I think the concept of retention is overblown and childish. Yes, that’s right.
- I am fully aware that it costs money to hire and train employees.
- I know it’s expensive to carry the benefit load for an employee who quits after a short period of time.
- I’ve been a recruiter. I know how difficult it is to find a skilled worker in a niche industry.
But hear me out. Retention is the trendy holy grail of recruiting & HR because it is an easy thing for everyone to understand and sell.
How many times have you heard, “If you buy my leadership program and management software, I can help you improve retention by X%.”
It’s bullshit.
The conversation we should be having is much more complex. Human Resources should be advocating for new & creative employee/employer relationships that are built around our specific organizations. If we want the best and the brightest people to work for us, let’s think differently about the nature of work in the 21st century.
- We should create an employment structure that doesn’t burden the corporation & shareholders with benefit costs. In America, this means that we should welcome a public health care option and say goodbye to administering private insurance plans with rising premiums & bureaucratic rules.
- We should protect our companies from stupid litigation by reconsidering and revamping trade unions, associations, and managed staffing solutions. Let’s create a culture of accountability among employees, unions, and workers by rethinking what it means to be employed. Who’s the boss in the 21st century? Wake up. The boss is you. Get to work.
- We ought to be creating robust & awesome ‘total rewards programs’ that incent our employees to achieve financial goals. Companies should then communicate the hell out of those programs. You retain great employees much the same way you share a video on YouTube: through viral word-of-mouth campaigns in your community.
So we can talk about retention in the 21st century, or we can talk about the things that matter: removing the burden of social programs from our corporations, implementing smart and flexible workplace policies so that merit-based performance plans apply to everyone from the janitor to the CEO, and treating our employees like adults.
What do you think?
{ 21 comments… read them below or add one }
I agree that we often do not place enough thought on retaining people and become accepting of the merry-go-round of new recruits. Part of this is bred by the myth that people don’t want to stay with one employer anymore. I don’t agree, I think people do – with the right employer. On one hand I am fortunate that we have an organisation where many many people have worked for decades.
The flip side to this is, of course, retaining the people you want to retain. Too many organisations retain the people they don’t want and lose the people they do want. To add to the elements that you have mentioned above (and of course we have the wonderful National Health Service here) I think I would suggest recognition and differentiation. Not everyone is the same and not everyone performs the same. Make it known, say thank you, recognise. Its amazing how feeling genuinely valued can make you want to stay.
There’s a whole lot of stuff in play with retention. First we should ask ourselves does it really matter? What I mean by that is there is a lot of conventional wisdom out there that says that retention is good, but show me the data that proves it, and then tell me good for whom?
If retention is in fact a good thing (I personally don’t see tons of evidence to say it is), then we have to understhand that this monster is not just a company created monster, but also one created by the public. We all want to beleive that the rainbow of raises (many in excess of 20%) that were easy pickings for changing companies over the last several years is something we are all entitled to (are we, are we not – that’s a whole other debate).
But I digress, I think we need to first really understand if retention is important, and to whom. I personally, think a mercenary culture is better for employees.
Honest to God just when I think I am getting as smart as you, you blow me away! I need to think about this more before I respond.
Awesome post.
Corporations often don’t invest the time and money to really, truly, honestly, THINK about HR and employees because it’s better used propping up next quarter’s share price.
And so it goes with retention. If you decide to stop caring about retention then your company will stop investing in it’s employees. Why spend money keeping someone you can just replace if they don’t like you? Follow the $$$. You see this most often in call centers. And what you end up with is a high-stress workplace, very low morale, and high turnover because your people are burning out. Places like jobvent.com will fill up with condemnations of your company and it’s atmosphere. Do you really want to be HR for a company that is knowingly burning-out it’s employees? So it quickly becomes an ETHICAL issue, IMO.
I agree with TheHRD’s assessment. We are living in a free agent world and people can do whatever they want (of course do it properly). People should know if they feel comfortable with their department and if there are any changes, that’s up to us to decide if you want to stick it out or move on.
