How can you help us improve workforce retention?

By Carine Lacroix
Annual employee turnover rate: 75% (with the service team being the most affected with a 92% turnover rate)
74% of the workforce had been employed for less than 1 year.
16% of the workforce had been employed between 1 and 2 years.
5% of the workforce had been employed between 2 and 3 years.
5% of the workforce had been employed for more than 3 years.
Many employees left to work for a direct competitor.
Some employees were involuntary terminated due to their low performance or lack of fit with the organization.
Recent organic initiatives to decrease attrition: leadership change, salary increases, equity incentives.
Company was not known as an attractive employer on the market: Many talented candidates in the industry declined job offers from the company because the organizational culture was seen as negative with a management style that was counterproductive.
XYZ leadership was composed of two smart men: Tom and Bradley. Tom was the founder of XYZ and brought Bradley on board to help him take care of the people, restore a great culture, attract great talent, decrease the turnover and motivate the workforce.

Bradley replaced Gerard who had been dismissed from the organization due to his “bad” leadership and lack of cohesiveness with the team. Aware of our expertise, they contacted us and together we created a plan for transformation and success.
Getting the Gears to Mesh

XYZ understood that decision-making based on data always wins over guesswork. For that reason, they immediately embraced the process that we outlined for them.
  • We reviewed exit interviews from former employees and other company documentation.

  • We interviewed some long-term employees to understand their perspective about the causes of the chronic attrition.

  • When it was possible, we did not hesitate to find out from outsiders (for instance potential employees) if they knew about XYZ and what they knew about the company. This also helped us understand the possible perception of potential employees about XYZ.

  • We conducted an online survey among current employees to understand what worked and what didnot work in the organization.

  • We analyzed market data from many sources and particularly the City Board of trade and Culpepper compensation surveys to understand XYZ competitors’ overall offerings and objectively appraise XYZ current rewards.

The outcomes of this researches were invaluable. We were able to pinpoint areas of improvements which were obviously the cause of some employees’ terminations. In fact, among many points, we discovered that:

1.    Some employees were wishing for a better benefits plan and the current plan of XYZ was definitely not competitive
  • 68% of employees declared that getting benefits through work was just as important to them as getting a salary; and 47% of employees confirmed that they were “somewhat dissatisfied” or didn’t “know anything “about their current benefits plan.

  • XYZ benefits plan was in the 4th quartile, meaning that the program in place was not competitive in the market

2.    Many employees were wishing for better performance and recognition systems
  • 89% of XYZ employees did not believe that when they did a good job, their performance was rewarded.

  • 68% of XYZ employees of XYZ employees did not believe that the firm did an adequate job of matching pay to performance.

  • 53% of XYZ employees did not believe that they were paid fairly, given their performance and contribution to the firm.

3.    More than half of the workforce were wishing for development and career opportunities
  • 58% of employees did not perceive “people development” as a cultural trait that applies at XYZ

  • 79% of employees did not believe the firm was doing a good job of developing its people to their full potential.

  • While analyzing each role, we also discovered that due to the unnecessary duplication of roles in comparison to the workload, some employees were underutilized, leading to stagnation in the role and boredom.

4.    More than half of the workforce were wishing for a retirement plan
  • 63% of employees said that it would make a difference for them and their family if their employer offered a retirement plan.

  • 58% of employees said they were ready to have their pay deducted to contribute to a pension plan.

5.    Some employees were wishing for base pay review and it turned out that market data confirmed that some of them were paid below the norm
  • 42% of employees informed that they were not fairly paid for task & responsibilities.

  • 25% were paid below the market and needed an actual pay adjustment

Tom and Bradley wanted to meet the employee needs as well as align with the company budget. Together we agreed that would satisfy both the employee need and fit within budgetary constraints.
Finding Winning Rewards

  • We recommended, designed and implemented (in partnership with XYZ’s benefits broker) a new benefits plan with features related with XYZ employees’ needs. Some of the features of the plan were the fact that : 1) It demonstrated XYZ cared for their employees and dependents; 2) It provided paid leave and extra cash for health and wellness; 3) It was within XYZ budget and was locked in for a reasonable period.

  • We recommended and implemented a new performance management process. Some of the features of the process were: 1) The breakdown of the performance process on ongoing phases; 2) The integration of development and career path discussions in the process; 3)The performance process was structured in an objective manner.

  • We recommended and implemented several recognition programs that resonated with XYZ employees, company business cycle and budget such as : tuition and seminars reimbursement, 1 paid week off in December over the holiday break, paid bereavement days, paid sick days, flexible work arrangements, team dinner, lunch with manager, movies and game tickets, service award, client referral bonus, recruitment bonus.

  • We recommended, designed and implemented their first pay structure. Some advantages were: 1) The identification of clear career paths; 2) The establishment of pay equity among all employees; 3) The reduction of risk of underpaid or overpaid employees in comparison to the market; 4) Peace of mind when making job offers to potential employees.

  • We agreed with our client that the integration of a retirement plan could wait a little due to their budget constraint, the workforce demographic age (58% of XYZ workforce were age 18-34 years old) and since other employees’ needs were getting satisfied now.

The Road Ahead

Those new HR initiatives (focused on what XYZ workforce values, current trends on the market and HR best practices) have made XYZ an attractive employer to work for and have increased workforce retention.
Employee job tenure increased
Despite a decision for management to downsize the team due to not enough work to provide to all employees; Most employees decided to stay and actually enjoyed working there.

We remember one saying “I am really enjoying the people here and learning a lot from the platform perspective […] With the changes, there are personal risks, but I truly believe in my heart that XYZ can overcome the obstacles and push forward and I believe in the people and management to get through this”

XYZ became an attractive employer and that showed on employees’ job tenure. Prior to our work, only 16% of employees were employed for 1-2 years; a year after our work 70% were employed for 1-2 years.

Annual Turnover rate decreased
The turnover of the service team was at 92% at the start of our mandate; A year after the deployment of our solutions, that turnover moved to 48% including the downsizing.

This case illustrates the strategic and tactical approach we take to transform your work place so you optimize your ability to attract, retain and engage great talent in a competitive marketplace and budgetary constraints