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Employee Retention

A strategic approach is essential to attract and retain the right talent.

September 5, 2017

Download Employee Retention PaperGROWING TO STAY OR GOING AWAY?


WHY A STRATEGIC APPROACH IS ESSENTIAL TO ATTRACT AND RETAIN THE RIGHT TALENT.

Are you growing talent to stay with the company long-term, saving you money, time, and adding to your success? Or are your employees unengaged and unproductive, already in the process of going away to other companies?

Attracting good talent is difficult, but it’s getting harder and harder to keep talent in place. You’re constantly competing with other companies and organizations for good employees, needing to become a “destination employer” so you’ll be able to consistently bring the best people on board.

But now the job is just beginning. You need to make sure employees are engaged and productive so they’ll stay with you. Otherwise, you run the risk of routinely paying for unnecessary recruiting, onboarding, and training.

But how do you engage employees? How do you keep absenteeism and presenteeism down and productivity up? How do you satisfy the needs of an increasingly diverse workforce?

STEP ONE: DESIGN A STRATEGY FOR INDIVIDUALS, NOT GROUPS.

Your first order of business is to know—not guess at—what each employee needs in order to feel engaged and rewarded. This goes far deeper than their level of compensation. And it goes beyond trying to create a one-size-fits-all approach to engaging them.

What kind of benefits appeals to them? How do they feel about the culture? What do they think could or should change? Do they feel “listened to”? Do they believe that communication within the company is effective? Are they engaged by the company and their role in its success?

The answers will be different for specific employee groups but, more importantly, for each individual employee. Keeping employees is critical, but you first need to make sure you have the right employees. That’s why the strategic process begins with attracting the right people.

Step Two: Become a Destination Employer

Does management embrace the value of your employees? If your talent is viewed as interchangeable, easily replaceable parts, then engagement and retention cannot be successful. And that means it’s even more difficult to attract the right talent in the first place.

A highly successful advertising executive once noted, “Our inventory goes down the elevator every night.” And, while he was speaking of an industry where people and their ideas are the inventory, it still speaks to the idea that, no matter what the company produces, great employees are key to your success.

According to Gallup, employees who have long tenure with the company, high engagement, and strong skills perform 18% higher than the average employee and 35% higher than a worker who goes zero for three. For skilled production and support staff, this represents $6 million and $12 million, respectively, per 1,000 employees. For highly educated professionals, the economic outcome essentially doubles from $12 million to $23 million per 1,000 workers.

If you have created the kind of culture where current employees do your recruiting for you—and employees plan on staying because you’re exactly the kind of place they want to work—then you have become a destination employer. Talent will come to you.

Step Three: Become employee-centric

Once you’ve aligned what the employee wants with what management will provide, you can begin creating a strategy for each employee.

After bringing talented people in, an organization can further serve its bottom line by engaging employees at all levels. Gallup has found that the most highly engaged business units are 21% more productive, experience 48% fewer safety incidents, are 22% more profitable, have 10% better customer ratings and experience 37% less absenteeism.

So, create strategic approaches that can be customized for individuals, not one-size-fits-all strategies. They simply won’t work. Employees are motivated in different ways: some need particular benefit packages; others are concerned about compensation; still others are attracted by the culture and the people; and many employees, particularly younger millennials, are passionately interested in the importance of the work they perform.

Without treating employees individually—and without creating a sustainable, passionate, involving culture—you are open to a wide range of risks.

Benefits, for example, is one area where employees need a more custom approach. This is causing HR to offer benefit options that appeal to a wide range of employee demographics, according to the SHRM 2016 Strategic Benefits Survey report.

The survey concluded that:

  • Nearly 20 percent of HR professionals alter benefits program to help retain employees
  • Approximately three-fifths of those altered health care benefits
  • More than one-third changed flexible working, retirement savings and planning, leave, and professional and career development benefits as well

About three-fifths of all respondents to the SHRM survey indicated that benefits for professional and career development, flexible work, health care, and retirement savings and planning will increase in importance to retain employees in the next three to five years. More than one-half expect that wellness and preventive health benefits will increase in importance to retain employees over the same period.

