Strategies on Retention: Top Reasons of Employees’ Departure and the variation on Gender, Generation, and Industry
Bharat Kumar Verma
100264655
Kwantlen Polytechnic University
HRMT 3135 S10 – D. Radcliffe, May 30, 2013
Introduction
In Adecco’s presentation on employee retention, it was noted that the Canadian labour market is expected to face a shortage of a million workers by 2020. Currently 83 percent of human resources (HR) executives stated they are experiencing technical or skilled labour shortages, and 63 percent anticipate this as a potential problem (O’Neill, 2013). Therefore retaining employees will be an important process for employers and understanding why they leave will help create strategies and policies to keep them in their jobs.
In the Adecco study and the Conference Board Survey, the top reasons employees leave their jobs are vary according to generation, industry, and gender which were repeatedly confirmed by various research reports and HR and business journals. The Conference Board 2001-2002 survey stated that limited career opportunities, an uncertain work environment, follow by disagreements or dissatisfaction with supervisors, and non-competitive compensation and benefits were among the top obstacles to successful retention. Although, retention issues challenged HR executives, the problem was not extensive and only limited to definable areas such as specific employee categories, and key positions. There are research reports, journals and articles that link these retention issues with gender, generation, and industry specific factors, especially for some industries. HR management practices have a great effect on employee retention and, these will be discussed in this review. The discussion will focus on retention strategies for each specific variance and for high-performers, and how HR executives devote much attention to retaining and securing specialists in industry-specific skills than attraction, in turn, increase company competitiveness and performance (Dell & Hickey, 2002).
Reasons why employees leave their jobs
When looking at the top reasons why employees leave their jobs, Dell and Hickey noted that the respondents to the survey completed by The Conference Board in 2001-2002 included the top reasons such as uncertain work environment, limited career opportunities and disagreements or dissatisfaction with supervisors (Dell & Hickey, 2002). These reasons, again, were confirmed by O’Neill’s Adecco PowerPoint presentation that employees leave due to the unexpected workplace or job, too few growth and advancement opportunities, and feeling devalued and unrecognized. Also others reasons range from mismatch between job and employee, too little coaching and feedback, stress from overwork and work-life imbalance, to loss of trust and confidence in senior leaders (O’Neill, 2009). The following sections will discuss reasons broken down by into the three areas
Industry
In terms of the employees leaving varying by industry, findings show that HR executives distinguished between the talent market and the labour market as talent market is not identical with the labour market. They feel challenged by the need to secure people with high-value skills, industry-specific know-how, and leadership competency, which represented the talent maket. In the 2001-2002 survey, findings from the Conference Board showed more than 90 percent of HR executives surveyed said they were having problems with retention because talent shortages were mainly limited to a few specific employee categories with industry-specific skills. It further noted that virtually 99 percent respondents indicated increase efforts to retain high-performers/high potential employees. The target category was senior executives and front-line workers were the least targeted category. Besides the level of employees needed, specific industry employment pool gaps will become more obvious by the year of 2015. The talent shortage will mostly be in computers and high technology; heath workers, customer service, and ‘“gray collar”’ technicians such as hospital medical equipment operator/technician, computer support and help-desk workers, technology repair technicians, para-legals, legal assistants (Dell & Hickey, 2002). He, Murmann, and Perdue’s journal article on the service industry demonstrated that companies realize that they cannot build a solid loyal customer base without having loyal employees, especially in the service industry. Employees are pivotal in such a competitive environment (He, Murmann, & Perdue, 2012).
According to Asiedu-Appiah, Kontor, and Asamoah from Kwame Nkrumah University (2012), HR management plays an important role in formulating and implementing organizational strategy. The need for HR managers to keep up with the effective management of employees cannot be overemphasized. The study found that majority of turnover in mining industry is attributable to HR management. Training and development, communication and information sharing, health, safety and welfare, incentives and compensation, and job security factors were major factors in turnover for the industry (Asiedu-Appiah, Kontor, & Asamoah, 2012).
Generation
There is definitely a contrast when it comes to reasons why employees leave their jobs by generation. According to O’Neill (2013), the four generations – the silent generation, baby boomers, generation X and Y – hold different expectations and demonstrate distinctive behaviours for their employer. For the silent generation, they obey the manger, familiar with a workplace, and receive pay every two weeks with strict office hierarchy. The oldest waves of the baby boomers are ready for retirement, and the youngest are managing the generation X and Y. The 33 percent of today’s workforce are generation X, who are highly educated, technologically savvy, self-reliant with strong work ethic, and multi-tasking. This generation value personal development and believe in a healthy work-life balance. Generation Y group, currently make up the 16 percent workforce, similar to their X generation, except they enjoy working in an environment that promotes communication, prefer value opportunity rather than job security (O’Neill, 2013)
As the baby boomers retire, the growth rate of the labour force will be just 0.25 percent between 2015 and 2025, demand in certain industries will be acute. HR managers have shifted their retention goals as generations expectations have shifted. Employees no longer build careers in a single organization, employees focus loyalty on their own career rather than to the employer. Employers are implicitly promising employees long-term jobs, careers, and security in return for loyalty, commitment and performance (Dell & Hickey, 2002).
