Webinar: Retention | How to Keep Top Talent

This session was recorded on November, 2021.

Presentation Slide Deck

 

Are you worried about losing your star performers? Keeping your best and brightest should be a high priority for any company. This is especially true considering that replacing an employee can cost you a surprising amount of their annual salary, not to mention the numerous indirect costs.

Join Sarah Borsten from Mineral, our HR Partner, as she discusses company culture, workforce engagement, and total rewards so you can keep your top talent in-house.

Webinar Transcript:

Marisa S., SPHR (00:03):

Good morning, everyone. Thank you so much for joining me today. I’m excited to welcome you to our training, Retention: How to Keep Top Talent. Before we begin, I would love to introduce myself. My name’s Marisa. I’ve worked in a variety of HR areas over the years, including payroll, staffing, and on and offboarding. I earned my bachelors in business administration and communications from the University of Oregon, and I’ve worked at both national and local companies in a wide range of businesses and industries. All right. Some quick housekeeping items, we are going to email you the recording of this presentation and the slides within 24-ish hours.

Marisa S., SPHR (00:48):

I will hold a poll later on, so I really hope you’ll participate in that. Stay tuned. And finally, please use the Q&A box for questions, and I will answer as many as I can during the brief Q&A session at the end. So please keep your questions in mind so you can ask them. And in this session, we’ll be talking about retaining your best and brightest, especially in the current climate. We’re going to start out by looking at why retention matters, then we’ll move on to focusing on company culture. Compensation and benefits can go hand in hand with reducing turnover, so we’ll dig into that a little bit,. And then we’ll end with a brief look at employee engagement, and then I’ll leave a few minutes for Q&A at the end, like I mentioned.

Marisa S., SPHR (01:32):

This is an ambitious agenda for today. Each of these topics that I mentioned in the agenda here could be its own webinar for at least an hour. Sit back and soak it all in. We’re going to give you some general and high level information on these things, but don’t hesitate to submit your questions along the way, or you can save them until the end. Now, let’s begin with an important question, why should you care about employee retention? Employees come. Employees go. It’s a natural and inevitable part of business and being an employer, so why sweat it? The answer isn’t just because of the great resignation either. Just to note, first, when we look at employee turnover, I’m referring to voluntary employee turnover.

Marisa S., SPHR (02:18):

In other words, that’s employees who are performing well. They’re making the choice to leave your company. You don’t necessarily want them to go. Why does it matter? Well, to begin with employee turnover is expensive. When I ask an employer, how much it costs for replace an employee who’s leaving voluntarily, the typical answer is, “Not too much. Basically the cost of posting the job on the industry sites or training them maybe for a few hours, that kind of stuff.” But that’s not exactly right. There are significant hidden costs of employee turnover, just like the total cost of having an employee isn’t just their salary. As you can see, there’s a lot more to replacing an employee.

Marisa S., SPHR (03:08):

There’s time to screen resumes, conduct interviews, onboard and train the new employees, some amount of loss productivity as the employee gets up to speed and as others have to train them. All of these soft costs can add up. In fact, a Gallup study from just 2019, so not that long ago, determined that the cost of replacing an individual employee can actually range anywhere from one and a half to two times that employee’s annual salary, and they say that’s actually a very conservative estimate.

Marisa S., SPHR (03:39):

This means that let’s say if you have a hundred person organization that provides an average salary of $50,000 a year, if you have high turnover and let’s say you turn over the entire company, replacement costs and turnover costs would be approximately $660,000 to $2.6 million. Those are big numbers. That’s a huge thing to consider here. Now then, retention also matters because employee turnover drains your company. Employees get better and better over time. They understand the business. They carry historical and institutional knowledge. They learn new skills and build relationships. But when an employee leaves, they take those capabilities and those contacts with them and a company loses some of that institutional knowledge.

