Please note this article was first published in 2004.
‘Stars and Water Carriers: Recruiting and Retaining the Best’
In the Tour de France, arguably the world’s hardest sporting endurance event, the objective is to be the quickest rider over the three weeks of racing. In order to achieve this, the team leader (the ‘Star’) has to build a team of riders (the ‘Water Carriers’), all of whom will have particular strengths and capabilities to support the leader in their quest for victory. It is a team event working towards a focussed goal. In order to attract and retain the right members, team managers undertake a comprehensive selection process. For the riders, financial recompense is part of the reward and retention equation; however, personal success during the race and the chance to join a winning team all form part of the package. For an organisation, selecting and retaining the right leader(s) and team members to deliver business objectives is fundamentally the same – only in the Tour de France victory is gained on the rostrum in the Champs Élysée, while in the organisation it lies in financial success.
Organisations are faced with the perennial problem of managing the recruitment and retention of good calibre employees. The size and complexity of this issue varies between employment sectors and categories of workers. In spite of the apparent downward trend in employee turnover from 16.1% two years ago to 9%, the fact remains that encouraging the right individuals and keeping them is no simple matter (1). Real effort and know-how is required if an organisation is to grow and retain its ‘Stars’ and ‘Water Carriers’.
A continuing and growing need for ‘Stars’ and ‘Water Carriers’
Whilst turnover rates may be dropping, the requirement for ‘Stars’ and ‘Water Carriers’ is very real. The ‘Pay and Workforce Strategy for Local Government’ clearly recognises the challenge and is actively addressing the problems (2). In 2004, it is envisaged that of the 350,000 new public sector jobs created in the next five years, a significant proportion will be in local government; this is in addition to the 200,000 employees local authorities recruit each year. Developing the right recruitment and retention strategies to suit their differing employment markets will place Local Government in an advantageous position.
Their strategy document clearly outlines the types of employees they require and the need to find ways to compete effectively in the market place. They have highlighted five priority areas, of which one focuses upon the recruitment issues that need to be addressed to attract candidates and another upon the requirement to develop pay, reward and recognition mechanisms in Local Government. Interestingly, their preliminary research highlights a number of potential reward advantages they believe they have over the private sector and intend to capitalise upon.
Key elements within the other three areas include skills training and development, more flexible working arrangements and further improvements to the work-life balance – basic building blocks of today’s recruitment and retention strategy. Local Government appears to be serious about positioning themselves in the market as an ‘employer of choice’.
Winning the challenge for talent: becoming an ‘employer of choice’
Central to winning the challenge for high calibre talent is ensuring clarity and purpose of the issues an organisation faces. Once this is clear then the business needs to develop a suitable recruitment and retention strategy that not only fits with the business and aligns with addressing the market pressures, but also complements the culture and feel of the organisation. After all, businesses want to attract individuals that fit, and retain those who are committed.
How many organisations really look critically at how they position themselves in the market – how well do they sell themselves and how attractive is the overall package? Conversely, do they have robust intelligence on why individuals have left, and if so, are they looking for the trends, reviewing the feedback and understanding what the competition is doing and re-aligning their ‘offering’ accordingly? Obviously some organisations do, as they appear to be ‘employers of choice’ at whatever level of role they are advertising.
A few years ago, members of the OE Cam team conducted a number of projects for both public and private sector clients on benchmarking recruitment and retention practices – resulting in the development of new and enhanced reward and recognition strategies.
Are we providing a competitive offering?
A key question in deciding whether your organisation is winning the challenge for talent is to ask the simple question: Do we continue to provide a competitive offering? The answer to this question would indicate what degree of change or enhancement is necessary to existing arrangements in order to establish and retain the winning team.
To answer the question, an organisation would do well to check out its position by answering the following questions:
- Do we experience difficulty with all levels of recruitment?
- What do our competitors provide?
- What recruitment practices do they undertake?
- Is the local/national labour market tight for these positions?
- Are the rates of pay suitable for the market?
- Do we effectively sell the organisation and the benefits?
- Are exit interviews conducted?
- Are the reasons given legitimate?
