Retention

Fast Food and Free Tuition

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Chipotle Mexican Grill Inc. has over 80,000 employees and 2,500 restaurants, and they are making a move as bold as their hot sauce. Chipotle is starting to offer its employees (who have been with the company for at least 120 days) free college tuition to earn a degree in 75 different business and technology programs in several educational institutions. Click here to read in greater detail about Chipotle’s innovative approach to valuing their employees.

This may be Chipotle’s next big move to ensure business success, because whatever it is they’re doing, it’s been working, according to their business results from the 2nd quarter of 2019:

  • Revenue up 13% to $1.4 billion
  • Net income of $91 million
  • Operating margins up over 20%
  • Expansion plan, including opening an average of 150 new stores next year

The question is why would Chipotle spend so much money on employee education? The most obvious answer is that they’re trying to improve their ability to recruit employees in a very tight labour market, but all HR professionals know that labour markets are cyclical, and there will always be ups and downs in hiring trends. This alone is not enough to sway an organization to commit to such an expensive employee educational benefit program.

Let’s take a closer look at Chipotle Mexican Grill Inc.’s organizational philosophy, and the place to start is with their mission statement:

Cultivate a Better World

What better way to “cultivate a better world” than to provide free education? There seems to be great benefit to a powerful mission statement. This can be seen on Chipotle’s company site on Comparably, where 100% of their employees said they were motivated by their mission statement.

It is inspiring to see an organization that is trying to make a difference, and is willing to spend resources to make that difference.

Discussion Question:

Research other companies in the fast food industry that are providing some type of educational support and/or benefits. Once complete, imagine you are a VP of HR in that industry; what type of educational support and benefits would you recommend to your CEO, and why?

Entrance Interviews May Be Replacing Exit Interviews

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All HR professionals are well versed in the “exit interview.” But have they heard of the “entry interview”?

We spend so much time and energy trying to find and select the correct employee – but that really is only the starting point. The real HR work starts when the new employee shows up for their first day of work. Orientation and effective employee on-boarding is vital to any organization’s success.

Most organizations are not very good at on-boarding new employees. According to statistics from Hierology website:

  • Approximately one-third (33%) of new hires look for a new job within the first six months, and about one-quarter (23%) leave before a year on the job.
  • The total cost of turnover per employee typically ranges from 100–300% of the individual’s salary.

These are shockingly high numbers and all HR professionals should take note.

It may be time to expand on the exit interview concept and bring it forward as part of your company’s on-boarding process. The entry interview can be a great tool to get to know new employees, make then more productive sooner, and reduce the chance that they will leave your organization.  Click here to read more about entrance interviews. 

Entry interviews are relatively new and there is not much evidence-based research on them yet, but it may be a trend worth watching and implementing.

Discussion Questions

Your VP of HR has asked you to research the benefits of making entry interviews. Conduct some research and develop a list that identifies organizations that are using employee entry interviews.

Develop a five-minute PowerPoint presentation on the potential benefits of these interviews.

How to Get Employees to Stay

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(Christian Chan/Shutterstock)

Employee retention keeps many HR professionals up at night. You can just hear the echoing murmurs throughout HR conference rooms across the country as turnover rates go up in this tight labour market. Many of them ponder these thoughts:

  • How do you keep employees from leaving?
  • What will make them stay?
  • Retention is the key, someone will always say

However, is retention really the key? Perhaps our language around employee turnover is wrong. Let us look at the definition of the word retention:

“The continued possession, use, or control of something.”

Now, let’s put that in the HR context and the perspective of building a relationship with the employee:

  • the continued possession of employees
  • the use of employees
  • the control of employees.

It makes one ponder how employees interpret the meaning of retention. Would you want to be retained by your employer, let alone be considered a controlled possession?

Is retention the key? Or perhaps it’s time to move our language forward.

MEC, an outdoor supply retailer, has always been an innovative company right from its foundational roots of being a cooperative.  MEC applies a forward thinking concept of employee retention. Here is a quote from Nahal Yousefian, chief people experience officer at MEC:

“The philosophy we’re taking here at MEC is that the approach to talent retention is already outdated.”

What does she mean talent retention is outdated?  What is MEC replacing it with? MEC is replacing the controlling concept of retention with the concept that the employees’ talent should be generated and that will create an environment where employees will want to stay.  This seems to make complete intuitive sense.

