Dick Finnegan, employee retention expert and president of Finnegan Mackenzie, a firm dedicated to the same cause, recently spoke with Consulting in advance of his keynote address at Consulting magazine's Recruiting and Retention in Consulting event to be held June 24 in Chicago. Finnegan, whose book RetentionMap is due out next year, says he's truly filling a need when it comes to retention strategies. Says Finnegan: "If you are in accounting or in purchasing or in sales, there are established strategies and tactics for what to do, but there is no established practice for cutting turnover." Here, Finnegan offers his thoughts on the topic. Consulting: What are consulting firms doing wrong when it comes to retaining top employees?
Finnegan: They do exit surveys and opinion surveys and from that data, they deduce why people leave or might leave and then plug in the holes in the dyke and think they've cut turnover. So an employee will say in an exit survey, "I'm leaving because I got a better opportunity," and so the organization will presume the better opportunity means more responsibility, more money, closer to home, but they don't know. But oftentimes people aren't honest in exit surveys anyhow. So we would say the number one reason why employees quit is because they can. The marketplace is so unforgiving that employees can leave—good workers can leave—whenever they want. But the number one reason employees stay is because of things they get uniquely from you. So rather than for an organization to put themselves in a position of reacting to what they think employees are doing, they need to be proactive to identify who they are, what they offer, market it and find the employees who match it. Now that sounds simple, but I'll tell you it's the biggest problem with companies' plans to cut turnover.
Consulting: Tell me a little bit about your book… what are some key takeaways?
Finnegan: How does applicant age correlate with retention? Several weeks ago I worked with the department of labor to go through all of their studies and found they have a study that proves the length of time a worker remains with the same employer increases with the age at which the employee began the job. Now this doesn't just mean higher gray hairs. This means 30-somethings stay longer than 20-somethings. So for some companies this means rethinking how you recruit and how you train because if you're training people on technology, you might need to train more deliberately and longer.
Consulting: So would you advise companies to hire older employees?
Finnegan: Absolutely. But older is relative. It could mean that you want to hire 30-year-olds vs. 19-year-olds for your call center. And it could mean that you want to hire 50-year-olds vs. 30-year-olds for your warehouse. Every decade that you go up, the lower your turnover will be.
Consulting: Why is that?
Finnegan: A couple of reasons. I think the older (which just means relative to younger, so no particular decade) you are, first of all, you know more about yourself and what you want to do. You're also more established with family and bills, [have] more responsibility and you know how much money you need to make. Also, you cannot take as many risks to quit jobs without another job. Here's another takeaway from the book: What one thing has become more important to employees than and pay and benefits? The answer is time. A recent study by CareerBuilder and Robert Half found that the most important perks for employees when they considered changing jobs were flexible schedules and telecommuting. Another study by WorldatWork ordered a varied number of factors on retention and gave the highest scores to telecommuting, compressed workweek and flextime.
Consulting: Do you think firms are open to such strategies?
Finnegan: Yes, especially once they put a cost on turnover and they understand what it costs them. Too many companies look at turnover like rush-hour traffic: It is what is and we can't do anything about it. They can do things about it. And once they fully understand its cost, they're much more motivated to make changes. None should be fooled that employees will sit still because the economy's hit a bump. There are just too many jobs. Good workers can find jobs anytime.
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