Marisa S., SPHR (04:31):

The new employee has to start building their own skills and their own contacts and building their own relationships. A program to transition can help reduce some of the loss, but rarely can a new employee just step in and produce at the same level and rate as an employee who’s been on the job for several years. High employee turnover or low employee retention can create a situation where your company is cycling rather than moving forward. Then the third reason why investing in retention matters, employee turnover can undermine your company and your team morale.

Marisa S., SPHR (05:07):

Employees rarely work in silos and the personal and professional relationships they develop while in your company are extremely important to their productivity, their engagement, their satisfaction. If their colleagues are frequently leaving, your employees won’t invest in relationships with those around them. And don’t think clients or customers won also notice constant turnover. Additionally, employees are more likely to stay at a company when they have made strong connections with their colleagues and friendships generally strengthen an employee’s emotional contract with the organization as a whole. And lastly, I wanted to end this section with a look at the antithesis of engagement.

Marisa S., SPHR (05:52):

Let’s talk about reason employees don’t stay. Some of the most common explanations employees give when they are voluntarily exiting a company are an imbalance or lack of work-life balance, uncompetitive pay and benefits, the employee’s manager or management in general, a poor company culture, career growth opportunities or rather a lack of, and finally, one that’s gained momentum in the last couple of years as you can imagine is flexibility, both in scheduling and in work location. Employees rate these as significant reasons for seeking greener pastures these days. And really the best way to determine if there is a concern is to talk to your employees. Ask them how feel about things.

Marisa S., SPHR (06:38):

Don’t wait until the exit interview to find out why you’re losing a valuable employee. This is called a stay interview. Let’s find out if employees are going to stay, thinking of staying and why that might be. You’ve most likely heard of the 2021 Great Resignation by this point. That might even be why you’re here today. What’s happening now is unlike anything we’ve ever seen before, the last year and a half has seen an extraordinary surge of resignations. According to the US Department of Labor, 4.3 million Americans, or 2.9% of the entire workforce, quit their jobs this past August alone. Economists and pollsters are still investigating what’s going on and there’s debate about the root causes.

Marisa S., SPHR (07:26):

And I’m here to tell you, it’s not just one thing. The UC Berkeley economist Ulrike Malmendier suggests that there’s something existential behind The Great Resignation. “The pandemic and the rise of remote work have changed the way we view our lives and the world.” Anthony Klotz, a management professor who coined the phrase, Great Resignation, says, “The pandemic, forced people to take stock of their lives and gave them the opportunity to reimagine it.” Many experts anticipate that this cultural shift will have a lasting effect on the workplace. What’s resulting in most industries is a need for employers to focus on strengthening and improving the ways they attract and retain employees.

Marisa S., SPHR (08:09):

So while this presentation isn’t centered specifically on The Great Resignation, I applaud you attending this as focusing on retention is a critical aspect of this. Many companies invest all their time and energy in developing the benefits and perks and relatively little time connecting them with their culture, values, and employees. Don’t be one of those companies. Try reversing this orientation so that your culture and values drive your conversation with your employees. Let’s focus in on culture next. Culture is a set of typically unspoken values, norms, and beliefs that the majority of employees within an organization have.

Marisa S., SPHR (09:00):

Company culture can change and grow based on the people who are in it and it can and should be purposefully shaped by the people in the organization. If you don’t take the time to be intentional with your company culture by defining it, sharing it, getting feedback about it, oftentimes employees will define it for you and not necessarily in the way you were hoping and not necessarily in a positive way. The most challenging part of culture is that there isn’t one right answer for how it should look. Every company culture is unique because the makeup of your company is unique. Organizations should determine how to best define their culture based on their own beliefs, rather than on what their competitors are doing.

Marisa S., SPHR (09:43):

What’s a good culture for one company may not be a good culture for another. If you advertise your company culture accurately and have a historical track record of maintaining that company culture, you’ll be far more likely to attract employees who naturally fit with your culture and add to it with such an environment. So as you introduce more workers who naturally match that culture, your culture will be naturally more consistent and easier to maintain. Really focus on what’s important to you. So then, what if you’re thinking that your culture, or might need a little bit of an intervention? Where do you start? Well, I suggest taking a look at your core values.