There are also surveys that support this concept transition; here are some current statistics about retention according to a Hays study:

  • 43% of employees are actively looking for other career opportunities and
  • 71% of employees are willing to take a pay cut for their ideal role

In addition, LinkedIn has discovered that 93% of employees would opt to stay in their role if their employer invested in their careers.

Think about these numbers for a minute: Almost 100% of employees will stay if the employer will develop them, and almost 75% are willing to take a pay cut to leave their current employment.

It may be time for HR professionals to put the controlling language of employee retention to bed and truly be a workplace where employees want to stay. All it may take is a true relationship-building commitment of employee development.

Discussion Questions

  • Research several organization that have low turnover rates.  Once that list is generated, identify what are the factors that may influence their success.
  • Identify what are the most beneficial training and development activities employers can implement to create an environment where employees want to stay employed

How To Keep Your Star Employees

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Most supervisors are the worst enemy for employee retention – and it may not be their fault. The fault may lie with the well-intentioned Human Resources department and their overreaching policies and procedure manuals.

A now-departed business associate of mine, Ron McQuide, once told me something that has always stayed with me: “All HR policies are just the scar tissue left over from some employee’s mistake.”

Think about what scar tissue does to a body: it can be unpleasant looking on the surface, but below the surface, it can decrease function, flexibility, and potentially cause more damage. Think about many of the policies that HR departments make their supervisors enforce. Here are some of those policies:

  • punitive attendance management programs
  • ineffective and condescending annual performance reviews
  • fault finding safety programs.

Many HR policies and procedures are valuable and effective, but just as many are not. Many of our HR systems are focusing on the wrong things, which is not beneficial to retain your star employees.

A Fact Company article by author Stephanie Vozza outlines some ideas on how to keep star employees from exiting the building.

One big idea (which is not new) is to give people autonomy to do their job. Star employees know what to do to be successful, so make sure HR policies do not hold them back.  Another idea is to keep the lines of communication open by having formal stay interviews. Ask them where you can help them in their career path.  Also, be open to their suggestions and respond to changes your employees want to make.

“Strive to create a community where people can be themselves, have a good time, bring their A-game, and employee engagement will follow,” Vozza suggests.

If more employers took Vozza’s advice, it would certainly make the executive recruiter’s job much more difficult.

Discussion Questions

Think back to a job you have had. Did you see examples where HR policies and procedures were holding you or other employees from performing at their best?

Review the Fast Company article. Create a dynamic performance management program that could be presented to a VP of HR that incorporates some of the ideas in the article.

Motivation with Meaning

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Motivational word graphic
Source: Kheng Guan Toh/Shutterstock

Motivation is one of the fundamental principles linked to effective employee training and development. It is pretty simple – If employees are motivated to learn, they will learn, if employees are not motivated to learn, they will not learn. The more employees are able to learn, the more connected they will feel to the organization. When employees are not connected to the organization, organizational growth and positive employee engagement just does not happen.

As highlighted in our Training and Development studies, motivation comes in two forms:  extrinsic and intrinsic. Extrinsic rewards are fairly standard in that they rely mostly on compensation based systems. It is a bit more difficult to build intrinsic reward systems as these rely on individual value based connections that may vary from employee to employee. From a value based perspective, however, the more difficult things are, the more important they become. This also applies to the development of intrinsic reward systems.

According to the Ivey Business Journal, intrinsic rewards are more important that ever, given a historical pattern that shows significant decreases in rigidly structured and directive driven organizations.

Click Here to Read the Article

As noted in this article, implementation of effective intrinsic rewards systems begin with management training on what intrinsic rewards ‘feel’ like. By developing a concrete understanding for the ‘feel’ of intrinsic rewards, the hope is that those managers will re-create a similarly positive feeling state for employees that report to them.

It is important to note that this article does not advise or advocate for the abandonment of all extrinsic rewards systems.  From a Human Resources perspective, we can learn from this advice by developing a solid blend of intrinsic and extrinsic rewards systems that act as motivators for excellence both for ourselves and for the organizations that we serve.

Discussion Questions:

  1. Thinking about your own work experience, how do extrinsic rewards influence your work performance?
  2. What are intrinsic motivators that drive you to be successful in your career?
  3. From a Human Resources perspective, how can an organization be explicit about rewarding performance from a value based, internal motivation system using the four steps identified in the article?
  4. Why is it so important to have management training based on intrinsic reward systems?
  5. Is striving for excellence an internal or external motivator for you?
  6. Why does excellence in employee performance matter?