Employee retention- The new imperative in the New Economy

The big story now hitting the employment market is employee retention. The New Economy is making outsourcers out of former employees, and the entire job market is changing. Employee surveys are being used regularly in the US as a “barometer” of pressures and influences on staff. The results aren’t always what businesses expect, either.

The big issues for employers

The new job market is changing so rapidly that keeping up with the options can be difficult. The New Economy is creating a very different dynamic to the old career progression. New graduates can go into business for themselves with an internship and a good professional portfolio, usually generated during the qualification years.

All of which leaves businesses in a difficult position, trying to compete with New Economy entrepreneurs for new skilled workers coming on the market while retaining their skills and knowledge base. Retaining staff in such a fluid market isn’t easy, particularly for businesses where technical and professional skills are the core business issues.

Employee retention strategies

The new business reality needs strategic planning. This means specific employment schemes and management initiatives to both retain and attract staff.

These schemes are created on a systematic basis, involving these elements:

  • Employee opinion surveys
  • Leadership effectiveness surveys
  • Team effectiveness surveys
  • Sales effectiveness surveys

Specific employee retention strategies are built on this information. This is a targeting methodology, identifying key skills and knowledge bases integrated with business plans.

How employee retention works

This can be a very productive, as well as profitable process. It’s becoming one of the main features of upmarket businesses, locking in career progression and incentives while simultaneously optimizing business organizational and operational needs.

For example:

A sales team is the primary focus of concern for a major car distributor. This is a highly competitive industry, and good sales people really don’t grow on trees.

The employee survey indicates some issues for the sales team:

  • Lack of incentives in the areas of commission and retainers
  • The team structure has a lot of salespeople, but only one main manager, who has to deal with their issues on a daily basis.
  • Lack of clear career paths in the organization. Salespeople basically remain salespeople.

The Leadership, Team and Sales effectiveness surveys bear out the employee survey. It’s an outdated (circa 1980s) organizational structure. It doesn’t make the best use of skills and experience. It doesn’t reward initiative and it creates management bottlenecks in dealing with team and individual issues.

The solution is simple, but elegant:

The sales team is broken up into 5 sales teams

  • Five senior, respected sales people become team managers reporting to the main manager.
  • Commission bonuses are introduced on specified sales targets.
  • Staff are encouraged to use their initiative to lock in distribution deals on a measured basis,
  • Retainers are increased on a percentage basis of sales per year.
  • Employer-sponsored training schemes and incentives are introduced for sales staff to develop key business management skills and provide a clear career path inside the organization.

The result:

  • Profits increase thanks to the new sales initiatives
  • Management bottlenecks in the sales team disappear
  • All staff take up the qualifications options, adding to the skills base

That’s the really good news about staff retention - It works.

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