tools for retaining your top talent
TRANSCRIPT
TOOLS FOR RETAINING YOUR TOP TALENT…
Including the benefits of
“stay interviews”
PLANET October 24, 2014
82sl
© Dr John Sullivan
www.drjohnsullivan.com
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1. Retention Impacts2. Retention trends3. Benchmark firms4. Retention rules5. Retention goals6. Common problems to avoid7. Prioritizing jobs / employees8. Learning why employees leave9. A powerful tool, stay interviews10. Identifying who is at risk11. Levers to keep the very best12. Metrics to use
Topics for today
I’ll move fast today…but please interrupt at any time
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Why must managers focus on retention…
The business impacts of retention
Part I
Retention is #2 in business impact among all of HR (BCG)
4Source: BCG/WFPMA - From Capability to Profitability: Realizing the Value of People Management, 2012
Firms with great retention generate more rev/profit
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What is the cost of losing a top performer ?
Most only calculate the replacement hiring cost
But the $ cost go up if you include these factors…
Customer impacts (lost sales and they may take
customers with them)
No value generated during each vacancy day (rev. $)
Low performance during new hire break-in period
The high new hire failure rate
Manager time spent on new hire
If they go directly to a competitor (2X)
Others may also leave (3-5)
Product development and projects may suffer
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Retention has a huge business impact
What is the cost of losing a single top performer?
Hourly's - $3,500 for an $8 per hour ee (SHRM)
60 % of annual salary (SHRM)
Up to 100 % of salary (Info-Tech)
1.5x salary… but up to 2.5x for managerial and
sales positions (Bill Bliss)
3x salary (Harvard study)
14x salary if the base salary is less than $100,000:
and 28x if the base is over $100,000 (Bradford Smart)
The cost to the Miami Heat of losing LeBron?
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Retention must be converted to $
If you only lose one person (10%) off of your golf
team, but that person is Tiger Woods…
your golf team is in big $ trouble!
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Retention has the highest ROI
Because the cost of retaining an employee is so low…
and the business impacts/ benefits are so high…
“Retention may have the highest ROI
of any program in HR”
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Retention trends
that should have managers concerned
Part II
85% of the employed would consider a new job.
Source: LinkedIn 2014
Almost everyone is available
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Retention is an important issue among executives
A SHRM/ economist survey showed that execs
forecast that retention will be the top issue for 10
years
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11 reasons why turnover is about to explode
1. Highest US turnover rate in 5 years (US dept. of labor)
2. Turnover rates increased by 45% last year
3. Another skills shortage is here
4. Employees have been “frozen” for 3-4 years
5. Simmering corporate frustration (the 1%)
6. Fear their job will be outsourced or offshored
7. Increased mergers and IPO’s increase anxiety
8. An aging workforce has only been delayed
9. Most managers have forgotten how to retain
10.Competition means they are hard to replace
11.Easy job search / application >
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How easy is it these days to look for a new job?
Direct mobile phone applications using a LinkedIn
profile make applying for a new job ridiculously easy
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You must consider all new hires to be a turnover problem
“Half of all hourly employees quit or are fired
within their first six months” (Source: Mel Kleiman of
Humetrics)
“46% of new hires fail within 18 months” Source:
Forbes 1/23/12
More than 50% “regret the decisions they made”
(either new hires or their hiring managers) (Source: The
Recruiting Roundtable 2009)
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Hiring weak people can increase turnover
“Never ever, ever compromise on quality,”…
“It’s toxic. If people see poor performers all around
them, they decide they don’t need to work that hard.
Your very best people will leave” Source: Laszlo Bock Google
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The benchmark firms
Part III
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GPTW firms with the lowest turnover rates
1. SAS Institute 2%
2. Intel 2%
3. General Mills 3%
4. Hasbro 3%
5. Atlantic Health 3%
6. NuStar Energy 3%
7. PCL Construction 3%
8. Publix Super Markets 3%
9. W. L. Gore & Associates 3%
10. DPR Construction 3%
11. Darden Restaurants 3%
12. Mercedes-Benz USA 3%
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The benchmark firms to learn from in retention
Deloitte
GE
Zappos
Apple
Villet
SAS
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Know these 6 retention rules
Part IV
Rule #1 You may be the problem!
