Posted by: rayseghers | August 26, 2009

Case Study: Thinking Outside the HR Box

A few years ago I worked with an organization that was concerned about retaining their relatively young workforce.  To this end, we conducted an employee engagement survey with a focus on benefits and compensation.

As the company expected, there were major differences in the survey scores across the product lines.  As an outsider, I asked the obvious question:  Why are some of these lines so positive and others so negative?  (This is always a risky question for a survey consultant since the organization may report that these data do not match what they already know, or think they know, about these groups.  Well, never fear.)  

I was very impressed that management had a very good understanding of these lines and listed a number of factors for each group explaining their strengths and weaknesses.  What I thought was interesting was not the specific factors per se but the fact that management had such a detailed  understanding of their employees and had the flexibility to offer different packages to different product lines.  Wow!  Knowledge and the ability to do something about it.  Quite a rarity.

But there was a catch.  HR and the management team disregarded their knowledge of their employees and proposed doing the same old thing.  No “outside-the-box” thinking here.  They figured that offering all of their employees a 401(k) plan would do the retention trick.  BUT, the average age on these product lines was less than 25 and they currently measured tenure in months.  Few, if any, of these employees would ever vest in the plan.  They failed to realize that very young workers are not motivated by retirement plans.  Maybe they should be, but the fact is, they aren’t.  I mentioned that the company would get a bigger impact on retention by giving these employees raises at the proper time.

So, when is the proper time?  Remember, they had a good understanding of their employees and what made them tick.  I asked what the critical retention time for each product line was.  For one line they said that if they could keep people for 8 months then they were likely to stick around for a while.  For another line the critical time was 3 months.  Again, management was able to differentiate the needs of the different groups. 

I asked when did they do performance reviews and give raises for new employees.  Without skipping a beat, they said 6 months for all groups.  Well, getting a raise at 6 months might be very helpful for the 8 month line but not for the 3 month line.  Most of these employees never lasted long enough to get to the review period.  Shouldn’t the review period and comp plan be tied to the characteristics and needs of the group?  They had the flexibility to do this and the cost was going to be less than the cost of the revolving door that they had now.

Knowledge and the ability to do something about it hadn’t been impacting their retention strategy.  They had just been doing what they had always done.  The good news is that now they understand the power of what they could do and they had the additional feedback from their employees to help guide them to greater success.  We got them to see the box and to peer over the edge.

What do you think?

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Responses

  1. Unfortunately, most people are motivated by money.. So giving reviews every 6 mths across the board doesn’t make sense to me… I do them based on the individual job classification and on the person. Owning a very small business this works for me!


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