Staff Retention
...into the Company. 2.2 Current Employee Pool The employee make-up is diverse consisting mainly of women burdened with family responsibilities and students, both groups working on a part-time basis during the week. Core retail staff consists of professionals and specialists some of whom are close to retirement or are planning to retire in 5 years time. 2.3 Average Tenure of Employees Senior managers of the Company are considering retirement in the next 5 years and there is a trend of sales staff staying with the Company for an average of 12 – 18 months before moving on. 3. DISCUSSIONS Despite attractive pay packages, staff in the Company are still leaving their jobs due to other several possible reasons. 3.1 Diagnosis of Causes of Turnover It is apparent from a recent 2004 press released survey conducted by SHRM, annexed hereto as “Annex A”, that monetary compensation is not always the only means of staff retention and loyalty. Results of the survey showed that: · 53% seek better compensation and benefits · 35% cited dissatisfaction with potential career development · 32% said they were ready for a new experience. In the case of the Company, pay does not seem to be an issue as employees are getting paid fairly and well. However, an implication of this survey results goes to show that though paying competitive rates is vital in retaining the staff, other factors like recognition and opportunity to grow though organizational ranks were cited as being important to employees. It is suggested that the Company look into different areas to better employee retention by spending more time on understanding what is it that their employees really want. This can be done using several methods. The next sections of the report will suggest several ways to gather information from employees and how by analysing the Company’s current internal as well as external situation may shed light on its current HRM practices. 3.1.1 Employee Surveys and Opportunity For Feed back A long relied on method of gathering statistical data and information on any subject matter, surveys have been proven to be useful in gathering vast amounts of data that can be analysed and interpreted to present useful information. Surveys come in handy when they ‘become a means through which management takes the pulse of employees on a variety of issues within specific departments or the entire organization’ (Phillips and Connell, 2003, p. 172). Thus surveys may be used to evaluate and access the Company’s culture in which an employee’s welfare and opinions are valued. Surveys provide an opportunity for employee feedback and allow for opened communication channels between all levels of management and employees. Transparency in communication among all staff about the Company’s activities allows employees to know what is going on in the Company (Caplan, 2003), thus top management should be proactive in their response and participation in accessing the survey results. Phillips and Connell (2003, p. 172) suggest that the surveys should include a wide array of categories like ‘pay, job satisfaction, safety, diversity and life balance’. This suggests that the Company could devise a survey that covers all aspects of the employment relationship as far as possible to allow for more accurate assessment of results. The Company could find out via these surveys or inter-personal communication as to what is making its staff leave. Surveys can either be anonymous or allow for identification of respondent, both of which are aimed at garnering honest and direct feedback on the Company’s current management standards and possible staff suggestions to better suit their needs. 3.1.2 PEST Analysis A PEST analysis may be conducted by the Company to assess its external macro-environment. The acronym refers to the Political-Legal, Economic, Sociocultural and Technological forces, which affect the Company indirectly. Each component of this analysis will be discussed as follows (Daft, 2000): Ø Political-Legal Refers to the important legal and political dimensions, which affects the Company and its people and define both formal and informal rules under which the Company must operate. These would include government legislation, regulations and policies underlying changes to the Company’s political-legal environment. The stable government in Australia ensuring that the Company is operating in a safe sound environment with continuity in leadership and policies is an example of the political forms that affects how the Company’s business is run. An example of legal aspects would include employment and labour laws regulating the employer-employee contract. These would include industrial relation legislations like the Equal Employment Opportunity (EEO) and Affirmative Action (AA), which can affect all aspects of the Company’s HRM activities. The EEO and AA legislations were introduced to prevent organizations from disadvantaging a person of employment due to discriminatory reasons and operates largely in the Commonwealth and the individual Australian states. In Australia, these legislations are put in place to ‘ensure that people are hired on the basis of merit’ (Gardner and Palmer, 1997, pg. 466). The legal implication for the Company in relation to its staffing process is its need to be able to maintain both legal and moral obligations to its employees while at the same time, ensuring that working conditions within the workplace are conducive and void of discriminatory factors (Cooke, 1998). The Company consists of a diverse workforce and thus, does not contravene such rules of employment. Ø Economic The economic