Managing Talent Retention

Obtaining Valuable Retention Data - The Ishikawa Diagram

Previously I’ve discussed the basics of conducting an interview focus group to gather information about retention and issues that may be affecting retention within your company.  While this method provides a lot of great input from participants, it can leave the company with a large list of ideas and possible issues to pursue, and can make it difficult to determine which issues are the most important and should take precedence. 

If obtaining a census from your focus group participants is your goal, you may want to consider using an Ishikawa diagram to brainstorm ideas related to the root cause of a problem.  After all ideas about the root causes have been identified, the group narrows the list of causes down to a few through voting.  The Ishikawa diagram, also known a fishbone diagram was named after Kaoru Ishikawa, who used the diagram to help teams identify cause and effect. 

Conducting a focus group using this process begins by carefully articulating the problem that needs to be solved.  After that participants brainstorm as many ideas as possible, categorizing them into specific “cause categories” that affect the specific retention issue, such as People, Materials, Environment, etc.  After all ideas are exhausted the group then votes on the causes they believe are most instrumental to resolving the identified problem, and thus, the top priorities are identified, leaving the company with a specific list of solutions to consider. 

Obtaining Valuable Retention Data - The Group Interview

There are several strategies that companies can use to obtain information about what is causing employees to leave the company.  Of these strategies focus groups are a great way for companies to solicit qualitative data on a specific topic or area of concern, and allow the facilitator to probe for more detail then what can be provided through a questionnaire. 

While there are several different ways to conduct a focus group, one of the methods used most often is a carefully crafted set of interview questions to ask the group.  Group interviews are a great method for gathering feedback directly from those that may be affected by such issues and can be very helpful in either identifying which issues should be researched further or validating the issues identified by other data collection methods. 

In Social Research Methods: Quantitative and Qualitative Approaches, Lawrence Newman identifies varies categories of questions that can be include in this type of focus group:

• Behavior-based questions that uncover the current behaviors of an individual
• Attitudes, Opinions, and Beliefs questions that reveal what someone thinks about a particular topic.
• Personal Characteristics that help to identify a particular group and potentially segment their responses.
• Participant Expections.
• Self-classification or Self-perceptions that participants have about themselves.
• Knowledge that participants currently posses or are lacking. 

Identify the series of questions to ask the focus groups and organize these into an Interview Guide, with specific questions grouped around common themes and ideas so that topics are not scattered and unfocused.  Ideally, broader conceptual questions, such as questions about specific behaviors, habits, and beliefs, should be asked at the start of the group interview, followed by more specific questions about challenges faced in the participant’s current role. Questions to get input on possible solutions should be asked at the end of the focus group. 

Coaching as a Talent Management Solution - Does it really pay off?

While it is widely accepted that coaching programs are effective in developing talent, coaching is also an effective solution for retaining talent. And, as organizations continue to evaluate the effectiveness of their people-related strategies and programs, more coaches find they must demonstrate the real impact coaching makes to an organization. The challenge for most coaches is how to credibly measure coaching’s impact in retaining talent.  

Using an ROI approach to capture business impact can help you determine if your coaching solution retains talent and produces a pay-off and return-on-investment for your organization.  In one recent case study a global company with relatively high turnover implemented a pilot coaching program with a select group of employees who were identified as “high risk” for leaving.  The company performed a full return-on-investment analysis upon completion of the program to determine whether it should be implemented on a wider scale.  The results of that study showed that none of the participants left the company during the year that the program was conducted and the study was completed, and the program resulted in a 251% ROI.  For every $1 the company invested in the program, $2.51 was returned after the costs of the program were captured.

Turnover Costs Company 11% of Gross Profits

Ruche Media Company (RMC)* is a global media company with 24 offices located around the world.  The corporate headquarters of this $260M organization is based in a major metropolitan city in North America. Most of the 1,100 employees are based at the corporate headquarters while the remaining workforce is located in sales offices located in major metropolitan cities throughout the world.

 

After reviewing where turnover was the greatest, RMC then calculated the turnover costs. It was agreed that turnover rates, as defined by Dr. Jack J. Phillips, would be utilized to calculate turnover costs. The table below contains a list of turnover cost ranges as a percent of annual wage or salary as captured from dozens of impact studies. The data are arranged by job category, ranging from non-skilled, entry-level positions to middle managers. The ranges listed represent the cost of turnover as a percent of annual wage/salary and are rounded off for ease of use and communication. The costs represented in these studies are fully loaded and include the exit cost of the previous employee, recruiting, selection, orientation, initial training, wages and salaries while in training, lost productivity, quality problems, customer dissatisfaction, loss of expertise/knowledge, supervisor’s time for turnover and temporary replacement costs. The data in this table reflects studies in industry and trade magazines as well as practitioner publications, academic research and independent studies conducted by professional organizations and associations.

 

In order to obtain an average cost of turnover that could be used per turnover, RMC calculated the cost of turnover for each individual who left the organization during a 12-month period by multiplying that individual’s wage/salary by the median percent of annual wage/salary for the job category appropriate for that individual. The cost of each turnover during that period was then totaled and divided by the total number of individuals during that period to arrive at an average turnover cost of $116,927.09 per employee. Using this average cost of turnover, the total cost of turnover company-wide was calculated at $28.3M; almost 11% of annual sales! 

 

*Company name has been changed

The Best Idea Will Fail Without Proper Talent and Execution

Talent management is fundamentally about ensuring that the right people are positioned in the right places and utilized to the fullest potential for optimal success of the organization. Top business leaders clearly understand their talent pools. They work hard to identify the key players who have critical relationships with customers and suppliers, and then work even harder to nurture and keep those key resources.

 

A number of business leaders have asserted that coming up with the best talent for their companies is the most important task they have to perform. Some, like former GE Chairman Jack Welch and Honeywell International’s Larry Bossidy, spent a significant amount of time searching for the best talent within their own employee pools, hoping to build leadership that way. Both Welch and Bossidy have frequently said that all the great strategies in the world will have little effect on a company unless the right people are chosen to execute those strategies.

 

Steve Miller, the most successful turnaround CEO, clearly connects talent and execution. This master of execution rescued Federal-Modul, Waste Management, RelianceGroup, Aetna, Bethlehem Steel, and Delphi, among others. One of his first tasks as a new CEO was to find the critical talent who could exercise the plans to save the company (Miller, 2008).

 

Effective leaders understand that key talent, those employees in jobs that are critical to the company, are essential to an organization’s success and put a premium on keeping the talent they need for growth.