Managing Retention: A Strategic Accountability Approach

by Jack J.Phillips


With most economies on the rebound, the subject of retention is heating up again. On the back
burner for many HR managers for the last two years, this topic is now commanding much attention as organizations strive to prevent another talent war characterized in the 1990s. Using a strategic approach, combined with analytics, including ROI, gives firms a competitive advantage.


The time to tackle this is now – before it becomes a crisis. This article explores this proven approach to managing retention. Some organizations do a superb job of managing retention where others fail miserably. The issues are not always externally driven, but often lie within the organization—sometimes in the approach to the problem. Finding a new approach requires shifting paradigms, changing perceptions, and
throwing out old habits. A more rigorous, analytical, and strategic approach to addressing internal issues is often needed.


Old and outdated approaches to managing retention have created six distinct problems. How many of these sound familiar?


Proactive vs. Reactive (What problem?). The pressure is on — a solution must be implemented, now! Many organizations react to the retention issue — waiting until a problem surfaces, often developing enormous incentive packages to entice key employees to stay with the organization. In these situations, the turnover issue results in severe stresses and financial impact in the organization before steps are taken to resolve it.


A proactive approach is needed to prevent the issue from ever surfacing. This is often easier said than done. Almost every manager will agree that employee turnover should be prevented before it becomes a problem. Unfortunately, many external environmental factors exacerbate the turnover issue. The HR staff and management team is not fully prepared for these issues and the results are sometimes disastrous. A continuous improvement process cycle is needed so that the focus is always on improving the current situation. This will help manage the employee retention issue.


Developing too many Preventive Programs (If we try this, and this, and this, we can prevent the problem in the future). Just as the reactive approach can be a problem, implementing too many preventive programs can also be a problem. In an effort to be proactive, many organizations implement multiple programs with a "try it and see" mentality without understanding the real impact turnover has on the organization. The philosophy is this: If enough programs are implemented, eventually, one of them will help maintain staffing, eliminating unnecessary turnover. Without the appropriate accountability applied to the program, the results of the program's implementation may never be known. Meanwhile, far too much money is spent. The landscape is littered with overspending in an attempt to prevent the turnover problem from occurring. While prevention is important, some method to forecast the value of preventive programs must be in place. Forecasting value provides some assurance that the program will generate enough monetary benefit to offset the costs.


Searching for Solutions (Hey, they have a great program over at the Hard Rock Café!). Many HR managers and staff members are constantly searching for a solution, trying to find a program that has worked for another location. When workshops and conferences are offered about retention strategies, HR staff flock to sessions, taking copious notes, and feverishly attempting to apply newly discovered techniques or programs to their organization. Many times this approach results in failure. Searching for a solution without the proper analysis of the problem is a very serious issue and leaves the management team wondering if there is a solution in their situation. An up-front evaluation is needed to identify the specific causes of turnover.


Too Many Solutions (I never met a solution I didn’t like). Even when employee retention is identified as a problem, far too many organizations (even some of the successful ones) base their approach to the issue on an excessive number of strategies. Turnover is a complex issue with many influences. There are probably 500 specific solutions that could be implemented. The published literature on retention doesn’t help—often offering countless solutions. One publication offers 154 solutions to “keep good people.” Implementing, or at least, attempting to implement, too many solutions can create disastrous results. The organization is burdened with an excessive number of new programs, projects, initiatives, plans, policies, and techniques. This can result in costly efforts with minimal, if any, results to show for them, while, at the same time, leaving staff members confused and managers perplexed. The objective is to tackle only the most critical turnover solutions, using precious organizational resources wisely to develop the most effective approach.


Mismatches between Need and Solution (We blew it on this one!). Too often, a solution that doesn’t actually address the need/problem is implemented. Maybe there is insufficient information to provide a clear understanding of the solution required. Maybe the wrong solution is selected or improperly implemented, resulting in a lack of added value. Maybe the solution wasn’t addressing the need as anticipated. Whatever the case, these mistakes can be avoided by clearly matching the solutions to the needs.


Lack of Payoff (What results?). When an expensive solution is implemented, taking precious time and resources, a familiar scenario often surfaces. The management team wonders if it made a difference. Did it add enough value to offset the costs of its implementation? Could a different, less expensive solution have similar results? Is the turnover rate still unacceptable? The solution might have successfully prevented further turnover deterioration or it could have left turnover unchanged, poised for further deterioration. The problem lies in not knowing. A process is needed to measure the results of a solution from a balanced perspective, collecting different types of data (tangible and intangible) so that management can clearly see the impact of major retention strategies.

NEEDED: A STRATEGIC ACCOUNTABILITY APPROACH

The strategic accountability approach is the basic model for this article (Phillips and Connell, 2003).

The process brings accountability to the retention issue and has five very important advantages:

It considers the retention issue to be an important part of strategy. The executive team is very involved in the retention issue. With many firms, retention has become a strategic issue because it makes the difference between financial mediocrity and excellence.

The retention issues are measured with bottom-line results. Accountability is built in throughout the process so those involved can fully understand the cost of the problem, cost of the solutions, potential impact of the solutions, and the actual impact of the solutions – all in monetary terms.

The approach moves logically from one issue to another. A series of steps, necessary to manage the process, are followed with this approach. Each step has options and possibilities, but needs to be addressed in some way for the process to be successful.

The approach is a discipline and a methodology. With this approach, it’s easy to stay on track because each of the different issues has to be addressed before moving onto another issue. The approach brings structure and organization to the retention issue, rather than shooting from the hip or implementing solutions without analysis.

It is a continuous cycle of improvement. Starting with the problem ultimately leads to an impact on turnover. The process continues until turnover is maintained at the desired level. Ultimately, the approach positions the organization in a preventive stance working to maintain the appropriate level of staffing and reducing the risk of turnover.