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05.31.07
Proven Ways to Retain Your Best Employees
 By Gregory P. Smith
Imagine--you have been working late to finish an important project when your sales manager walks into your office and tells you she has been offered a better job. This is the same person you handpicked, trained, and recently gave a pay raise. As she turns to depart she says, "There are others thinking about leaving too."
What went wrong? How are you going to finish this project? Who will be next to leave? The dread is starting to sink in.
Employers face enormous challenges when they consider the increasing difficulty of finding skilled people, a more demanding younger workforce, and a growing population of older workers heading toward retirement. In the next 10 years, HR professionals expect three out of 10 employees in their organization's workforce to retire.
The difficulty in finding and keeping talented people is having a catastrophic impact on many businesses and industries throughout the world. In addition to those retiring, surveys show one out of every three people plan on quitting their jobs this year. The greatest threat employers face is losing their best and brightest to the competition. That's a lot of talent leaving organizations and just the beginning of what many people have described as the "perfect storm."
Here Comes the "Plug and Play" Generation
A new generation of workers is transforming the landscape. There are several reasons why. On one end of the workforce, the Baby Boomer generation is retiring, leaving fewer skilled people to choose from. On the other end, a smaller group of younger workers is entering the workforce who place their needs for instant gratification first and foremost. The average tenure of a 20-something is less than 18 months, creating a swinging door and a cycle of misery for employers.
The Cost of Turnover
Each year businesses spend billions of dollars recruiting and replacing their employees. They assume turnover is unavoidable and think there is very little they can do to prevent it. For the most part, organizations focus on retention after they start experiencing a turnover problem.
Few businesses consider the impact of turnover on their bottom line. It takes $7,000 - $14,000 to replace a typical employee, and to replace a key manager costs the same as buying a Lexus. To replace a critical care nurse can run up to $185,000; and when a top talented individual in a key role departs, it can cost millions. In spite of the staggering cost, the majority of businesses do not have a formal retention program.
Money and benefits are important, but studies show most employees leave for other reasons. Obviously, a certain degree of turnover is unavoidable, but with a small amount of effort organizations can make a major difference. Your retention plan should address the following key components.
Continue reading this article.
About the Author:
Greg is founder and President of Chart Your Course International, a management development firm located in Atlanta, Georgia. Many of his clients include both Malcolm Baldrige National Quality Award winners and Fortune Magazine's "Top 100 Best Places To Work." Greg Served on the Board of Examiners for the Malcolm Baldrige National Quality Award. He is listed in Harvard University's Profiles in Business and Management: An Internation
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