Marisa S., SPHR (10:24):

Are they relevant to your business today versus when they were created? Do you even have core values? Do you talk about them? Do your employees know what they are? If this sounds overwhelming or you need some inspiration, start by looking to other organizations that you admire for their values. Talk to your current or prospective team members. Most importantly, ask yourself what type of company you want to build and what kind of employer you want to be. Really give yourself some time to chew on this. And then building on that last slide, let’s talk about an HR tool called a needs assessment.

Marisa S., SPHR (11:01):

This may sound like a scary buzzword, but it’s a useful tool and a way to take stock of where you are, not just for company culture or core values, for anything really. It can be pretty difficult for people to assess and understand their own culture. When you’re at work day after day, many of the indicators of culture can become hard to see or hard to identify. You’ll want to start by answering the questions you see on the screen here. Where are we? What’s your culture like today? What kinds of things are you seeing that you’d like to change? This could be things like disengaged employees, excessive absenteeism, poor customer service scores, high turnover rate.

Marisa S., SPHR (11:38):

All of these are symptoms of a sick culture. And then where do we need to be? What’s your dream brand? What’s your dream culture? How do you want the industry, employees, and applicants to view you? The beauty of this part of the needs assessment is that you decide what success looks like for you. And then how do we get there? This is where you really want to crowdsource your employees and managers for their thoughts and feelings. What kinds of things are they seeing that contribute to the gaps between where you are and where you want to be? This could be ineffective policies, untrained managers, time between promotions, failure to recognize success, lack of diversity, size of pay increases.

Marisa S., SPHR (12:21):

Then brainstorm how you can begin bridging the gaps and what opportunities you now have to create a richer culture. And then finally, you’ll want to ask, how will we know when we have the right culture or a good culture? Again, only you can define success here. This may be 2% less employee turnover. It could be better customer satisfaction metrics or decreased absenteeism and higher employee morale. At the end of your needs assessment, you should have maybe five to 10 statements that will help define who you are, what you’re passionate about, what your purpose is, and who you serve. You can then use these to guide you and even help develop a tailored retention plan.

Marisa S., SPHR (13:07):

Another important piece of culture is employee recognition. Although some managers and organizations may dismiss this as unnecessary, evidence suggests a strong tie between recognition and enhanced job performance. For example, SurveyMonkey partnered with Bonusly to find out how recognition and retention are related. Out of 1,500 respondents, 63% of those who were always or usually recognized said they are very unlikely to job hunt in the next three to six months. In contrast, only 11% of those who were never or rarely recognized would agree. Then a survey by OGO found that the lack of recognition has a hugely negative impact on how employees feel about the workplace.

Marisa S., SPHR (13:56):

According to their survey, 82% of American professionals feel they aren’t adequately recognized for their contributions to their workplace, and that could easily lead to turnover. Think about that. It’s huge. 40% of the workplace feels more motivated and willing to work harder just by being recognized for what they’re already doing. Think how quickly you can recognize someone, even if it’s just a high five or an email or a shout out during a meeting. These simple things take seconds and cost nothing, but they can have a big impact on employee engagement and their attachment to your organization. Those highly engaged employees are a lot less likely to leave us.

Marisa S., SPHR (14:40):

All right. We’re going to pause again here and jump our poll. My colleague, Sarah, is going to hop on and conduct that for you. I’m going to hand it over to Sarah.

Sarah (14:50):

Yeah, perfect. We’ll give Marisa a chance to take a sip of water. I’m going to launch the poll here. We’re just curious, how has the retention conversation changed within your company over the last year or year and a half? You’ve got three options here. We’ll give you a few seconds to go ahead and weigh in. Let’s see. We’ve got 40% of you that have participated, jumped up to 50%, up to 60%. You all are quick. Give you another few seconds here and then we’ll close out to 75%. That’s pretty good. All right. I’m going to go ahead and close the poll in five, four, three, two, and one. Okay, so I’m going to end it now. Let’s just take a look. Let’s see what everyone said here.

