Most companies report shortages in skilled manpower to continue for the next few years. Companies have traditionally focused on retaining their executives, but today more leaders express the concern of retaining their key staff throughout the organization. Retention is critical because it directly affects the company’s bottom line performance measures, as well as the corporate culture. Management has typically focused on the direct costs of hiring and training new staff. Management is becoming increasingly concerned with the indirect costs such as the morale of the surrounding staff, the lost of knowledge of the company’s practices and informal networks, acclimating customers and distributors to new individuals, etc.
Companies report that they find educational and lifestyle incentives more effective than dollars and cents compensation for staff retention. Technical training, employability training and flexible work arrangements are perceived as most effective, significantly ahead of stock incentives and even pay for performance programs. The programs aimed at improving work skills and future career development are particularly effective. Corporate leadership knows that it takes more than money to keep employees. Healthy companies are offering employee training programs and "giving them a life" by offering ‘flex time,’ which is more effective retention tools than cash payoffs. Studies show that when companies help employees balance their lives between job and family without penalizing their career development, people are less likely to leave for a few more dollars.
What is fascinating is that companies do not actually use the retention strategies they feel are most effective. The most common programs are external conferences & seminars, managerial training, company support for degree programs, and pay for performance programs. Other retention strategies used include flexible work arrangements, interpersonal skills training, technical training, employee empowerment, employability training.
The corporate culture which prioritizes the career development and balanced life issues for the individual will show growth on specific performance measures, such as profitability, market share, innovation, quality of product, sales growth, of a company. The most recent findings indicate that a commonly supported corporate mission, which is measured by commonly held vision and strategic direction, affects the greatest number of ‘bottom line’ performance indicators of a company. The second most important characteristic of a company to affect the profitability is the involvement of staff, which is accomplished by highly functioning teams, creativity, and capability development. These characteristics of a corporation’s culture can be both measured and developed by the CEO and his executive team. If breakthrough results are desired (not just incremental changes, but a whole new level of performance), the company’s leadership will focus and promote the strategic direction and vision of the company, as well as the involvement and development of the staff. This corporate culture develops staff loyalty and retention and the company becoming an employer of choice, as well as increasing corporate growth and profitability.
About The Author
Lilli Friedland, Ph.D. is president of Executive Advisors in Century City, a company who partners with CEOs and executives to develop supportive corporate cultures and organizational systems to enhance their greatest asset their people. We serve as advisors to CEO and executive team, as catalyst to developing the corporate vision, facilitators of strategy and scenario planning, executive coaches for high potential senior executives who were recently hired or promoted to provide rapid assimilation, conductors of customized executive assessments, evaluators of company's communication and interpersonal infrastructure, providers of individual and team evaluations promote system for team building and collaboration, facilitators of succession planning. Our consultants work with mid-sized companies to Fortune 500 corporations.