The Pied-Piper of Employee Retention

Businesses feel the increasing threat of the Pied Piper who, with just the sound of his flute can steal away valuable employee! What happens to a company when long-term employees quit? The loss of an integral part of any organization is disruptive at best, so what are the successful strategies to retain valuable employees?

The old style of management was exemplified by the attitude that employees were replaceable and interchangeable; "if you don't like this employee then just get rid of him and replace them with another just like 'um". A shift in attitude has occurred and now many companies now prideful expound "our employees are our most important resource". Although this has become true in some organizations, it is pure "lip service" in others. If this attitude is not a living, breathing corporate attitude, employee's BS detectors can tell when management is acting differently from stated beliefs. It is then management hears the sound of the Pied Piper playing in the background.

Replacing employees is expensive! The cost can be a few thousand dollars for a clerk, upwards to three times the base salary for a manager. Obviously there are some marginal employees that their leaving becomes a welcome blessing but it is the good employee loss that is sorely felt. This loss is very expensive, for as they walk out of corporate doors, they take with them the sum total of all the training and experience the organization has invested in them. Compounding an already bad situation, often a competitor now hires your once competitive advantage and they are stronger for the gain! It is difficult to replace this person in a labor market that is approximately 40% smaller then even a few years ago, and in a 1998 study completed by Sibson & Company, over 50% of employees are either thinking about quitting or have planned to quit. Compounding this dismal picture is a very low unemployment rate.

The mid-eighties ushered in the sweeping changes in business. With excessive competition occasioned by the now global market, companies could no longer afford the inefficiencies caused by multiple layers of costly middle management. It was during transformation time I walked into a client's office and stared into his glazed eyes. Upon asking him what was the matter he told me that he had obtained a promotion. I gave him a congratulatory pat on the back and asked him why such good news made him look so glum? He responded, "they didn't replace me"!

This loss of middle management has caused decisions to be pushed further down the corporate hierarchy. Responsibilities previously held by middle managers were now being made on the shop floor, often by hourly employees. Eliminating direct management has forced the empowerment of the work force as not imagined twenty years ago. Self-directed work teams, quality improvement initiatives, and flatter organization charts all contributed to management's attitude toward their employees; from "replace them with another just like 'um", to a 180 degree change of the sharing of power and responsibilities.

In the book entitled First Break All the Rules, the authors, Marcus Buckingham and Curt Coffman, write about a survey conducted by the Gallup Poll using the responses of over 100,000 employees. With the expertise of this world-famous polling organization they were able to establish a list of questions which directly related to employee retention. The retention questions are as follows: Do I know what is expected of me at work? Do I have the materials and equipment I need to do my work right? At work, do I have the opportunity to do what I do best every day? In the last seven days, have I received recognition or praise for good work? Does my immediate supervisor, or someone at work, seem to care about me as a person? Is there someone at work who encourages my development?

In the following months this column will develop each one of these concepts. The Gallup Poll's scientific study has demonstrated the tune of the Pied Piper and it is the unwise or ignorant businesses who fail to heed his ominous flute. nnnn