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Lisette Howlett

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Opinion: Cost-effective retention strategies


Continuing with her series on recruitment and retention in today’s business landscape, this month Lisette Howlett explains how to implement an effective retention strategy that doesn’t break the bank.

The trick to a really good retention strategy is not just effectively keeping your people, but actually knowing who it is that you want to retain in the first place. It’s also about thinking ahead – there is a clear link: the more you take action in advance, the lower the cost (in money, time and relationships).
Anyone who has worked in manufacturing will be aware of the concept of preventive maintenance. For those less familiar with this concept, it is the idea of taking action when equipment is working well so that it does not break down. Retention is exactly this.

Pay dilemma

I cannot imagine a single HR professional (who has done some operational HR/business partnering) who has not faced the situation where a manager demands that an individual get a huge pay increase because they have just announced they are leaving for another job at a much higher salary. 
It is always an awful dilemma. The manager is thinking short term (the project will be delayed, the sales targets missed etc). You will be thinking about the impact on other staff, the need to avoid creating a culture where people threaten to leave in order to negotiate pay increases, the damage to the relationship between the leaving individual and the company (there is always the niggle in the back of the mind of someone retained by a last-minute pay hike that they had been cheated in the past).
This whole scenario is avoidable. This is what retention is all about – keeping the people and keeping to your organisation values (which generally do not support of the idea of bribing someone to stay).
Before looking at the ‘how to keep them’ side of the equation, I would like to first look at the ‘who to keep’ side. You need to be able to do this on two levels – the individual level and the organisational. Individual is straightforward – you need to have quality processes for identifying both your high performers and high potentials (these are different and you need both to be successful). 
The organisation level is about aligning your staffing strategy to your business strategy and challenges. Are you looking for staff who stay for a long time and grow and develop with the organisation, or are you looking for a higher level of natural churn in order to keep up with technological changes, increase organisation flexibility etc? This strategic context needs to drive the core elements of your retention strategy.
So, if the best way to retain people is to stop them thinking about leaving, what are some of the things you can do to achieve just this? 


  • At the strategic level, your approach to reward and the value given to the different elements (base pay, benefits, variable pay/bonus and long term incentives) needs to be aligned to the type of people you wish to attract and how long you ‘generally’, assuming good performance, want people to stay. So high benefits (particularly those that improve with service) generally attracts a lower-risk taking, longer-term employee.
  • Plan individual salaries over a three- to five-year horizon. Thus as well as having an annual salary review have your managers think about salary trajectories for every member of staff over the three- to five-year horizon – have they plateau’d, are they going to increase steadily, are they looking at significant growth (quite common for someone moving up the organisation)? Share these directional thoughts with staff so you can manage expectations.
  • Do a sense check/relativity check on your salaries. Performance pay reviews can sometime mean we can focus on the pay increase, as opposed to the pay and we can find that some people ‘slip down the pay curve’ without our being really conscious. In my experience they are frequently the ones who face significant pay increases upon leaving (and lead to the dilemma referred to above). 


  • Take the time to match recognition to individual motivators and be imaginative. Use training, conferences, projects, attendance at meetings, public speaking and the like as recognition rewards. Do not fall into the trap of the ‘usual suspects’ – i.e. the first name that comes to the managers heads is put on a project, asked to present etc. 
  • Make sure your managers take time to thank the ‘low key’ high performers – those that may not be high potential but are absolutely critical to the organisation’s success – they can get overlooked.


  • This is, of course, one of the buzz words in HR but something that high quality organisations have been doing instinctively for a very long time. You need to find hooks that tie your people to you at a deeper level than the formal contractual/financial. Thus being clear about your organisation purpose and values is vital. It will mean that from time to time you lose people who do not share them but this is a good thing in the longer term.
  • You also need to make people feel part of a team and to understand how their job fits in and contributes – good objective setting processes and communication will achieve this.


  • Providing challenge in the job needs to be individually aligned but boredom is a major cause of people leaving. Providing challenge does not necessarily mean bigger jobs but it does mean new things to think about, goals or target’s and a sense of purpose and contribution. Being able to see yourself working in the company in ‘x’ years time is important for people – if they cannot envision this they leave.
Very few organisations can afford to ‘lock in’ their staff through money alone and, actually, even if you can afford it I would suggest it is a flawed strategy which is fairly short term. If the only thing that keeps someone with you is large amounts of cash think how easy it would be for someone in the same or better ‘cash rich’ sector as you to lure them away. Good management is often a better substitute for money; thus your retention strategy needs to be founded on this.
Finally, any good retention strategy requires an equally good disengagement strategy. You need to retain the right people and exit the right people. There is a risk that if this side is not thought about at the strategic and operational level you will retain too many people which is almost as bad as unintentionally losing people.
Previous articles in the series:
Lisette Howlett has worked at a senior level for a number of global companies. As well as successfully launching and running her own HR consultancy she is also behind the first ever website that enables employees to rate their experience of using recruitment agencies,

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