Sarah (15:43):

Looks like 70% of you said you talked about it before, but you’re definitely kind of more focused on it now. Only 12% of you are just aren’t having that conversation yet. So yeah, definitely looks like things have very likely shifted in the last year.

Marisa S., SPHR (16:03):

Thank you, Sarah. Yeah, that’s not surprising at all, but I’m glad that you are having the conversation, those of you that are, whether it’s as much as you were before or more now. And for those of you that aren’t yet, hopefully today we’ll give you some good places to start and some conversations to have with the other stakeholders in your company. All right. So now let’s talk about the dollars and cents of retaining employees. While it’s easy to fixate on salary as the key to retention, sometimes money isn’t the problem, or it’s at least not the only problem. Consider this, if an employee has decided they are no longer invested in their current company or role, it’s really difficult to change their mind back.

Marisa S., SPHR (16:51):

According to the CEB Corporate Leadership Council, if an employee has been offered a position with another company and their current employer provides them with a counter offer to stay 50% of employees who accept that counter offer and stay still end up leaving within 12 months. So think about that. They said, “Yeah, money’s great. I’ll take it. Happy to stay,” but it didn’t solve the problem. So many people would consider taking a pay cut to work in a position where their work is meaning to them or they feel more valued. But then let’s also consider that sometimes money is the problem and undervaluing an employee’s contributions with uncompetitive compensation can really hurt morale.

Marisa S., SPHR (17:38):

Have you ever been perfectly content with your salary until a coworker or a friend told you they make more than you? Feeling undervalued and underpaid can plant a seed of dissatisfaction. Employees commonly believe they have to switch companies in order to receive any significant increases in salary. No matter how happy and engaged an employee is, if feeling undervalued, they are more likely to find a new employer who will pay what they think they’re worth. Pay here includes the total compensation package. Does your organization provide benefits that your employees value? Sometimes it’s important to consider what message you send your employees based on the benefits package you offer.

Marisa S., SPHR (18:21):

And while benefits and workplace perks are both a crucial part of your strategy, they are not interchangeable terms. Benefits are what companies offer to the employees as part of their compensation package, things like health insurance, 401(k)s, paid vacations, sick days. They’ve become so commonplace that employees expect those things. They’re no longer considered a perk. Just something that comes with a job. But on the other hand, perks, like I’m showing you on the screen here, they are company wide extras that elevate your benefits and your compensation package and set it apart. Perks demonstrate that your business goes above and beyond to keep employees happy and that you value them as people with needs that exist beyond their jobs.

Marisa S., SPHR (19:10):

Your workplace perks should be valuable to your employees and by extension add value to your workplace. This doesn’t mean that perks have to cost a lot of money, but they do need to impact employees in a meaningful way. And to note, studies do show a big shift in the perks employees are interested in since the pandemic. With fewer employees working on site these days, the free coffee and break room pool tables or the catered lunches, they have less meaning. As the world gradually reopens, employers should actively engage their employees in discussions about what perks they do actually want and will make use of, but also listen to what they want from their job overall.

Marisa S., SPHR (19:50):

Because I don’t know, it sounds like it’d be pretty bad if you’re spending all this money on some perk or benefit in an office space that no one’s going into, when you could be using that money to do something employees will appreciate. So now that we’ve talked about why retention matters, specifically focusing on your culture and your benefits, let’s take a look at employee engagement and why this is key. Engagement. It’s a buzzword. It comes up over and over, but what does it actually mean? Well, Gallup defines engaged employees as those who are involved in, enthusiastic about, and committed to their work and workplace.

Marisa S., SPHR (20:34):

One great way to create engagement is to help your employees see right away the connection between their position and the larger mission of your company. The employees you want to retain are the ones who understand and care about that mission and how their job connects to it. Give your new employees that context from the start. And again, ensure that the company mission and values are revisited from time to time. Employers may occasionally feel that not every position can be important and connected to the mission, but I have yet to find a single role worth having in any company that doesn’t connect with it. After all, you created the role to further your mission, right?

