Staff retention difficulties are still on the increase as carefree employees flit back and forth in search of the perfect job. But with the multitude of available benefit options designed to make them stay put, Matt Henkes discovers the secret ingredient is love.

It’s no longer enough for employers to expect loyal devotion from their employees simply in return for allowing them to have a job. Hanging on to your key talent takes even more effort, so what is the secret to retention that also makes your business tick?

The number of employers reporting staff retention difficulties rose by 9 per cent to 78 per cent on last year’s figures in the Chartered Institute of Personnel and Development’s 2007 recruiting and retention survey. Private sector businesses reported the worst problems, with 83 per cent of firms struggling to hold on to people. But why?

In the 12 months to the end of June, the Office of National Statistics reported the number of jobs in the UK increased by 248,000 – the highest rise since records began. Whereas 20 years ago, it was expected that you would get a job for life, employees today, particularly in the booming services sector, are spoilt for choice, driving up the cost of human capital like never before and blowing the recruitment arena wide open.

Richard Leech, head of learning services at the employee reward firm Grass Roots, believes that as the UK economy has become more buoyant, its workforce has become both more demanding and more mobile. “The erosion of the job for life contract cuts both ways,” he says. “Employees are taking control of their lives and are more prepared than ever to move on, either to meet their aspirations or if they feel their current environment is simply not giving them the satisfaction they crave.”

Strategic motivation

Firms are rising slowly to the challenge, adding attractive extras to their employment packages. Pensions, flexible working, gym memberships and additional holidays are all a great place to begin. However, John Sylvester, executive director of employee benefits and motivation specialist P&MM, believes these can only be truly effective when used as part of a strategic motivation solution.

“It is no secret that businesses with strong strategic direction and leadership in their core marketplace tend to be more successful as employers too,” he says. “The real magic comes from engaging employees in that vision and making them a central part of the success of the organisation.”

With a basic remuneration and benefits package clearly defined, employers can use classic motivation techniques to get staff to appreciate the important part they have to play in the ongoing success of the company. “It involves clear measurement and monitoring of performance, and reward and recognition for those who achieve and exceed their goals,” says Sylvester. “But more than anything else, it requires a good understanding of motivational techniques and how to effectively communicate the proposition.

“Employers must learn how to create and market an added value employment proposition to their employees and prospective employees,” he adds.

It’s a convergence of HR management, marketing and communications, and is creating a whole new discipline. “Getting it right has clear bottom line benefits for the employer,” he remarks.

A pat on the back goes a long way

Jonathan Haskell, CEO of reward and recognition firm Michael C Fina, believes the answer is simpler. At the heart of the matter, every employee wants to feel their contribution is valued by the company. “The problem is not that all managers are as effusive or demonstrative as they should be,” he says. “Some are just totally incapable of uttering a single word of thanks or praise.”

This sentiment is echoed by Robert Myatt, business psychologist and director of Kiasen Consulting, who says that, generally, employees who leave their job are leaving their manager, not the company. Effective line management is the most critical factor in retaining staff. “The fundamental thing that a lot of research is telling us is that people go to work for their boss,” he says, “If they decide to leave it’s because they’re unhappy with the development, support and motivation they’re getting from that boss.”

He advises more care in the selection of line managers. “Companies need to look for the qualities that show these people actually want to lead and inspire others,” he says. “Think about what sort of motivation you’re looking for in your team leaders, rather than just promoting the best performers into the role.”

The qualities that make someone a great salesman, for instance, probably won’t translate well when it comes to people management.

Don’t ignore development

After line management, Myatt believes development is the next key factor in hanging onto staff. While a well-planned development programme won’t make up for a lousy line manager, its symbolic value can make employees feel like the company is willing to invest a bit of time and money in them, and that they’re key to its future, he says.

Mark Fisher, chief executive of the Sector Skills Development Agency, agrees with this wholeheartedly. “To retain staff, it is vital the employer invests in the development of their skills,” he says. “Skills are the key to unlocking an individual’s potential, making them feel valued by their employer and improving their career prospects.”

Put in place individual development plans for each employee, advises Victoria Philpott, associate director at the international recruitment firm Badenoch & Clark. Even a warehouseman will have some ambition – he may want to get his second forklift license or learn about stock-counting. You’ll never know unless you talk to your employees and listen to what they want.

Philpott says a major problem for many firms is simply this lack of communication. For instance, often a job is oversold during the interview process, leaving the employee already feeling dejected within the first few months. It is a common problem, caused by the recruitment officer’s fear of losing them. But once false expectations are raised, it increases the chance that person will leave the firm anyway.

“Take the time to sit down with them, explain what the company expects from them and find out what they expect,” says Philpott. “It’s a two-way thing that comes back to making them feel valued.

“We all need a good stroking,” she adds. “We all need someone to say ‘that was great, you really did well there’. It’s on the job training; it’s just caring about people.”