How Do We Retain Employees Without Busting The Budget?


Money is a convenient and overused excuse for turnover. It is rare that money alone causes the typical employee to leave. Most employees would willingly take a little less money than they could make somewhere else if they find other things they value more in their work environment—challenge, developmental opportunities, friendships with peers and supervisors, flexibility, appreciation and other real benefits.

Even in cases where employees are happy with the job, knowing that they are paid significantly below market can cause hard feelings and lead to turnover. Money is a natural and fundamental concern. As such, it often deserves serious, albeit painful, consideration and action by even the most cash-strapped organization.

Before you spend a penny on additional salary, benefits or other programs, it is important to find out specifically what is broken in your relationship with employees. If you don’t do this, you risk fixing the wrong things and wasting precious money, time, effort and good will. Here are a few data-gathering techniques that have worked well for me over the years:

Exit Interviews:
Identify what leads your employees to read want ads or accept a call from a recruiter in the first place.

There are a number of good questions you can use to get the information you need. One of my favorites is “Tell me about the three things you’d change tomorrow if you owned the company.” Another is “What things, if changed, would have prevented you from considering another job?”

An active and patient listener will glean a lot of good information from these questions.

Focus Groups and Surveys;
There are a number of decent employee-opinion survey products commercially available. Learning to do a focus group is easily within the grasp of most HR professionals.

Even so, I prefer using objective, experienced third parties to do this kind of work. Employees often feel that outsiders will keep their input more confidential and are less likely to have their feelings hurt by the results of focus groups than will company personnel. Focus groups and surveys done by outside personnel tend to get more forthright answers than those done by in-house personnel.

Retention Interviews;
Identify the employees you really, really need to keep. Sit down with them and discuss the company, their personal satisfaction, ideas to make their job even better than it is, and related topics.

Showing your interest is often rewarded with additional commitment and longevity.

One word of caution for all of these techniques: Don’t use them if you aren’t willing to listen to what people think. More important, if you are not willing to consider making changes, you are well advised not to ask. The “sugar high” of raised expectations quickly diminishes into all-time lows of employee morale if people think you aren’t listening.

You will find that the answers to turnover are not as elusive as you may think. They are, in reality, fairly basic. The suggestions you harvest from employees will help you design the practical solutions you need and can afford.


George F. Mancuso, CPC CEO
Client Growth Consultants, Inc.

1 comment:

  1. The question proposed is great and the surface fixes will retain some employees, but to retain "A" players that every company is seeking is a bit more involved, but equally simplistic. The first step in not just retaining "A" players, but developing them is creating a strategic partnership with HR. Make HR the most important aspect of c-level meetings, initiatives, directives and hold them to higher standards. This will create a culture that will harvest "A" players through recruitment and internal T&D.
    Once inside the system, "A" players look to better themselves beyond the walls of the corporation. Instead of raising salaries, raise perks that all employees can take immediate advantage of and involve those in their household.
    Example: Company A hires on 2 "A" players which work for company A 9 months. Their employee contract was for $6500/month and a quarterly bonus of 1% of divisional Net Profit + car allowance and benefits.
    Both employees left company A for company B in which the began at $6000/month, with the ability to bump 5% each quarter after year 1 capping at $7000/month up to year five, quarterly bonus of 1% of divisional Net Profit + car allowance + benefits (but company B takes their benefits a step further and advertises this: complete education for every employee and spouse on maximizing their benefits, end of the year company holiday party in which families are invited to feast with the corporate executives all family style and casual, push the corporate health & wellness program past a gym membership but with education and resources past going to the doctor). Company B's retention is over 72% company wide among new hires from 2007-2010, and Company A's retention was only 43% in the same time period.
    Company B also had 85% participation in company matching 401k plan, 90% participation in HSA, and over 75% participation in their other flexible spending account. Before the onsite gym and fitness center was built in 2011, Company B had 63% of employees exercising 3x or more per week, and over 80% at least one hour per week. Company A was not even 50% of any of these numbers.
    After a survey in 2011, Company B found after implementing the following programs in 2007, their employee participation in ALL benefits, programs and functions went through the roof:
    -Employee benefits education program online=$50k/year with survey showing is reason for higher participation
    -Discounted gym membership for each employee=FREE
    -Change health care plan to consumer driven allowing employees to choose their own plan=reduced $500k/year!!
    -Increase of 20% in employee participation of 401k matching plan-reduced up to $300k in tax liability

    These results from moving into an unknown, using HR as a Strategic Partner and moving outside of the narrow thought processes, saved company B over $500k annually, retained "A" players simply by listening to what they needed and providing simple steps for them and their families, and ultimately putting Company A out of business.


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