Keep your staff happy and keep your profits

Don't think your best people won't leave just because of the downturn. Sally Whittle looks at smart ways to keep good people on...

Don't think your best people won't leave just because of the downturn. Sally Whittle looks at smart ways to keep good people on your team

The current job market is a tad confusing. While the headlines are still filled with stories of massive layoffs and bankruptcies, IT directors struggle to find and retain skilled employees.

According to the Wharton Business School, top performers in an organisation typically contribute anywhere from five to 22 times more value to their company than middle or low performers. However, in the main, these high performers are paid only 10% more than their less effective colleagues - making them a tempting target for your competition.

Managers looking to attract and retain the most valued employees need to do a better job of selling both their company as a place to work and the position as a place to further one's career, says Ian Williams, regional HR director at Computer Associates (CA). Staff retention is still a big issue despite the economy, Williams believes.

"The downturn means that the market is more competitive than ever. We still have to compete to find and retain the best people," he says.

Working conditions
At CA, the company has a comprehensive employee retention strategy, including an on-site Montessori pre-school for employees' children, a gym, flexible working hours, online shopping and community support projects.

Although the company does have a philanthropic ethos, the benefits ultimately deliver value, and should help it retain staff even when the economy picks up. "To think nobody will leave during the recession so you don't need to worry about retention is short-sighted," says Williams.

The strategies have paid for themselves partly in improved staff retention, and partly through lower recruitment costs, he adds. Candidates are more likely to accept jobs offering a family-friendly environment and a $3,000 bonus for introducing new workers has cut recruitment agency and advertising fees significantly.

"The facilities here are quite a draw, and they give a good impression of the company," Williams says. "People are now making more careful choices. The idea of work-life balance is something they're thinking about."

This type of retention strategy became popular during the internet boom and smart companies have kept the perks up, says Ian Simmons, a regional manager with recruitment firm Elan. "Two years ago, it was a case of trying to find people - now it's the cost of replacing your staff if they start to leave," he says. "For small companies in particular, the knowledge that IT staff can take with them can be devastating."

Although the recruitment market is slow now, when the upturn starts, Elan expects to be deluged with CVs from IT types who have been waiting for the earliest opportunity to get out of their jobs. The good news is that keeping your best workers doesn't necessarily mean pay rises all round. "In the 1990s we saw pay and perks as a big part of the process. But people are taking a more holistic view this time," he says.

While Computer Associates might be able to support a gymnasium, dry cleaning service and on-site school, you can retain staff using more modest means. One of the most effective strategies is to use a flexible benefits package where employees can pick and choose benefits from a menu according to their priorities - for example, one worker might choose the additional pension and a car allowance, while another colleague would prefer gym membership and childcare facilities.

"The idea is that your retention costs don't increase because you're still spending the same total, but the employees are getting the things that really matter to them," says Simmons.

Training is important to motivation
Although softer benefits can be an important incentive in recruiting and retaining staff, it's naive to imagine that training and pay aren't equally important. Recent research from Gartner Group found that staff who received more than the average number of training days were more motivated, more productive - and more loyal to the company. It's a matter of showing people you are committed to them, says Mike Dodd, a vice-president with Giga Information Group.

Investing in training is perhaps one of the most important elements of successful retention, and can lower recruitment costs significantly. Retraining long-serving staff with legacy expertise in new skills can provide a rich seam of largely loyal and previously overlooked workers. "Demographics show there aren't enough young people coming through to fill the gaps effectively," Dodd says.

In an insecure market, flexible working conditions and some good training can be a good way to reassure a jittery workforce, adds Simmons. But frittering away your money on pointless freebies doesn't help anyone. Simmons cites the case of one company that provided its 1,000 workers with free crisps and sweets each day. Six months later, half the workforce was laid off.

"How much money did that company throw away, and what else were they wasting money on?" Simmons asks. "You can bet the people left behind were looking for new jobs pretty sharpish." N

How to spot an employer of choice
The answers you give to a few smart questions  can say more than any company handbook or sales flannel from HR execs. What would your answers be to the following?

  • Can you provide a copy of the CEOs last speech?(Gives candidates an insight into the values of the person at the top of the company)
  • What sort of position did the person move onto after doing this job? (Provides insight into promotion and career development prospects) 
  • Can I use the bathroom? (Good facilities show a company considers working conditions important)
  • What awards has the company won for HR practice? (This can show if the company matches national standards on all HR practice)
  • If I do well, what will I be earning in three year's time? (Find out if there is a structured pay review policy)
  • How many industrial tribunals has the company been involved in? (Is this a company that has problems with sexual harassment or unfair dismissal?)
  • Who is going to watch over my career? (Do those platitudes about 'support' and 'encouragement' mean anything?)
  • How many training days are provided? (Am I expected to spend my weekends with my nose in a manual?)
This was last published in June 2003

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