Marisa S., SPHR (21:11):

So there must be a connection. And if there isn’t, perhaps that role isn’t worth having, or at least not in its current state. Let’s take a receptionist position. One way to communicate the responsibilities and expectations of the role is simply to handle a list of tasks like open mail, check in clients, answer phone. But now consider an alternative. Rather than starting with tasks, start with your company’s mission. Perhaps it’s to deliver a great experience to your customers or a positive experience for your employees or both. Your receptionist plays a critical role in accomplishing either of those missions. Frame the position that way and you’ll build a more longstanding relationship between your employee and the company.

Marisa S., SPHR (21:59):

How else do you engage employees? Well, encourage them to share their career roles, ideas for how to improve the organization, areas they’re interested in developing. Then we usually see disconnection and disengagement when employees feel like they can’t act creatively and where jobs are so automated that they feel like part of a machine. That said, you can’t necessarily offer autonomy or creativity in every job out there, so maybe consider something else. Every team might have different stress or leverage points. Our job as employers is to see what works and to keep trying until we get it right. Finally, if you spot any telltale signs of complacency or frustrations, be ready to act.

Marisa S., SPHR (22:43):

If you think an employee may be feeling bored, offer them a new assignment using a skill they’re developing. If you’re unsure why they seem checked out, have an open conversation to see, but you can gather and show them you’re invested in their success of the company. And as I noted earlier, managers play a solid role in their direct reports, engagement, and success. In fact, Gallup Research shows that managers account for 70% of the variance in team engagement. Effective management training can save employers lots of money in turnover costs. It’s critical to make sure you have the right leaders at the helm of any organization or team.

Marisa S., SPHR (23:25):

Consider revisiting how managers are selected to increase the odds that leaders select managers with the potential to raise the bar for their teams. Often, supervisors are promoted because they have fantastic skills as an employee. They’re really good at that job, but leadership coaching and training are often omitted from their management onboarding process. And these new managers don’t know how to lead, or at least not lead effectively. Neglecting to take this seriously can set managers and their direct reports up for failure. Managers should be trained to help their employees feel valued and appreciated, which in turn helps develop a mutual respect and build trust.

Marisa S., SPHR (24:05):

Several studies have suggested that fair treatment by a supervisor was the most important determination of retention. As the saying goes, people leave their manager, not their job. And then providing feedback and focusing on development to help employees grow is key as well. Have a plan to develop your best and brightest. I’m going to touch on this next. All right. Another key to building long lasting relationships is to invest in your employees’ growth. And here’s a paradox for you. The best way to retain your best employees is to prepare them to leave. Here’s what I mean by that. Many of your best employees are going to want to build their skills, their responsibilities and experience over time.

Marisa S., SPHR (24:55):

Ultimately, those enhanced skills make them more marketable to other employers. But by investing in their development and not being afraid of them leaving, you’ll actually be building a stronger relationship with your employees. They will see you and your company as a partner in their development as you’re helping them achieve their goals. And the best part, as they become stronger and stronger and consequently more and more valuable to other employers, they’re also going to become more and more valuable to you. And while we’ve all heard of some larger company’s expensive and elaborate development programs, yours doesn’t have to be that fancy.

Marisa S., SPHR (25:35):

Investing in an employee’s growth could be as simple as scheduling a quarterly coaching session, assigning a book to read or a TED Talk to watch or discuss, or allowing them time to take some online courses, or even setting up a program where employees create and deliver trainings to each other. Professional development doesn’t have to break the bank. It just requires some creativity. Ultimately, empowering and investing in developing your employees not only benefits you, but makes employees feel valued. Finally, it is important to know when to let go. Keep in mind that employee turnover is not always bad and saying farewell to the lowest performers in your company can really be a positive thing.

