Retention

Retention appears last in this sequence, because it is what you do once you have landed the employee, trained him and now just want to keep him.. Companies are in the habit of overlooking this step altogether and it is the most fatal flaw of all. The ITAA reports that every time an IT professional quits, it costs his former company anywhere from $123,000 to $250,000 to replace that person. Essentially, if you do everything else in the recruiting process right, but neglect retention, you have essentially made a huge investment preparing someone to go to your competition.

After being brutalized by losing their best people, companies have begun to hone in on retention as a critical link to their survival. Having a clear grasp of your retention strategies also is fundamental to communicating that overall "HR is our second business" theme from the moment a candidate first hears about your company onward. The following gives some sense of what is being done over and above the obvious, such as stock plans that vest over time, longevity bonuses etc. Money will always be an important part of the mix, but when a competitor matches or exceeds what you offer, then is when you know whether you have a real retention program in place.

The greatest fundamental underpinnings of a strong retention program seem to rest on two things: Communication and Recognition. Recognition deals with finding ways to reward your people for a job well done; it also means recognizing their abilities in all potential areas, and providing whatever incentive you can to grow and nourish those capabilities.

Communication is about having a genuine and ongoing dialogue with your employees, learning what their concerns and ideas are, and figuring a way to take action on things that need acting upon. Also, it means finding out what is really important to your people so that you can motivate them with incentives that have meaning.

A good example of both Recognition and Communication is in a practice called Goalsharing.. Goalsharing is a system by which a company identifies goals for members of its work force that do not contribute in ways that can easily be tracked to the bottom line (i.e. sales). Upon achieving these goals, the employees get compensated in cash, but the process instills a greater buy-in and sense of teamwork from the team that is assigned with the goals. This is a practice being utilized by companies such as Corning, Weyerhauser and Sears. Sears reports that employee turnover at stores that use goalsharing is 10 percent lower than those that do not.

Another way in which the Recognition and Communication components kick in is when there is a culture that takes interest in each employee's personal development and fulfillment on the job. This means frank and open discourse between the employee's superiors and he, and doing things that make sure the employee has a personal investment in the company.

A big way for the above to happen is to keep people stocked with challenging work. This is also cited as one of the top reasons for taking or leaving a certain job situation. If people are enjoying what they are doing, as a rule, they will usually choose that over an incremental increase in pay or even stock offerings. Of course, you can't let yourself be outbid at any level if possible, which is why you need those things too, but your foundation of loyalty should be because your people actually like to work for you.

Key to making work an enjoyable experience, some companies are now hiring Chief Morale Officers. As bizarre as this might sound, it gets back to how seriously you are willing to take your HR as a second business concept. Do you just want a magic fix, or are you willing to really commit to an ongoing solution? Scient's Chief Morale Officer, Joe Galuszka, travels to the company's offices around the country and over roundtable luncheons, asks people for feedback about everything from compensation and corporate policies to snacks in the lunchroom. He refers to himself as a Resource without an agenda. The results speak for themselves; Scient is running an 11 percent turnover rate, very low for the IT industry. Ticketmaster Online - City Search has a similar program. Walt Boyle has been its Minister of the Interior for more than 4 years. He describes his role as part court jester, part town crier and part independent facilitator. Boyle reports directly to the CEO, and is charged with keeping more than 1,000 workers in 37 offices motivated. In addition to the fun-making part of all this, these companies have managers or "sponsors" focused on individual employees careers, providing counseling, advice, and if needed, resources to move them forward. Managers are given discretionary funds that they can use for training and other careerbuilding activities. Zero-Knowledge gives each employee $1200 per year to spend on Quality of Life enhancements such as laundry service, high-speed home internet access, or massages.

The communication precept is also extremely important when dealing with workers who you believe may be looking to leave, or are not happy. Traditionally, there has always been a stigma about an employee and employer talking about the employee's thoughts of departure. The employer feels a sense of betrayal, and may make statements designed to intimidate the worker into staying "you walk out that door, you'll never walk back in" or something of that nature.

Today, though, companies are recognizing a few things. If the employee is about to leave, the company's opportunity to do something to stop it was months ago. Somehow, they weren't watching this one, paying enough attention, doing whatever they needed to to keep them on board. Counteroffers rarely work, and the intimidation play certainly does nothing at all. Companies also realize that sometimes it really isn't their fault. The employee has been lured away with promises of great wealth and success. Especially post April 2000 it is painfully clear how hollow some of these promises may be, but at that moment the person has bought into the dream and his current employer does not have many tools available to dismantle that dream and come out looking good. So companies are adopting what is called an Open Door policy. This means that instead of getting mad, they are telling the employee that they can go with their blessing, but if for any reason it doesn't work out, they can come back and still get their old job back. Most will even guarantee that if they are to return within a certain period of time their options, 401Ks, benefits etc. would still be intact. This is creating "Boomerangs"; employees who leave, but whose previous employers have maintained excellent relations with, and who, at the end of the day, realized the dream was not all that it was cracked up to be, and decided to "come home".

Some companies are even going a step further, and creating Externships. They are approaching employees who they sense may be growing restless, and are arranging for them to go to work with other companies for a year. This gives employees a chance to do something completely different, develop new skills and accrue a whole set of experiences. These are employees who bear no grudge against their current employer, and tend to be even more favorably inclined after being allowed to take this kind of break.

Conclusion

It is surely not news to anyone in this room that one of your greatest threats to your ability to staff effectively is the U.S. itself (not to mention Europe and Japan). America's corporate leaders recognize that the H-1B solution is a short term one, but one that will work just fine until the domestic work force is back up to speed. And as long as that is the case, they are making this as much a part of their mission as any other strategy. The June 16 issue of Human Resource Executive has an in-depth article titled Out of India, in which it not only surveys the dynamic of recruiting from India, but gives in-depth pointers on how to attract and retain Indians. It mentions many of the things I have referenced today, as well as sensitivity to cultural issues, making it easy for employees to take long breaks to go home and visit family etc.

Do not make the mistake that America made in the late 30s with World War II, believing that it was someone else's problem. We are in a global economy. The war for talent in the U.S. has already landed on your shores, and you need to respond with depth, passion and urgency for you to win it. Learn from the companies that are working very hard to attract your best and brightest, and I have little doubt that you will be able to emerge victorious and grow your companies according to plan. I hope what was presented today will be useful to you in this effort.

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