Are You Serious About Measuring Employee Retention?
Employee retention may not be the most exciting topic in the world, especially not when paraded alongside its more glamorous counterpart of hiring. It seems that the excitement of finding, selecting and closing on an exciting new hire, who is going to reshape your organization, seems to trump the act of revitalizing and rejuvenating a fallen star back into an effective employee. This is ironic really as studies tells us that, like-for-like, an internal recruit will outperform an external recruit and will also be cheaper. So, in real terms, the successful internal recruiter/retainer of talent deserves the same, if not greater, plaudits.
A Hay Group study shows that we inhabit a time of record levels of employee turnover, which shows that employee retention initiatives should be considered to be one of the most effective weapons that employers have in the talent war – staff retention is the broadsword in the battle field for talent.
This means that 2014 is the time for employers to take employee retention up a level and a key starting point is to begin measuring employee retention itself. Of course, many of you will know the simple retention equation of: number of leavers / divided by number of employees X 100, but this is not the alpha and omega of staff retention, it’s just the basics and just enough to open the door on the topic. Because knowing that you have a 50 percent turnover rate simply tells you that you have a problem, but it’s not actionable data and doesn’t tell you how to remedy the problem.
In order to be serious about measuring employee retention you’ll need to do greater analysis in order to get actionable data that can actually inform your HR tactics and strategy. This will enable you to be listened to in boardrooms and win budgets and support for corrective strategies. You’ll need to be doing a deep dive into your turnover data to find out how much of your turnover is:
- Due to retiring staff
- As a result of people leaving for promoted roles
- As a result of people leaving to move sideways
- As a result of people leaving to move away from the area/abroad
- Voluntary versus involuntary
- Occurs during the probationary period
- Occurs during specific tenure period, such as within one year, between 1-3 years, etc.
- Occurs within critical departments or within mission critical roles or mission critical people
- Occurs at specific times of years
- Occurs within hard-to-fill roles
- Occurs at different levels, e.g. managers
- Occurs in certain countries, territories or departments
- Occurs within specific age groups or other protected categories
Now, there is no question that this requires a large degree of data collection, coding and analysis, but it’s nothing that an intern wouldn’t be able to do quite easily for you. It’s this level of analysis that is needed to enable you to effectively pinpoint your retention issues and areas for corrective action, and it will enable you to track the effectiveness of your retention initiatives.
It’s time to get serious about measuring employee retention.