What is your Retention Risk Factor?

Posted by Larry Brantley on November 08, 2011

We are beginning to see counter-offers and bidding wars for top level talent.If you have to counter in order to keep an employee, you might save yourself the cost and frustration by taking care of them now before they want to leave. My experience has proven that a counter offer is just a short-term fix. A loyal and committed employer would serve themselves well to evaluate their company’s risk of losing key personnel who are critical to the success of day to day business and growth. Direct turnover costs per employee are about 25%-30% of an individual employee’s salary/benefits package, according to market research firm InsightLink Communications.

We interview candidates every day and see a broad range of experience and talent. I thought it might be helpful to get another perspective of why people leave a job.

Some of the more common reasons people share with us regarding why they are looking to leave are: broken promises, loss of business, change in management, no growth in role, role has changed, money, benefits, commute, staff conflict, merger/acquisition, review/raise.Almost all of these can be remedied or addressed before people leave.

Broken Promises- Whether real or in a person’s own mind, a broken promise is hard to overcome.It could be as simple as a dedicated parking space or a review that never happens.Once the trust is gone, you have an uphill battle.

Loss of business- Business comes and goes.Unfortunately, the people who support that business do as well.

Change in management- Employees don’t like breaking in a new boss.It is always uncomfortable and creates a shuffling of roles and relationships.No one wants to be the odd man out.

No Growth in Role- Driven employees have a full agenda of what they are trying to accomplish in their career.If the advancement in their career at your firm is not to the level they expect, they will jump to find it elsewhere.

Role has changed- Change is not always perceived as good.A person who is a routine style employee will find any alteration in their work rhythm as painful.

Money- Competitive pay for services rendered is an expectation.An employee may take less when the market is down for survival, but once it improves they will be gone if they are not given a fair increase.Also, there is an unspoken expectation that a person’s salary increases with years of service.It could be in promotion, performance or a cost of living increase.Money is the most sacred of areas protected by an employee.

Benefits- This concern is most important to individuals with families to support or people who might have a pre-existing condition.They need cost-effective and comprehensive options that are broad and affordable.A job with little to no health benefits is a high turnover risk.

Commute- People prefer to work, as a general rule, within a 30 minute commute from their home.Our candidates are reluctant to consider jobs more than an hour commute.

Staff conflict- People do not want to work in an environment where there is personality or personal conflict.

Merger/Acquisition- When two companies combine there is often a redundancy of staff.Reducing the additional people helps control costs and improves productivity.It can be perceived as the perfect time for people who are afraid that they might be on the chopping block to jump ship.Good people who are fearful may jump too soon.

Review/Raise- This is the most common reason I hear from people for leaving a job. It could be because they haven’t had a review and don’t feel valued or that they don’t agree with the reviewer’s opinion of them, or lack of a pay adjustment.

RETENTION RISK Survey

For each statement below, circle the number to the right
that best fits your opinion on the importance of the issue.
Use the scale below to match your opinion.

Statement

Scale of Importance

Never

Seldom

On Occasion

Most of the time

Always

We share all critical company information with staff

1

2

3

4

5

Reviews are conducted annually

1

2

3

4

5

We have had no change in our management team

1

2

3

4

5

Pay increases are an annual event

1

2

3

4

5

Our business has remained strong

1

2

3

4

5

We promote regularly from within our staff

1

2

3

4

5

We reward staff spontaneously for excellent work

1

2

3

4

5

Bad Managers are removed quickly

1

2

3

4

5

Our staff has grown with work volume as needed

1

2

3

4

5

Our benefits are little to no cost to employees

1

2

3

4

5

We have no staff turnover

1

2

3

4

5

We have an average tenure of 5 years+

1

2

3

4

5

Total Score50-60You have a work environment where staff grow and are loyal.

35-49Your firm is considered stable and provides most of the things an employee seeks

25-34You have and environment that is not for everyone.

0-24Your firm is at a high risk of losing key staff for better opportunities

This assessment is not a scientific tool.It is based on social feedback and the opinions of staff and recruiters compiling this data.

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