Sunday, October 24, 2004

Concerned about keeping good people? You should be.

The predicted shortage of people in the workplace means competition for the best - and some of them already work for you. Why do people stay and what makes them decide to leave?

Are you concerned about keeping your best people?

You should be.The Canada West Foundation has issued the most recent of three positive report in a row on the prospects for the BC economy and says that it is 'finally gaining traction after three years of lacklustre growth'. The report predicts that the provincial economy will outperform the rest of the country over the next two years and notes that current employment growth is already outpacing the national average. Good news for business and employment in BC.Every silver lining has a cloud however, and this threatens to rain on our parade unless BC business owners pay attention to the impact of a booming economy on the hiring and retention of good people and are prepared to do what it takes to keep their top performers.
Click on "Read More" below for the complete article
And if you are still not convinced that it is worth the effort to keep your best people, consider the cost of turnover. Craig Symons, a principal analyst at Forrester Research, defines two major cost components: hiring costs, the hard costs of recruitment, and vacancy costs such as compensation for interim replacements, overtime for current staff, and productivity losses. Harder to quantify in dollars, and sometimes the most devastating long term, is the impact on current initiatives, the break in continuity of internal relationships and the lost knowledge of the workings and history of the organization. Forrester estimates the average hard replacement cost ranges from 25 percent to 100 percent of a worker's annual salary and this estimate does not include vacancy costs.

Commitment to the organization is the strongest influence on an employee’s decision to stay or go. Complex factors affect commitment to the organization including perceptions of long term prospects, job satisfaction, stress and fairness. Money is important but not most important. People staying only for the money are not committed; they are simply waiting for a better opportunity .

So how do you keep your best people?
You know how it is when you are really engaged with what you are doing. You enjoy it, you get involved and you know that your efforts are worthwhile. Employee engagement is the current term for this stepped up commitment at work. It describes the positive attitude held by the employee towards the organization and its values. Opportunities to contribute and learn, the knowledge that opinions counts, working with people committed to doing a good job and the belief that personal goals can be met within their organization all contribute to job satisfaction [see inset for more contributors]. There is great deal of ongoing research, surveying, discussion and speculation about what raises mere satisfaction to genuine engagement. Out of all this, what seems to be emerging as the strongest driver for employee engagement is a sense of feeling valued and involved.

Simple to say and complicated to achieve, there are many aspects to creating an engaging culture and making it real and sustainable. Employee engagement is a lot like trust – hard to get, easy to lose and even harder to rebuild.

One vital key to engagement and retention is the relationship between the employee and a valued manager or supervisor. As employees’ expectations of involvement and appreciation are met, their commitment to the organization increases. Day to day, it’s the manager that fosters the relationship with the employees. Getting and growing commitment and engagement with employees means making a real commitment to engage with them.

For the business case:

o In a major review of millions of interviews, the Gallup Organization discovered that workgroups that exhibited the highest levels of employee engagement were more likely to have above-average employee retention, customer loyalty, safety records, productivity and profitability .

o Companies with high engagement levels had markedly higher total shareholder return (TSR) than those with low employee engagement. Companies with 60% to 100% employee engagement achieved an average TSR of 24.2%. With engagement scores of 49% to 60%, TSR dropped off to 9.1%. Companies with engagement below 25% suffered negative TSR .

Keeping Your Best People: creating the work place where they want to be. Learn what builds employee engagement and how to use this practical knowledge to create the place where they want to be. Ann Brown and Shauna Jones present this workshop in the BC Centre for Quality Insights Series.
November 4, 2004 8 am - 12 noon
349 West Georgia Street, Vancouver (enter off Homer St.)

Non-members $219; BCCQ Members $119 (GST exempt);

Register online for a lively, informative and thought provoking workshop.


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