“Conservative estimates put the cost of losing a trained worker at one and a half times the annual salary of the outgoing employee, as measured by lost productivity and recruiting and training costs for the replacement.” Excerpt page 3, Paragraph 1
It’s Your Ship, is a rare management book that devotes a good deal of time focusing on retention, both the cost, and suggestions for improving the retention rate. A Gallup study found that when people leave their companies, 65 percent of them are actually leaving their managers. All leaders face the challenge of getting the most out of their people. According to the author, the ability to do this depends on three variables: the leader’s needs, the organization’s atmosphere, and the team’s potential competence.
Morale is a big contributor to retention. The author made several improvements to benefits that directly improved retention. Two that come to mind are better food and movie night. We could give employees a $100 gift card as recognition for an outstanding achievement. Increased paid time off in the form of a one or two day PTO bonus can increase employee happiness and morale, which has the ultimate effect of improving employee retention.
The first day on the job is a major opportunity for good morale. On the USS Benfold, Captain Abrashoff learned that there was no formal onboarding process. He set about developing one that made each new person feel special. One important ingredient of the new onboarding process on the USS Benfold was the assignment of a “running mate.” We could do the same. At present the first day is a blur of forms, passwords, policies and procedures. At present this is a very impersonal process and is missing the important concept of a “running mate.” The training and support that we provide from Day One sets the tone for the employee’s tenure at the company. Pairing a new employee with a mentor is a great idea for onboarding. New team members can learn the ropes from a veteran with a wealth of resources, and the new hire offers a fresh viewpoint to experienced staff. Mentors should not be work supervisors, but they can offer guidance and be a sounding board for newcomers, welcoming them to the company culture. As the saying goes “you only have one chance to make a good first impression.”
At the beginning of Captain Abrashoff’s tour, the USS Benfold had a 28% retention rate. At the end of his tour the retention rate was 100% in most critical categories. I recommend that IST review “It’s Your Ship” with an eye to picking up ideas for retention that could be applied directly to our company.
By Terry Cassman
Nissan – Franklin, TN