Transcript PowerPoint Presentation - The Retention Institute

What Drives Retention Across All Industries?
Presentation Title
Accountability!
Presenter’s
• Date
Dick Finnegan Name
June 30 , 2010
th
©SHRM 2010
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Today’s Agenda
1. A CIA Question
2. Data: Will Good Employees Quit?
3. Principles & Strategies:
The Rethinking Retentionsm Model
4. Tactics: 3 Case Studies of Accountability & Retention
5. Free Stuff: Parts 1 and 2
©SHRM 2010
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Today’s REAL Agenda
Provide you with convincing data and clear
thinking so you can influence your
executives to establish retention
accountability across your organization,
top to bottom
©SHRM 2010
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CIA Story
A “milk-toasty” CIA story…
Why do CIA employees change
departments?
©SHRM 2010
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3 #s The Media Doesn’t Report
1. 11%
2. 31%
3. 3-5 X
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High Performers Never Concerned
1.
Jobs were much harder to find in 2008
2.
Many employees still quit…your chances of losing a good
worker in the 2008 recession were 89% as strong as in the
booming economy of 2007
3.
Layoffs lead to losing muscle after fat
Therefore, it is likely that your good workers can always find jobs
and they are the ones who are leaving
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“Resume Tsunami”
3 Studies on Employee’s Post-Recession
Intentions
 Deloitte warns companies to expect a “resume tsunami” as
49% are looking or plan to look as the economy improves
(September, 2009)
 Right Management reports 60% plan to look as the
economy improves (November, 2009)
 Execunet and Finnegan Mackenzie found more than 90% of
executives would take a recruiter’s call and more than half
are already looking (July, 2009)
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The Rethinking Retentionsm Model
 Key Phrases are “Research-Based” and “ProcessBased”
 Research into all published studies, company bestpractices, and academic publications…based entirely on
retention results
 Experience working across top US companies and on 6
continents
 Elevator Speech: High-retention companies install
business processes for retention as they do for sales,
service, quality, and safety
 Fills the Void as employee retention has no established,
research-based process…until now
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Process or Program-Driven?
Retention Processes
driven by executives from the
top like sales, service, quality,
and safety
CEO
Retention
Programs driven
EVP
by HR from the side like
hiring, performance
management,
others
VP
©SHRM 2010
EVP
VP
VP
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Process-Driven? Probably Not
Sales
Service
Quality
Safety
Retention
Accountability,
tops-down in Ops
Y
Y
Y
Y
N
Recognition
company-wide
Y
Y
Y
Y
N
Consequences,
good and bad
Y
Y
Y
Y
N
Training,
skill-specific
Y
Y
Y
Y
N
Coaching
for improvement
Y
Y
Y
Y
?
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Research-Driven, Process-Based
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10 Points for Rethinking Retention
3 Principles…
Point #1. Employees quit jobs because they can
Point #2. Employees stay for things they get
uniquely from you
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10 Points for Rethinking Retention
3 Principles…
Point #1. Employees quit jobs because they can
Point #2. Employees stay for things they get uniquely from
you
Point #3. Supervisors build unique
relationships that drive retention…or turnover
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7 Retention Strategies
Strategies for Supervisors…
Point #4. Hold supervisors accountable for
achieving retention goals
Point #5. Develop supervisors to build trust with
their teams
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7 Retention Strategies
Strategies for People Management
Processes…
Point #6. Narrow the front door to close the back door
Point #7. Script employees’ first 90 days
Point #8. Challenge policies to ensure they drive
retention
©SHRM 2010
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7 Retention Strategies
Strategies for Top Management…
Point #9. Calculate turnover’s cost to galvanize
retention as a business issue
Point #10. Drive retention from the top, as executives
have the greatest impact on achieving retention
goals
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Who Owns the Strategies? HR or OPS?
