The Power of Stay Interviews for Engagement and Retention: Second Edition

The Power of Stay Interviews for Engagement and Retention: Second Edition

by Richard P. Finnegan

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Overview

An Updated Classic for Reducing Turnover and Improving Engagement. For decades organizations have struggled to better engage and retain their best employees. Retention expert Richard Finnegan proposes a proven and proactive approach, the Stay Interview: an easy-to-use tool to uncover, anticipate, and resolve issues and concerns before your best employees leave. Stay Interviews do three things that employee surveys do not: they deliver information that can be used today; they give practical insights for engaging and retaining top performers; and they provide managers with a reliable process for developing individual stay plans. One of SHRM's all-time bestselling books, The Power of Stay Interviews,is now revised and updated to reflect Generations at work, including Millennials and Older Workers, brand-new Stay Interview questions, and introduces “Finnegan’s Arrow”—a potent business-driven strategy for Stay Interviews.

Product Details

ISBN-13: 9781586445126
Publisher: Society For Human Resource Management
Publication date: 06/18/2018
Edition description: Second edition
Pages: 128
Sales rank: 749,251
Product dimensions: 5.90(w) x 8.80(h) x 0.40(d)

About the Author

Dick Finnegan, CEO of C-Suite Analytics and the Finnegan Institute, is widely recognized as the leading thinker on Stay Interviews and has worked with scores of companies around the world to improve their engagement and retention. A high-demand keynote speaker for executive meetings and conferences, Finnegan’s other books include HR’s Greatest Challenge (SHRM), Rethinking Retention in Good Times and Bad, The Stay Interview, and Raise Your Team’s Employee Engagement Score (AMACOM).

Read an Excerpt

CHAPTER 1

Making the Case: Why Stay Interviews Are Better

For decades, organizations have struggled to find clear solutions to better engage and retain their best employees. At some point, doesn't it make sense to say, "Why don't we just ask them?"

Well, we do ask them. We ask them through engagement surveys, opinion surveys, climate surveys, and exit surveys. We survey online, over the phone, and with live and recorded voices. These surveys generate reports, and from reports come scores and rank orders, which then become benchmarks. From benchmarks, we set goals to improve our scores on the next survey.

The primary outcome of all of our surveys is that we build programs. To improve recognition we add employee appreciation week and employee of the month. To improve communications we hold town-hall meetings and write better newsletters. To improve careers we hold brown-bag lunches and career fairs.

Our client executives tell us this ongoing survey process makes them feel like a hamster on a wheel. In the beginning, it made sense to utilize expanding technologies to measure employees' opinions as a pathway to improve them. But over time these surveys morphed into redundant administrative processes that lead to few new outcomes. Instead they've become periodic rituals like preparing budgets, leading to jaded comments like, "Is it that time again?"

The good news is that there is a better way to strengthen each employee's engagement and retention, and that better way is simple.

The Good and Bad News about Surveys

Let's look at the ways companies use employee surveys and examine what works and what doesn't work. Exit surveys can be called the original retention tool, as it has long made sense that knowing why employees leave will direct us to retention solutions for survivors. But, though they are based on logical thinking, exit surveys rarely lead to retention or engagement solutions. The primary obstacles are as follows:

* Leaving employees often don't tell the truth.

* Employee participation is too low, in part because surveys are too long.

* Surveys are designed to accept "attendance" and "better opportunity" as reasons for leaving, which fails to trigger solutions.

* Companies are reluctant to make policy or management changes based on "autopsies," that is, the words of employees who no longer work there.

Over the last few years I've polled hundreds of HR professionals to determine if they've ever improved their companies based on exit survey results. The number who indicated they have improved their companies in any way has been less than 1 percent. How many employee hours on both sides of the desks have been invested yet received no outcome? What about the administrative work to generate these worthless reports?

