The Struggle for Talent: The Attraction and Retention Game

1
The Struggle for Talent The Attraction and
Retention Game
HRPLD Tuesday, February 21, 2006
David Bratton, President Bratton Consulting Inc.
2
This Evenings Agenda

• Canadas Employment Boom
• Challenges in Attracting Retaining Talent
• Turnover hurts
• Why employees join a company
• Why employees leave
• What can be done? Advice on Attraction and
  Retention

3
Canadas Employment Boom

• Tight Labour Market - full employment is here
• Average wages increased by 3.2 in 2005
• Jan-Dec, 2005 net total new jobs 214,000
• New jobs are of high quality (Mgt., Sciences,
  Social Service, Education Government)
• Jobs lost were in poorest paying occupations
• Stats Canada

4
Chart 1. Canadian Unemployment Rates Five-Year
Trend
5
Effects of Full Employment

• Its a SELLERS market - one in three workers
  will leave within the next two years.
• It costs anywhere from 25,000 to 250,000 to
  replace one key employee.
• Losing employees, especially high performers, has
  a significant impact on profits and productivity!
• Money, Leadership and Career Opportunities drive
  turnover.

6
Causes of Voluntary Turnover

• Better career opportunities
• Compensation
• Poor advancement opportunities
• Dissatisfaction with the way their department was
  managed
• Management/supervisory conflict
• Lack of challenge
• Way company managed
• Unclear job expectations

7
Chart 2. Employee Turnover Rates Five-Year
Trend
8
Cost of Turnover Direct Costs

• HR staff time (job analysis, recruitment,
  selection, orientation)
• Recruitment ads
• Agency or executive search costs
• Travel and relocation of new hires
• Overtime costs for those staff who cover for
  departing employees

9
Cost of Turnover Indirect Costs

• Lost productivity due to lengthy vacancy
• Lost productivity until new hire gets up to speed
  (3-6 months)
• Lowered morale for those who have to cover
• Impact on company reputation

10
Effects of Turnover

• Turnover results in lost opportunities to build
  and sustain emotional bond with employees.
• Competitors rarely go after your worst talent.
• the ability to attract and hold on to talent is
  the single most reliable predictor of overall
  excellence.
• - FORTUNE Most Admired Companies, 2005

11
Retention in a Booming Job Market

• In a surging economy, retaining the right people
  becomes critical
• Improving performance is more central to ongoing
  success of the business
• The top talent are the drivers when the economy
  turns around
• New MBAs looking for security and stability

12
Attraction Why Do People Join and Stay

• Challenging/interesting work
• Opportunity to apply skills
• Company reputation
• Compensation
• Need for employment
• Work location
• Globe Mail Best Companies to Work
  For - 2001

13
Attraction Strategies

• Improve Corporate Culture
• Attract All Ages
• Accept the Oddballs (Tattoos and Metal!)\
• Use Diversity to Advantage
• Cast Wider Net in Hiring
• Vary the Reward System
• Welcome Prodigal Employees Back

14
Importance of Overall Satisfaction

• How would you rate your organization as a place
• to work?

59
58
54
53
Hay Group International Research - 2001
15
Impact of Low Job Satisfaction
Hay Group International Research - 2001
16
Retention Strategies In an Up Market
Inspiration/Values
Meaningful Work
Work/Life Balance
Future Opportunities
Tangible Rewards
Enabling Environment
17
Inspiration/Values

• People like to work for good companies
• Values are really important
• Inspiration is just as important as perspiration
• Social Services provide inspiration

18
Meaningful Work

• No meaning no engagement
• Interesting challenging work is critical
• No one likes schlock jobs
• Technical challenges

19
Work/Life Balance

• Life ? Work!! Surprise, surprise
• Making time for both life and work
• Recognition of duality of roles for both parents
• Accommodate different lifestyles

20
Future Opportunities

• Whats next for me?
• Do I have a career path?
• Is the company growing?

21
Tangible Rewards

• Base pay adjustments
• Variable pay
• Signing bonuses
• Retention bonuses
• Referral bonuses to employees who bring in new
  talent

22
Tax-effective Rewards

• Mortgage subsidy plan
• Employer-provided daycare
• Discounts on merchandise
• Personal Counselling (EAP/Coaching)
• Membership fees

23
Tailoring Retention Strategies

• Retention strategies must be tailored to the
  specific position or job.
• Occupational groups differ in reasons for their
  commitment, e.g. white collar vs. blue collar,
  individual contributor vs. supervisor/manager.

24
Hanging On To Your Greatest Asset

• Show them you care take a personal interest in
  developing your staff
• Be lean but not mean
• Walk the talk, dont just talk the talk
• Measure the soft skills
• Fight attrition with smart training
• Weed out poor managers
• Deal with poor performers in the ranks

25
What More Can You Do?

• Use individual and group-sensing mechanisms to
  predict turnover.
• Understand the real reasons why your people may
  opt out and leave.
• Check how you are performing in these areas.

26
Conclusions

• Keeping the right people translates into real
  dollars on the bottom line.
• Employees who have left mentally, but cant leave
  for a better job, can be costly.
• Understanding what drives attrition is the first
  step in dealing with the problem.
• Develop a strategic, on-going approach to
  attracting and retaining your high value-added
  performers.

27
Sources

• Results-Based Leadership. Ulrich, Zenger and
  Smallwood. Harvard Press. 1999
• Hay Group presentation to Strategic Leadership
  Forum 2001
• ROB Best Companies to Work For 2005
• Fortune 500 Best Practices Survey 2005
• Globe Mail Careers
• Stats Canada/HRDC
• Barbara Moses

28
David A. Bratton, BA, MBA, CHRP, FCMC David is a
management consultant in the fields of human
resources and cultural change. His clients
include manufacturers, financial services,
professional services, not-for-profits and health
sciences. He is president of Bratton Consulting
Inc., a management consulting firm based in
London, Ontario. In addition to management
consulting, the firm is the Southwestern Ontario
business partner of DBM, Canadas largest career
counselling and outplacement firm. David taught
for eighteen years in the Advanced Program for
Human Resource Management and the Management of
Strategic Change at U of Ts Rotman School of
Management. He has written a number of articles
on management and has published a book, Best
Practices in Human Resource Strategy (2001) for
Carswell Thomson. He is currently a Board member
and Chair of the HR and Corporate Governance
Committee of Pacific Western Bank, Canadas
first new bank in the 21st. Century and the 9th
largest. P W is based in London, ON. David is
a Fellow of the Canadian Association of
Management Consultants and a member of the
National CAMC board and Treasurer. He is also a
member of the London Hunt Club, the London Club,
London Chamber of Commerce and the HRPAO Contact
Information dbratton_at_brattonconsulting.com 519
679-2774. www.brattonconsulting.com