Retention: Tag, You're It!

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Date: Apr. 2000
From: Training & Development(Vol. 54, Issue 4)
Publisher: Association for Talent Development (ATD)
Document Type: Article
Length: 3,295 words

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How to build a retention culture.

Retaining key employees is corporate America's s number 1 problem. A solution means more profitable companies, happier, more productive employees, and more satisfied customers. Losing employees is also expensive. Studies have found that the cost of replacing lost talent is 70 to 200 percent of that employee's annual salary. There are advertising and recruiting expenses, orientation and training of the new employee, decreased productivity until the new employee is up to speed, and loss of customers who were loyal to the departing employee. Finding, recruiting, and training the best employees represent a major investment. Once a company has captured talented people, the return-on-investment requires closing the back door to prevent them from walking Out.

We believe that the key role of HRD professionals is to lead the war for talent on behalf of their organizations. They must be the designers of systemic retention processes, and they must be strategic thinkers. They must see the big picture and then identify and point out the ramifications and real cost of talent loss. The day-to-day responsibility for keeping talented people, however, falls to line employees, who must recognize their powerful role in the talent battle. HRD must lead the process, not own it.

The particular challenge for HRD professionals is to wake up managers to the power and responsibility they have--and then give them the tools or tune-ups they need. Some managers are natural retention experts; others need help. Most of all, they need to become conscious of their critical role in retaining talented employees. They need to be held accountable for building a retention culture in their teams and in their departments.

Which way did they go?

If it's the job of HRD professionals to lead retention efforts through line management, the first step is to find out where line managers stand on the issues. Are they already savvy about why people stay and what entices them away? Do they have stellar retention records? If so, your job may be just to reinforce what's already going well. Be certain that excellent retention managers are rewarded and their stories are used as examples.

But if your organization is more like the norm, there will be line managers who are clueless about what people really want and what makes them vulnerable to talent theft. According to the Harvard Management Update (June 1988), nine of 10 managers think people stay or go because of money. We know that's not the case. Money and perks matter, but employees tell us again and again that what they want most are challenging, meaningful work, good bosses, and opportunities for learning and development.

A 1999 Hay Group study of more than 500,000 employees in 300 companies found that of 50 retention factors, pay was the least important. Our research of more than 2,000 respondents from diverse industries and functions shows similar results. Here are the most common reasons respondents gave for wanting to stay with a company:

1. career growth, learning, and development

2. exciting...

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Gale Document Number: GALE|A61949970