Retaining top performers

Stories of unhappy employees are the things of HR nightmares, and losing key talent is always costly.

The loss of top performers at plastics companies have both tangible and intangible costs: Vendor relations may be damaged, morale can suffer, and there's often added stress on the supporting team.

The cost of filling the gaping hole from the departure of a top performer is expensive. According to the Society for Human Resource Management (SHRM), replacing a salaried employee costs 50-75 percent of their annual salary. However, the cost rises to as much as 213 percent for highly educated executives.

For example, the cost to replace a $100,000 director at a plastics company can cost as much as $213,000. That doesn't include the intangible, and often untracked, costs associated with employee turnover.

You simply can't place a price on your top performer's ability to lead his or her team or the subtle nuances they've learned.

Last year SHRM conducted employment job satisfaction research. In spite of a generally satisfied workforce, the survey showed a surprisingly large number of employees seeking new opportunities. In fact, 40 percent said they would consider new employment outside their organization within the next year.

Even if you believe your employees are satisfied, you need to adopt a proactive retention strategy. Consider the following methodologies to prevent the loss of your organization's stars:

• Understand them. What type of employees are you hiring? Are you asking the right questions from the beginning? As much as you're able, make sure your new hires' goals align with your company.

Today there are a large number of new employees entering the workforce for the first time, many retiring and few in the middle.

As Rebecca Knight of Harvard Business Review pointed out, five generations will soon be working together.

Members of these generations have their own set of unique values and experience. Placing stereotypes aside, understanding the psychology of these different generations is important.

• Incentivize them. The proverbial carrot remains a vital part of retaining your top performers. Competitive salaries, attractive bonus structures and incentive programs should be a part of your corporate retention strategy.

Many corporate incentive programs seem like a great idea to management and human resource department but are less than motivating to employees. Practical suggestions included an idea bounty, flexible work hours, on-site fitness centers and offering equity in the company.

• Recognize them. According to research, 79 percent of all employees feel undervalued because of a lack of recognition.

Nearly 75 percent of companies have recognition programs, but only 58 percent of employees know about them.

There are a few things to keep in mind when recognizing your top performers. Public reward is best for a couple reasons. Recognizing your employees' success is appreciated by the recipient and it also shows everyone within the organization what work is appreciated and why.

Regular rewards are valued more than infrequent or tenure recognition. Distribute rewards when they are unexpected. You want to offer recognition that is fair, but you also want to avoid creating expectations or entitlements.

• Invest in them. Average employees may be comfortable to ride the status quo, but top performers will always be looking for advancement.

Be willing to invest in their professional development.

• Request their feedback. This can be done informally through an honest conversation with key employees. And this should be done through a formal process done systematically on a regular basis.

Requesting ongoing feedback will help you identify areas you can improve in order to retain top performers.

David Peterson is a managing partner and the director of Direct Recruiters Inc.'s plastics and flexible packaging teams.