Marisa S., SPHR (26:28):

With many caveats to what I’m about to say, a turnover rate of about 10% is considered normal and healthy in some circles. Again, this percentage isn’t a hard and fast rule and, indeed, it varies by industry, by company, by internal preference, by what’s what category of growth your company is in. But no matter what, weeding out those who consistently underperform or who aren’t a fit for your company culture allows you to focus on recruiting better talent. The top performers are most often the employees who are engaged and committing to doing their best work. Ultimately, not all turnovers should be avoided. Some should be sought. The key issue is about who leaves and who stays.

Marisa S., SPHR (27:13):

Is it your top producers or your low performers? Remember, even if you cultivate the ideal company culture, you recognize your employees. You provide generous wages and benefits. Your managers are engaging and invested and focused on growth and employee development. Even with all that, not everyone’s going to be a right fit and not everyone’s going to be happy or have a good attitude. It’s just the nature of running a business and working with humans. You can’t win them all. And finally, look for trends in who is leaving your company. Many organizations, especially those on the smaller side, tend not to track turnover. And not necessarily at any fault of theirs.

Marisa S., SPHR (27:53):

It just never occurred to them. But this is unfortunate, since some key realizations might be gained from looking at the numbers more closely. You can’t measure what you aren’t tracking, and you can’t improve what you aren’t measuring. What if every single person who’s leaving your company and is a good performer you wish you kept is leaving at the 12 to 14 month mark? Well, maybe there’s something there we should pay attention to. All right. All right. Well, we made it. We covered a lot here. Thank you for sticking with me. I’m going to look through the questions that you chatted in and I’ll be able to answer a few. Apologies if I do run a few minutes over answering questions.

Marisa S., SPHR (28:34):

But again, we’ll be sending the slides and the recording to you within about 24-ish hours. Somebody asked if I can explain a little bit more about state interviews. Definitely happy to do that. A stay interview solicits employee feedback, like I mentioned. But instead of being held when an employee is leaving, like an exit interview, it’s done before the employees decide to leave. I mean, like the name implies, the stay interview asks employees why they stay. You might ask employees to assess what they like and don’t like about working for their company. But it’s important to know that if employees fear retaliation when they’re honest about that kind of stuff, they may feel like they just can’t be candid or honest, and then it’s not useful for you.

Marisa S., SPHR (29:20):

For them to be affected effective, employees do need to know they can trust the interview, as well as their employer. They need to have confidence their employer is actually going to listen to them and maybe do something about the things they learn. That’s a high level overview of a stay interview. And then a question about trying to improve recognition within a department. Would you recommend focusing on giving awards? That’s a great question. I don’t think it should be a consistent focus or the only focus. Let’s talk about some ways maybe you don’t have to spend money and still have a solid program in place.

Marisa S., SPHR (30:04):

My colleague worked at an organization where managers would submit to the CEO nominations for employees of the month, and then the CEO would hand write thank you notes to the employees who had gone above and beyond or demonstrated the company’s core values. He would hand write the note. He’d come to their desk. He’d thank them and talk about how or why their work was so appreciated. The team was able to see that and celebrate the employee. And that went a really long way for morale. There are other small, but mighty ways to recognize employees. Something my direct manager does, he buys fun stickers from the dollar store. And when someone does something great, he just walks over to them and gives them a little sticker.

Marisa S., SPHR (30:42):

It seems really silly. It costs a dollar for a bunch of stickers, but it does a great job of making the recipient feel seen and appreciated on the fly and consistently. And it is just a bit silly. It makes you laugh and smile. It’s a very low investment. It takes barely any time to brighten someone’s day, but it’s effective. You can get as creative as you want when it comes to employee recognition. I think, let’s see, we’re about a minute over. I think that’s all we have time for here. I just want to say thank you again for spending your time with me today. Hopefully this was super helpful. If you have ideas about how to keep your employees engaged or keep them in your company, make sure you talk to your employees about it.

Marisa S., SPHR (31:38):

See if those are things they would actually like and appreciate, because you don’t want to waste your time or your effort. Have a great rest of your day. And again, thank you for spending your time with us.

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