Employee retention is not a strategy, it's a culture

Photo: Collected

Human Resources (HR) managers are often asked about their retention strategies for talent. Management naturally expects that their talent and critical resources will remain with the company even amid tough times. However, many companies do not have a formal retention strategy as a separate or exclusive process.

This raises a pertinent question: Why is this the case? Why aren't companies, especially HR departments, preparing exclusive retention strategies? And if they are, why aren't they being followed. Or if followed, why aren't they achieving the desired results in retaining talent?

I worked for a digital company undergoing transformation from the time I joined. Over more than a decade, it became clear that employee retention was always a challenge when driving change management. Despite this, the company's management consistently overcame these challenges and turned them into opportunities for employees.

Their approach was to build trust by providing internal employees with new opportunities within the company, helping them grow and prosper in their careers. This wasn't just a strategy, but a culture established by the management, which significantly improved the retention rate.

Retention is an outcome of how you implement other people-related strategies like resourcing, talent management, succession planning, performance management, total rewards, and employee relations. Strategies are not inherently good or bad; their success depends on their acceptance and integration within the organisation.

Therefore, even the best strategies won't yield the right outcomes unless they are well-accepted by the organisation's people and contribute to their experience. Embedding people-related strategies into the organisation's culture directly enhances the employee value proposition and supports retention.

Consider a military environment where the retention rate is almost 100%. What are they doing right that private companies are not? Their strength lies in their consistent approach to developing talent, maintaining internal equity in pay and benefits, implementing a structured performance management process with less subjectivity, fostering a high-quality inclusive job environment, and prioritising employee well-being.

While the approaches and purposes of these two types of organisations—military and private—differ, building a people-centric culture that ensures diversity, equity, and inclusion has proven to be one of the most successful strategies for improving talent retention rates.

Therefore, retention strategies are the cumulative approach that has been taken from the other people strategies. In order to make the retention efforts successful, the effort and initiatives to improve employee value proposition should be coming from the leaders of the organisation. Leaders from top companies have successfully implemented various people strategies to enhance employee retention.

Satya Nadella, CEO of Microsoft, has cultivated a culture centred on a growth mind-set, emphasising continuous learning and innovation. This approach has empowered employees, fostering higher engagement and retention.

Similarly, Sundar Pichai, CEO of Google, has focused on employee well-being and development through initiatives like the Google Career Certificates programme, which offers career advancement opportunities. This investment in employees' professional growth has strengthened their loyalty to the company.

In another example, Mary Barra, CEO of General Motors, has championed diversity and inclusion as a core part of the company's strategy. By promoting a more inclusive workplace, GM has created an environment where employees feel valued and respected, leading to higher job satisfaction and retention.

Additionally, Patagonia's CEO, Ryan Gellert, has implemented policies that align with the company's strong environmental values. Offering extensive benefits such as on-site childcare and flexible work schedules has contributed to Patagonia's reputation as a desirable place to work, further boosting retention.

These leaders demonstrate that a successful retention strategy often involves creating a supportive and inclusive culture, providing opportunities for professional growth, and aligning company values with employee benefits. Learning from the good examples around and considering the contemporary modern global corporate environment there are some tactics and philosophies that will ensure a robust retention strategy for the entity we are engaged with.

Embed 'people over revenue' culture: People are the most valuable asset and strength of any organisation because they are unique individuals and cannot be imitated. Therefore, valuing employee experience should be prioritised over short-term revenue gain. This approach conveys to employees that they are valued and that their contributions are essential to enhancing business performance. Statistics show that valuing employees is a more effective tactic for improving retention rates than solely managing talent and high performance.

Ensure internal equity and inclusion: This is a key initiative and action that a company needs to establish. One of the most common reasons for employees leaving organisations is dissatisfaction with internal parity, whether it be salary, benefits, or access to talent development programmes. Therefore, ensuring transparent internal equity promotes retention.

Establish trust through transparency: Trust is a critical element in promoting a culture of retention. Employees want to see that management's words and deeds align. This alignment enhances their motivation to go the extra mile and believe they will be recognised for their contributions. It encourages people to stay with the organisation, knowing their efforts and performance will be rewarded, thus enhancing retention.

Encourage innovation as tool of empowerment: In the modern corporate environment, people look forward to opportunities to add value to the organisation by doing things differently and introducing innovative methods. Organisations that offer such platforms empower employees to unleash their potential and hidden capabilities, allowing them to stay ahead in the race of healthy professional competition and advance in their careers. As a result, talented and innovative employees find value in remaining engaged with the organisation.

Endorse contribution with respect and reward: One of the most important cultures to embed is endorsing contributions through structured rewards and incentives. It is always encouraging when your accomplishments are valued, and you are rewarded for them. This increases intrinsic motivation, supported by extrinsic rewards. Such culture and practices are crucial for improving retention.

Embrace employee feedback and open communication: Employees always appreciate being given opportunities to express their feelings and provide feedback about their experience. Transparent communication from management is equally valued by employees, as it fosters an authentic relationship. In turn, this increases employee loyalty and has a positive impact on retention rates.

To conclude, retention is not just about formulating strategies but more about establishing good practices and transparent processes that build a culture of inclusivity, equity, and diversity. Ultimately, this approach enhances the employee value proposition, leading to improved retention and a stronger organisational foundation.

Faisal Imtiaz. Sketch: TBS.

Faisal Imtiaz Khan/Ex-Chief Human Resources Officer of Robi Axiata and currently teaching at a college in Canada.

Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinions and views of The Business Standard.