The belief that exit surveys are a must-have tool has been reinforced by vendors who have leveraged technology to make it easier for HR executives to gather survey data. Companies now purchase electronically-delivered exit surveys that lead to pages of reports about how those who leave rated their pay, benefits, communications, and other variables. Too often missing is why the employee left, although there is no guarantee that executives could improve their companies even if they actually knew (see Table 1.1).

Various types of employee surveys have offered hope, too. It again makes sense that learning how employees feel about a number of important items will provide clues on what improvements companies must make to retain and engage them. Again, vendors have made this an easy process for companies to gather data and distribute reports.

The missing piece here is solutions. Survey reports focus on scores and benchmarks but don't tell us how to increase those scores. Benchmarks are worthless because few companies actually know how to improve engagement, so we find false comfort when comparing ourselves to others. And survey scores bring little value unless they report scores for each manager so you can see which managers are improving engagement and which are not. Gallup tells us that engagement has hardly budged since 2000, so we and other companies are clearly on the wrong track. What's worse is the news from Deloitte that we will soon spend $1.53 billion each year to "improve" engagement. The most useful data these surveys provide are about how effectively each individual manager drives engagement for their teams. The surveys fall short on detailing real engagement and retention solutions (see Table 1.2).

Again, the dilemma with this approach is that all solutions are programs. By their nature, employee surveys are confidential, so you don't know what your best performers think, and all data represent average thinking. Further, survey results typically report all items as equal in importance for driving retention and engagement, whether your survey includes twelve items or seventy. The result is that managers focus on driving up lower scores without knowing if those lower scores represent the items employees care about most. And the solutions they provide touch all employees in the same way, regardless of the unique needs of each employee.

One way to measure the effectiveness of employee surveys is to ask, "Will our resulting action plan lead to improved engagement and retention for our top performers?" The real answer is that you just don't know.

The Stay Interview Advantage

A stay interview is a structured discussion a leader conducts with each individual employee to learn the specific actions she must take to strengthen that employee's engagement and retention with the organization.

Stay interviews do three things that surveys do not. They bring information that can be used today, they give insights for engaging and retaining individual employees, including top performers, and they put managers in the solution seat for developing individual stay plans. Gone are the following obstacles to and distractions from implementing real engagement and retention solutions:

* Time delays. It takes time to survey employees, distribute reports, write action plans, and implement those actions. How soon do data become stale?

* Watered-down solutions. Since all data are aggregated into groups, only group-level fixes can be developed, and this paints all employees with one brush regardless of whether they are your best or worst performers.

* Short-term, feel-good programs. Casual Fridays or free coffee check the box for new initiatives, but do nothing to improve supervisory skills, and ultimately have no bearing on whether employees stay, leave, or increase their engagement.

How much can your company improve engagement and retention with programs alone without effective day-to-day supervision and leadership? When is the last time you heard a good worker say, "My boss treats me like dirt, but I'm holding on for employee appreciation week; I'll get a balloon and a hot dog and I'll be stoked again for another fifty-two weeks"?

Leaders who substitute programs for fine-tuned supervision skills take few steps, if any, to actually become better leaders. The bottom line is that once employees leave any employee program, regardless of how good the food is, they still have to go back to work.

What Are "Engagement" and "Retention," and How Much Are They Really Worth?

* Here are our definitions for engagement and retention as we refer to them throughout this book: Engagement: Employees are fully committed each day to give their all to help their organizations succeed.

* Retention: Those employees the organization wants to keep stay with the organization.

Our definitions are pure and deliberately not complicated; employees who give their best each day and stay are our goal. Disengagement then refers to employees who underperform because they are not invested, and turnover refers to companies losing employees they wish to keep. We recognize that good employees sometimes leave for reasons beyond their organizations' control, and that many examples of turnover do indeed create healthy opportunities for other people. But our fundamental approach is to assume that organizations want all employees to be fully engaged, and that they also wish to keep all whom they want to keep.

