Torrington, Hall & Taylor, Human Resource Management 6e, © Pearson Education Limited 2005 Slide 8.1 Interest in Staff Retention Depending on tightness.

Torrington, Hall & Taylor, Human Resource Management 6e, © Pearson Education Limited 2005

Slide 8.1

Interest in Staff Retention

• Depending on tightness or looseness of labour markets

• In recent years topic has moved up the HRM agenda

Torrington, Hall & Taylor, Human Resource Management 6e, © Pearson Education Limited 2005

Slide 8.2

Perspectives on Staff Retention

• Tracking turnover rates over organisational policy aimed at improving retention as a whole

• Retaining high performing, key players – use of more sophisticated retention practices

Torrington, Hall & Taylor, Human Resource Management 6e, © Pearson Education Limited 2005

Slide 8.3

Turnover Rates & Trends

• Mismatch between rhetoric and job tenure and reality

• Are there jobs for life?

• Turnover rises when economy is strong and jobs plentiful, during recessions turnover falls

Torrington, Hall & Taylor, Human Resource Management 6e, © Pearson Education Limited 2005

Slide 8.4

Job Tenure in UK Since 1975

Table 8.1  Job tenure in the UK since 1975Source: Table compiled from data in P. Gregg and J. Wadsworth (1999) ‘Job tenure, 1975–98’, in P. Gregg and J. Wadsworth (eds) The State of Working Britain. Manchester: Manchester University Press, p. 115.

Torrington, Hall & Taylor, Human Resource Management 6e, © Pearson Education Limited 2005

Slide 8.5Job tenure in the UK

Table 8.2  Job tenure in the UKSource: Labour Market Trends (2001), ‘Length of time continuously employed by occupation and industry’, Labour Market Trends, February.

Torrington, Hall & Taylor, Human Resource Management 6e, © Pearson Education Limited 2005

Slide 8.6

In Favour of Staff Turnover

• Rejuvenation of organisation with fresh blood

• New ideas and experiences brought into the organisation

• Helps managers keep control over labour costs

• Redundancy bills are lower

• Functional rather than dysfunctional

Torrington, Hall & Taylor, Human Resource Management 6e, © Pearson Education Limited 2005

Slide 8.7

Against Staff Turnover

• Expensive to replace staff

• Lost resource

• Symptomatic of poor management

Torrington, Hall & Taylor, Human Resource Management 6e, © Pearson Education Limited 2005

Slide 8.8

Turnover Analysis & Costing Techniques

• Exit interviews – but will those leaving give the

real reasons for leaving?• Analysis of turnover rates between different

departments and different job groups • Attitude surveys

Torrington, Hall & Taylor, Human Resource Management 6e, © Pearson Education Limited 2005

Slide 8.9

Reasons For Staff Turnover

• Outside factors

• Functional turnover

• Push Factors

• Pull Factors

Torrington, Hall & Taylor, Human Resource Management 6e, © Pearson Education Limited 2005

Slide 8.10

Push & Pull Factors

Push – dissatisfaction with work or the organisation leading to unwanted turnover

Pull – attraction of rival employers, e.g. better salary

Torrington, Hall & Taylor, Human Resource Management 6e, © Pearson Education Limited 2005

Slide 8.11

Common Reasons

Research by Taylor 2002 found a mix of factors

• Push factors more prevalent than pull factors• Alternative employment sought when

employees no longer enjoy working for current employer

• Few people leave for financial reasons

Torrington, Hall & Taylor, Human Resource Management 6e, © Pearson Education Limited 2005

Slide 8.12

Staff Retention Strategies

• Pay• Managing expectations• Induction• Family friendly HR practices• Training and development• Improving quality of line management

Torrington, Hall & Taylor, Human Resource Management 6e, © Pearson Education Limited 2005

Slide 8.13

Pay (1 of 2)

Debate over extent to which raising pay levels reduces staff turnover

Some evidence to show that employers who offer the most attractive reward packages have lower attrition rates

Also evidence that pay plays a satisfier role, but does not usually have an effect when other factors are pushing someone to quit

Torrington, Hall & Taylor, Human Resource Management 6e, © Pearson Education Limited 2005

Slide 8.14

Pay (2 of 2)

Pay is a hygiene factor rather than a motivator

An approach that can be matched by competitors

Provided pay levels are not significantly lower than competitors other factors will usually impact more

Torrington, Hall & Taylor, Human Resource Management 6e, © Pearson Education Limited 2005

Slide 8.15

Enhanced Benefits Packages

Enhanced benefits if appreciated by staff are more likely to have a positive effect on staff retention

• Staff discounts

• Holiday entitlements

• Private healthcare

Torrington, Hall & Taylor, Human Resource Management 6e, © Pearson Education Limited 2005

Slide 8.16

Managing Expectations

Benefit of employees gaining a realistic job preview before starting their job

Job dissatisfaction is having one’s high hopes of new employment dashed by unmet expectations

Work experience before starting work can help establish realistic expectations of work

Torrington, Hall & Taylor, Human Resource Management 6e, © Pearson Education Limited 2005

Slide 8.17

Induction

• Effective and timely• Helps starters to adjust emotionally to new role• Understand where things are, and who people

are• Provides a forum for information giving• Suitable occasion to discuss health and safety

regs, organisational policies etc.

Torrington, Hall & Taylor, Human Resource Management 6e, © Pearson Education Limited 2005

Slide 8.18

Minimum Rights (1 of 2)

• 26 weeks maternity leave for all employees with more than 6 months service

• An additional 26 weeks unpaid maternity leave for employees with over 12 months service

• Reasonable time off for pregnant employees to attend ante natal classes

• Specific health and safety measures for pregnant workers or those who have recently given birth

Torrington, Hall & Taylor, Human Resource Management 6e, © Pearson Education Limited 2005

Slide 8.19

Minimum Rights (2 of 2)

• 4 week’s paid holiday each year• A total of 3 months unpaid parental leave for

parents on the birth or adoption of a child• Reasonable unpaid time off for employees to

deal with family emergencies• Consideration of reasonable requests by

parents of young children to work flexibly• 2 weeks paid parental leave for new fathers

Torrington, Hall & Taylor, Human Resource Management 6e, © Pearson Education Limited 2005

Slide 8.20

Training & Development

• Training opportunities enhance commitment to an employer making them less likely to leave

• Training makes people more employable and will leave to develop careers

Torrington, Hall & Taylor, Human Resource Management 6e, © Pearson Education Limited 2005

Slide 8.21

Improving Effectiveness of Supervisors

• Select people for roles following an assessment of their supervisory capabilities

• Provide training in effective supervision

• Appraise line managers and their skills

Torrington, Hall & Taylor, Human Resource Management 6e, © Pearson Education Limited 2005

Slide 8.22

Summary (1 of 2)

• Staff turnover tends to decrease in recession and increase in economic booms

• Job tenure has not reduced substantially over the last 30 years

• Retention rates vary considerably between industries and regions

Torrington, Hall & Taylor, Human Resource Management 6e, © Pearson Education Limited 2005

Slide 8.23

Summary (2 of 2)

• Too great a rate of staff turnover is damaging

• Necessary to analyse the cause of turnover and calculate costs

• Flexible benefits, better induction, etc can improve retention