Recognition is another key aspect of employee engagement. According to a Gallup analysis, only one in three workers in the U.S. strongly agree that they received recognition or praise for doing good work. At any given company, it’s not uncommon for employees to feel that their best efforts are routinely ignored. Employees who do not feel adequately recognized are twice as likely to say they’ll quit in the next year.

Engaged employees are less likely to consider leaving. When employees are actively disengaged, the percentage who would consider leaving for a raise of 20 percent or less increases to 54 percent.

But when employees are fully engaged—when they feel involved in, enthusiastic about, and committed to their work—the percentage who would consider leaving for a raise of 20 percent or less drops to 37 percent, or by slightly more than 30 percent compared with actively disengaged workers. The majority of actively disengaged workers are likely to bolt for almost any raise, while the majority of engaged workers would require more than a 20 percent raise to leave their current company.

STEP FOUR: ADDRESS EMPLOYEE RISK

Lack of engagement. Absenteeism. Presenteeism. Lowered productivity. Dissatisfaction with the job and the organization. Lack of communication or poor communication between employee and managers. Lack of stated, understood policies. Lack of effective safety protocol.

HR is juggling a myriad of critical issues every day—compliance, benefits, safety, wellness, as well as recruiting. But HR is also responsible for leading the creation and maintenance of a culture and organizational environment that attracts, engages, and retains superior employee talent.

Employers that fail to be strategic with their most important asset—their employees—face increased risks that result in lowered efficiency and higher costs.

“Human risk” needs to be managed, just like any other business risk. You can keep employees for the long term by making sure you keep employees:

  • Engaged
  • Working productively
  • Compliant, in terms of regulations and legal issues
  • Injury-free

Having an engaged workforce helps create a culture of compliance, too. Gallup’s meta-analysis of employee engagement shows that business units with high employee engagement have 28 percent less internal theft or shrinkage and 21 percent higher productivity than their bottom-quartile counterparts. Higher workplace engagement also leads to other positive outcomes, including lower absenteeism (37%), fewer patient safety incidents (41%) and fewer quality defects (41%).

WHY WORKING WITH A QUALIFIED HR CONSULTANT SHOULD BE YOUR NEXT STEP.

In today’s ever-escalating war for talent, organizations and leaders are searching for strategies to attract and retain their top performers while increasing growth and employee productivity. From offering new perks to designing flexible workplaces, company efforts to optimize the workplace are as necessary as ever.

The right HR consultant can provide an objective, informed view of your workplace, employee relations, and strategic approach. A strong HR consultant can help you with recruitment and selection; onboarding and orientation; employee services; retention and engagement; performance management; and separation and transition issues.

An HR consultant can help you from the start—from pre-hire recruiting to employee screening to policy development.

After discussing your goals, an HR consultant should conduct an evaluation of your needs using the appropriate tools, which may include employee surveys, policy audits and other assessments. This process will help identify any necessary improvements or missing components.

A qualified HR consultant can help you design and conduct HR audits, to make sure your policies and processes are up-to-date and in good working order. They can help with issues such as:

  • Job vacancies
  • Vetting candidates
  • What happens after the employee is hired
  • Employee handbook
  • Employee discipline
  • Finding time and organization to accomplish your goals

Next, a plan is developed that will meet your goals, and with your approval, set this plan in motion, making any adjustments along the way as necessary. The HR consultant will track progress throughout and keep you informed on the discoveries and improvements made.

Marsh & McLennan Agency has an extensive history of successfully helping corporations and organizations plan and execute the right approaches to managing human risk and keeping the right employees highly engaged. We’d welcome the opportunity to share our experience with you. To learn more about what MMA can do to help you create and implement an effective HR strategy, visit marshmma.com.


This document is not intended to be taken as advice regarding any individual situation and should not be relied upon as such. Marsh & McLennan Agency LLC shall have no obligation to update this publication and shall have no liability to you or any other party arising out of this publication or any matter contained herein. Any statements concerning actuarial, tax, accounting or legal matters are based solely on our experience as consultants and are not to be relied upon as actuarial, accounting, tax or legal advice, for which you should consult your own professional advisors. Any modeling analytics or projections are subject to inherent uncertainty and the analysis could be materially affective if any underlying assumptions, conditions, information or factors are inaccurate or incomplete or should change.