Certified Employee Retention Professional (CERP)

Onward! For those who are seeking HRCI credit, please return to your home page and take the Module #1 HRCI Assessment, and then proceed to Module #1, Tool #2, Choose an Executive Sponsor All others, please proceed directly to Module #1, Tool #2, Choose an Executive Sponsor Note: All research cited herein is from Richard Finnegan s book, Rethinking Retention in Good Times and Bad. Boston, MA: Davies-Black, 2010 3

Contents 1. Rethinking Retention Model and the Secret Sauce 2. Supervisors are an important point of attack 3. Inspect what you expect and other relevant cliches 4. Goals and tools ; introducing Stay Interviews 5. Tools available in Module #2 2

Research-Driven, Process-Based 5

The Rethinking Retention Model Process or Program-Driven? Retention processes driven by executives from the top like sales, service, quality, and safety CEO Retention programs driven by HR from the side like hiring, performance management, others VP EVP VP EVP VP 6

Is Retention Process-Driven? Probably Not Is Your Retention Process-Driven? Sales Service Quality Safety Retention Accountability, tops-down in Ops Recognition company-wide Consequences, good and bad Training, skill-specific Coaching for improvement Y Y Y Y N Y Y Y Y N Y Y Y Y N Y Y Y Y N Y Y Y Y? 7

The Secret Sauce Point #4: Hold supervisors accountable for achieving retention goals Point #9: Calculate turnover s cost to galvanize retention as a business issue Point #10: Drive retention from the top, as executives have the greatest impact on achieving retention goals This is the road to moving retention from HR to Operations, from HR programs to Business Processes! 8

An Accountability Clue 2-ball off the 6-ball: The secret to influencing the CEO to set retention goals is to ask the CFO to put a $ cost on turnover first then both the CEO and CFO become advocates for what you ve always known, that retention must be managed on the operations side of your company as well as in HR 9

Executives Managers Supervisors Experience tells us that the best way to make things happen in organizations is to drive them from top to bottom think sales, service, quality, safety Intuitively, the same should be true for retention but is there data from respected research that tells us this is true? 10

Supervisors Impact on Retention If you have a turnover problem, look first to your managers Gallup Primary reason for seeking a new job is disliking boss s performance Yahoo Employees stay for managers first and co-workers second salary.com Poor leadership causes over 60% of all employee turnover Saratoga Institute When employees stay, it is because of their immediate managers National Education Association Employees who stay primarily for their supervisors stay longer, perform better, and are more satisfied with their pay TalentKeepers Given the high cost of turnover, it is clear that poor managers dramatically increase the cost of operations Kenexa 11

The Real Power of Supervision More importantly, a study by Kenexa confirms that employees satisfaction with pay, benefits, learning, development, and advancement is mediated by their relationships with their supervisors and concludes: Offering a higher salary or developmental/advancement opportunities may not be enough to retain employees So it appears that poor supervision overcomes the benefits of pay and development and leads to higher turnover 12

4 Thoughts to Ponder 1. Poor supervisors will trump good employee programs good programs + good supervisors = retention good programs + poor supervisors = turnover 2. Poor supervisors also trump good pay and development, and drive higher turnover 3. Supervisors refers to anyone who supervises people including executives and senior managers so all must have retention skills 4. If one or more of your supervisors fails to build effective retention relationships, what other legitimate advantages do you offer your employees that your competition for talent does not? 13

2 Tales of Retention Accountability No Accountability Supervisors focus hard on productivity, less on people With Accountability Supervisors seek tools and training to retain their teams Turnover leads to finger-pointing at pay, policies, HR Retention is seen as achievable and within each supervisor s control Turnover is seen as rush-hour traffic, that nothing can be done to fix it Good supervisors are rewarded, ineffective ones addressed Losing good workers is seen as unfortunate events for which no one is accountable This is my team and I am in charge of leading and retaining it 14

Recommendations Are Not New Recommendations to address employee retention through supervisor accountability include: For Nurses: Hold nurse managers accountable for retention goals Healthcare Advisory Board For Teachers: Amend NCLB [No Child Left Behind] to hold school leaders accountable for turnover and its costs The National Commission on Teaching and America s Future For All Jobs: Make supervisors more accountable for worker retention by tying their compensation to retention performance Monster 15

But Not Common Practice Monster reports 11% of supervisors are held accountable to retention goals, TalentKeepers reports 14% Accountable might mean bundled into people management category on performance appraisals up to a direct connection to pay, incentives, or bonuses Consider if 80%+ of your competitors are old school on retention, how much of a competitive advantage is available to you by going new school by establishing and enforcing retention goals? 16

