The long haul

Retaining employees is a delicate balance of compensation, training and culture

Tony Johnson
TJ & Assoc.

The key to success in business is its people. Keeping people in an organization engaged and current in their field is not just the right thing to do – it is good for business and the bottom line.

The cost of hiring is tremendous – figures on the Internet range between 50 percent and 400 percent of an employee’s annual wages, which can include training and lost opportunity. Regardless of the exact number, it is significant. Some businesses believe that once employees receive training they may leave as they become more marketable. This is not an employee retention strategy.

Recent statistics on a website for the Wall Street Journal state that of 500 employees surveyed, 41 percent of them are actively searching for a new job, while 35 percent were passively looking. That leaves only a quarter of the current workforce not actively or passively looking for new opportunities. Should that put employers on alert? Yes, as employment conditions improve a proactive retention program becomes even more critical.

Losing employees because they are not able to grow and develop in an organization costs businesses a bundle not only in lost hiring costs, but in lost organizational experience and know how – it takes time and money to bring a new person up to speed. Many companies are better served in developing the good employees that they have vs. rehiring due to lack of a retention strategy or lack of development opportunities.

So how do employers effectively respond? Discussing career goals and opportunities during the employee performance review process is a good first step. Another information resource is the exit interview which is not proactive, but can provide good information for remaining employees. Employee focus groups can be very effective as they can provide feedback and ideas for solutions in terms of development and delivery of the retention plan.

To further combat this potential exodus of key employees, Society for Human Resource Management indicates that human resource professionals are implementing more retention strategies. Depending on the level of employees, different strategies are more effective. Executives seem to respond better to compensation incentives while lower level staff respond better to training and career development.

An employee who craves but does not receive learning and career development opportunities is the same one who will leave for a job that provides those things. If the ability to learn and grow is continually provided to the employee, he or she is much more likely to stay and provide excellent service to the current employer. Creating and encouraging a constant learning environment makes a more educated and enthusiastic workforce while providing the employer a variety of benefits including – current knowledge base, loyalty to the organization, motivated employees and less turnover.

In addition to compensation, training and career development – depending on the life stage of employees – life balance issues is another area to address. Sometimes employees are not dissatisfied with the work, instead they are dissatisfied with the time required to be there in comparison to family or social time. Creative solutions including virtual office options, increased vacation time and job sharing can be considered. By conducting a solid assessment of the work, perhaps a day per week could be spent working from home to help achieve that balance. For a self motivated employee, more work can be accomplished in a shorter time (considering the commute, fewer interruptions and so on) resulting in a more satisfied employee.

Job sharing can be very effective in a number of instances: a single parent of a child with day care issues, parents who have shift work, or employees who are caring for an aging parent who lives at home.

Regardless of the reason, if employers can listen and respond to the needs of their employees, a positive, mutually beneficial long-term relationship can be the result. A well thought out retention strategy is a smart thing to implement.

Tony Johnson is president of TJ & Assoc., a small business offering custom services in recruiting, business and human resource consulting. They can be reached at 360-263-2676 and


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