Retention must be approached strategically to achieve measurable, sustainable, and long-term impact for your organization.
In order to develop an effective retention strategy, start with the following four steps:
1. Understand your company’s strategy
Determine what sort and type of talent should be retained.
2. Collect employee demographic data
Analyze your workforce in terms of age and career stages (for example, early career, mid-career, late career), gender, management level, etc. List any reasons why the employee accepted a position in your company from the beginning.
3. Analyze your attrition rate
Investigate the attrition rate over several years by distinguishing between voluntary and involuntary, internal and external, and dysfunctional (of high performers) and functional (of low performers) turnover. Apply the fishbone diagram or other tools to solve complex problems.
4. Conduct stay interviews
The keys to a successful retention strategy involve knowing:
• What works within the parameters of your company’s culture,
• What works for your employees, and
• What employees value about your company and their work.
Tuesday, March 25, 2008
Tuesday, March 18, 2008
Bad Vibes through Seating Arrangements
Leaving aside interview techniques, a pure seating arrangement can influence the status and power dynamics of a job interview.
Location of chairs and their height (from the floor level) can create an atmosphere of seriousness, partnership, or compassion. Besides, the chair size and its accessories may also have impact on the mood.
Typically, an interviewer and interviewee sit directly opposite one another as on the attached picture.
In this seating arrangement, the most power is exerted and a defensive and competitive atmosphere prevails. In addition, the table becomes a solid barrier between both parties.
Therefore, the competitive position almost implies that the parties are meeting to work out why they should not enter an employer-employee relationship. At the same time, the idea of a shared vision and moving together in the same direction is pushed into the background. Without a doubt, this position does not foster understanding and does not put an interviewee at ease when speaking with the interviewer. In addition, conversations tend to be significantly shorter in this position.
The competitive position can be quite detrimental to recruitment practices.
Wednesday, March 12, 2008
Tell me the Future
HR and Finance represent two different kinds of expertise to help the CEO grow the business.
So, for the two to work collaboratively, both should have equal weight and influence. For this reason, Liz Ryan suggests that professionals in the top HR spot should receive the same compensation as the CFO. After all, “Why would a company hesitate to pay its top people officer just what its top money officer is earning? Beats me -- unless the company doesn't value its people as much as it says it does.” Ryan writes.
Interestingly, according to Michael Page’s Salary Survey for 2007/2008, a CFO at an established company receives an annual salary of HK$ 1.5 - 3 million+ whereas the HR Director at a large company earns HK$ 1.4 million+.
This discrepancy demonstrates that:
• Firms are more interested in past harvest (apples) than in future earnings potential (apple tree roots),
• Firms value Finance’s oversight role on how and where dollars are spent more than HR’s role in talent management,
• Firms appreciate building a fiscally sound company (Finance) more than an organizationally sound company (HR),
• Finance departments are incapable of applying financial thinking to an area where value is largely intangible (HR) and therefore do not support a significant investment in the people officer position,
• HR departments are incapable of addressing the value that they create in financial terms and therefore cannot change its image of cost centers.
Yet, for both areas, there is a long way to go to be strategically significant; for HR to be able to create intangibles and for Finance to be able to grasp them in a future-oriented Intellectual Capital Balance Sheet.
So, for the two to work collaboratively, both should have equal weight and influence. For this reason, Liz Ryan suggests that professionals in the top HR spot should receive the same compensation as the CFO. After all, “Why would a company hesitate to pay its top people officer just what its top money officer is earning? Beats me -- unless the company doesn't value its people as much as it says it does.” Ryan writes.
Interestingly, according to Michael Page’s Salary Survey for 2007/2008, a CFO at an established company receives an annual salary of HK$ 1.5 - 3 million+ whereas the HR Director at a large company earns HK$ 1.4 million+.
This discrepancy demonstrates that:
• Firms are more interested in past harvest (apples) than in future earnings potential (apple tree roots),
• Firms value Finance’s oversight role on how and where dollars are spent more than HR’s role in talent management,
• Firms appreciate building a fiscally sound company (Finance) more than an organizationally sound company (HR),
• Finance departments are incapable of applying financial thinking to an area where value is largely intangible (HR) and therefore do not support a significant investment in the people officer position,
• HR departments are incapable of addressing the value that they create in financial terms and therefore cannot change its image of cost centers.
