Employee Retention and the Bottom Line

It’s always about people...

Over the past 30 years, there has been a growing realization in the business community that a strict focus on performance and stakeholder returns can only take a company so far. To fully drive growth and profitability, companies must retain and engage their best employees. Indeed, research shows a direct correlation between employee satisfaction, customer satisfaction, and company or unit profitability (Satisfaction, C. Denove and J. D. Power IV, 2006).

The empirical evidence can no longer be ignored. Creating a “Great Place to Work” is not only good for morale, it’s great for the bottom line. According to Monte Enbysk of the Microsoft Small Business Center, a 2001 study of 20,000 exit interviews found the most commonly cited reason for quitting a job was “poor supervisory behavior.”

Interviews collected during the study showed that employees often viewed their direct supervisors as oppressive, controlling micro-managers who gradually deflated the will and creativity of their employees.

These exiting employees are the folks HR refers to as “regrettable losses,” valuable contributors who take their skill sets, acquired knowledge, and connections to colleagues, vendors and customers with them as they move on to more considerate workplaces – often their former employer’s competitors.

This “brain drain” of confidential, proprietary information and intellectual capital is obviously not a recipe for high performance.

Creating Environments that Promote Performance and Retention

Most employees want to do a good job and receive rewards and recognition for achieving agreed-upon targets. The key is to create an environment that naturally supports employee recruitment and retention.

As the research shows, if your employees are satisfied, your customers will be satisfied. If employee loyalty as measured through retention is high, you will likely enjoy strong customer loyalty as well.

The research is conclusive - the more motivated the workforce is to remain loyal and serve an organization effectively year after year, the greater the profitability, productivity and competitiveness of that organization.

To create a retention-focused work environment, four crucial attributes must be in place:

1. Collaborative Culture: Tune into the health of your organization – are people encouraged to contribute original ideas to improve business processes or strategies? Is it OK to speak up without fear of ostracism or career derailment?

2. Leadership Link™: Do your top-level executives make it a regular practice to walk around and engage in casual conversation with employees at all levels – just to see how it “feels” at work? How easy is it for employees to communicate with those who set strategy?

3. Employee Development: Are skill-building and ongoing learning rare events or part of the regular course of business? If people are learning how to do their jobs better, continuous improvement happens, well, continuously.

4. Audacious Goals: People respond to bold challenges. (See the sidebar to the left for one of the most famous ads ever placed.) Formidable odds with a chance for great success are a sure way to appeal to the nobler instincts of many employees.

Case Study: Building a Stronger Foundation for a Renowned Architecture Firm

The Problem

When iCAN international, the founding member of the iCAN Alliance Network, signed on to create a more harmonious environment at a prominent, 60-year-old architecture firm, the challenge was a difficult one.

This global company specialized in designing resorts, casinos, and destinations for some of the biggest names in the hospitality field. Their track record was one of superlatives. Yet there were significant roadblocks to a similarly prosperous future.

The general consensus of the workforce was that the firm’s leadership team, guided by one CEO for 15 years, was inaccessible, stuck in the past and visionless.

The CSI Solution

iCAN began to implement our proven Communication Success™ Initiative (CSI) with the firm.

The basic elements of this program apply to any organization, regardless of industry:

All-Hands Communication Success™ Survey

Interviews with the executive leadership team

Roll Out of the Communication Success™ Course to the entire staff

Employee report-outs to management of discoveries resulting from the course

For the architecture firm, we gathered constituency input, survey results from all staff members worldwide, the collective vision of the firm’s leaders, and feedback from each location on how to make the firm more effective, profitable, enjoyable to work for, and worthy of long-term employee retention.

Working closely with the board of directors and the executive leadership team, we were able to prioritize and monetize the suggestions, zero in on the highest yield initiatives, and build a strategic vision around that body of work.

When the vision was rolled out the following year, people were really pleased to see their own input and contributions in the final product. Everyone felt as though they were co-authors of the new direction.

Almost two years after iCAN began working with the firm, support for the shared vision is thoroughly woven into the company fabric. Evidence of a positive culture shift is accumulating:

1. A motivated board of directors has established a forward-thinking five-year vision.

2. The location directors and the executive leadership team are communicating effectively.

3. The workforce feels a sense of connection and contribution to the direction of the firm, resulting in increased productivity.

4. Best of all, the firm surpassed their 2006 revenue projection by over 25%!

Take-Away Tips

Creating a culture shift with full buy-in from management and employees takes time. But in today’s highly competitive and fast-moving business culture, investing the time to fundamentally improve your business by supporting your employees is crucial.

Contact the iCAN Alliance Network today. Get the state-funded support you need to boost your profitability by recognizing the critical contributions of your employees. We’ve guided many companies to greater success with this model, and we can help yours, too. By keeping the best, you’ll be the best.

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Employee Retention and the Bottom Line