7 tips for improving employee retention

How confident are you that you can keep key positions filled with qualified employees over the next five years? If you’re like most IT leaders, the answer is: Not very. And it’s not just because of pipeline and skills gap problems. Your best employees are likely hot targets for savvy recruiters — and some may already have an active eye on the door.

About 25 percent of employers report that many of their key positions don’t have a successor in place, according to HR consultancy BPI group. About two-thirds of millennials at large companies are actively looking for jobs elsewhere, and the remaining third will do so within three years. Meanwhile, about 10,000 baby boomers retire every day. Add it all up, and the future looks bleak. “Because of all this, 84 percent of companies will have a serious shortfall of leaders within five years,” says Mike McGowan, managing director and practice leader for leadership and talent at BPI group.

Your IT department can beat those odds if you put time and effort into retaining current employees, rather than focusing only on recruiting new ones. “Retention is often overlooked,” McGowan says. That’s a huge mistake, because hiring well-qualified employees — especially those with in-demand tech skills or leadership abilities — is a major challenge in today’s market.

“To hire one person, you’re not going to interview two, and you’re not going to interview ten. You may interview fifty,” says Timothy Wenhold, chief innovation officer at Power Home Remodeling. Once you do make that perfect hire, it will take a while for your new employee to become a valuable contributor. This is why, McGowan says, the cost of losing an employee may be six to nine months of the replacement’s salary.

So how do you keep valuable employees around when recruiters are pinging them by phone, email, and LinkedIn on a daily basis? Offering a compensation package that’s competitive with the market is essential, experts say, but it’s not enough to keep talented employees around. Instead, you need to think about your “employer value proposition” — the unique mix of culture, job satisfaction, working environment, and opportunities for advancement and growth that will keep your best employees from taking recruiters’ calls or opening their emails.

Here are the most important elements of that value proposition.

1. Foster purpose

What is the larger meaning of an employee’s job? How does it support your company’s overall mission, and what is the larger meaning of that mission? If your IT employees don’t have good answers to these questions, you’re at greater risk of losing them, especially millennial employees, experts say.

“People really enjoy understanding the mission and purpose of the organization, being able to focus not only on what they’re doing or how, but why,” McGowan says. But while some companies are shifting their cultures to put the organization’s mission front and center, others are failing badly in this regard. McGowan recalls a recent training he conducted at a technology company where he asked his audience what the company’s vision and mission were. “There was a deer in the headlights look,” he says. No one seemed to know the answer until finally one of the participants looked it up on the company’s website.

Nearly all companies have a mission or vision statement, or both. But, McGowan says, “If the company doesn’t live it in every behavior, they’re just words on a page.” For example, does your company claim to value collaboration but leave people working in separate silos? “People leave because they see what’s behind the curtain,” he says.

Purpose done right is indeed a powerful retention tool, according to Steven Miller, CIO at Steelcase, the world’s largest maker of office furniture. “It’s part of the regular discussions leaders have with employees, connecting your personal purpose to work,” he says. “It’s a very powerful factor when you look at loyalty.”

Steelcase’s mission is to help organizations “create places that unlock the promise of their people.” So it makes a big difference when IT employees interact with Steelcase customers. “The spaces our team’s working in are the same ones we take customers through,” he says. “People see firsthand the people they actually help and what a difference it can make for companies. That brings a strong sense of reality to it. They may be working on scripts for a website, but they can see how what we do is affecting people.”

2. Manage meaningfully

How do the people who work for your IT organization feel about the daily experience of doing their jobs? It’s important for you to know the answer to this question, beginning with what it’s like to work for their immediate boss. When you ask employees why they moved to a new employer, the top reasons are more money, better career development, or greater opportunity for promotion, says Diane Berry, research vice president at Gartner. “But if you ask why they were looking in the first place, the number one reason is dissatisfaction with their immediate manager.”

This is why Berry says she always asks clients about the quality of their management. Because most aren’t good at leadership development, “They put people in as managers who should never be managers.” It’s hard to blame IT leaders who do this, given the scarcity of effective managers, especially in today’s tight labor market. Gallup research has shown that only 1 in 10 people have the talent to be a good manager, Berry notes. “With training, another 2 in 10 can learn.” That means about 30 percent of your employees have even the potential to become good managers, she says. “Those aren’t really great stats.”

Although it’s challenging, it’s important to have good managers in place throughout your IT organization if you hope to discourage employees from leaving, she says. “It’s not about command-and-control; it’s about playing the role of a coach. For a lot of managers who’ve been in the role for a while, command-and-control is how they understand to operate.”

