People Central in the News – NZ Herald 17th November 2010

New Zealand Herald – 17th November 2010

Act to Reward the Faithful

By Steve Hart

Retaining good staff will start to get tougher next year as the job market warms up and people reach bursting point to move on to fresh jobs.

Many workers sat tight during the year, grateful to have a job, but have grown increasingly discontented with their lot, says Steve Evans, managing director of People Central, a Hawke’s Bay staff development and recruitment firm.

He says once the recession ends and more jobs are created – particularly because of the Rugby World Cup and a predicted up-turn in the economy – many employees will be off.

These people could include staff who have good relationships with their customers, have institutional knowledge, fit in well and add real value for their employers.

What has thrown staff retention up for discussion is the talk of keeping Generation Y on board, says Evans.

“But it is not a new concept by any stretch. Staff retention can be traced back to Quaker firms and their factories. However, it had a resurgence this decade when everyone was talking about work-life balance. But that took a back seat during the recession.”

Nevertheless, it appears employees are a little more mercenary than they were, preferring to look after their careers first and their employers second.

“When it comes to careers, many people are now thinking of themselves rather than their employer,” says Evans. “Talented people may well be attracted away to their employer’s competitor when the job market really turns the corner.

“A job has been something of a prize during the past year or two. People thought long and hard before risking their salary … But that will change as more jobs start being advertised.”

Evans says some key factors that may cause staff to leave an organisation include its image not meeting their expectations, the company culture not matching their values and not having a clear career path.

“Career-minded people want to know the next step within their firm and if it isn’t clear then they may start looking around,” he says.

“What could fix this is staff believing that their employer is genuinely interested in them and their career.

“People shouldn’t be left to trudge on day by day, month by month and have a turgid performance review at the end of the year.

“This just doesn’t give staff the commitment they are looking for from their employer. They want to see that they will be developed and have some of their expectations met.”

In short, says Evans, companies need to engage with their staff to understand the aspirations and goals of each one. “One way to do that is with a respectable company culture survey, and then analyse the results. A company should compare how it sees itself with how its staff see the firm. If there is a big difference, work will need to be done to close the gap.

“Firms are very keen to talk about their carbon footprint and their environmental policy – and that can mean a lot to members of staff. It makes them feel as though they are working for a worthwhile organisation.”

Evans says signs that all may not be well within a firm include people leaving, whispers of staff being unhappy, disengagement and the results of exit interviews.

He says exit interviews can be worthwhile – but only if they take place within a few days of the resignation letter being dropped on the HR manager’s desk.

“Holding an exit interview a day or two before the person actually leaves the building can render it useless, and for really meaningful results the interview should be done by a third party,” says Evans.

“The member of staff may be leaving because of their manager, so it’s no point them doing the exit interview. Plus, staff are often more open, frank and honest when they can tell their story to someone other than a colleague.”

Evans also says that if an exit interview is done quickly, the employer may have a chance to turn a valued member of staff around and encourage them to stay.

While the job market is just starting to warm up, certain professions are running red hot – and those include the finance and accounting sectors.

Sydney-based trainer, career coach and former recruitment consultant Kim Seeling Smith says staff typically leave a firm because of issues with people, structure and process.

“Turnover is expensive,” she says. “The average cost to replace an employee is between 50 per cent to 200 per cent of the person’s annual salary.” This means an employee earning $80,000 a year would cost a minimum of $40,000 to replace – a significant figure when multiplied by annual staff turnover.

“Not only is retention a cheaper option, a stable staff can add value to your company and help to make it more competitive,” she says.

Bringing together a combination of research and anecdotal evidence from 15 years as a recruiter, including six years in Auckland, Seeling Smith says retaining good employees is hard.

“Especially in today’s environment,” she says. “Yet the concepts behind it are actually very simple.”

She says many managers mistakenly believe that employee retention boils down to salary and benefits. While people do need to be paid a fair wage, research shows that most employees will be far more engaged by simply being given the opportunity to do “meaningful work at a company they love, with a team they enjoy”. Especially if they are able to put their own mark on that work and be recognised for their achievements.

“The first step is to stop and have a think about who the critical people in your organisation are – the quiet over achievers, and the ‘rock stars’,” says Seeling Smith. “This is where managers should be putting 80 per cent of their energy.

“Creating a structure and management processes where your critical people can really excel at their roles and become strategically creative will create the type of environment that most employees want, drastically reducing the amount of turnover a company experiences.

“Placing more emphasis on the retention of these people is one of the smartest moves you can make.”

Seeling Smith says most organisations hire people for a particular skill set because they want them to add value from day one. She likened this strategy to rolling the dice.

“At best it’s a crap shoot because you are dealing with human beings and they will constantly surprise you,” she says. “Hire, instead, based on a candidate’s cultural fit within an organisation. You can train a skill set but you can’t train cultural fit.”

Kim Seeling Smith has co-authored 101 Great Ways to Enhance Your Career, which is due to be released this month.

Steve Hart is a freelance journalist. See

By Steve Hart