Keeping Top Workers From Leaving

Hanging on to top workers in today’s tight labor market is a challenge for many small-business owners.

High performers are twice as likely to be actively looking for new jobs compared with midlevel and low performers, according to a study to be released this month.

Too often, though, companies don’t act to prevent the loss of their most valuable workers. That can affect the bottom line: When key employees leave, important customer relationships can suffer, projects can be disrupted and companies face new costs to find and train replacement workers.

To solve the employee retention challenge, managers need to understand why each worker stays and why he or she might leave, experts say. That’s not a conversation most managers are eager to have.

“The biggest thing we see hurting organizations is falling into the trap of thinking that talking about these issues is actually going to cause employees to leave,” said Mark Murphy, founder and chief executive of Leadership IQ Inc., a Washington-based training and research company.

The most important step companies can take is to put the issue on the table and engage workers one-on-one, he said.

Yet a study to be released this month from Leadership IQ found that fewer than 25% of managers talk with their employees about retention issues at least once a quarter.

Lack of communication can lead to disengaged workers and, eventually, lost workers: According to the study, 47% of high performers are actively looking for new jobs, and an additional 44% are passively looking -- posting resumes online, for example, but not going on interviews. Just 25% of mid-level and low performers are actively looking, the study revealed.

“The really shocking thing is that 91% of high performers are, let’s say, less than cemented to their current employer,” Murphy said.

His company surveyed 3,700 high-performance workers and 11,000 mid-level and low performers who had participated in Leadership IQ’s online workplace performance-review system. The employees responded anonymously.

In small businesses, one key employee can have a major effect on the company’s health, Murphy said. The employee may be the stellar salesperson or serve as a less obvious yet crucial information hub.

“At a small company, for example, the owner’s secretary has relationships with [the] most important customers that rival their best salesperson,” Murphy said.

To keep valued workers, managers need to learn the “shoves and tugs” for each employee, the consultant said.

“Shoves” are the conditions at work that, if not right, might spur a worker to leave. Schedules, working conditions, pay and relationships with managers are all potential shoves, Murphy said.

“Tugs” are often the big-picture issues, such as how well an employee likes the work, the opportunities for advancement and a company’s culture.

The goal is to eliminate the shoves and address an employee’s most important tugs, Murphy said.

That’s what Jean S. Fraser is trying to do at the nonprofit San Francisco Health Plan. Fraser, the plan’s chief executive, participated in one of Leadership IQ’s online seminars on employee retention.

“You are always worried about keeping your employees,” said Fraser, who has headed the 75-employee organization for five years.

The retention rate has not been as high as she would like, she said, but is improving as the organization focuses on its individual employees in an effort to overcome the downsides of working at a small nonprofit where salaries are relatively low and there is limited room for advancement. It’s a challenge familiar to many small-business owners.

“It’s a terribly competitive market and we can’t pay as much as large, for-profit institutions,” Fraser said, “so trying to provide flexibility has really made a huge difference.”

Fraser says she has not adopted all of Leadership IQ’s formal methodologies but found the concept of shoves and tugs helpful.

She says she also provides additional intellectual challenges to her brightest employees by allowing them to take on projects outside the normal scope of their work.

And Fraser holds two performance-related talks with each employee every year. One is a formal performance review, and the second, six months later, is an informal check-in. Both are good times to talk about an employee’s goals, motivations and other “shoves and tugs” issues, she said.

Supervisors are evaluated by their staff in annual reviews, she said. And exit interviews are held with each departing employee.

“Consistently in exit interviews, everyone says it’s a great place to work,” Fraser said. “What’s bad? It’s almost always money. It’s frustrating for us, but there it is.”

Despite Fraser’s experience, money is not the most common shove or tug for an employee, based on several studies, Murphy said.

“If you ask managers, somewhere in the neighborhood of 90% say employees quit for financial reasons,” he said. “When you ask employees, roughly 10% of employees say they quit for the money, so there is a huge disconnect.”

Talking with employees regularly about their wants and needs can help bridge that communication gap, he said.

Murphy outlines several of his other employee retention recommendations in his new book, “The Deadly Sins of Employee Retention” (Leadership IQ Press), a quick read co-written with Andrea Burgio-Murphy, his wife and the company’s executive vice president. The book includes short quizzes and sample questions for use by managers and company owners.

The investment in time that is needed to retain valuable workers is one that successful managers know is well worth making, Fraser said.

“A business is run off people,” she said. “So cultivating and spending time with your employees is the best investment you can make.”

Cyndia Zwahlen can be reached at cyndia.zwahlen @latimes.com.