“No one ever quits a company…
they quit their manager!”
Conclusion of the Gallup Survey
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Know the 6 rules of retention
2. Remember the don’t generalize rule…
(illustrated by the Sullivan brothers)
3. Instead find out what causes each key employee
to stay (no generation, gender or race stereotypes)
4. Know that what they want will change over time
5. The same things that cause them to stay… will
also attract them… and make them productive
(the 3 sided coin)
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Know the 6 rules of retention
6. Failing to have a great job will not by itself make most leave… it also takes an additional triggering event or career wound like…
A rejected major project
A major budget cut
A favorite friend/boss left
A missed promotion
A perception of unfairness
A corporate merger
A key point in their career cycle
A family event
Make a list of the triggers and watch for them
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Retention goals
Part V
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15 goals of retention efforts
Potential goals for your retention effort
1.A retention toolkit of tools “that work” for mgrs.
2. Prevent Hi-Per’s from picking up the phone
3. To get preventable / regrettable turnover to stay
4. Get them to stay longer
5. Get them to be more productive while here
6. Accurately predicting who/when they are leaving
7. Know why they left
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15 goals of retention efforts
8. Get them to leave during our “slow” period
9. Prevent them from taking others with them
10. To ensure they don’t go to a direct competitor
11. Get them to leave “happy” as an Alumni (refer?)
12. Get the Hi-Per’s to return some day
13. Minimize the impact when they leave (have a
“backfill” or recruit a better performing new hire)
14. To increase the turnover of Lo-Performers
15. Find out who is raiding you by rewarding
employees for capturing and reporting the
content of recruiter calls
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Lifelong employment may not be a goal
“You can’t have an agile company if you give
employees lifetime contracts - and the best people
don’t want one employer for life anyway.”
Source: Harvard business review http://hbr.org/2013/06/tours-of-duty-
the-new-employer-employee-compact/ar/1
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Common retention problems
to avoid
Part VI
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Common retention problems
7 common retention program problems to avoid
1.Not calculating the $ cost of bad turnover (3x)
2.Not having a formal retention effort
3.Not making retention decisions based on data and
information
4.Trying to retain everyone (not prioritizing)
5.Assuming a low turnover is automatically good
6.Over-relying on pay based retention levers
7.Using “one-size-fits-all” retention levers
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Prioritizing retention targets
Part VII
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Target retention on high impact jobs/employees
Realize that you don’t have the time or resources
to keep everyone on your team…
And that everyone isn’t worth keeping
So first… prioritize and focus your retention efforts
on your… high-impact jobs
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Target retention on high impact jobs/employees
Criteria for prioritizing your team’s jobs (15% target)
Mission critical jobs
Revenue generating and revenue impact jobs
Jobs that are responsible for innovation
High customer impact jobs
Key manager and executive jobs
Hard to fill through recruiting jobs
Hard to fill through succession or “back-fill” jobs
All jobs in your key teams (high growth, profit or margin)
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Next prioritize key employees
Criteria for prioritizing employees that are not in
critical jobs (10% target)
Top performers anywhere
Potential leaders
Those that innovate
Those that have key current or future skills
Those with key plans / secrets
Those with significant business contacts
Employees that can not be easily replaced
Those that are diverse
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Use market research to understand
why employees leave
Part VIII
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Identify the causes of turnover
Identify “why” employees quit in the past
1.Identify general causes of turnover – develop a
traditional exit interview process for identifying
the general causes of turnover in the past
2.Identify the turnover causes for key individuals
that left – develop a post-exit (delayed) process
for accurately identifying the specific causes why
each targeted individual actually left and what
actions would have prevented it (you can also
“buy” their offer letters)
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Also do this…
On their first day during onboarding…
Identify the historical turnover factors of all new
hires by asking…
Why did you quit your last 2 jobs?
