A Different Paradigm for Talent Retention

Here is a guest post from Don & Sheryl Grimme, Authors of The New Manager's Tool Kit. We will have another follow-up post from the Grimme's in a couple of days.

A Different Paradigm for Talent Retention

Despite the dismal economy, retaining talented employees remains a real challenge for employers … and the techniques typically utilized to meet this challenge are not working. We need to apply a different paradigm.

By Don & Sheryl Grimme

The retention of talented employees has emerged as the workplace issue of the decade. For example, the Society for Human Resource Management’s 2006 Workplace Forecast predicted that the #1 employment trend most likely to have a major impact on the workplace is: a greater emphasis on retention strategies.

This continues, notwithstanding the recent rising unemployment rate. You see, more than a shortage of bodies, this is a crisis is of talent. Fortunately, every crisis contains not only danger, but also opportunity … if you know how to tap into it.

Employers are groping at ways to attack the problem. A 2005 SHRM survey found the techniques being used are: salary adjustments, job promotions, bonuses, more attractive benefits and retirement packages, and stock options. All of which are expensive … and not very effective. The reason is that they are misdirected.

In 1997, The National Study of the Changing Workforce, conducted by the Families and Work Institute, examined the impact on work outcomes of four sets of factors. The Study found that, while Earnings & Benefits have only a 2% impact on job satisfaction, Job Quality and Workplace Support have a combined 70% impact. That’s a 35 times greater bang for the buck!

And the results were similar for factors impacting organizational loyalty and employee retention.
Are we saying that competitive wages are unimportant? Of course not. Money usually is a necessary, but not sufficient condition to attract, retain and motivate good employees. [By the way, money isn't even always necessary. Notice how energized and enthusiastic unpaid volunteers often are.]

We will go to work for a paycheck and a benefits plan. But we won’t really do work (or, at least, our best work) unless something else is present. It is the quality of the work itself and of our relationships with others at work, which draws us to the best organizations and keeps us there – energized and performing at peak effectiveness.

What use does this have to you as a workplace leader? Well…

These concepts can become your mental model or paradigm – guiding you as you interact with your employees on a day-to-day and minute-by-minute basis. It’s a very different paradigm from the carrot & stick approach typically used; and is much more effective in getting the bottom-line results you want.

You can think about your own behaviors and your organization’s current policies, practices and programs from what may be a different perspective. Are they working for you? Are they consistent with these principles? What changes can you begin making?

And you can anticipate the efficacy of new initiatives under consideration. For example, to reduce turnover, does it now make sense to rely on salary increases, promotions, bonuses, benefits, retirement packages and stock options?

We think it make more sense to:
1.    Pay them fairly.
2.    Treat them GREAT!
[As for how to treat them great, see the ten tips shown on our Employee Retention HQ website.]
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The Grimmes are nationwide trainers and speakers … and authors of the groundbreaking new book on managing people in today’s workplace, The New Manager’s Tool Kit (AMACOM, 2008).