Retention Management

From Wikipedia, the free encyclopedia

In a time of demographic change the binding of employees is especially important for the survival of companies. Today firms should recognize that the number of workers in absolute terms is falling. Companies should take measures in advance and set up a systematic retention management, which is becoming a major issue for many businesses. A manager schould keep in mind: "getting good staff is only half of the battle; the other half is keeping them".[1]

Definition of Retention Management

The workforce Planning for Wisconsin State Government (2005) defines retention management as a systematic effort by employers to create and foster an environment that encourages current employees to remain at the same employer having policies and practices in place that address their diverse needs.[2]
[Objectives

and Principles of Retention Management

Retention management focuses on the effective system of measures that lead to retention of employees. It includes all activities that systematically influence the binding, performance and degree of loyalty of staff. David J. Forrest (1999) defines 5 basic principles [3] of retention management, that lead to successful employee performance and satisfaction, and therefore to their retention. First of all, employees need to feel they are appreciated, valued and trusted. It is about respecting people and their contributions to the company effort. The second principle is development. Employees who participate in their own growth and development plans are going to stay with the company because they know their company wants more for them. The next principle is growth in responsibility. Most people want to grow and to feel more competent and more responsible, at any level. A good company helps people manage themselves by consistently focusing on performance and results. The manager teaches the employee what they are good at, what else they need to know and how to get it. As they grow they receive higher levels of responsibility and accountability. This attitude also encourages innovation and creativity.

The fourth principle is a good relationship with the manager. The supervisor represents the personal experience of a corporation of employees and therefore reflects, for better or for worse, its underlying attitudes toward them. The fifth principle is success. The valued and successful employee stays. This implies, of course, that the work is meaningful to the corporate enterprise. The strong employer rewards employees for helping to make others successful as well. As a result a company expects from its staff power, loyalty and willingness to stay in the company. Employees expect a fair treatment and a personal appreciation, which lead to the efficiency of retention management.[4]
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procedure of Retention Management

The procedure of retention management consists of six steps[5]: 1. 2. 3. group 4. 5. 6. Identification of the targeted measures Implementation of the measures Evaluation of the measures Identification of the target and actual needs of the staff Analysis of the fluctuation risk of the staff The Analysis of factors of Motivation/Demotivation of the retention

Step 1: Identification of target and actual needs of the staff The starting point is the corporate strategy and business objectives. The product, market or organisational goals of the company can help to identify strategic staffing needs and the strategic relevant skills of employees. Step 2: Analysis of the fluctuation risk of staff In step 2, the HR manager is interested in the degree of the fluctuation risk. First, it is important, to analyse the common portfolio of the potentials and performance of the employees. In large companies, this could be done through a management audit. In small businesses this can be clarified with an employee interview. This gives the manager information about the power structure in the relevant group. But this information is not enough to estimate the probability of fluctuation. It is also necessary to consider the demand for the relevant skills in the labor market. When a manager combines the results of the analysis he can identify three risk categories, which would cause a priority for the retention management:

Those employees, who are in great demand in the labor market and who

have a high capacity, are the key target group for retention management measures.

Those employees, who perform well and whose skills are somewhat in

demand in the labor market, have a mean fluctuation risk. Depending on the corporate strategy they are the second important target group for retention management measures.

Employees that have skills that exist in large numbers in the labor market and

who also who perform well are currently not a relevant retention target. Step 3: Analysis of factors of Motivation/Demotivation of the retention group Now motivators and demotivators must be found in the identified retention target group. The motivators must be taken into account and demotivators must be removed with the help of appropriate measures, to ensure that the employees develop affective commitment. Motivators and demotivators can be estimated from the outcome of questionnaires. Subsequently a Motivation/Demotivation profile of the retention target group should be formed. Step 4: Identification of the targeted measures The various measures of human resource management relate to different motivational factors. These connections can be used to create a specific matrix in which the action areas of personnel management and appropriate measures will be brought together with the motivational factors. Step 5: Implementation of the measures After the analysis measures will be implemented. Here are some important aspects:

Conceptual foundations: The measures must be defined and applied

according to clear rules, in this context ad hoc measures lead only to short-term success with negative cultural impact.

Cultural fit: Measures must be in accordance with the corporate culture and

the existing Management tool system For example, a variable compensation system makes little sense without a performance appraisal system!

Marketing personnel action: The application of the measures must be

accompanied by internal communication. Only then the efforts of a retention manager will be perceived!

Retention factors: By the design and implementation of retention

management policies respect and transparency must be taken into account. Only when these measures convey these values, they will have great influence! Step 6: Evaluation of the measures After the implementation of the measures it is necessary to assess the success of the activities. This can be achieved by comparing the results to the objectives that were set in the retention management strategy. After the expiry of the defined period and after application of the retention policies the manager can check how the objectives were achieved. For example, if the objective was that 80% of the defined strategically relevant staff should be in business at time X, then the manager can determine whether this ratio was reached at time X, and whether it was exceeded or not exceeded. From this statement the manager can derive new measures and draw conclusions about the practice of the concept of retention management. Important conditions for the success of retention management are on the one hand, human resource management in the company, and on the other hand project management of the implementation of retention management.
[edit]Retention

Management and Richard Ekstrom's company

Retention management was founded by company President Richard Ekstrom.[6] It represents a vision that embraces the future of membership driven industries in a world empowered by technology. The company was created to enhance an organizations profitability and success through effective use of retention management. The company helps its clients to develop long-term relationships with their members "which extends beyond the physical walls of their business". Under Mr. Ekstroms leadership, the company has grown into a business leader and innovator serving more than 2.5 million members with clients in all 50 states of the U.S. The company expanded its service to the United Kingdom in January 2008 and Australia and New Zealand in August 2008. This great interest to retention management shows, organizations realise, that an effective retention management will help them sustain their leadership and growth in the market. Organizations implement retention management as a core element of their talent management strategy and organisational development process. Managers agree that retaining the best employees ensures customer satisfaction, product sales and satisfied workers, organizational knowledge and learning. Those firms, who are not able to realise the importance of retention management, are at

risk of losing their top talented people to the competition. This can lead to higher costs, customer discontent, lower competitiveness and failure of the company.[7]
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