For Supervisors…
Point #4. Hold supervisors accountable for achieving retention goals
MORE OPS
Point #5. Develop supervisors to build trust with their teams MORE HR
For People Management Processes…
Point #6. Narrow the front door to close the back door MORE HR
Point #7. Script employees’ first 90 days MORE HR
Point #8. Challenge policies to ensure they drive retention MORE HR
For Top Management…
Point #9. Calculate turnover’s cost to galvanize retention as a business
issue MORE OPS
Point #10. Drive retention from the top, as executives have the greatest
impact on achieving retention goals MORE OPS
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Accountability Secret Sauce
Point #3. Supervisors build
unique relationships that
drive retention…or
turnover
Point #4. Hold supervisors
accountable for achieving
retention goals
Point #6. Narrow the front
door to close the back door
Many of these ideas
used to cut call center
turnover 50% and nurse
turnover 54%
©SHRM 2010
Point #9. Calculate
turnover’s cost to galvanize
retention as a business
issue
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Executives
Managers
Supervisors
Experience tells us that the best way to make
things happen in organizations is to drive them
from top to bottom…think sales, service, quality,
safety
Intuitively, the same should be true for retention
but is there data from respected research that
tells us this is true?
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©SHRM 2010
Supervisors’ Impact on Turnover
“If you have a turnover problem, look first to your managers”…Gallup
Primary reason for seeking a new job is disliking boss’s
performance…Yahoo
Employees stay for managers first and co-workers second…salary.com
Poor leadership causes over 60% of all employee turnover…
Saratoga Institute
“When employees stay, it is because of their immediate
managers”…National Education Association
Employees who stay primarily for their supervisors stay longer,
perform better, and are more satisfied with their
pay…TalentKeepers
Given the high cost of turnover, it is clear that poor
managers…dramatically increase the cost of
operations…Kenexa
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©SHRM 2010
The Real Power of Supervision
More importantly, a study by Kenexa confirms that
employees’ satisfaction with pay, benefits, learning,
development, and advancement is “mediated” by their
relationships with their supervisors and concludes:
“Offering a higher salary or
developmental/advancement
opportunities may not be enough to
retain employees”
So it appears that poor supervision overcomes the
benefits of pay and development…and leads to higher
turnover
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©SHRM 2010
4 Thoughts on Supervisors and
Retention
4 Thoughts to Ponder
1. Poor supervisors will trump good employee programs
good programs + good supervisors = retention
good programs + poor supervisors = turnover
2. Poor supervisors also trump good pay and development, and
drive higher turnover
3. “Supervisors” refers to anyone who supervises people
including executives and senior managers so all must have
retention skills
4. If one or more of your supervisors fails to build effective
retention relationships, what other legitimate advantages do
you offer your employees that your competition for talent does
not?
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©SHRM 2010
Accountability Drives Retention!
Additional Landmark Studies…
 Supervisory accountability is the first recommended
solution for retention of nurses and teachers
 How many organizations hold supervisors
accountable for retention? 14% in one study, 11% in
another
 Retention accountability is a “butterfly effect”
initiative
 Moves retention discussions from “co-dependency”
to accountability
©SHRM 2010
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An Accountability Clue
2-ball off the 6-ball:
The secret to influencing
the CEO to set retention
goals is to ask the CFO to
put a $ cost on turnover
first…then both the CEO
and CFO become
advocates for what you’ve
always known, that
retention must be
managed on the
operations side of your
company as well as in HR
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Why Finance?
 Because Finance is the keeper of all things about measuring
$...essential for moving retention from an HR-only issue to
a company-wide initiative?
 Because the CEO and other operations executives listen to
Finance and the CFO?
 Because Finance has more credibility on financial matters
than HR?
 Because Finance is more likely to support their own findings
than yours?
 Because Finance might under-estimate the cost of turnover until
they study it, and then will become your strongest ally for
establishing retention goals?

Answer: All of the above
©SHRM 2010
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Cost Per Exit
• Direct costs…exit processes, temporary help, recruiting
and hiring costs, training and onboarding
+
• Indirect costs…Revenues per FTE divided by 240,
weighted for contribution; multiply times # days to fill
vacancies and half # days to ramp up
=
• Starter cost of turnover…does not include lost morale,
turnover due to turnover, other immeasurables
• Full cost model www.TheRetentionFirm.com
©SHRM 2010
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Setting Retention Goals
Base metric on history and think short-term
 Monthly might be better than annual, and first-90days might be best based on your tipping point
Drive goals top to bottom, from CEO to firstline
supervisors
Reinforce with reports, performance appraisals, bonus,
incentive, pay
 How do you reinforce sales, service, quality, and
safety?
©SHRM 2010
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Reporting Retention Results
Who reports? Finance…because Finance reports the
important #s
How? $s saved/lost compared to goal
> “In May our retention goal was ___% and achieving it
would save us $___ . We achieved that goal and we
did indeed save $___”
> “The leading departments/managers who achieved
their goals were ___ and the ones who missed their
goals were ___.”
