Here Today, Here Tomorrow

by Gregory P. Smith

In a no-nonsense, take-charge style (stemming from his 20 years of military experience), Gregory P. Smith outlines the new rules for dealing with worker shortages, the high cost of turnover, a diminished work ethic, managing a diverse workforce, and the increased importance of job satisfaction.

At a time when the workplace environment is critical to keeping workers, here are proven ideas for having fun, communicating, rewarding employees, and building loyalty.

The author also provides specific action steps to address such problems as absenteeism, getting teams to work together, and turning performance appraisals into positive opportunities. If managers want to see an increase in productivity and a positive impact on the bottom line, then focus on retention, says Gregory Smith. Depending on the industry, turnover rates vary from 300% (fast food industry) to an organization like SAS with a turnover that has never exceeded 5 percent in its 20 years of existence. Low-employee turnover allows organization to focus on revenues and productivity.

Smith’s book provides eight elements that high-retention organizations have in common.

1. Purpose. People want to be part of an organization that stands for something that provides them with personal fulfillment and meaning. Singapore International Airlines (SIA) prides itself on customer service. They improved retention ratios by placing more time and effort in the selection and training of employees and aligned the training to support the organization’s mission goal of providing excellent customer service. Today when customers are happy, they express their appreciation to SIA employees who are proud of being on the SIA team. Smith provides dozens of suggestions from high-retention organizations to create a meaningful work environment where employees are proud, happy, and more productive.
2. Caring management. Smith uses a General Ulysses S. Grant’s quote, “There’s no bad soldiers, only bad leaders” to remind readers that poor leaders and managers can be a problem and on-going leadership development is critical. He shares a number of leadership development strategies used by low-turnover organizations. How can a manager or leader create the type of environment where employees would come to work even if they were not paid?
3. Work schedules and benefits that allow work/life balance. The downsized, super competitive work environment of today often forces employees into putting their family in a secondary position. The Randstad North American Employee Review recently found in a survey that only 34 percent of the American employees now want a traditional full-time job. Smith provides methods used by high-retention organizations in meeting employees’ expectations, reducing employee turnover rates, and increasing productivity/loyalty.
4. Honest, updated information and communication. In 1995, the Boeing Company suffered its second-longest walkout ever when the Machinists Union led a 69-day strike. Boeing lost hundreds of millions of dollars and experienced big customer service headaches when they missed the delivery dates on 36 planes. Boeing’s President, Frank Shrontz, later acknowledged the strike was a result of management’s failure to communicate with the workforce about their concerns. UPS provides another example where they lost over $700 million in revenues and lost customer trust when UPS failed to communicate with their workforce. No one wins in these situations and Smith shares strategies used by high-retention organizations to prevent miscommunications.
5. People want to enjoy their work environment. Some work is simply routine but Smith’s findings suggesting providing employees something to talk about – future goals they can conquer or results that have been achieved. Sports teams keep players motivated this way. Often organizational bureaucracy kills the spirit and ideas of employees who want to contribute.
6. Performance Management. Numerous suggestions are provided on ways to improve employee performance and productivity. He illustrates methods that have been successful in motivating migrant workers as well as senior executives.
7. Rewards and recognition. All humans need to feel appreciated and in a survey conducted by Robert Half, International, the results showed that recognition and praise was the number one reason employees stay in their work environment with fair compensation being secondary. Smith’s book provides low-cost, easy to implement “fair” recognition programs that keep people focused and heading in the right direction.
8. Employees migrate to training and career development opportunities. If employees are blocked into a specific or dead end job with no opportunity for promotion or variety, they will leave – especially Gen X and Gen Y workers. An ASTD study showed that leading-edge companies trained 86 percent of the employees whereas average companies trained only 74 percent. Companies that invest in workplace learning yielded higher net sales per employee and higher gross profits per employees. Smith suggests holding HR and training departments responsible for results and provides numerous suggestions on how an organization can ramp up their learning culture.

Smith’s research reflects that at a minimum, it costs $4-$7K to replace an hourly worker and up to $40K to replace a midlevel, salaried employee.

The costs associated with turnover may include lost customers, business, damaged morale, and then the hard costs of time spent in screening, verifying credentials, references, interviewing, hiring and training the new employee just to get back to where you started. This expenditure of time and money does nothing to give a manager or an organization a competitive edge.

However, despite these known costs and loss of productivity, Development Dimensions International reports that 54 percent of businesses do nothing to create a high-retention culture or reduce high employee turnover. The revolving door keeps moving – employees leave, managers interview and hire more workers allowing competitors with low turnover to focus more on productivity.