dimension represents the overall economic health of the country or region in which the Company functions. Economic growth, interests rates, exchange rates and inflation rates in Australia affect the Company’s purchasing power of customers and Company’s capital, which in turn affects its staffing and hiring practices. Ø Sociocultural The sociocultural dimension of the Company represents the demographic characteristics, norms, customs and values of the population in which it operates. Being sensitive to issues relating to employee welfare and cultural or religious issues within the Company will increase loyalty and commitment of staff to the Company when its people know that the Company is concerned and value their contribution. Ø Technological The technological dimension affecting the Company represents scientific and technological advancements in the industry that may be applied by the Company in their HRM structure. This could be Annexed hereto as “Annex B” is an article where an internal hiring web-based system is helping to reduce hiring costs and boost employee morale in the leading home appliance manufacturer, Whirlpool Corp. The Company could make do with a system like that, which would allow its employees to apply for new jobs or future job openings within the Company, and encourage them to personally match jobs to their qualifications. A web-based system could eliminate the need for external expenses of hiring and other related costs of recruitment like advertising and training costs. The system the Company could come up with is one which could set out succession paths for the employee years from now, to allow employees to know where they stand and how they can effectively rise through the ranks. 3.1.3 SWOT Analysis A SWOT analysis may be used to match the Company’s current resources and capabilities to the competitive environment it operates in. The acronym refers to the Company’s internal Strengths and Weaknesses and external Opportunities and Threats, which can affect the Company’s formulation of future HRM strategies and current selection policies. Each component of this analysis will be discussed as follows (Daft, 2000): Ø Strengths These refer to the Company’s resources and capabilities that can be used to develop and achieve competitive advantage in the long run. In relation to its HRM practices, hiring a multitude of workers of diverse backgrounds ensures the pooling together of more talents and human resources for the business. A good and strong brand name, consistent reputation among its customers for high quality services and affordable quality goods are also advantages that the Company has over its competitors. Ø Weaknesses These refer to the absence of certain strengths or advantage the Company could have had in relation to its competitors. Thus it is of paramount concern that the Company is able to identify its distinctive capabilities and competencies to stay viable in its current competitive environment. In this case, ad-hoc HRM policies should be scrapped for a more integrated approach. HRM policies serve a guide to decision-making in the Company and should be communicated to all employees (Stone, 2002). Tichy, Fombrun and Devanna (1982) state that HRM strategies need to be matched and fitted with business objectives. Ad hoc or ‘one-off’ methods in the HRM process of the Company seek to distinct HRM activities from its business processes and are only referred to when a problem crops up. Ad-hoc HRM policies leave little or no room for improvement on current HRM activities as they are used only once. Tichy et. al. (1984) stated that the link of managing people in an organization need to be in line with the achievement of business objectives, which the Company is not achieving at this point of time. The Company could thus come up with a uniform and systematic HRM policy and process across the organization that is agreed and implemented by all staff across the boards. This would in turn cut costs for the need to come up with new policies and time spent, thus allow for better productivity. Ø Opportunities Following the above PEST analysis of the Company, it is apparent that some factors could pose as opportunities to the Company. As such factors that are beyond the Company’s control should be taken into consideration. Opportunities may come in the form of chances for growth and profit to the Company. In this case, technological advances can allow the Company to lower staffing costs via internal hiring, as discussed in point 3.1.2. Removal of certain trade barriers may also be seen as an opportunity of expansion of the Company’s operations in the near future. Ø Threats The last component of the SWOT analysis externally examines the threats the Company is and would be facing in its current position. Changes in the external environments resulting from new employment regulations for example, could mean that current staffing policies need to be changed and in turn, cost the Company to incur more costs. Rivalry from existing organizations dealing with the same products would mean that competitors are constantly on the look out for staff with the relevant experience in homeware retail. They may offer higher remunerations and benefits to attract staff that have left previous similar organizations, and eventually hire them. The issue on retaining older workers need to be addressed as well. Senior staff should be viewed as the Company’s most valued resources due to their tenure in the Company. Should they leave or retire, there could be immense loss of institutional knowledge. One reason why some staff leave may come in the form of a ‘counte...