Disengagement and turnover are extraordinarily expensive. A Watson Wyatt study tells us that an improvement of one standard deviation in engagement is associated with a 1.9 percent increase in revenue per employee. To put this into perspective, the typical employee in their sample works at a firm where productivity equals about $250,000 per employee. This means that a significant improvement in engagement is associated with a $4,675 increase in revenue per employee. For a typical S&P 500 organization, this represents a revenue increase of $93.5 million, and the proportional increase is just as large for small- and medium-sized companies.

Regarding turnover, PwC tells us that turnover costs organizations over 12 percent of pretax income, up to 40 percent for some. Another study indicates that turnover across the United States costs $25 billion annually just to train replacements. A third study tells us that turnover reduces US corporate earnings and stock prices by 38 percent in four high-turnover industries. My company helps client organizations put dollar costs on turnover for their specific jobs, and here is just a sampling from our database:

* $225,208 for a physician in an Ohio healthcare center.

* $131,000 for a software engineer in a Colorado technology company.

* $29,447 for a call center representative in Indiana.

* $4,955 for a truck loader and unloader in Philadelphia.

The software company CEO immediately grasped the importance of his turnover cost's and announced, "Now I know the most important thing I have to do to make our annual profit plan is to retain our software engineers." Should you wish to wake up your CEO to your real turnover costs, feel free to use the turnover cost calculator on our website at www.c-suiteanalytics.com.

So, finding real solutions to engagement and retention is essential for corporate success because the costs of turnover and disengagement are likely your company's greatest costs.

CHAPTER 2

Supervisors' Mighty Power to Drive Engagement and Retention

Most of you who read this book already get it regarding the impact of the supervisor-employee relationship on engagement and retention. You've learned this from your own experiences at work as well as by observing the outcomes that high-performing supervisors bring to your organization. But let's take a look at relevant research in this area to strengthen our beliefs and, if necessary, to convince others.

As we study the following data, let us draw a clear boundary between the impact leaders have on engagement versus the impact of well-designed and well-meaning employee programs. "Leaders" in this context means supervisors on each level from CEOs down to first-line leaders. "Programs" refers to one-size-fits-all initiatives that are intended to improve engagement and employee morale. While the impact of leaders versus that of programs can be hard to separate, there is convincing research suggesting that the relationships leaders form with their teams are directly related to those teams' levels of engagement.

A study by Development Dimensions International (DDI) found that "engagement is strongly influenced by leadership quality," and that employees' levels of engagement were considerably higher when their supervisors had higher levels of engagement as well. It also found that employees who report to highly engaged supervisors were less likely to indicate they may leave the organization within a year. More important are the six personal characteristics DDI identified as closely linked to engagement. As you read these characteristics, consider whether employees are likely to improve in these areas as a result of one-size-fits-all programs:

* Adaptability: Openness to new ideas and experiences; readily modifying work approaches in response to change.

* Achievement orientation: Pushing oneself through a continual cycle of setting goals, reaching them, and setting progressively more challenging goals.

* Attraction to work: Maintaining a positive view of one's job despite periods of stress and frustration.

* Emotional maturity: Avoiding impulsive actions and extreme or sustained emotional reactions that would negatively impact work effectiveness and coworker relations.

* Positive disposition: Demonstrating agreeableness with customers and peers; eagerness to help others accomplish work goals.

* Self-efficacy: Exhibiting secure, unyielding confidence in the ability to succeed in the job and to advance beyond one's current position.

It is clear that supervisors' pathways for developing these characteristics involve providing feedback, coaching, and developing positive one-on-one relationships, not just trying to fix the problems with programs.

Another study takes us in this same direction but adds a new twist. In this research, titled The Power of Federal Employee Engagement, the US Merit Systems Protection Board reports, "Even a cursory review of the 16 questions that we used to measure employee engagement reveals how important supervisors are to their subordinates' level of engagement." The report then lists a sample of question areas from their engagement scale that they say "supervisors have a major influence" on. Here is the list:

* Communicating job expectations.

* Making good use of employees' skills and abilities.

* Ensuring that employees have the resources to do their jobs well.

* Providing employees with challenging assignments.