Gender
The Centre for Labour Market Research noted that traditionally women workers exhibited different behaviour from men. One of the major causes of turnover is the wage gap between men and women and women are constrained by family or domestic commitments leaving their jobs more frequently than men (Theodossiou, 2002). However, Haggard suggested that job sharing has kept more professional women in the workforce during child-rearing years, and flexitime has allowed greater ability to customize work, personal time and family activities. Also, women exhibit a different pattern (age, education attainment) of turnover due to family reasons compared with men (Haggard 2013).
Relating the gender issue to the top reasons why employees leave their jobs. Grisom, Niholson-Crotty, and Keser’s article indicated that they find “evidence that supervisor gender matters for satisfaction and turnover” (2012, p.649) The authors further support it by noting that multiple theoretical perspectives suggest that gender congruence between managers and employees may impact employee turnover and satisfaction (Grisom et al, 2012). This also links to one the top reasons for employees turnover due to dissatisfaction or disagreement with supervisors.
Strategies that would appeal to all differences and some specially targeted at each variation
Turnover is generally considered something to be avoided because it entails time, cost, and inconvenience to replace lost employees. One of the examples provided in Dell and Hickey’s research report has noted that the cost of losing one bank teller equals to “43,000 non-customers access of your ATMs at a $1.50 surcharge per use, with a profit margin of 15 percent on those uses”’ (Dell & Hickey, 2002, ). The company also loses its investment in the employee and the value created. Combating some of the top reasons for turnover, and retaining top talent remains a primary concern for many organizations. In order to develop an impact on immediate and longer-term talent needs, HR must have knowledge of the company’s environment and plans such as merger, divestiture, new products, competitive climate, and growth. Ninety-four percent of the respondent of the Conference Board survey indicated the increasing use of employer-of-choice range to quality-of-life, employee value proposition, diversity program as strategies for keeping the best employees. However these strategies need to be adapted to each situation (Dell & Hickey, 2002).
As mentioned, the top reasons for employees to leave included: limited opportunities and disagreement; the job or workplace was not as expected; disagreement and dissatisfaction with supervisors; and non-competitive compensation and benefits. Research was done with 24,829 employees in the leisure and hospitality industry revealed that job satisfaction, extrinsic rewards, constituent attachments, organizational commitment, and organizational prestige were the most frequently suggested for staying with the company. Advancement opportunities and organizational prestige were frequently used to retain high performers and non-hourly employees, whereas extrinsic rewards were more for low performers and hourly employees (Hausknecht, Rodda, & Howard, 2008). This interpreted that employers have to consider the intrinsic factors such as psychological and emotional wellbeing because keeping good employees is the boon to center morale and customer service (Kwatlen Polytechnic University [KPU], 2004).
One of the strategic approaches is employer branding. According to the key findings of the 2001-2002 Conference Board survey show, 90 percent of companies are now emphasizing a strong employer brand and reputation (Dell & Hickey, 2002). This is especially important for generational Y employees because they are prone to value opportunity rather than job security (O’Neill, 2009). An effective employer branding keeps both current and potential employees actively aware of the employee value proposition in turn contributing to motivating, engaging, and retaining employees (Dell & Hickey, 2002).
In addition, the Conference Board research report indicated that current and prospective employees attach a high value to the training, development, and career advancement opportunities for a job provides. Companies needs to work with the people they have, constantly re-recruit by telling their employees about their career development progression, and make employees hem feel good about the organization to avoid employees leaving due to the lack of leadership opportunities. The two factors, career advancement and disagreement/dissatisfaction of supervisors are closely related so spending time working with your employees, constantly letting them aware of their career progression and development, make employees feel good about being part of your organization, and opportunities on cross-functional exposure are some of the strategies that would appeal to all differences (industry, generational and gender). Also, with employees leaving their job due to disagreement and dissatisfaction with supervisors, it is suggested that on holding leaders accountable for the condition of their subordinates can help. Thus if an employee is failing then it is the leader’s fault as it becomes a line leadership issue. HR can only attack a turnover problem with the help of upper management because individual mangers are responsible for their own skills, behaviour and job design of their subordinates (Dell & Hickey, 2002).