- What trends emerge from the information given?
- Do the trends correlate with the staff survey, or employee opinion survey feedback?
- Is turnover comparable within the sector/local market place?
- How serious is the problem?
Matching offering to need: developing an appropriate recruitment and retention strategy
Once a picture of the recruitment and retention position is gained, organisations can then begin to look critically at what they offer. Recent research suggests that organisations have a plethora of elements available to them to develop an appropriate recruitment and retention strategy (3).
In the reward arena, pay is still central to the overall package. However, it is not always possible to simply increase rates and indeed, it is not always required. The use of other mechanisms is, for many employees, of equal importance and enables the organisation to deliver ‘value added’ for relatively less cost.
Our work on reviewing, developing and implementing reward strategies focuses heavily on providing organisations with a cost effective and realistic mix of options, suitable to support the delivery of business objectives through its employees.
There are several popular selection methods such as competency-based interviews, interview panel, critical incident interviews etc, but our experience indicates that an objective, systematic selection process, which is aligned with the strategy of the organisation, is the most powerful approach for bringing in people who can deliver real business value.
One of the questions we are often asked is about the level of investment required to run an assessment process which will bring in people who can deliver real business value as opposed to just bringing technical skills. There are many complex methods of calculating whether a more complex assessment process would make a good investment.
Of our clients 80% decided to do something in the first instance because of a major miss-appointment. For example:
- The sales manager who was great at selling and was promoted to managing a sales team. Within five months nearly a quarter of the team members had left to go to a competitor because of his management style.
- The public sector senior manager who kept changing role, but irrespective of the teams she managed there were always a significant number of people off work with stress-related absence.
A well designed assessment process not only helps protect you from risk, it provides an opportunity to identify real talent. It allows potential ‘stars’ to shine (which they would never do on paper or at interviews). These are the people that cannot only do the job, but add real value to the business.
Steps taken to address retention
Whilst not an exhaustive list, the following table provides a hierarchy of other elements commonly used by organisations to address retention. Within this listing, many individual items can be developed to suit the particular need of the organisation and workforce.
See Table 15 “Steps taken to address retention“, page 31 in the CIPD Recruitment and Retention Survey, June 2003, Survey Report
e.g. creating flexible patterns of work to correlate with service delivery and the improvement of, or the introduction of, a choice of ‘Flex’ benefit arrangements.
Organisations need to churn at a rate that is both desirable and sustainable. However, the cost of leavers is on the rise with reported figures of £4,300 for general positions and circa £7,000 for managers (4). These are not insignificant costs for any organisation, especially when factored by the number of leavers. Potentially the monies saved through utilising an effective retention strategy could offset a significant part of the cost of any tangible enhancements to the overall reward arrangements.
Organisations hope that improved training and development can encourage employees to remain with them on three levels. Firstly, assuming that one of the reasons individuals join an organisation is to develop, delivering on this demonstrates to the employee that the organisation is holding their side of the psychological contract. This is likely to enhance feelings of loyalty. If expectations of development are not met, this can cast doubt on the integrity of the organisation about matters not related to development. Secondly, on a practical level, enhanced competencies at delivering the job should lead to enhanced job satisfaction. Finally, through the process of training and development, an individual can assimilate the culture of the organisation. This alignment can increase the organisational fit that an individual feels with a company, thus making the thought of leaving and adapting to another organisation less compelling.
Undeniably, the cost to an organisation of excessive or inopportune turnover can be both financially expensive both in real and measurable terms, but also possibly more so in terms of the damage done to employee morale. If left unchecked, the resulting depletion of resources and the inability to replace competent employees could seriously impact upon service delivery and business results. Organisations are taking the design and delivery of recruitment and retention strategies very seriously. A detailed understanding of the key issues, the appropriate choice from the options available and ensuring their synergy with the business objectives will deliver a podium position.
- CIPD Labour Turnover Survey, 2003
- Office of the Deputy Prime Minister & Employers’ Organisation, December 2003
- CIPD 2003 & IRS Employment Review 773, 776, 777
- People Management, December 2003