Accountability At The Top Hay Group reports 8.2% of organizations use retention as a performance measure in executive compensation plans, increasing three-fold over the previous 2 years Penske Automotive tied 8% of CEO Roger Penske s bonus to retention, saying Our business is one that is based on people. There has to be a tone at the top. Pep Boys links 10% of 3 executives bonuses to retention of middle managers Extreme Networks bases up to 20% of several executives bonuses on undesirable attrition 17

4 Tips for Setting Retention Goals 1. Metric Annual? Monthly? LOS such as first 90 days? Total company or one division? (optional project) One key job or all jobs? (optional project) Drive for continuous improvement over past performance Disregard benchmark studies 2. Simple Example: 25% turnover for all supervisors unless circumstances such as night shift, different types of jobs 3. Achievable Strong enough to make a difference, light enough to motivate 4. Cost Tie all goals and results to dollars in order to drive performance 18

Which Quits Count? Stay Simple! Avoid the debate of voluntary/involuntary, desirable/undesirable, controllable/uncontrollable Expect next-level-up to make good decisions about which turnover is good turnover even if it impacts the supervisors progress toward goal and also to encourage supervisor to fire poor performers even if doing so impacts goal achievement Consider offering an amnesty period before accountability is in place so supervisors can address poor performers as well as apply the tools from the CERP program before full acountability begins track and report immediately, hold accountable in 3 months 19

3 Distinct Paths to Accountability #1: SunTrust Banks: Driving and selling accountability through turnover s cost #2: A Rural Hospital: Using cost and LOS data to define specific accountability #3: Hilton s Call Centers: Specifying accountabilities for HR, Training, and Operations 20

#1: SunTrust Banks Situation and Solution: My career launcher CEO said cut turnover, I said You don t understand Finance conducted cost study for 6 cascading job groups, CFO announced results Top operations executive set goal for all branches to cut turnover 10% over previous year Bob from back of the room, Now let me get this straight 21

Outcome: #1: SunTrust Banks Turnover reduced by 19% in 9-month period, resulting in initial savings of over $4MM Methods were (1) announce goals, (2) tie to costs, (3) provide monthly report of each manager s progress and best practices Did not raise pay, implement new benefits or programs, provided nothing new to employees except focused supervision as managers strived to achieve their retention goal 22

Situation: #2: A Rural Hospital 100 bed hospital, part of a major hospital corporation whose executives directed us to their most troubling retention hospital Overall turnover 21% Completely decentralized hiring with few common processes Top management concerned, open to change 23

Job Group Results Job Group Example Jobs 08 T/O % 09 Proj T/O % Non-skilled Nurses aid 20 17 Skilled Hourly Phlebotomist 24 9 Licensed Hourly Rehab therapist 13 19 Nurses Surgical nurses 23 29 Exempt All top managers 18 7 TOTAL 29.6 21.3 24

Turnover s Cost by Group Job Group Example Job Cost/Exit Exits/Year Cost/Year Non-skilled Nurses aid $7,273 20 $145,460 Skilled hourly Phlebotomist 11,825 30 354,750 Licensed hourly Rehab therapist 20, 429 21 429,009 Nurses Surgical nurses 49, 319 78 3,846,882 Exempt All top managers 52,225 12 626,700 Total Cost/Yr $5,402,801 25

0-3 mos Leavers by LOS 4-6 mos 7-12 mos 1 st yr Lvrs 13-36 mos 37 mos + Non-skilled 30% 3% 17% 50% 33% 17% Skilled hourly 22 9 18 49 27 24 Licensed hrly 10 5 29 44 24 33 Nurses 33 14 22 69 17 14 Exempt 8 8 8 24 50 25 Total 25% 9% 21% 55 27% 18% 26

Hospital Retention Plan Solution Cost + LOS data lead to nurse retention goals for the organization, departments, and managers for 90-, 180-, and 360-day retention Many other tools in place to support goal achievement including new hiring and onboarding processes, specific leadership training with post-training assignments, and other initiatives 27

Situation #3: Hilton s Call Centers 5 centers averaged 55% annual turnover and company reported annualized turnover and monthly turnover Missing was knowledge that 50% of new agents failed to reach 90 days Challenge included what to measure and what goals to set Accountability was perplexing as many touched new hires in the first 90 days 28

Hilton s Call Centers Solution: Reduced turnover in half in 4 months by Structuring retention accountability for HR, training, and operations Requiring managers send a 90-day retention report to the CEO Implementing new standards for 90-day retention, app/hire ratio, and employee referrals Leveraging the Hilton brand and travel benefits travel consultants Designing structured interview to measure intent to stay Implementing a facilitated realistic job preview Focusing recruiting on older workers over 30 and eliminated tech experience Assigning new hires to best supervisor Tracking new hires retention likelihood weekly with coaching 29

