Exchanging ideas to create the well-being advantage

This week, I’m really pleased to be able to share the blog with my colleague and good friend Professor Ivan Robertson, Managing Director of Robertson Cooper and Professor of Organisational Psychology at the University of Leeds. He is a leading figure in the areas of personality assessment, recruitment, retention and well-being. Over to you Ivan….

Employers never like losing their most valued employees, but this will always happen to some extent because it’s actually the best (and worst) performers who are most likely to leave organisations. In fact, research shows that it is those in the middle range of performance who tend to have the longest tenures, but the most successful organisations actively invest in extending this trend to their best performers.

They do this because of the cost of losing good staff, but it seems that staff retention is becoming an increasingly difficult trick to pull off. The latest CIPD survey showed that the number of employers reporting retention difficulties has risen from 69% in 2005 to 78% in 2006 (which included a staggering 83% reported by private sector businesses). My estimate, based on CIPD data, is that it costs organisations at least £8,000 for each productive employee who leaves – other, less conservative, estimates have put this figure at over £20,000!

The CIPD survey reported that the most common reasons for leaving jobs were career development (including lack of promotion) and pay. This suggests that improving people’s career prospects (e.g. through promotion) would be one way of holding on to people. But not all of the research supports this idea - with at least two studies suggesting that promotions may, in fact, lead to higher turnover. It seems that people who move up the organisation more quickly are more likely to leave and that this effect is, in fact, more pronounced for poorer performers.

Of course not all employers want to increase employee retention, some are happy with their current situation – with a minority (10%) actually wishing to increase turnover. Regardless of how happy an organisation might be with current turnover rates, it’s important to be able to establish a trend whereby good performers stay and poor ones leave. Achieving this requires relatively high levels of performance management so that organisations know who the good and poor performers are. But this is not the full story.

After career development and pay, the most frequent reasons for people leaving cited by the CIPD were lack of support from their manager and stress. And just as in the case of performance management, line managers are therefore highlighted as key ‘operators’ of an effective retention strategy. So, investing in line manager skill development is usually seen as a priority for the most successful businesses.

All employees – whatever level – derive motivation from having a strong sense of purpose and feeling good about coming to work every day. The relevance of this conclusion is inescapable for all organisations that compete in the war for talent: When people are engaged in activities that bring them pleasure, activities which have a clear and relevant purpose, they are unlikely to actively choose to stop doing them!

Professor Ivan Robertson