Yet, for both areas, there is a long way to go to be strategically significant; for HR to be able to create intangibles and for Finance to be able to grasp them in a future-oriented Intellectual Capital Balance Sheet.
Monday, March 10, 2008
Stay Interviews (Part II)
Following up on my earlier post on the role of stay interviews, a question emerged on Xing’s “Human Resources in China” forum as to the difference between the stay interview and the suggestion box.
What the stay interview and the suggestion box have in common is that both tools seek out opinions of a company’s workforce during the actual employment phase and not after and toward the very end of an employment period as an exit interview does. Furthermore, both tools also require an action plan for implementing findings or suggestions to be effective.
As to the differences, the suggestion box is definitely a more efficient way to receive employee feedback since it does not require as many resources of both the interviewee (time and productivity costs) and interviewer (e.g. consultancy fees).
Most importantly however, the stay interview and the suggestion box differ in terms of their underlining objective. The suggestion box is not specifically a HR tool and is an outlet open for comments about business, business processes, customer relationships, etc. But, the stay interview is an individual-centric HR tool; it is about the employee’s well-being, development, and their perception of the employer.
Notably, suggestions can also be requested in a stay interview (What would you do differently here?) but rather in respect to the way the company manages its people than the business as a whole. After all, asking employees to provide suggestions engages them in solving organizational problems and helps to generates support for change initiatives.
What the stay interview and the suggestion box have in common is that both tools seek out opinions of a company’s workforce during the actual employment phase and not after and toward the very end of an employment period as an exit interview does. Furthermore, both tools also require an action plan for implementing findings or suggestions to be effective.
As to the differences, the suggestion box is definitely a more efficient way to receive employee feedback since it does not require as many resources of both the interviewee (time and productivity costs) and interviewer (e.g. consultancy fees).
Most importantly however, the stay interview and the suggestion box differ in terms of their underlining objective. The suggestion box is not specifically a HR tool and is an outlet open for comments about business, business processes, customer relationships, etc. But, the stay interview is an individual-centric HR tool; it is about the employee’s well-being, development, and their perception of the employer.
Notably, suggestions can also be requested in a stay interview (What would you do differently here?) but rather in respect to the way the company manages its people than the business as a whole. After all, asking employees to provide suggestions engages them in solving organizational problems and helps to generates support for change initiatives.
Friday, March 7, 2008
Magic in Your Workplace
March 8th is International Women’s Day. This day brings about awareness of women’s issues, recognizes achievements, and encourages leadership. Women business owners, leaders, community role models, mothers, and wives are commemorated and celebrated while pinpointing diversity, work-life balance, and glass ceiling concerns; still very dominant in the business world.
In fact, only 16 percent of all senior executives in Fortune 500 companies are held by women. Worst still, research shows that top women leaders feel like outsiders in their organizations.
But, women leaders in general excel at overtaking the responsibility for workforce performance. They strive to establish bonds with their workforce, develop genuine interest and understanding toward their staff, manage by sending signals about what is valued, and what is appropriate, etc.
On a personal note, one word connects two remarkable women I met this year. Both, Ruth Ang, Managing Director of TBWA\ and Alexandra Hynes, Co-Owner and CEO of Salzer Consulting place magic in the centre of their leadership approach. They motivate by creating magic, believe that they can achieve results through magic, and seek out magic as the highest performance level.
So, when was the last time you experienced magic in your workplace?
Monday, February 25, 2008
Organizational Self-Awareness
An increasing body of evidence supports the linkage between an organization's culture and its business performance. However, managerial and non-managerial staffs in Shanghai rarely talk about their company’s culture at ease.
During the past several weeks, I conducted very sporadic and unsystematic research in China to gauge employees’ and especially recruiters’ ability to describe their company’s organizational culture. The majority of professionals that I spoke with had very little to say when asked; third-party recruiters knew the least.