@TheHRD I totally love & respect your POV but let me say this: I’m okay with a merry-go-round, actually. How do you expect to adapt to an ever-changing marketplace if you can’t adapt to an ever-changing employment landscape? Also, long-term employees can be good — but what about group-think and diversity issues? Hard to include new & fresh voices when you’re only hiring at the bottom and not the top. Also, I’ll say this: I felt genuinely valued at my last two employers and left, anyway, because it was time to go. Turnover can be healthy. Or am I crazy?
@Puf Thank you, you just wrote Part II of my post. Does retention matter? Who says so? Why? Where are the numbers? All good questions and I think it’s one of those myths that we just accept. Must have mashed potatoes on Thanksgiving. Must get fries with your burger and coke. Must strive to retain the best and the brightest. I think employers actually fear empowered employees who act like mercenaries. Keep ‘em fat & complacent. Cut-throat ninja employees are bad for the bottom line.
@Michael Do a post on this. I’d love to hear your thoughts!
@David T Can you invest in employees without the construct of retention? How about just investing in employees because it’s the right thing to do? I wonder if this retention issue would suss itself out if HR stopped making ‘retention’ into a Clinton Global Initiative. We’re not curing AIDS. We’re trying to be profitable and foster an innovative & ethical work environment.
@Tracy Tran Agree with both you & HRD — but retention can breed comfort and complacency. What happens when the best & brightest become the slow & dull-witted?
Wow, look at this: http://www.ere.net/2009/09/28/understanding-available-retention-strategies-and-are-you-prepared-for-turnover-rates-to-double-part-1-of-a-2-part-series/
Retention is everywhere. I was just kidding when I called retention ‘trendy’ but maybe it is…
“We ought to be creating robust & awesome ‘total rewards programs’ that incent our employees to achieve financial goals.”
Bless you Laurie, you didn’t say ‘incentivize’. I work for a company with staff turnover of less than 10% annually. We need new blood damnit. There are advantages and disadvantages to the retention question. If healthcare benefits could be factored out, I believe that retention would decrease as employees no longer needed to consider this when hanging on to a position they couldn’t stand.
Great post! There is no we can move ahead as a discipline if we aren’t willing to kill a few of our “sacred cows” and retention is one of them. While I agree there are some negatives to retention, that’s all that we seem to focus on, much to our detriment. Unfortunately, I think this forcus on retention is partially driven by the attention we give to turnover. It is one of the easiest metrics to calculate and understand, and it is actually something HR has total access to the data for. Yet, we don’t cross-section turnover to look at what really matters, turnover by department, key employee group, voluntary vs involuntary, etc.
Keep writing such thought provoking post!
@Laurie – Nailed It
A company will only invest in employees if they get something in return. By demonstrating the cost savings of high retention you can get that investment.
Throw retention out the window and there is NO reason for a company to do anything for their employees except leave them in the position they were hired for, at the wage they were hired for, indefinitely. This is what the cheapest of companies actually end up doing. And they get high turnover.
High turnover is very BAD for intangible reasons, and that is what I was trying to point out. Your workforce is ever transient, and the majority of the people slog to work because they don’t like it, stress levels are very high, and they are looking for another job on their downtime. People know the company is not going to give them a dime’s worth more than they have to, so everyone is looking out for #1. Cooperation happens only to the extent someone can use it to climb over and backstab someone else.
How can you possibly say “throw retention out the window” but also say you want to invest in your employees? That’s like loading up at a company picnic and leaving your plate out for someone to take. That’s like buying a gold watch and leaving it on your desk as you head to lunch. Retention and investment go hand in hand.
Laurie, you are absolutly right about companies fearing mercenary employees. It’s a control thing, and isn’t retention just another word for control?
Isn’t this the same mentality of failed financial institutions giving fat bonuses to execs– because they might leave?? Wait a minute… didn’t it fail BECAUSE of these people?
Mercenary employees- basically outsourcing. The company can specify the parameters of the final product, but has no insight or control over it’s production or internal quality. Tech support in India anyone? Take a look at FedEx Home Delivery, and you will see that mercenary employment isn’t the answer. FedEx has structured the program so that the “subcontractors” who purchase routes from them bear all the cost, with no employee rights. FedEx pays the Home delivery “subcontractors” only in the case of successful delivery regardless of the circumstance, and their rate is basically peanuts per delivery. Many drivers barely make it if at all.