Paths to Accountability Driven by $ Data? LOSdriven Goals? Goals with Accountability? Achieved Retention Goals? SunTrust Yes No Absolutely Yes A Rural Hospital Yes Yes Absolutely Yes Hilton s Call Centers Yes Yes Absolutely Yes 30

Retention Goal Flow Chart (Module #2, Tool #2) 1. Make The Approach Cost data + sponsor + targeted executive goal 2. Establish Achievable, Effective Goals Metrics, simple, achievable, tie to cost 3. Set Goals Tops-Down Executives managers supervisors 4. Communicate Goals with Confidence Drive home importance and accountability 5. Report Results Tied to Cost By executive, manager, supervisor 6. Reinforce Goal Achievement, Tops Down Recognition, performance appraisals, compensation, promotion 31

Stay Interviews Introduction Stay Interviews are the first CERP tool for executives, managers, and supervisors to use with their teams to help them reach their retention goals Executives, managers, and supervisors apply Stay Interviews to learn one-on-one why their individual employees stay and might possibly leave Stay Interviews are personal, direct, and effective and put solutions in the hands of executives, managers, and supervisors so resulting actions are customized for each employee and driven by operations versus based on generic programs developed by HR 32

What is a Stay Interview? One-on-One: A Stay Interview is a one-on-one meeting each manager and supervisor has with each direct report in order to learn why that employee stays with your company Local action: Each manager and supervisor then acts on the stay reasons in order to increase the likelihood the employee will stay with your company longer and be more productive Aggregates results: Each manager and supervisor also records the stay reasons for their combined team and forwards this information upward so your company can take actions based on common stay reasons Tops-down: The Stay Interviews will be conducted tops-down, meaning each manager and supervisor will participate in a Stay Interview as an employee before conducting one as a manager or supervisor 33

How Do Stay Interviews Work? 1. Executives, managers, and supervisors attend stay interview training 2. Conduct interviews cascading, beginning with executives 3. Record data and build stay plans for each employee 4. Review stay plans with their manager 5. Send aggregated results to HR for EVP and future policy decisions 6. Implement stay plans and retain their teams 34

Are Exit Surveys Better? Exit Interviews Are autopsies but not as scientific Leavers won t burn bridges and hide real reasons Attendance and abandonment offer no solutions HR managers say nothing happens as a result Stay Interviews Focus on current employees we want to keep Remove the middle man so supervisors hear directly how to keep employees Employees hear We want you to stay Next steps are in supervisors hands vs. program solutions 35

Are Opinion Surveys Better? Opinion Surveys Are anonymous so don t reveal specific employees inputs Stay Interviews Supervisor hears specifically why each employee stays, would leave Usually ask for opinions but not importance; Leaves us wondering Would this item cause you to leave? Focuses on topics beyond supervisors control Employee s priorities are clearly expressed and understood Designed to learn what employees need each day from supervisor and team Leads to reports and action plans that usually include more program fixes vs better 1-1 supervision Next steps are in supervisors hands vs. program solutions 36

Tools In Module #2 Tool #1, Operationalizing Retention Webinar Share this webinar with your sponsor and key executives if helpful Pull slides and data from it to influence others to act Tool #2, Setting Retention Goals Use this tool as guidelines for setting retention goals and share it with all who make goal decisions Tool #3, Stay Interview Training for Managers and Supervisors Use this tool for you or your trainers to facilitate training with executives, managers, and supervisors to enable them to conduct stay interviews with their teams Tool #4, Stay Interview Forms These are handouts for the stay interview training Tool #5, Module #2 Completion Form For you and your sponsor to complete after you ve finished this module 37

3 Ways Your Organization Will Grow from Module #2 1. Retention Accountability: Executives to firstline supervisors now know they are not only accountable for retention but responsible in all ways for their teams 2. Real and Personal Data: Stay Interviews provide face-to-face reasons why employees stay and give supervisors information for building their own customized solutions 3. Grist for EVP: Aggregated data tells us what your company has long needed to know why your employees stay 38

3 Ways YOU Will Grow from Module #2 1. Shared Responsibility: You ve achieved the most important step for reducing turnover by providing the behind-the-scenes work to establish tops-down retention goals on the operations side of your company and you can take this methodology and experience throughout your career 2. Value of Inputs: You ve experienced first-hand the relative worth of exit survey data, opinion survey data, and Stay Interview data and will continue to see the growth of company-wide Stay Interview exchanges and follow-up 3. Buzz: You ve created much positive discussion among executives, managers, supervisors, and employees about why they stay and deepened your own retention knowledge level 39

ONWARD! Please proceed now to Module #2, Tool #2, Setting Retention Goals and remember to use upcoming Retention Summits and the CERP blog for questions, suggestions, and best practices you wish to share Note: All research cited herein is from Richard Finnegan s book, Rethinking Retention in Good Times and Bad. Boston, MA: Davies-Black, 2010 40