* Rewarding and recognizing employees appropriately.

* Giving employees an opportunity to improve their skills.

* Treating employees with respect.

* Valuing employee opinions.

* Fostering an environment of cooperation and teamwork.

This study further drives home the power of supervisors on engagement, as researchers asked both engaged and disengaged employees if their supervisors had "good management skills." Of the employees who were engaged, 87 percent agreed that their supervisors had good management skills. Conversely, of the employees who were not engaged, a mere 13.7 percent agreed that their supervisors had good management skills.

Gallup provides us with a third view on supervisors' impact on engagement. Gallup categorized employees as engaged, not engaged, or actively disengaged when surveying and reviewing survey data in "Feeling Good Matters in the Workplace." The report states that "supervisors play a crucial role in engagement," and then provides supportive data from three survey items: whether supervisors focused on strengths or positive characteristics, how employees interacted with coworkers, and whether employees felt challenged.

Research led by the Association for Talent Development (ATD) provides us with an additional perspective on leaders and engagement. In Learning's Role in Employee Engagement, just 15 percent of respondents agreed to a high or very high extent that their leaders were skilled at engaging the workforce. The study concludes that "the bottom line is that many leaders and managers need considerably better engagement-building skills than they currently have."

Concluding that supervisors have a strong impact on engagement is clear and easy. The crucial question for our discussion is, How effectively can supervisors improve engagement with one-size-fits-all programs? The answer is, not very well.

How Important Are Supervisors for Retention?

For most of us, the link between leaders and retention is intuitive, just as it is for engagement. The amount of supportive data is overwhelming and spotlights the production power that results from leaders on all levels developing relationships with their teams via skills versus programs. Let's look at just a few of the available studies.

The Saratoga Institute found that poor leadership causes over 60 percent of all employee turnover. Its study was extensive, covering more than nineteen thousand workers across seventeen industry groups, and specified that the majority leave because they are not recognized or not coached by their supervisors.

As Gallup consultants Marcus Buckingham and Curt Coffman disclosed in First, Break All the Rules, "If you have a turnover problem, look first to your managers." They go on to say that "how long that employee stays and how productive he is ... is determined by his relationship with his immediate supervisor." These conclusions are based on study results from over one million employees and eighty thousand managers, compiled over a period of twenty-five years.

Teacher turnover provokes many speculations about the effect of job conditions, like low pay, little career advancement, difficult students, and even more difficult parents. My daughter is a teacher and I know all these things are true. Yet the National Education Association reports, "When teachers stay it is because of their immediate managers," and therefore recommends that principals have specific retention goals to retain their best teachers by conducting stay interviews with them. And it's fair to say that if teachers can be retained via stay interviews, it's likely that any other occupational group can also be retained.

(Continues…)


Excerpted from "The Power of Stay Interviews for Engagement and Retention"
by .
Copyright © 2018 Richard P. Finnegan.
Excerpted by permission of Society For Human Resource Management.
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
Excerpts are provided by Dial-A-Book Inc. solely for the personal use of visitors to this web site.

Table of Contents

Dedication v

Foreword ix

Introduction xi

Chapter 1 Making the Case: Why Stay interviews Are Better 1

Chapter 2 Supervisors' Mighty Power to Drive Engagement and Retention 9

Chapter 3 Introducing Finnegan's Arrow 19

Chapter 4 Stay Interview Essential Ingredients 23

Chapter 5 The Five Stay Interview Questions 37

Chapter 6 Thinking Through Stay interview Solutions 41

Chapter 7 Can Stay interviews Solve Millennials' Engagement and Retention issues? 49

Chapter 8 Three-Legged Power: integrating Stay interviews, Exit Surveys, and Employee Surveys 57

Chapter 9 The Stay interview Game 69

Chapter 10 True Stories of Stay interviews at Work 95

Chapter 11 "I've Burned the Ships" 103

Notes 105

About the Author 111

About C-Suite Analytics 112

Index 113

Customer Reviews