Comments were usually limited to: young staff, international team, big and established company, dynamic environment, processes to foster innovation, specific culture, unique culture, very distinctive culture, etc. Well, let’s stop before we get even more vague and tautological.
So, how can employees provide more substantive responses when referring to their company’s culture? One way of doing so involves increasing organizational self-awareness through:
• Learning dimensions of organizational culture,
• Understanding how the company scores against these dimensions, and
• Communicating the above to employees regularly (message reinforcement).
Raising organizational awareness can increase recruiters’ ability to promote the company to talents, managers’ ability to engage employees, and employees’ understanding of their own roles.
During the past several weeks, I conducted very sporadic and unsystematic research in China to gauge employees’ and especially recruiters’ ability to describe their company’s organizational culture. The majority of professionals that I spoke with had very little to say when asked; third-party recruiters knew the least.
Comments were usually limited to: young staff, international team, big and established company, dynamic environment, processes to foster innovation, specific culture, unique culture, very distinctive culture, etc. Well, let’s stop before we get even more vague and tautological.
So, how can employees provide more substantive responses when referring to their company’s culture? One way of doing so involves increasing organizational self-awareness through:
• Learning dimensions of organizational culture,
• Understanding how the company scores against these dimensions, and
• Communicating the above to employees regularly (message reinforcement).
Raising organizational awareness can increase recruiters’ ability to promote the company to talents, managers’ ability to engage employees, and employees’ understanding of their own roles.
Wednesday, February 20, 2008
Cultural Fit
Cultural fit is the congruence between individual and organizational values.
Nevertheless, the concept of cultural fit is ambiguous because the choices of values are limited and organizational cultures are rooted in relatively similar if not the same values.
For example, accountability, integrity, and creativity are among the favorite values articulated by companies of different sizes and in different industries. But, companies can go differently about them in every day situations. Regarding accountability, one company can develop a very rigorous performance management system while the other still tolerates low performers and has no processes in place for exiting them. In respect to integrity, this particular value can be non-negotiable for some companies while perfectly negotiable for others. Additionally, creativity can be differently celebrated and practiced differently at various companies.
In fact, companies do not differ so much in the selection of values but in terms of how they cultivate values and are able to impact conditions where they flourish. Similarly, sometimes the values individuals think they embrace (ideal values they should have because of outside influence such as family, religion, or employer) are actually different from those they live (actual values).
Thus, when determining cultural fit, there are two useful tests to run in order to identify peoples’ actual values:
• Calendar test - How much time do you spend each week trying to acquire or increase this value?
• Checkbook test - How much money do you spend each week trying to acquire or increase this value?
The same questions apply of course to companies as well.
Importantly, prerequisites to success for assessing cultural fit are a solid self-awareness of employees and candidates and a sound company’s own organizational awareness.
Nevertheless, the concept of cultural fit is ambiguous because the choices of values are limited and organizational cultures are rooted in relatively similar if not the same values.
For example, accountability, integrity, and creativity are among the favorite values articulated by companies of different sizes and in different industries. But, companies can go differently about them in every day situations. Regarding accountability, one company can develop a very rigorous performance management system while the other still tolerates low performers and has no processes in place for exiting them. In respect to integrity, this particular value can be non-negotiable for some companies while perfectly negotiable for others. Additionally, creativity can be differently celebrated and practiced differently at various companies.
In fact, companies do not differ so much in the selection of values but in terms of how they cultivate values and are able to impact conditions where they flourish. Similarly, sometimes the values individuals think they embrace (ideal values they should have because of outside influence such as family, religion, or employer) are actually different from those they live (actual values).
Thus, when determining cultural fit, there are two useful tests to run in order to identify peoples’ actual values:
• Calendar test - How much time do you spend each week trying to acquire or increase this value?
• Checkbook test - How much money do you spend each week trying to acquire or increase this value?
The same questions apply of course to companies as well.
Importantly, prerequisites to success for assessing cultural fit are a solid self-awareness of employees and candidates and a sound company’s own organizational awareness.
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