Retaining Employees: Why They Stay

This week we’ll be looking into a few other paths to turnover and, more importantly, why employees stay.

Two major factors have the largest impact on turnover: job satisfaction and job alternatives.

People who are satisfied with their jobs, who positively evaluate their pay, supervision, chances for promotion, work environment and tasks they do will stay. Those who aren’t, will not stay. Job enrichment (such as training), good supervision, clear roles, and met expectations also contribute towards job satisfaction.

Turnover Is Tougher on Small Organizations

The loss of key employees can have a particularly damaging impact on small organizations:

  • Departing workers are more likely to be the only ones possessing a particular skill or knowledge set.

  • A small company’s culture (and morale) suffers a more serious blow when an essential person leaves.

  • There is a smaller internal pool of workers to cover the lost employee’s work and provide a replacement.

  • The organization may have fewer resources available to cover replacement costs.

While turnover may be hard to spot in some circumstances, there are multiple points in the turnover process where organizations can intervene to influence turnover decisions.

Key attitudes—job satisfaction and organizational commitment— are especially critical during the turnover process and therefore are worth paying special attention to.

In the withdrawal phase of the turnover process (reviewed last week), the intention to leave is generally the most powerful predictor of turnover. Thus measuring it is vital.

The research findings we’ve been examining this week and last can identify and manage the turnover predictors most important in your organization. However, research has also recognized that not every employee follows the above-described path toward the decision to leave a job.

The unfolding model of turnover identifies four different paths to turnover:

(1) Leaving an unsatisfying job: Leaving an unsatisfying job resembles the typical turnover process discussed last week.

(2) Leaving for something better: Leaving for something better entails leaving for an attractive alternative, and may or may not involve dissatisfaction. That is, some people who are quite satisfied with their current jobs still leave when presented with an even more appealing alternative. These decisions may be initiated by a “shock,” such as an unsolicited job offer that the individual can’t resist.

(3) Following a plan: Following a plan refers to leaving a job in response to a script or plan already in place. Examples may include employees who intend to quit if they or their spouse becomes pregnant if they get accepted into a particular degree program, after they earn a certain amount of money or complete a particular training program, or after receiving a retention bonus. Again, these decisions may have little or nothing to do with job dissatisfaction. Further, there may be little or nothing organizations can do to influence these decisions.

(4) Leaving without a plan: Leaving without a plan is all about impulsive action, typically in response to negative shocks such as being passed over for a promotion or having a family member suffer a catastrophic illness requiring extensive care. Once more, these departures may or may not be associated with dissatisfaction before the shock. In addition, organizations can manage these decisions by minimizing certain types of negative shocks in the workplace (such as sexual harassment). Companies can also consider providing support mechanisms to help employees recover from the shock.

Shock n 1. Any event that leads someone to consider quitting his or her job. Shocks can be expected (e.g., completing a degree) or unexpected (discovering that a spouse has to relocate). They can also be job-related (a negative performance appraisal) or non-job-related (pregnancy). Finally, they can be positive (winning the lottery), neutral (a merger), or negative (sexual harassment).

While understanding and planning for employees to leave is understandable, It may be more valuable to understand why employees stay.

Some recent studies have examined the ways in which employees become embedded in their jobs and their communities. As employees participate in their professional and community life, they develop a web of connections and relationships on and off the job. Leaving a job would require severing or rearranging these connections.

Employees who have many connections are more embedded, and thus have numerous reasons to stay in an organization. There are three types of connections that foster community:

  • Links

  • Fit

  • Sacrifice

Each of these types may be related to the organization or the surrounding community.

Links are connections with other people, groups, or organizations. Examples include relationships with co-workers, work-groups, mentors, friends, relatives, church groups, and so forth. Employees with numerous links to others in their organization and community are more embedded and would find it more difficult to leave. CMC Workforce creates this web with our trainees inside and outside of the job site.

To build and strengthen links you can:

  • Provide mentors

  • Design work in teams

  • Foster team cohesiveness

To build and strengthen links CMC Workforce:

  • Provides mentors and coaching.

  • Places in teams.

  • Encourage employee referrals.

  • Creation of recreational leagues.

  • Encourage and support community involvement; for example, through community service. organizations and recreational leagues.

Fit represents the extent to which employees see themselves as compatible with their job, organization, and community. For example, an employee who relishes outdoor activities and lives in a community that offers excellent outdoor opportunities would find it more difficult to leave his or her job if doing so required moving to another community that did not provide such opportunities. This, again, is a way that CMC Workforce helps our Employee Partners. By ensuring that each trainee is matched with the specific company that suites not only their personality but also their skill level and training track.

To build and strengthen the fit of your organization you can:

  • Provide clear socialization and communication about the enterprise’s values and culture.

To build and strengthen links CMC Workforce:

  • Provide realistic information about the job and company during recruitment.

  • Incorporate job and organizational fit into employee selection.

  • Build ties with the community (by sponsoring local events)

  • Ongoing Training and Development

Sacrifice represents forms of value a person would have to give up if he or she left a job. Sacrifices include financial rewards based on tenure, a positive work environment, promotional opportunities, status in the community, and so forth. Employees who would have to sacrifice more are more embedded and therefore more likely to stay.

To build and strengthen links you can:

  • Tie financial incentives to tenure and productivity.

  • Provide a training, development and benefits package.

  • Provide unique incentives that might be hard to find elsewhere.

To build and strengthen links CMC Workforce:

  • Provide Financial Literacy programming.

  • Provide Apprenticeship Training Certification tied to Employment.

  • Develop career paths that do not require relocation.

  • Create a community within our organization that reinforces a sense of accountability and belonging.

By partnering with CMC Workforce, we can create a career track where the appropriate employees are not only trained but placed. This placement includes a deep commitment with our trainees and our employee-partners that engages on various levels to embed all parties along the same path with the trainee.

Retaining employees not only ensures spent resources stay within your company, as we saw last week, it also creates an environment that embeds all employees and creates a community. Next week we’ll be taking things a little further along to help you create a Retention Management Plan.

A large amount of this article, data and information comes from:

SHRM Foundation’s Effective Practice Guidelines Series, Retaining Talent: A Guide to Analyzing and Managing Employee Turnover, which we strongly recommend reading.

Also recommended are How to keep your best employees: Developing an effective retention policy (Mitchell, T.R., Holtom, B.C., & Lee, T.W. Academy of Management Executive 2001 pgs 96-108), and Why people stay: Using job embeddedness to predict voluntary turnover (Mitchell, T.R., Holtom, B.C., Lee, T.W., Sablynski, C.J., & Erez, M. 2001. Academy of Management Journal, 44, pgs 1102-1121).

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