Whether you’re a recruiter, a manager or a business leader, the chances are there’s one email in particular you don’t want to receive – the one telling you a key member of staff is leaving and there’s nothing you can do to stop them.
Talent retention is arguably less of an issue in the Gulf region than in other parts of the world. In a 2015 survey from Naukrigulf.com, 73 per cent of companies reported attrition rates of less than 15 per cent, which is, for most, a comfortable level of turnover (the relative complexity of leaving one Gulf business for another is undoubtedly a factor).
But when a hard-to-replace employee decides to leave, it hurts. Apart from the disruption, and the fact they may be taking valuable knowledge with them, hiring is time-consuming and expensive: some studies have put the average cost per hire of a senior staff member at more than 100 per cent of their salary, when the price of back-filling them is factored in.
What can businesses do to keep the right people in the right roles? The answer sits squarely with the HR department – and it starts long before the employee has even begun to think about leaving. The very thing that probably helped attract them to you in the first place – the ‘employer brand’ that makes you stand out from others in the recruitment market – is the starting point.
Zoe Spicer, an Ashridge Business School associate who works with HR professionals, says: “Building the right brand to attract a diverse employee population will help employers ensure they have the right mix of experience for the longer term, and broader attraction outside of the local market.”
Cash is another part of the equation, of course. Salary still plays an intrinsic part in motivation, but Randa Bessiso, director, Middle East, at Manchester Business School, says employees also need support and commitment from management; a clear career path; exposure across the business; and training and development opportunities so they can reach their full potential and contribute to the company’s growth.
In the GCC’s predominantly expatriate job market, compensation has often been thought of as a major reason employees leave, but, in Hays’ Salary & Employment Report 2016, 37 per cent of employees surveyed in the region said they moved jobs last year because of a lack of career development in their organisation. Salary was cited by only 27 per cent of respondents.
Of course, not all employees are created equal: while many may be difficult but not impossible to replace, there are some whose disproportionate worth to an organisation means they deserve special attention, says Alan Hynes, a compliance specialist for the banking and financial services sector at recruitment consultancy Morgan McKinley in Dubai. “At the end of the day, it costs significantly less to address the specific needs of a high performer [than it does to] replace them,” he says, adding that targeted intervention campaigns – rather than a one-size-fits-all approach – are essential in maximising the ROI on any retention effort.
“Companies should identify those employees most at risk of leaving, [especially] their top-tier performers. They need to understand the attrition drivers that are specific to the individual, as opposed to the overall set of employees.” In-house surveys, for example, can determine whether an employee would recommend the company to a friend, helping HR gain a better understanding of morale in the firm.
Oxford Strategic Consulting (OSC), meanwhile, has found that leaving a company is a process that begins with unhappiness in the workplace, progresses to vague thoughts of quitting and then manifests as intention to quit. It is only when the employee reaches this point that a job search begins, leading inevitably to resignation.
Often, exit interviews underscore salary as the key issue for a staff member’s departure, but Dr Najat Benchiba-Savenius, OSC’s head of social and economic research, believes that, if an employee had been satisfied with their line manager, they wouldn’t have started exploring other options in the first place. “Being unhappy almost always has to do with poor immediate leadership and an employee’s relationship with their line manager,” he says. “Once they get to the stage of intention to quit, money will play a much greater role in their decision-making. By the time they do resign, money usually serves as a major factor.”
Interventions in this area don’t have to be drastic, but they can be transformational. David Leman, chief HR officer, Middle East and Africa, at Marriott International, recognises the importance of training managers as a way to continue engaging employees. “We believe that people leave leaders rather than companies – a key driver of turnover is the relationship between the employee and their manager,” he says. “Transformational and supportive” leadership styles that encourage and reward staff have become the norm at the hotel giant, he says, rather than an authoritarian or dictatorial form of managing.
Not every business will reach such levels of revelation. For many, the concept of building any sort of loyalty can be alien, says Benchiba-Savenius: “There is a ‘psychological contract’ with expats, which is often very transactional – we pay you, you do your job, we won’t invest in you.”
Bessiso adds: “Happy employees are loyal and productive, and organisational culture plays an important role in making sure staff feel fulfilled by the work they do.” Investing in learning and development, for example, not only promotes employee engagement, but also provides companies with a pipeline of highly skilled staff members who can contribute to increasing the organisation’s competitiveness. “It is clear that all employees, including middle managers and mid-career professionals, are looking for development and growth opportunities,” she says. “But different people may look for this in different forms.”
Bessiso says it is important to look at the various types of employee that can be found in the workforce. For example, new joiners often prefer mentorship programmes to help them develop with support from senior peers. Millennials also need to believe in the work they do, so projects that are meaningful, based on their values, will influence retention. More seasoned employees may look for access to formal professional certifications, MBAs or executive training programmes.
There is evidence, both statistical and anecdotal, that many businesses have fallen short when trying to address employee retention. According to Robert Mogielnicki, senior analyst at OSC: “HR professionals here, as in every other region, often address the wrong issues in trying to solve retention. They don’t often know who to retain.”
