Retaining Talent is about creating the right environment to engage your talent to deliver their best and reach their potential, while remaining in your organisation.
Understanding the concept of employee retention
Employee retention is the extent to which an organisation is able to keep its employees, either over a long period of time or until the completion of a specific project or contract, ensuring that the knowledge, skills and experience that add value to the organisation are effectively applied to organisational success and patient care.
The departure of talent and high turnover rates have a significant financial cost and can interrupt productivity, workflow and service, and a loss of valuable expertise and knowledge.
Actively managing HR policies, practices and interventions designed to engage the workforce to stay ensures a focus on employee retention. Such interventions can include actions on pay and reward, inclusive management culture, career management, training or development opportunities, which all contribute towards a motivated workforce.
On the other hand, identifying the organisation-specific reasons why people leave is an important source of HR information and can be used to inform the areas which should be targeted for employee retention.
The reasons people leave organisations can be categorised into two forces that impact on the dynamics of retention - pull or push factors. Both push and pull factors provide insights that can be used as a platform on which to build a retention strategy. The objective of retention will be to maximise the pull factors within the organisation and to minimise those that push the employee out.
Creating a retention strategy
A strategic approach to employee retention requires a deep understanding of the needs of the individuals in your organisation. The objective is to align people management and talent practices to the achievement of a high engagement culture that will in turn lead to the organisation achieving its objectives.
The retention of talent needs a multifaceted approach that combines rewards with others that are based on values, meaning and a culture of opportunity. Retaining talent should not be looked at in isolation and is a holistic process that will span most aspects of people management, from attraction through the complete employee life cycle.
It is a fundamental concept to talent management and at each stage of the talent management cycle, strategies, approaches and processes should aim to engage and retain your critical talent. The framework below illustrates how the elements of talent management each link to retention.
Understanding what incentivises people
It is critical to understand what incentivises people to perform and stay with an organisation above and beyond financial reward, as increasingly it is not money that motivates people. Particularly for the NHS, the inability to incentivise people financially calls for NHS organisations to look at alternative reward packages.
The concept of ‘total reward’ includes elements in addition to financial reward and pay, which are important when developing an employee retention strategy. These include work/life balance, a positive company culture, the opportunity for employee development, a positive working environment including job design and the physical workspace and opportunities to engage in charitable work or social and environmental initiatives. See Rewards in the NHS
Total reward provides an excellent mechanism for aligning organisational goals with employee ambitions and is a great communication tool to signal to employees what the organisational values are, as well as their progress within the organisation. The success of a total rewards approach is in offering a value proposition to employees that meets their wants and needs. It gives employers a lot of flexibility in tailoring reward packages to differentiate according to performance and talent segments.
In addition to the reward elements a key part of your reward strategy must place an emphasis on recognition. Employees who perceive that their organisation values their input and performance are more likely to respond positively to their work, which will in turn enhance their commitment and engagement and ultimately their inclination to stay with the organisation. This means creating an environment where employees feel that their efforts and performance are recognised.
Employee recognition can take many forms, varying from manager feedback to peer-to-peer nomination mechanisms to team-based recognition to organisation-wide recognition. The failure to provide effective recognition for a job well done can be demotivating and is one of the prime reasons why people leave. It is therefore a powerful retention tool, which can be formalised as part of the total reward package.
Total reward packages are inherently linked to your EVP, which will have identified the elements that attract, motivate and retain your people. It is important to develop reward policies and practices around the elements of your EVP to make your offer a reality. According to PA Consulting’s ‘What Talent Wants’ research, when organisations effectively deliver on their EVP, new employees arrive with higher levels of commitment (38%), compared with a 9% commitment rate for organisations with poor EVP delivery. Elements of the package can also be tailored to your talent segments, differentiating people according to the contribution or the potential contribution they make to the organisation’s success.
Use the Total Reward Package Tool to understand how to implement a total rewards strategy