Also look at their resume and calculate their…
“average job tenure”… so you’ll know how long
it will be before they are likely to leave your job
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Retention of top performers
Top performers leave within two years
“High achievers… are leaving their employers
after an average of 28 months” (i.e. those that are on
average 30 years old with great school and work credentials)
95% of elite young managers actively researched
other employment opportunities, and they tend to
follow through on that instinct in short order
Source: Harvard business review 2014
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Use “stay interviews” to identify why your
current employees stay and… why they
might leave
Part IX
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Retention tool – Stay interviews
Problem – once an employee announces that they
are leaving… it’s generally too late to act
Solution – before they even consider leaving…
proactively identify the factors that cause them to
remain… using a “stay interview”
Goals of the stay interview
1.To identify and reinforce the positive factors
that cause an employee to stay
2.And to proactively identify the negative factors
that might cause a current employee to leave…
while there is still time to fix them
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Stay interview introductory question
Introduction – “We want your job to be as fulfilling
as possible…
So can you help us identify the factors that make
you more passionate, committed and loyal to our
team… so that we can maintain and reinforce them”
Will you help us? >
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Possible “Stay Interview” questions
Can you list “the WOW factors” that really
excite you about your current role?
When asked by others… can you tell us the
reasons you gave them for wanting to stay with us?
Do you feel “fully utilized” in your current role? If
so, can you identify the factors that make you feel
fully utilized (Google’s primary turnover predictor)
Can you list the factors that make you feel like
“you’re doing” the best work of your life”
Can you list the factors that make you feel like
“you are having a positive impact?”
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Now shifting to… “frustration related questions”
Factors that “frustrate you” related questions
Can think back to a time in the last 12 months
when you have been at least slightly frustrated or
anxious about your current role? Can you list those
factors? Can you also help us understand what
eventually happened to lower that frustration?
If you’ve had conversations with other
employees that have considered leaving… did
any of the reasons they provided cause you to
partially nod in agreement? Can you list those
factors and tell us why they seemed to be justified?
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Stay surveys
An alternative approach… use a more of /less of
survey
Since you know yourself better than anyone… if
you were made your own boss and given the
assignment to dramatically increase your
productivity in your current role…
Can you provide us with a list of the things that you
would need “more of” and “less of”… in order to
produce dramatically improved results?
An illustration >
Example – More of / Less of list
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I would like less of
1.Meeting attendance
2.Paperwork
3.Writing reports
4.Travel
5.Weekend work
I would like more of
1.Leadership roles
2.Stretch projects
3.Interaction with execs.
4.Attending conferences
at Stanford
5.New technology tools
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Use “stay interviews” to keep the best
The benchmark firm for “Stay interviews”
This firm uses stay interviews (why do you stay?)
to head off retention issues
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Identifying which individual employees
are at risk of leaving
Part X
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Identifying which employees are likely to leave
Develop a process for identifying “who” is at risk
of leaving
The process might include external approaches:
A search of the web for resumes
Blind recruiter calls… to see who responds
A dry search by a headhunter to see who is desirable
Run blind ads to identify who is applying
Suddenly speaking at conferences
They extensively update their LinkedIn profile
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More external approaches:
Look for major life events that trigger job search
Marriages and divorces
New births
Children reaching school age
Deaths
Health issues
A large amount of their company stock vesting
An extremely negative performance review
Certain landmark ages (turning 30, 40, 50 or 60)
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Identifying who is at risk of leaving
Internal approaches for IDing who might leave
Track time in previous jobs before leaving
Negative behaviors like absences, no OT, error
rates or gone every Friday afternoon
Triggering events occur – their project was
rejected, their boss / best friend left or a divorce
“Superknowers” on your team to warn you
They use the firm’s resume template
Having a manager, a close colleague or even a
close friend leaving the team can provide a
powerful impetus for an employee to leave
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Identifying who is at risk of leaving
Internal approaches for IDing who might leave
Identify high turnover jobs – employees get the
idea to leave simply because many other
employees in their job family are leaving.