©SHRM 2010
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3 Paths to Accountability & Retention
For High-Turnover Industries
#1: SunTrust Banks: Driving accountability
through turnover’s cost
#2: Florida Hospital Flagler: Using cost and LOS
data to define specific accountability
#3: Hilton’s Call Centers: Specifying
accountabilities for HR, Training, and
Operations
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#1: SunTrust Banks
Situation:
My career launcher…CEO said cut turnover, I said
“You don’t understand…”
Finance conducted cost study for 6 cascading job
groups, CFO announced results
Top operations executive set goal for all branches to
cut turnover 10% over previous year/tied to bonus
Bob from back of the room, “Now let me get this
straight…”
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#1: SunTrust Banks
Turnover fell 19%, saved $4 MM
 Primary retention tool was monthly accountability
report with managers’ names, employees lost,
progress toward goal
 No pay increases, no new benefits, no additional
manager training…just accountability
connected to annual bonus
©SHRM 2010
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#2: Florida Hospital Flagler
Situation:
99 bed hospital, part of a Adventist hospital corporation
whose executives directed us to their most troubling
retention hospital
Overall turnover 21%
Completely decentralized hiring with few common
processes
Top management concerned, open to change
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Job Group Results
Example Jobs
‘08 T/O %
‘09 Proj T/O %
Nurses aid
20
17
Phlebotomist
24
9
Licensed
Hourly
Rehab therapist
13
19
Nurses
Surgical nurses
23
29
Exempt
All top managers
18
7
29.6
21.3
Job Group
Non-skilled
Skilled Hourly
TOTAL
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Leavers by LOS
0-3
mos
4-6
mos
7-12
mos
1st yr
Lvrs
13-36
mos
37 mos
+
30%
3%
17%
50%
33%
17%
Skilled
hourly
22
9
18
49
27
24
Licensed
hrly
10
5
29
44
24
33
Nurses
33
14
22
69
17
14
Exempt
8
8
8
24
50
25
25%
9%
21%
55
27%
18%
Non-skilled
Total
©SHRM 2010
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Hospital Retention Plan
Reduced nurse turnover 56% by…
 Establishing nurse retention goals for the organization,
departments, and managers for 90-, 180-, and 360-day
retention
 Implementing other tools to support goal achievement
including new hiring and onboarding processes, specific
leadership training with post-training assignments, and
other initiatives
©SHRM 2010
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#3: Hilton’s Call Centers
Situation
> 5 centers averaged 55% annual turnover and company
reported annualized turnover and monthly turnover
> Missing was knowledge that 50% of new agents failed to
reach 90 days
> Challenge included what to measure and what goals to set
> Accountability was perplexing as many touched new hires
in the first 90 days
©SHRM 2010
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Hilton’s Call Centers
Reduced turnover in half in 4 months…
Structuring retention accountability for HR, training, and
operations via 91-day meetings
Requiring managers send a 90-day retention report to the CEO
Implementing new standards for 90-day retention, app/hire ratio,
and employee referrals
Assigning new hires to best supervisor
Tracking new hires “retention likelihood” weekly with coaching
Implementing a facilitated realistic job preview
Designing structured interview to measure intent to stay
©SHRM 2010
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3 Paths to Accountability
Driven by $
Data
“When” IDs
Metric
Goals with
Accountability
SunTrust
Yes
No/Company
-wide
Absolutely
Florida
Hospital
Yes
Yes/Jobspecific
Absolutely
Hilton’s Call
Centers
Yes
Yes/Jobspecific
Absolutely
©SHRM 2010
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Research-Driven, Process-Based
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Free Stuff, Slide 1
For Information On…
1.
2.
3.
4.
5.
6.
Retention accountability for nurses and teachers
Exit interviews managers conduct with supervisors
Realistic Job Previews
Employee Referrals to obtain 50% of new hires
New Hire Interview Questions
Stay Interviews
Please write your “order” on the back of your
business card
©SHRM 2010
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Free Stuff, Slide 2
Module #1 of the online
Certified Employee Retention Professional
Program (CERP)
 Earn 1 HRCI credit for completing Module #1
 Earn up to 26 HRCI credits for completing the
CERP program
Please write “Module #1” on your
business card
Contact: [email protected]
407.694.3390
©SHRM 2010
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