On the battlefield in the war for talent, there’s a mission that may be just as, if not more, critical for accounting and finance executives than recruiting a new crop of professionals: retaining the skilled employees they already have.
I know, I know, you’re probably tired of seeing or hearing the term “war for talent.” It’s overused (I’ve used it twice already; three times if you include the title), and some even call it pervasive. But if they covet victory, accounting and finance leaders must have their swords and shields ready at all times.
At the vanguard of retention
Sue Taylor, chief accounting officer at Facebook, believes employee retention is as equally important as recruitment.
“At Facebook, we are a strengths-based organization, which means that we want people in roles that they are both good at doing and that they enjoy,” she said. “Both of these are key elements of achieving fulfillment at work.”
Joseph Kehoe, senior vice president of financial management at Oak Brook, Ill.-based Republic Bank of Chicago, said accounting and finance leaders can lose sight of employee retention in the recruitment process and don’t realize the quality of the employees who are right under their noses.
“The environment for top talent has become tougher,” he said. “If we are able to hire the right individual into an entry-level position, we can groom them for advancement and hopefully not have to deal with the tug of war for talented individuals.”
Recent research backs up the importance of employee retention. A study published earlier this year by Kronos Inc. and Future Workplace revealed that 87 percent of organizations consider improved retention a critical or high priority over the next five years.
“New employees cost a lot of money—plain and simple. You have to find ways to grow the business and grow your people. Keep them engaged, and reward them with benefits, bonuses, and raises,” said Angela Pronto, assistant controller at LogRhythm Inc. in Boulder, Colo.
And Angela is right – the cost of employee turnover can give accounting and finance executives a serious case of heartburn. The Society for Human Resource Management (SHRM) explains how costly turnover can be:
Research suggests that direct replacement costs can reach as high as 50%-60% of an employee’s annual salary, with total costs associated with turnover ranging from 90% to 200% of annual salary. Examples include turnover costs of $102,000 for a journeyman machinist, $133,000 for an HR manager at an automotive manufacturer, and $150,000 for an accounting professional.
Whoa, $150,000 for an accounting professional? Remember that next time you’re questioning your value.
It goes without saying that having an engaged and happy workforce results in professionals who are not as stressed out, less likely to leave their job, and who are better performers.
But how can accounting and finance leaders win this crusade? Good question. This white paper from Oracle provides some insight:
Because low talent retention produces a substantial drain on corporate resources, leaders need to know which practices work and what they should focus on to retain and motivate their workforce. For instance, a talent management strategy that allows employees to build a network, seek and find mentors, and help them grow and develop while feeling more connected and engaged is one means of retaining talent.
Another approach to increasing retention is hiring based on culture and values, according to Brent Gleeson, a Navy SEAL, speaker, and leadership consultant. He wrote in Forbes:
Employee retention starts with first being able to clearly articulate what the organizational culture is. What are the aligned values, beliefs, behaviors, and experiences that make up the organization’s environment?
Hiring employees that don’t mesh well with the existing or desired company culture leads to poor work quality, decreased job satisfaction, and a potentially toxic environment. This results in turnover which has high costs—both hard and soft.
And you can’t discuss employee retention strategies without mentioning compensation and benefits. Compensation is king for both recruiting and retention, Dan Schawbel, research director at Future Workplace, wrote in Fortune, and “if you don’t pay employees fairly, they will leave—and no perk will change their mind.”
Sure, I’d like to make just as much money as the next guy or gal, but I don’t agree that compensation is the end-all, be-all factor in why a person might leave their job. Personally, I was unhappiest in the jobs that paid above what I thought I was worth and I didn’t stay there long. The jobs where I made less were often the ones where I was the happiest because of the people I worked with and the perks offered: working at home, flexible schedules, and more vacation time.
And according to the SHRM, compensation and pay satisfaction “are relatively weak predictors of employees’ decisions to leave,” and offering pay increases or bonuses “may not be the most efficient way to address retention.”
Here are five other strategies from Joseph Kehoe, Angela Pronto, and Sue Taylor that can help controllers, CAOs, and other accounting and finance leaders take the tension out of retention:
1. Invest in training. Work with your employees and train them the way you were trained, Kehoe said. “You’ve been successful in your career for a reason; this is the opportunity to pass it on,” he added.
2. Make communication clear about how employees can grow into their next role. “Find out from them what they want that next role to be,” Pronto said. “Attempt to fit that into your team structure as you grow.”
3. Provide the resources employees need to do their jobs well. And actively remove any roadblocks that hinder their success, Taylor said.
4. Don’t be skimpy on praise and recognition. “Tell employees regularly they are doing a good job and that you appreciate them,” Pronto said.
And provide opportunities for employees to shine and impress senior management, Kehoe added. “You want to make sure your employees are recognized for what they offer the company,” he said. “This will make them feel more a part of the organization and that what they do matters.”
5. Show care by understanding what is most important for each person’s experience at the company. “Building a strong community at work should be a company-wide effort, and leaders across various organizations should work collaboratively on this,” Taylor said. “That said, leaders and managers play an important role in defining the experiences employees have every day.”