3. Create a positive day-to-day experience

Beyond having a good immediate manager, it’s important to consider all aspects of an IT employee’s daily experience. “For people to be their most productive, they need to feel safe and comfortable, and also enabled,” says Paul Chapman, CIO at storage and collaboration company Box. Chapman and his team spend a lot of time considering a simple question: “What’s it like to be an employee on any given day when you’re trying to get your work done?” This is why Box works at getting seemingly simple things right that he says can add up to a good work experience.

“If someone is talking on the phone and it hangs, we will be alerted and someone will immediately come to fix it. If printers run out of ink or need paper, we have alerts that tell us. If you don’t check into a conference room that you’ve reserved within eight minutes of the scheduled time, it’s freed up.” That last rule dealt with the problem of conference rooms reserved for recurring meetings that are no longer taking place, increasing the availability of conference rooms by 20 percent, he says.

Similarly, if an employee logging on to the network enters the wrong password three times, he or she is shut out for an hour. When that happens Box now sends an automated message to employees’ mobile phones, asking if they’re trying to log in and allowing them to initiate a password reset, thus using two-factor authentication to verify employees’ identities. That change alone eliminated 2,000 help desk requests per month, Chapman says, making life easier for all employees, and easing pressure on IT staff at the same time. “We want employees to come to Box and be able to do their best work and that means less friction in how they get their work done,” he says.

4. Provide opportunities

Whatever they may be doing today, most IT employees will always be thinking about their future career path. So if you want those careers to stay within your organization, be proactive about discussing the future on a regular basis, and make sure you can offer the opportunities they seek.

“We provide people the opportunity to grow their careers and really become a world-class engineer or scrum master, if that is their trade,” says Rob Alexander, CIO of Capital One Financial. “Career development can include progressing up the management track, managing small teams and then bigger teams. It can also be an individual contributor career path for folks who want to develop their skill set and not become managers of others. We expect them to become thought leaders, and mentor others, and become a beacon of excellence in their craft.”

Every large IT organization should offer this sort of non-managerial career path in which engineers can gain advancement, better compensation, and a higher profile without gaining direct reports, experts agree. Forcing everyone who wants to advance into a managerial role is a recipe for the sort of bad bosses that cause other employees to leave, Berry notes. You’ll also wind up with unhappy, unfulfilled managers.

For those who do aspire to leadership positions, the best companies allow for rotation through other jobs and other departments outside IT, and back again. “Unfortunately, a lot of companies that have standard training or engagement programs find they just don’t work now,” McGowan says. “Millennials have a bad reputation of job-hopping, but here’s why: They view development and engagement as more than just training. They expect coaching, mentoring, and rotation through different roles. When they realize their company doesn’t offer that, they will move on to another company.”

5. Be flexible

“A big mistake employers make is failing to see the difference among different demographics and among employees,” McGowan adds. Different employees have different needs and desires when it comes to everything from how they learn new skills to how they arrange their work lives and even whether they’re happiest and most productive in an open-plan office or a cubicle. Or maybe working from home. “We treat work as a state of mind rather than someplace you go,” Chapman says.

Berry adds that this issue of telework is one too many companies get wrong. “You wouldn’t believe the progressive high-tech companies I still have to beat over the head around telework,” she says. “They aren’t comfortable managing by objective — if they can’t see Joe, then Joe’s not working. But I think it’s a differentiator for employers.” She herself, she adds, would never quit Gartner because the company lets her work remotely.

Giving productive employees as much flexibility as you can to manage their own work schedules and work environments and even remake their workspaces at your company will help you retain employees, experts say.

6. Offer perks that matter

Beyond workplace flexibility, what kind of perks and options will keep your employees happy and engaged? Rather than try to figure that out yourself, use a simple strategy: Ask them.

“It’s best for leaders to crowdsource information from employees about what types of perks and what types of technology would make the biggest difference,” McGowan says. “If you don’t do that, you run the risk of throwing darts at a wall and hoping one will stick.”

7. Get a pulse on engagement

Beyond finding out what perks to offer, surveys can improve employee engagement and retention in all sorts of ways. For example, at Power Home Remodeling, Wenhold sends out a one-question survey every Friday: On a scale of 1 to 5, rate your happiness with the company and your role within it. “If a number is less than 3, I want to know about it,” he says. “We record it, and I want to have a conversation with that person.”

To some IT leaders, a weekly happiness survey might seem a bit much. But to Wenhold, it serves as an early warning system to let him know when there’s a problem or an ineffective manager. In today’s fast-moving world of IT, especially in an agile organization, managers have a lot of autonomy and things change quickly. It can be difficult for a department leader to spot trouble right away, he explains. “That’s why the happiness numbers are so important.”