Managers should work with HR in order to develop
what is known as a “Heat Map”
Identify employees that are “overdue” for
important things – a key frustrator is when they
perceive that they are unjustly "overdue" for a pay
raise, promotion, training, a chance to lead,
upgrades in their tools, computers and phones
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Identifying who is at risk of leaving
Internal approaches for IDing who might leave
Recognize when a top performer feels
underutilized - once a top employee feels that their
skills are either eroding or that their talents are
being underused, they will likely begin considering
leaving (Google research indicates that the feeling of being
underutilized is their #1 reason).
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Bold best practice levers
to keep the very best
Part XI
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First - retention levers to avoid
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What generally doesn’t work in retention
Be careful of these 5 retention levers
1.A retention bonus means that you are paying to keep an unhappy person around… instead, fix the
job first or offer a project completion bonus
2.Employee engagement can be a weak lever –
“43% of highly engaged workers… have weak or
lukewarm intentions to stay” (Accenture 2011)
3.Development without career opportunities
actually increases turnover (S Seibert U of Iowa 2011)
4.A pay raise usually has a one year or less impact
5.Corporate wide retention actions seldom work
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Your retention levers must “match” the reasons
for wanting to leave
The retention actions of firms don’t match the reasons employees leave
Why employees leave
1.Better comp/benefits $
2.Coaching programs
3.Mentoring programs
4.Tuition reimbursement $
5.Stock options $
6.Profit-sharing $
7.Flexible hrs./schedule
8.Retention bonuses $
Only 2 of 6 causes are met
Most common offerings
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1.Career advancement
2.Pay/benefits $
3.Lack of job fit
4.Management/environ
5.Flexible scheduling
6.Job security
1 of 6 is $
Sources: Gallup 2006 Sources: OI Partners 2012
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Your retention levers must matchthe reasons for leaving
1. Know what to expect
2. Right tools
3. Opportunity to do what I do best
4. Recognition or praise for good work
5. Care about me as a person
6. Encourages my development
7. Talks to me about my progress
8. My opinions count
9. Firms Mission/ purpose makes me feel important
10.Co-workers are committed to Quality Work
11.I have my best friend at work
12.Opportunity to learn & growSource: Gallop’s “12 questions”
Offer
these…
not $ or
benefits
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Top performers demand different things
Top performers need “different things” to stay excited
An average worker wants these
things… (Homer Simpson)
1. Doing the best work of your life
2. Great managers
3. Opp. to innovate/ take risks
4. Learn rapidly / be challenged
5. Choice of projects
6. Make decisions
7. Implement ideas
8. Differential for performance
9. Input into schedule/ location
10.Work with top co-workers
Top performers want “well
managed” factors… (LeBron/ Messi)
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1. Guaranteed pay
2. Exceptional benefits
3. Security
4. Time off with pay
5. No surprises/ predictable
6. Seniority matters
7. Equal treatment
8. Minimize risk and stress
9. Work/ Life balance
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Personalized retention levers
that are customized to the individual employee
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A personalized retention plan
Personalized retention levers to excite
A challenge or learning plan (Qualcomm & McD)
An exposure /visibility plan
Where would you like to be in 2 years plan?
Personalized approaches improve retention
Mass career customization (Deloitte)
Every employee can dial up/down their job… as
career aspirations & personal needs change.
