR professionals (98 per cent) are dissatisfied withtheir current retention efforts. It is important to improve organisationalsystems, such as training and development and the selection system, and todevelop openness of communication between managers and employees. 3. Young employees are more likely to move onYoung people are less likely to spend their entire careerswith one organisation than their predecessors. With the implementation of newtechnologies, certain positions have become difficult to fill. Some candidatescan choose from the best offers from a number of organisations. Those who feel neutral or dissatisfied about their jobs aremore than twice as likely to leave an organisation as their colleagues. 7. The importance of gathering informationHR professionals greatly value the information gathered frominternal studies of retention and exit interviews. Before action can be taken,however, they must look beyond the surface of the often scarce and tactfullypresented data gleaned from an exit interview to develop an understanding ofwhy employees leave. 4. A business priorityThe study showed that retention is a top business priorityfor more than one-third of the respondent organisations. Nevertheless, almosthalf, 49 per cent, have no formal strategy for addressing retention. Many donot consider it a top priority. This approach might backfire later when thelabour market tightens and filling positions becomes difficult. Why it is important to have a formal strategy for retaining talented peopleOn 4 Mar 2003 in Personnel Today It’s axiomatic that high-fliers move on. A benchmarkingstudy by DDI shows that almost one-third of employees surveyed expects to leavefor another job within the next year. Dissatisfied employees will ‘vote withtheir feet’. last_img read more