Common retention solutions, such as across-the-board salary increases, do not differentiate between strong performers and weaker ones, adds Mogielnicki, who says HR managers aren’t always proactive enough when it comes to addressing issues important to workforces. “The focus should be on developing early-stage excellence in, for example, great leaders, or at least [being aware] when there is a high performer who is unhappy.”
And once an employee hands over their letter of resignation, there is little to be gained from offering better pay or conditions. As Mogielnicki says, “they have psychologically resigned”, and would likely not be the productive worker they were before, as they would still be looking for better opportunities.
The concept of intervening early is bolstered hugely by the burgeoning suite of workforce analytics available to HR departments, says Hynes. Metrics can help you identify “attrition drivers” – the true motivating factors in staff departures, above and beyond the clichés. It could be high-burnout projects that drive employees to the edge, a mistrust of senior leadership or even the pain of commuting; travelling between Abu Dhabi and Dubai every day, for example, is not uncommon but can wear people down over time, and can be addressed through the use of flexible working.
Analytics can be used to calculate what employees value most, Hynes says, whether it be work-life balance, reward and performance or rotational work projects. Data may also reveal that an organisation’s most prized talents are concerned about their compensation package.
Ericsson Middle East doesn’t only look at employee engagement metrics, it also incorporates other KPIs, such as leadership quality and professional development opportunities, when monitoring satisfaction levels among its workforce. Girish Johar, who heads the Swedish company’s HR operations in the Middle East, says: “[Our analytics surveys are] direct feedback and we can accordingly see the pockets that have an issue and take necessary corrective actions. This is a leading indicator for us in pre-empting the problem.”
Analytics can also play an important role in keeping employees engaged, says Benchiba-Savenius: “The value or contribution made by a staff member can be calculated from things like appraisal ratings. Intention to quit can be [extrapolated] from monitoring staff morale and engagement on a daily basis.” He also believes that “difficulty to replace” can be quantified using sophisticated statistical analyses. High scores in all of these metrics point to a need for urgent intervention on the part of leadership, and he recommends that HR and management step in as early as possible.
As well as measuring labour turnover and its associated causes, Marriott International, says Leman, also uses analytics to keep a close eye on the hiring process. “We conduct a survey three months after hiring to discover the quality of the employee’s overall recruitment experience, and whether they have settled into their role. We also measure time-to-hire at junior and managerial level because we know that, while a vacancy may save us a little bit of money, having that vacancy for too long creates stress in the workplace and people have to pick up slack.”
Encouraging the best and brightest to stay may be a daunting prospect involving ongoing commitments to in-house monitoring, investment in training programmes and mentoring initiatives for junior staff. But, as many businesses are beginning to understand after years of under-investment in this area, it really does pay to keep your best team on the pitch.
How smart businesses stop losing out
Company culture can be an intangible thing. But getting it right is one of the key tools in Ericsson Middle East’s retention armoury. According to Girish Johar, who heads the company’s HR operations in the region: “Having a strong focus on leadership development, diversity and employer brand helps us create a strong sense of engagement and pride in our employees.”
He adds that Ericsson makes sure it is competitive from the start, but also links pay to performance so that the employees who contribute the most are appropriately compensated. “We make sure every employee goes through a minimum number of relevant training hours. This has paid off very well – we see that our people are increasingly satisfied with their learning and development within the company, which has been fundamental to our best-in-class retention rates,” he says.
Ericsson also provides scholarship programmes for its employees, regardless of their formal education, in a bid to broaden the workforce’s fields of knowledge and encourage increased responsibility.
David Leman, chief HR officer, Middle East and Africa, at Marriott International, says the company’s ‘Take Care’ scheme is guided by the philosophy that “if you put your employees first, the rest will take care of itself”. Comprising four pillars – career, financial, physical and emotional wellbeing – the programme has been the backbone of the company’s employee retention strategy.
It focuses on managing the careers and future prospects of the workforce through clear succession planning, unlimited access to training and development, and transparency of opportunities within the organisation. Marriott also offers its staff guidance on nutrition and health, and personal finance management.
“Emotional wellbeing is based around good communication, so people know what’s going on in the organisation,” says Leman. “[This entails] lots of town hall meetings. We also conduct engagement surveys and action planning, and spend a lot of time working on our leadership style. And we [mimic] the US corporate office, by having a meditation room and yoga studios.”
Leman is convinced that, without the support of chairman Bill Marriott, the company’s employee-first culture would not have had the same impact. “In some firms, such programmes fall under HR alone and don’t always get the leverage that you would hope. But when it comes from your chairman or CEO, it has a lot more influence.”
Who’s going to quit?
Employees considering switching jobs, by industry
- 67% Supply chain
- 60% Accountancy and Finance
- 59% Construction and Property
- 59% Engineering
- 57% Information technology
- 56% Sales and marketing
- 54% Office support
- 50% HR
- 42% Legal
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