They can adjust:
• Work hours
• Travel demands
• Job responsibilitiesResults:Do most employees choose to dial down or dial up their career? And what is the ratio? Voluntary turnover rates of top performers choosing this option were 2x lower
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2/3 dial up
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Scheduling and flexibility impacts retention
Results Only Work Environment
•Pick your hours
•Pick where you work
•No in-person meetings required
The business impacts: Retention
ROWE individuals have ___ lower turnover
($13 million per year at $102k per employee)
When workers switch to ROWE, their productivity jumps by 35%
45%
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A motivation survey tells you what motivates them (besides $)
Ask key employees in a survey to rank their
motivators…
The types of economic rewards that motivate
The types of non-monetary rewards
The types of choices in their job environment
The types of recognition that will have the most
impact
This enables managers to customize recognition, &
promote employee satisfaction and retention
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Retention levers that excite top performers
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A personalized “how to manage you” plan
The “best way to manage me” tool
Ask a top employee “if you were made your own
boss… How would you change your current job &
how you are managed to make the job perfect?”
How do you prefer to communicate?
How often would you like to meet?
How do you like to be recognized?
What rewards have the highest impact on you?
What frustrates you?
Describe the key elements of your “dream job”?
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A personalized retention plan
The best way to manage me
What do you expect to accomplish in this job?
What challenges you professionally?
What specific things would you like to stophappening in your job?
What currently occurring things would you like to continue in your job?
Any work experiences that you want to try?
Anyone that you would like to work directly with?
Any projects you might want to work on?
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Bold practices to excite top performers
Excitement levers (to keep their mind off of frustrators)
Free time to work on their own project
An opportunity to innovate
Fast decision-making on new ideas
Rewards and recognition for performance
A CRM process to remind you when to recognize
and communicate
Let employees appear in product ads (HP)
Become an expert (Wegman’s I know that cow)
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Bold practices to excite top performers
Company examples of practices that excite Internal promotion contests (MGM Grand)
Internal mobility team – Booz Allen & Cisco
Identify barriers to productivity and innovation (being successful retains) – State of NC
Show the family “you matter” (DFS)
Use “browngrassers” to discourage (Agilent)
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Influence the influencers for retention
Tiger cruise - to show friends and family what Dad/Mom does
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Influence the influencers for retention
4,000 showed up
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Some additional retention tools for individual
managers to try
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11 additional bold retention levers / tools
1. CEO calls / Visits
2. Re-recruit (Match the external recruiter efforts)
3. Offer part time job rotations
4. Provide employees with a master list of challenges and WOW options (from a survey)
5. Walk them down stream to see the impact
6. Please warn me (a 1-5 likelihood) / Please stay
7. Treat the best like volunteers or customers
8. Choice of projects or assignments
9. A chance to lead
10.1 day a week promotional rotation
11.Group retention bonus
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Bold retention tools during onboarding
WOWing them during onboarding can cement
their decision to stay
90% of employees make the decision to stay
within the first 6 months (Aberdeen group 2006)
Succeeding@IBM offers new hires learning
opportunities from job acceptance until their
new job start time (80% higher 1st yr. retention)
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Exciting young, techie and diverse workers
Reverse mentoring
Matching execs. with “technical” or diverse employees
It keeps managers up to speed with trends
It spreads inclusion
It can increase the retention of younger workers
Cisco, HP, PwC, IBM, Microsoft and GE
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Pay to quit
“Pay to Quit” at Amazon
“Once a year, we offer to pay our associates to
quit”. ($2,000 the 1st yr., to $5,000 the 5th)
We hope they don’t take the offer, the goal is to
encourage folks to take a moment and think
about what they really want in the long-run
“An employee staying somewhere they don’t
want to be isn’t healthy for the employee or the
company”
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And finally…
Retention metrics
Part XII
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Top 10 retention metrics
High business impact measures to consider
1. Calculate the $ cost of last year’s turnover
2. % of key employees that are “at risk” of leaving
3. Performance turnover
4. Regrettable turnover
5. Innovator, a game changer & pioneer turnover
6. Preventable turnover
7. High revenue impact turnover
9. Where the turnover goes
10.Diversity turnover
Did I make you think?
Did I give you a few retention
takeaways?
www.drjohnsullivan.com