As far as the financial institutions… this is due to their culture of corruption and looking the other way on ethical issues. To blame it on caring about retention is a long jump.
I work as a freelance admin schmuck. I went freelance because it was easier to find work that way; so many companies in my area absolutely cannot afford to hire a full time file clerk or admin asst. and the restaurants weren’t biting (having worked food service in 7 years). I stayed freelance because I realized how much better for me a constant rotation of different projects and employers truly was.
@ali I hate the word incentivize because it’s not even a word. English, people. Speak it. Also, you’re right about liberating our employees by removing the employer-healthcare-mandate. Let those chumps go!
@Sid Thanks
@Heather Thank you. I think you’re right — easy math is better than a more nuanced discussion without metrics. SHOW ME THE NUMBERS = SHOWING YOU STUPID, OUT OF CONTEXT NUMBERS. Not all metrics are created equally.
@Puf I hate control issues. I struggle with my own. Must be way control issues in Corporate America exhaust me so much.
@MattyMat You are exactly right. Awesome.
@David T I think caring about retention is noble. I just don’t know if it’s the right way to get a the problem. Also, FedEx can suck it. Hard.
@Mouse I like the diversity of assignments when I’m a freelancer. What do you do for benefits?
@Laurie – Its true that some turnover is good. But I do think too often we see the long servers the old timers as dead wood. And of course whilst some might be, many are loyal, committed and knowledgeable employees. And I’d take one of those for 10 GenYers.
As for Group Think…..there is nothing that I hate more (although you could argue it did help to build the railways!) But thats surely one of the roles of HR? To provide the challenge, to be devils advocate and to ensure that people are always thinking, reviewing and learning?
@TheHRD You’re right. There’s a risk of equating turnover with age. “You’re old. You’ve been here forever. Go away.” I love those grizzled old timers who’ve seen it all. We had a 75 yr old pension expert at Pfizer who retired. No one knew what the hell was going on after he left. CHAOS! You’re also right about HR operating as the devil’s advocate. We need more of that…
@Laurie Your example of the guy at Pfizer is great. Some times companies do not place enough value on institutional knowledge. Efficiency can be seen as complacency. When someone is able to navigate through a company, and not raise a stink and demand a reward every time they accomplish something, they are not seen as high achievers. Some turnover is good, turnover for the sake of turnover can cripple an organization. Challenge your best employees and reward them and they will stay. Pay them and bore them to death and they are going to run for the next opportunity.
You are so right to blow the whistle on software vendors who claim that their product influences retention. It does no such thing! Neither does it influence succession, promotions, terminations, etc. Software takes in data and moves it around so it appears in different configurations. It does this very well, and that’s what makes it useful. But it doesn’t make decisions; people make decisions. There is no getting around this.
I have to object, though, when you wave retention away as overblown and childish. Devoting efforts to keeping key employees what what I call managing the exit door. We manage the entrance door all day every day. This is where recruiting happens. But most organizations devote almost no attention to managing the exit door.
When the economy recovers the realities of the seller’s job market (fewer job seekers than jobs) will be back. Organizations will need to:
1. Develop criteria for identifying key employees (talent).
2. Take steps to ensure that key employees don’t believe that the grass is greener somewhere else.
3. Help key employees to see that they can realize their career goals without leaving your organization.
These are the initial steps in planning to manage the exit door.
Benefits? What are those? I wasn’t getting them working FOR a boss so working for myself changes nothing on that score. I haven’t had benes that were worth anything since I was in the military (and those barely qualified as being worth anything since they actually broke me, leading to my discharge) 13 years ago. I had some really terrible, overpriced, and mandatory (as in there was no way to say to the company, I’d rather not since these are worthless) medical/dental for a while when I was 25 but it was seriously the worst insurance ever so I never used it once I figured that out.
The only downside to working for myself so far is low income months. I’m having one right now so I’ll probably pick up a part time job to compensate but accidentally going freelance is the best decision I ever made.
And my parenthetical should have read “haven’t worked food service in seven years.” Because what I actually said made no sense.