André Durivage on How to Predict the Loyalty of Today’s Employees
Expert human resources advice from EPSI President and highly-respected author, André Durivage, PhD
Q: Our company recently hired three employees for our business development department following a comparative interview process in which we compared the candidates’ education and skills against the job’s specific tasks and required skills. Given the increasingly technological nature of the field of marketing, we selected three young people with the necessary competencies and knowledge to help the company move forward. Despite these new employees’ relative inexperience, we were very satisfied with the ideas they brought to the company. However, less than a year after they were hired, two out of the three decided to leave us. Because we are aware of the potential of the employees that we lost, we would like some advice on how to select employees who will stay with us in order to reduce the costs associated with staff turnover. Is it possible to predict employee loyalty?
A: Thank you for your question, Joshua. Let’s start by examining the possible reasons why your employees may have left. There are several factors to consider in this type of situation. One of the most important factors that will influence whether or not the person you hire will stay with your organization is the benefits you offer. The candidate will expect a certain salary, benefits and, depending on his/her age, a pension plan. As a result, it is important to make sure that your company offers what the candidate is looking for in this area.
Another key factor, which you identified in your interview process, is the work itself. In other words, are the tasks expected of the person in line with his/her abilities, experience and knowledge? And, at the same time, will those tasks be interesting and rewarding for him/her?
Another extremely important factor is the work climate at the organization. If the climate is very good, a person might decide to stay, even if he/she could earn more money elsewhere. An organization’s climate includes the employee’s relationships with his/her colleagues and supervisors, with the organization’s senior management, and with other employees. It also covers anything that can make life enjoyable at work, such as, for example, having a social committee at the organization. Additionally, this climate includes factors that can affect an employee’s motivation, such as a degree of autonomy, the impression that his/her tasks are an important part of the company’s work as a whole and that these tasks have a start and an end, as well as the opportunity to have his/her say. Your company will need to ensure that it has a pleasant work climate that is able to attract and retain employees.
Still another factor to consider is the possibility of promotion and growth. For example, an employee might think, “I might not have the pay that I would like, but I’ll be able to develop professionally through training workshops, which will be of use to me later on.” This means making sure that your employees have the opportunity to grow and advance in their careers.
Finally, a factor that has emerged very clearly in recent years is the notion of personal values versus organizational values. When these values are aligned, people are more productive. When they are not aligned, people do not want to stay. It is therefore important to include an assessment of the candidate’s values as part of your hiring process. There are a number of psychometric tools available to facilitate this assessment, such as the Organizational Values Test (OVT).
You also stated that the employees you hired were young. It is often said that new graduates no longer have the sense of belonging and loyalty that they used to. But this is only partially true. There is still a typical pattern that career development tends to follow. When people finish their studies, they are looking to figure out their aspirations and interests. There are fewer financial issues at this stage, which means that the commitments we make when we are younger are not as strong as when we reach our late 20s and early 30s, and find ourselves with a mortgage and a family to support. Once that happens, our commitment is not just an emotional one, but also financial. Moreover, young people today have more options in terms of job opportunities. The choice is theirs to make. When jobs are scarce, a person cannot leave his/her current position. Today, the economy is more varied and more service-oriented, and start-ups are commonplace. As a result, the challenge is to present your organization as the best possible choice.
You also mentioned that you are aware of the potential of your departing employees. Literature on staff retention from the past 15 years tells us that, just as you did in your hiring process, we need to immediately (at the time of selection) identify those people who will be valuable, and hire them at a certain salary, for a certain type of work, with certain benefits, and so on, and then make extra efforts for those individuals. These efforts do not necessarily involve compensation; they can also relate to the quality of the person’s tasks and to his/her responsibilities. For younger employees, these efforts can also revolve around training and professional development. What is important is to manage employees fairly, based on their competencies.
To answer your question more specifically, yes, it is possible to predict employee loyalty. During your hiring process, you took the first step, that of evaluating your candidates’ competencies, experience and education. However, it is crucial to go beyond those standard criteria, to determine whether or not the person will want to stay at your organization. What we are now seeing in Canada and elsewhere with regard to employee loyalty is that, if you assess people’s values and those values match the organization’s, as mentioned above, those employees will have greater loyalty toward the organization. To define their organizational values, we ask companies to do an exercise in which they choose from 34 core values that we identified after conducting, according to industry standards, an evaluation of the reported values of a large number of companies. The goal is to choose those values that best represent the organization’s objectives, such as whether its products’ quality or quantity is more important for profitability. In other words, we ask companies what they prioritize, as an organization, and then assign an order to their values. You can then ask your employees to do the same. The five to ten core values selected by an employee will provide a good indication of his/her future behaviour. If those values are among the five to ten values prioritized by the company, there will be a higher chance of the employee staying with the organization.
To retain your employees, you need to be proactive. You need to establish a clear, realistic contract with them. When hiring someone, it is important not to make promises that you will not be able to keep. You should tell people exactly what they can expect. Additionally, you need to make sure that the atmosphere in the workplace is as positive as possible. Furthermore, it is the responsibility of the managers closest to the employees to make sure that everything is fine with each of them. It is also important to obtain outside information so that your organization can position itself in relation to the labour market, especially when it comes to remuneration.
These steps will help you to avoid the effects of staff turnover. In economic terms, turnover can be expensive: both departures and hiring are costly processes. With regard to productivity, the loss of a valuable employee can affect relations between the company and its clients, particularly if the client’s staff is used to working with that person. There is also an impact on competitiveness and the ability to provide adequate service. In short, nothing less than the company’s reputation is at stake. For this reason, as you pointed out, it is important to be able to predict employee loyalty.
To submit a question to EPSI President André Durivage, PhD, please email firstname.lastname@example.org with “Question for the Doctor” clearly indicated in the subject line.