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Getting to the Heart of Retention

It's logical to conclude that poor managers are at the heart of the problem, says Richard Finnegan, co-founder of the Retention Institute and author of Rethinking Retention in Good Times and Bad.

February 20, 2012
Related Topics: Top Stories - Frontpage, Employee Career Development, Retention, Workforce Planning, Training & Development
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The adage that "employees quit their bosses, not their jobs," still holds largely true. Despite a rugged jobs market, U.S. workers are surprisingly restive. More than 1 million workers voluntary left jobs last October, the highest number in more than a decade, according to the U.S. Bureau of Labor Statistics.

Specific data on why those employees quit are not available, but it's logical to conclude that poor managers are at the heart of the problem, says Richard Finnegan, co-founder of the Retention Institute and author of Rethinking Retention in Good Times and Bad.

"The people who left likely were among their organization's top performers, too," Finnegan says.

Recent research by the Corporate Executive Board Co. backs up Finnegan's assessment. The Arlington, Virginia-based advisory firm says 1 in 4 high-potential employees sought new jobs last year compared with 1 in 7 in 2005.

Some experts contend the role of managers is diminished by organizational changes, such as "matrix" reporting relationships and increased collaboration among peers.

Nonetheless, Finnegan says the relationships managers build with employees remains the single-biggest factor in retention. Too often, organizations try quirky things like casual Fridays or offering pet insurance to keep their best people. "Retention is the one thing companies try to fix by going to human resources, instead of by involving their managers."

The Retention Institute's certification program equips HR professionals with new weapons in the war on turnover, Finnegan says. The model aims to help them manage turnover in the same way as other business drivers such as customer service, quality or sales.

The Institute's program is based on three broad principles: 1.) Employees quit because they can; 2.) They stay for things they get uniquely from their organization; and 3.) Supervisors exert the most influence on whether employees remain with an organization or are compelled to look elsewhere.

"Retention is about pulling many different strings. It's not one thick rope," Finnegan says.

It's an analogy well-understood by HR professionals such as Joan Holda. Organizations often want quick fixes, but retention depends on more than one person or program. "It takes a team effort and a cultural change," says Holda, director of HR at the Burcham Hills retirement community in East Lansing, Michigan.

Holda earned the designation of a certified employee retention professional at the Retention Institute in 2010. The course provided a framework of key issues that needed to be addressed, including setting goals and analyzing the financial cost of losing employees, she says. Of particular concern to Burcham Hills' officials was a troubling trend in turnover of newly hired nurses: Of new the nurses who left, most were quitting within their first 180 days on the job.

Since it costs about $35,000 to hire each nurse, the negative financial impact was significant.

"We knew if we could get them past that 180-day period, that we'd increase the odds of keeping them," Holda says.

To determine what job factors keep nurses at Burcham Hills, Holda and her HR team planned to conduct "stay interviews" with those who stuck with the organization. "Before we could do that, we needed to know if employees felt they had managers they could trust. Otherwise, the stay interviews were going to be almost useless."

Burcham Hills thus rolled out special training on building trust for its team of roughly 40 managers and directors. Managers were told they were being held accountable for developing trust among their staffs, and that it would comprise part of their own performance evaluations.

Supervisors were asked to rate themselves on their ethics and integrity, while employees were polled on whether the manager was approachable, took an interest in the employee's concerns and followed up with them.

Burcham Hills also made adjustments to its hiring and onboarding of new nurses, Holda says. "You want to hire people who are going to stay. I look the person in the eye and tell them: 'It's going to cost us about $35,000 to bring you onboard. I need to know if you can commit to staying with us."

The hard work appears to be paying off. Holda says Burcham Hills has retained all new nurses hired since the program launched in 2010, saving the organization about $325,000.

Garry Kranz is a Workforce Management contributing editor. To comment, email editors@workforce.com.

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