For industry specific, the example of customer service industry, management support, encouragement, and constructive feedback on employees’ performance for employees can help them to become more productive as a result of the enjoyment of a more f the meaningful job. In addition, it is necessary to consider employees as organizational resources, provide career advancement opportunity and increasing job satisfaction level. (He et al, 2012).
The study in the mining showed that HR management practices for employees’ intension to leave and retention in the mining sector of Ghana is almost non-existent. The research brings attention to HR management practices and the need to systematically use these practices to reduce employees’ intention to leave and with the goal of retaining the core employees (Asiedu-Appiah et al, 2012)
In terms of gender, women are more prone to leave their jobs for wage gap and family reasons due to child rearing, which the findings shows the beneficial implications the reduction of the gender wage gap and work/life balance programs such as job sharing (Theodoussiou, 2002).
In reality, with today’s environment and employment situation, one of the strategies suggested by Stinger, founder and president of Hire.com, one of the respondents for The Conference Board survey talked about the strategies of today’s reality on protecting talent base when recovery begins by taking a proactive and results-oriented process through ‘“talent supply management”’ models instead of’ “fulfilment-oriented recruitment”’ models that are reactive and inefficient, which capture the right candidate largely by coincidental. He also recommended an ‘“always on”’ model to build and manage a ‘“private talent community”’ that a group of candidates is already in a pool for selection when a position opens. The “‘private talent community’” pool is considered to be more cost effective and higher chances to capture higher performers (Dell & Hickey, 2002).
Conclusion
In order to retain the high-performers in a company, HR has to focus on retention more than attraction. The rules of retention have been more complicated as employers have to emphasize value employees, those whose value had been enhanced by their training, acculturation, and institutional memory. Further they have to accept the fragility of the employment relationship. Those value enhanced employees’ career prospects are not only focus on their current employer but also on how their current career might prepare them to move on to future employers. Employers cannot consider the blanket policies to retain value/high performers in today’s competitive employment environment. Strategies to retain the best require individual incentives or case to case incentives to achieve the desired results.
As companies are giving more retention as high priority, HR leaders are required to work more closely with senior management and the CEO to discuss the talent situation within the company. Companies and organizations failing to retain their best or highly-skilled employees will be left with under qualified workforce that ultimately hinders their ability to remain competitive (Dell & Hickey, 2002). Thus the new focus for HR is not to hire the best but to keep the best.
References
Asiedu-Appiah, F., Kontor, E., & Asamoah, D. (2013). Effect of human resource management practices on employee retention: perspectives from the mining industry in Ghana. International Research Journals, 2(2), 30-48.
Dell, D., & Hickey, J. (2002). Sustaining the Talent Quest: Getting and Keeping the Best People in Volatile Times. The Conference Board of Canada. Retrieved from http://ww.conferencboard.ca/e-library/abstract.aspx?did=847
Grissom, J., Nicholson-Crotty, J., & Keiser, L. (2012). Does My Boss’s Gender Matter? Explaining Job Satisfaction and Employee Turnover in the Public Sector. Journal of Public Adminisration Research and theory, Inc., 649-674. doi:10.1093/jopart/mus004
Haggard, D. (2013). Employee Retention Strategies: Graceful Aging of the US workforce? Companies that Prepare Now Will Find Far Smoother Sailing. Retrieved May 23, 2013, fromhttp://www.employeeretentionstrategies.com/strategies/baby-boomers/
Hausknecht, J.P., Rodda, J.M. & Howard, M.J. (2008). Targeted employee retention: Performance-based and job-related differences in reported reasons for staying. Retrieved from http:// digitalcommons.ilr.cornell.edu/cahrswp/484
He, P., Murmann, S.K., & Perdue, R. (2012). Management commitment and Employee Perceived Service Quality: The Mediating Role of Affective Commitment. Journal of Applied Management And Entrepreneurship, 17 (3), 79-114.
Kwantlen Polytechnic University. (2004) Report on Customer Relationship Management: Top Retention strategies for Your Best Employees. Retrieved May 23, 2013, from ebscohost: Academic-Search-Premier Direct:http://www.lexisnexis.com/
O’Neill, J. (2009). Employee Retention: The real Reasons Employees Leave Organizations and How to Stop Them [Adecco. PowerPoint slides]. Retrieved May 22, 2013, from Business Source Premier database
Theodossiou. I. (2002). Factors Affecting Job-to joblessness Turnover and Gender. Labour, 16(4), 729-746.