Guest Post: Retention Q&A
Guest Post: Retention Q&A
CAMPAIGN: 3BL Blogs
Brian Coffman joined Maxwell Drummond in Houston as a Senior Consultant before transferring to Calgary to manage the company’s Alberta operations in 2009. In 2012, after serving as the Vice President Americas, Brian was promoted to Vice President Talent & Organizational Capability and is now responsible for several areas surrounding Maxwell Drummond’s global talent strategy.
In this addition of the Human Capital Blog, Brian discusses retention strategies and challenges in this informative Q&A with PennEnergy.
1. Why is retention important, and how does it factor into the “Big Crew Change”?
The Oil & Gas industry has been discussion the potential challenges presented by the “Big Crew Change” for years and now we’re starting to see those affects on factors such as retention. “Crew Change” aside, however, an ever-increasingly mobile workforce that doesn’t naturally think in terms of loyalty is reason enough for companies to look long and hard at their retention strategies. Quite simply, an effective retention scheme can lower turnover costs, reduce the costs of recruitment and training, prevent the loss of company knowledge, improve the effectiveness of succession planning and increase loyalty amongst other benefits. The “Big Crew Change” is inevitable, but successful retention schemes can and have been effective in slowing the handover points.
2. Is it more cost effective to retain an existing employee or bring on a new employee? Why?
Retaining and hiring will always co-exist in a company’s broad HR strategy, and the benefits of retaining a high-performing/high potential employee is not just a discussion on cost. New employees should be considered for vacancies where there are no clear internal candidates, and that should be determined via a thorough succession and development planning process. Retaining an employee, however, reduces measurable recruitment and training costs as well as impacts intangible costs such as the time and effort to build organizational awareness, cultural identity and loyalty. The answer, therefore, is to focus on retaining employees that bring true long-term value to the business and hire where your organization objectives cannot be met internally.
3. What techniques can be used to encourage employee retention during difficult economic times? During times of wage freezes? Furloughs?
Employees can be retained through a variety of non-monetary vehicles, and often these can hold the greatest influence on an employee’s decision to stay. In setting a retention strategy, financial benefits should not overshadow the power of corporate identity, job satisfaction and development. Thus, despite downward pressure on monetary retention, employees can be motivated to remain in place if they feel their company remains THE place to grow, learn and have their needs met. Non-monetary retention strategies should include systems for regular praise and recognition of good performance, robust learning and development opportunities, meaningful work that aligns with corporate strategy, a valued system for offering feedback, recreation and creative benefits that extend beyond basic health and wellness.
4. What has been effective in encouraging employee loyalty? What has been shown to drive away employees?
What triggers loyalty for one many not trigger it for another. Perhaps the question is best answered by addressing what drives employees away? Actions that are almost certain to drive disloyalty include an inability to provide meaningful work and recognition, poor training, ineffective internal communication systems, lack of management/employee engagement, below market pay and benefits, lack of advancement opportunities, unethical corporate practices, etc. Notice that pay and benefits isn’t listed first and this is intentional, as often that is not the most significant factor driving loyalty.
5. What kind of management styles have shown a major effect on employee retention?
Management that focuses on being honest and building trust, growing employees by helping them improve and advance, setting clear goals and strategies, communicating with employees and taking their feedback seriously will be very successful in building an organization that people find difficult to leave. The “command and control” approach that includes a lack of clarity around mission, values and strategy, coupled with aloof behaviors, will stifle employee engagement and affect retention.
6. What bargaining chips are available for retention discussions? Are vacation days or other perks effective?
Let’s put compensation aside as it is a natural bargaining chip that carries weight. Non-monetary perks can be as or more effective, and this trend should continue with more and more data showing that Gen Y and Gen Z workers place a high value on work/life balance. The value placed on time away from the office is increasing and can be addressed through more aggressive vacation policies, unpaid leave and even sabbaticals, a newer strategy which some are beginning to experiment with. Equally, more flexible work arrangements for jobs that can be performed remotely are a useful retention tool. This can include set working days from home or fewer core office hours. Other perks can include paid memberships to fitness clubs or dues to professional organizations, loans assistance, educational assistance, etc.
7. Is there a period in an employee’s timeline with a company when retention is most/least a concern?
The best approach is truly to build loyalty and “retention mindedness” from day one. To say or imply there is a period when retention isn’t a concern is to say there are moments when risking the loss of a good employee is acceptable. Rarely should this be the case, adverse impact or significant external forces aside. Taking into account every retention strategy already highlighted, these should be adopted or introduced from day one with constant oversight and monitoring from HR/executive leadership. The retention strategies should also be reviewed at regular intervals to assess their effectiveness and suitability for the organization.
8. How can companies benefit from the retention mistakes of other companies?
Mistakes with retention can serve as a warning and a means of improving retention effectiveness. Failed programs are either ineffective in their core design or in implementation and if you can understand why these mistakes were made, it can be easier to introduce the right programs in the right way in your own organization. Retention vehicles are not often universal, meaning a specific program isn’t guaranteed to work in every organization. By monitoring the success/failure of retention programs in similar or competitor companies, it can be much easier to know which programs will be successful with your own employees and how those programs should be both implemented and governed. From a talent acquisition standpoint, companies with poor retention easily become targets as a greater willingness amongst the employee base to consider alternate employment is created.
9. How can employees position themselves so their retention is fought for?
A well-qualified, experienced, hard working employee that continues to learn and grow is worth fighting for. Employees shouldn’t have to strategically and politically maneuver for retention benefits, whatever they may look like, if they uphold their end of the employment proposition. Additionally, companies that care about retaining top talent should have mechanisms for identifying these workers and fighting to keep their loyalty. Right now in Oil & Gas, there are numerous skill-sets in extremely high demand resulting in an employee-driven market. Employers across all O&G sectors know this, and it is leading to some incredible retention benefits unlike any the industry has seen and there a few signs of this trend slowing.
Click here to read more from this author.
The Human Capital blog - brought to you by PennEnergy.com - presents the insights of top executives from Maxwell Drummond International, a world leading retained search consultancy offering professional search services to clients in all sectors of the energy and natural resources industries.